AyC7h^^t^....^^__ 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


\' 


»  \ 


\  ^ 


\  > 


A 

SELECTION  OF  CASES 

ON  THE 

LAW   OF   CONTRACTS 


SELECTION  OP  CASES 


ON   THE 


LAW    OF    CONTRACTS 


EDITED    AND    ANNOTATED 

BT 

SAMXJEL  WILLISTON 

DANE   PROFESSOR   OF   LAW   IN   HARVARD    UNIVERSITY 


Second  Edition 


BOSTON 

LITTLE,  BROWN,  AND   COMPANY 

1922 


T 

Entered  according  to  Act  of  Congress,  in  the  year  1879, 

By  C.  C.  Langdell, 
In  the  ofl&ce  of  the  librarian  of  Congress,  at  Washington, 

Copyright,  1894,  1904,  1982, 
By  Samuel  WiiiLisTON. 


a 


PREFACE  TO  THE  SECOND  EDITION 


THE  general  plan  and  the  subdivisions  of  this  collection  of 
cases  remain  unchanged  from  the  first  edition,  with  the  ex- 
ception of  the  Chapter  on  the  Statute  of  Frauds.  Various  pro- 
visions of  that  statute  are  customarily  studied  in  courses  on  property, 
sales,  suretyship  and  trusts,  and  there  seems  little  use  in  inserting 
a  treatment  —  inadequate  at  best  —  of  such  provisions  in  a  se- 
lection of  cases  on  contracts.  Accordingly  in  this  edition  the  only, 
clause  of  the  Statute  dealt  with  is  that  relating  to  contracts  not 
to  be  performed  within  a  year.  The  space  thus  gained  has  made 
it  possible  to  compress  the  work  into  a  simple  volume  and  never- 
theless insert  a  number  of  important  late  decisions. 

When  the  first  edition  was  published  there  was  no  recent  com- 
prehensive treatise  on  the  laws  of  contracts,  and  for  that  reason 
the  collection  of  decisions  in  the  notes  to  the  cases  was  somewhat 
elaborate.  To  bring  these  annotations  down  to  the  present  time 
with  similar  fullness  would  have  undesirably  expanded  the  size 
of  the  book  and  in  view  of  the  existence  of  several  newly  published 
exhaustive  treatises  on  the  subject  has  seemed  unnecessary. 

SAMUEL  WILLISTON". 
Cambridge,  1922 


^871  OR 


PREFACE   TO   THE   FIRST   EDITION 


THE  plan  of  this  book  needs  little  explanation.  I  have  en- 
deavored, in  the  light  of  all  that  has  been  done  before, 
to  prepare  a  selection  of  cases  on  the  law  of  contracts  adapted  to 
the  use  of  students.  In  order  to  cover  the  subject  fairly  in  two 
volumes  of  reasonable  size,  I  have  been  obliged  frequently  to  shorten 
the  reports  of  cases.  Arguments  of  Counsel  have  been  generally 
omitted,  and  where  the  opinion  of  the  court  contains  an  adequate  state- 
ment of  facts,  the  opinion  only  has  been  printed.  I  have  thought 
this  general  statement  would  be  sufficient  warning  to  the  reader 
of  such  omissions.  When  other  changes  from  the  original  reports 
have  been  made,  they  are  specifically  indicated.  Head-notes  are 
of  course  omitted,  and  for  the  same  reason  the  headings  of  chapters 
and  sections  are  general,  and  the  subdivision  of  topics  is  not  always 
as  minute  as  might  be  convenient  to  one  seeking  authority  on  a 
particular  matter.  Headings  of  sections  may  easily  be  made  a  key 
to  the  results  of  the  cases,  and  it  is  desirable  for  the  student  to  work 
out  this  result  for  himself  with  the  aid  only  of  such  suggestion  as 
proves  necessary  in  the  class-room.  The  annotations,  for  the  same 
reason,  are  mostly  confined  to  lists  of  cases  in  accord  or  opposed 
to  the  case  which  is  printed.  An  index  at  the  end  of  the  second 
volume,  I  hope,  will  make  the  contents  of  the  book  reasonably 
accessible  without  being  open  to  the  objection  of  giving  the  student 
the  answer  before  he  has  done  the  problem. 

Every  teacher  of  law  who  prepares  a  volume  of  cases  for  the  in- 
struction of  students  is  consciously  or  unconsciously  indebted  to  the 
work  of  Professor  Langdell;  but  an  indebtedness  greater  than  that 
which  every  worker  owes  to  the  pioneer  in  his  chosen  field,  must 
here  be  acknowledged.  The  law  of  contracts  was  the  subject  selected 
by  Professor  Langdell  for  his  first  collection  of  cases.  That 
collection,  first  published  in  1871   and  a  second  edition  in   1876, 


Vm  PREFACE    TO    THE    FIRST    EDITION 

has  been  used  continuously  since  its  publication  in  the  Harvard  Law 
School,  and  in  recent  years  in  other  law  schools.  The  development 
of  the  law  during  the  past  thirty  years  has  now  made  it  desirable 
to  substitute  a  new  book  for  one  which  must  be  regarded  as  marking 
an  epoch  in  legal  education.  In  preparing  the  new  book,  I  should 
have  found  it  impossible,  had  I  made  the  attempt,  to  avoid  deriving 
benefit  from  the  selection  and  arrangement  in  the  earlier  book. 
Fortunately,  no  such  effort  has  been  necessary^  since  Professor 
Langdell  has  kindly  permitted  me  to  make  such  use  as  I  wished  of  his 
work.     Of  this  permission  I  have  freely  availed  myself. 

SAMUEL  WILLISTON 
Cambridge,  1903 


CONTENTS 


CHAPTER    I 


PAGE 

FORMATION  OF  SIMPLE  CONTRACTS 1 

Section  I 

Mutual    Assent 1 

(a)  Offer        1 

(b)  Duration  and  Termination  of  Offers 31 

(c)  Acceptance          66 

Section  II 

Consideration 152 

(a)  Early   Development       152 

(b)  General  Principles 165 

(c)  Executed  Consideration  and  Moral  Consideration  .    .  260 


CHAPTER  II 

FORMATION"  OF  CONTRACTS  UNDER  SEAL  ....     313 

Section  I 
Formalities  of  Execution 313 

Section  II 
Delivery        325 

Section  III 
Consideration       328 


X  CONTENTS 

CHAPTEE  III 

PAGE 

PAETIES  APFECTED  BY  CO:NrTRACTS 333 

Section  I 

CONTKACTS  FOB  THE  BeNEFIT  OF  ThIKD  PeKSONS 333 

Section  II 
Assignment  of  Contracts 365 

Section  III 
Joint    Obligations      408 

CHAPTER  IV 
THE  STATUTE  OF  FRAUDS 427 

CHAPTER  V 
PERFORMANCE  OF  CON'TRACTS 452 

Section  I 

Expbess  Conditions 452 

(a)  Conditions    Precedent       452 

(b)  Conditions  Subsequent      500 

Section  II 

Implied  Conditions  and  Effect  of  the  Plaintiff's  Failure 

to  Perform  his  Promise 507 

Section  III 
Impossibility '^13 

CHAPTER  VI 
ILLEGAL  CONTRACTS     '^84 

Section  I 

OONTRACTS  IN  RESTRAINT  OF  TrADB 784 


CONTENTS  XI 

PAGE 
Section  II 

"Wagees  and  Gaming  Contracts -■     804 

Section  III 

Contracts  Obstructing  the  Administration  of  Justice     .    .  827 

(a)   Champerty  and  Maintenance      827 

(fo)  Agreements  to  Stifle  Prosecution 846 

(c)  Agreements  to  Submit  to  a  Specified  Tribunal     .    .    .  854 

Section  IV 
Contracts  tending  to  Corruption      876 

Section  V 
Miscellaneous  Cases  of  Illegal  Contracts 889 

Section  VI 
Effect  of  Illegality 923 

CHAPTEE  VII 
DISCHAEGE  OF  CON"TEACTS 955 

Section  I 
Parol  Agreement  to  Discharge      955 

Section  II 
Novation       965 

Section  III 
Eelease      970 

Section  IV 
Accord  and  Satisfaction      975 

Section  V 
Arbitration  and  Award 1017 

Section  VI 
Surrender  and  Cancellation      1033 


XU  CONTENTS 

PAGE 
Section  VII 

Alteration        1038 

Section  VIII 
Meeqee 1041 

lil^DEX      1053 


TABLE  OF  CASES 


Page 

Ackert   v.  Barker  830 

Adams  v.   Lindsell  4 

Ahem,  BlaisdeU  v.  832 

Albany,  Sturljra  v.  157 

Albert's  Ex.  v.  Ziegler's  Ex.  1033 

Alexandre,  Wells  v.  181 

Allen's  Case  365 

Allen,   Blackburn   v.  773 

Allen  V.  Harris  978 

"      V.  Milner  1018 

Alexander,  Slayback  v.  1015 
American  Lithograph   Co.   v. 

Ziegler  385 
American  Publishing  Co.  v. 

Walker  i.58 

Anderson  v.  May  721 

Andrews,  Blandford  v.  644 

Anglum,  Whitman  v.  738 
Anonymous                 152,  319,  328,  507 

Armstrong  v.  Levan  296 

,  Nash  V.  255 

"          ,  Seymour  v.  18 

Arnold  v.  Nichols  363 

Ashanti  Explorers,  Smith  v.  447 

Atkins  V.  Hill  268 

Atkinson,  Tweddle  v.  336 

Atwell  V.  Jenkins  174 

Austin  V.  Whitlock  320 
Austin  Real  Estate  Co.  v.  Bahn    206 

Averill  v.  Hedge  37 

Avery,  Scott  v.  854 
Ayer  v.  Western  Union  Telegraph 

Co.  73 


B 


Babcock  v.  Hawkins 

991 

Backwell  v.  Litcott 

366 

Bacon  v.  Reich 

1046 

Baerselman,  Kemp  v. 

397 

Bahn,  Austin  Real  Estate  Co.  u. 

206 

Baily  v.  De  Crespigny 

713 

Baker  v.  Higgins 

576 

Balbirnie,  Thumell  v. 

480 

Bale,  Stone  v. 

313 

Balfour  v.  Balfour 

183 

Bank  of  Seattle  v.  Gidden 

550 

Barber,   Case    v. 

977 

Barber     Asphalt     Co.,     Kelley 

Asphalt  Co.  V. 

77 

Barker,  Ackert  v. 

830 

"     ,  Price  V. 

419 

Barnard  v.  Simons 

238 

Page 

Barnes  v.  Hedley  275 
Bartlett,  Boston  and  Maine  Rail- 
road V.  31 
Bate,  Hunt  v.  154 
Bateman,  Harvey  v.  366 
Batterbury  v.  Vyse  475 
Beach,  Work  v.  488 
Beech,  Ford  v.  978 
Beecher  v.  Conradt  620 
Benson  v.  Phipps  204 
Bernard,  Freeman  v.  1017 
Bettini  v.  Gye  557 
Bidwell  V.  Catton  238 
Big  Diamond  Mfg.  Co.  v.  Chi- 
cago etc.  Ry.  Co.  303 
Biggers  v.  Owen  63 
Binnington  v.  Wallis  278 
Bimie,  Morgan  v.  470 
Bisbee  v.  Mc Allen  925 
Bischoffshiem,  Callisher  v.  244 
Bishop  V.  Eaton  94 
Blackburn  Co.  v.  Allen  773 
Black  V.  Security  Life  Assoc.  923 
BlaisdeU  v.  Ahem  832 
Blake,  Cadwell  v.  594 
Blake's  Case  975 
Blakeway,  West  v.  959 
Blandford  v.  Andrews  644 
Boardman,  Borden  v.  340 
Bohanan  v.  Pope  361 
Booker,  Ollive  v.  533 
Boone  v.  Eyre  512 
Borden  v.  Boardman  340 
Borelly,  Christie  v.  640 
Borrowman  v.  Free  704 
Bosden  v.  Thinne  261 
Boston,  Loring  v.  33 
"  ,  Pool  V.  227 
Boston,  &c.  R.  R.  Co.  v.  Bartlett  31 
V.  Nashua, 
&c.  R.  R.  Co.  1023 
Bourne  v.  Mason  333 
Bowditch   V.  New  England  Ins. 

Co.  943 

Boynton,  Pixley  v.  819 

Brackenbury  v.  Hodgkin  64 

Bradley,  Hayden  v.  616 

Briggs,  Callonel  v.  510 

"     ,  Riches  v.  158 

British  Waggon  Co.  v.  Lea          393 

Brocas'  Case  507 

Bronson,  Herbert  v.  375 

Brooks  V.  Haigh  165 

Brooks  V.  Masters  Assoc.  930 


XIV 


TABLE   OF    CASES 


Page 

Brooks,  Pearce  v. 

891 

Brown,  Gillingham  v. 

298 

"     ,    Hunt  u. 

996 

"     ,    Noice  V. 

918 

"     ,    Scott  V. 

904 

Browning,  Lewis  v. 

117 

Bruce,  Lynn  v. 

253 

Brunswick -Baike-Collender 

Co., 

Poel  V. 

46 

Bugbee,  Pelosi  v. 

931 

Bullingham,  Riggs  v. 

260 

Burchell,    James    v. 

630 

Burr,   Freeth    v. 

580 

Bush  V.  Stowell 

310 

Butler  and  Baker's  Case 

325 

"     ,  C.  F.  Jewett  Publishing 

Co.  V. 

911 

Butterfield  v.  Byron 

729 

Byrne  v.  Van  Tienhoven 

42 

Byron,  Butterfield  v. 

729 

Page 

Connecticut    Mut.    L.    Ins.  Co., 

Herman    v.  387 

Conradt,  Beecher  v.       i  620 

Constable  v.  Cloberie  452 

Cook,  Guernsey  v.  885 

V.  Lum  373 

Cooke  V.  Oxley  2 

Cooper,  Davidson  v.  1040 
"      ,  Presbyterian  Church  v.      188 

Cordray,  Runnamaker  v.  1044 

Corlies,  White  v.  135 

Corrigan,  Gifford  v,  340 

Corwine,  Meguire  v.  882 

Couch,  Weber  v.  964 

Coupland,  Howell  v.  718 

Cripps  V.  Golding  157 

Cross  V.  Powel  1033 

"     ,  Wheat  v.  131 

Crouch  V.  Matin  367 

Crump,  Martin  v.  422 
Currie  Hardware  Co.,  Donnelly  v.  14 


C.   F.   Jewett  Publishing   Co.   v. 

Butler  911 

C.  R.  I.  &  P.  R.  Co.,  Small  v.  844 

Cadwell  v.  Blake  594 

Cage,  Harrison  v.  171 

Cahen  v.  Piatt  593 

Callan,  Fowler  v.  838 

Callisher  i'.  Bischoffsheim  244 

Callonel   v.  Briggs  510 

Calnan,  Wells  7<.  561 
Canney  v.  Southern  Pacific  Coast 

R.  R.  Co.  22 

Carwardine,  Williams  v.  80 

Case  V.  Barber  977 

Catton,  Bidwell  v.  238 
Cavanaugh     v.    D.    W.    Ranlett 

Company  144 

Cave,  Payne  v.  1 

Chalmers,  Ex  parte  636 

Cheesman,  Good  v.  988 

Cherry  v.  Heming  443 
Chesebrough    v.   Western   Union 

Tol.  Co.  28 
Chicago   etc.   Ry.   Co.,  Big  Dia- 
mond Mfg.  Co.  V.  303 
Chicago  Ry.  Co.  v.  Dane  139 
Chicago  Washed  Coal  Co.  v. 

Whitsett  693 

Child,  Trist  v.  876 

Chri.stio  r.  liorolly  640 

Church   r.  I'roclor  900 

Ciarf-nciciix,  Holt  v.  172 

Clark  /•.  Marsiglia  680 

Clarkf  V.  Watson  472 

Clobfrie,    ConKtable    v.  452 

Codiniin,  Kroll  v.  330 

Cole,  I'ordii'/o  i>.  508 

Colf-nian,  FrrguHon  v.  825 

CommingH  .'.  Fleurd  1020 

Comstock,  Raybnrn  v.  680 

Coniers  and  Holland's  Ca.'jC  955 


D 


Dane,  Chicago  Ry.  Co.  v.  139 
Darland  v.  Taylor  1036 
Davidson  v.  Cooper                        1040 

"     ,  England  v.  226 

Davies,  Offord  v..  89 

Davis,  Eddy   v.  625 

"     V.  Van  Buren  422 
Davis,  Scottish   American   Mtge. 

Co.  V.  109 

Dawson,  Row  i\  367 

De  Cicco  V.  Schweizer  221 

De  Crespigny,  Baily  v.  713 

Deering  v.  Farrington  370 

De  la  Tour,  Hochster  v.  655 

Denison,  Gardner  v.  357 

Denton,  Fairlie  v.  967 

Devecmon  v.  Shaw  185 
Dewey  ^'.  Union  School  District    748 

Dexter,  Meigs  v.  328 

Dickenson  v.  Dodds  56 

Dickinson  Co.,  McMuUan  v.  179 

Dietrich   v.  Hoefelmeir  445 

Dingley  v.  Oler  669 

Di.xon,  Doyle  v.  441 

Dodds,  Dickinson  i>.  56 

Doll  V.  Noble  486 

Donlan  v.  Boston  564 
Donnelly  v.  Currie  Hardware  Co.     14 

Donovan  v.  Middlcbrook  400 

Dorell,  Herring  v.  242 

Dorville,  Longridge  v.  239 

Dovle  /'.  Dixon  441 

Duff  Gordon,  Wood  v.  141 

Duke  of  St.  Albans  v.  Shore  24 

Douglas,  Joll  V.  414 

Dnnlop  V.  Higgins  97 
Dunlop    Tvre    Co.    v.    Selfridgc 

Sc  C'o.     ■  334 

Dus(!nbury  v.  Hoyt  287 

Dutton  V.  Poole  335 


TABLE   OF   CASES 


XV 


E 


Page 


Page 

Globe  Insurance  Co.,  New  York 

-fj  - 

Eames  v.  Peston 

321 

V. 

752 

Eaton,  Bishop  v. 

94 

Globe  Mut.  Life  Ins.  Assoc,  v. 

Eddy  V.  Davis 

625 

Wagner 

466 

Edgar,  Green  v. 

575 

Golding,  Cripps  v. 

157 

Edmond's  Case 

267 

Goldsmith,  Turner  v. 

749 

Edney,  Mowse  v. 

365 

Goochman,  Jeremy  v. 

158 

Edwards  v.  Weeks 

956 

Good  V.  Cheesman 

988 

Eley,  Vitty  v. 

82 

Goodisson  v.  Nurm 

517 

Eliason  v.  Henshaw 

132 

Graham,  Hawkins  v. 

483 

Ellen  V.  Topp 

525 

Grand  Lodge,  National  Bank  v. 

338 

Elmer,  Moore  v. 

265 

Grange,  Fox  v. 

498 

Emley  v.  Perrine 

381 

Grant  v.  Porter 

273 

England  v.  Davidson 

226 

Graves  v.  Johnson 

895 

Evans,  Tichnor  v. 

565 

"      V.  Legg 

529 

Eyre,  Boone  v. 

512 

Gray  v.  Gardner 

500 

"     V.  Smith 

707 

F 

Great  Northern  Ry.  Co.  v.  Wit- 

ham 

137 

Fairlie  v.  Denton 

967 

Green  v.  Edgar 

575 

Falck  V.  Williams 

67 

Green  Bay  etc.  Co.,  Pulp  Wood 

Farrington,  Deering  v. 

370 

Co.  V. 

794 

Fenton,  Trueman  v. 

270 

Greenebaum,  Kullum  v. 

907 

Ferguson  v.  Coleman 

825 

Griffith,  Stewart  v. 

456 

Finch,  Hale  v. 

452 

Gross,  Grobb  v. 

285 

Fink  V.  Smith 

231 

Guernsey  v.  Cook 

885 

Finkelstein,     Security     Bank 

of 

Gye,  Bettini  v. 

557 

N.  Y.  V. 

307 

Fireproof    Film    Co.,    Sturtevant 

Co.    V. 

26 

H 

Fitzgerald,  Gleason  v. 

968 

Fletcher,  Leavitt  v. 

642 

Haigh  V.  Brooks 

165 

Flower  v.  Sadler 

846 

Hale    V.  Finch 

452 

Flower's  Case 

955 

Hale  V.  Spaulding 

418 

Ford  V.  Beech 

978 

Hamer  v.  Sidway 

233 

Fowler  v.  Callan 

838 

Hampden  v.  Walsh 

804 

Fox  V.  Grange 

498 

Harbor  v.  Morgan 

988 

Fox,  Lawrence  v. 

342 

Harding  v.  Harding 

371 

"     V.  Rogers 

953 

Harding,  Spencer  v. 

8 

Eraser,  Henthom  v. 

103 

Harris,  Allen  v. 

978 

Free,  Borrowman  v. 

704 

"       ,  Garst  V. 

793 

Freeman  v.  Bernard 

1017 

Harrison  v.  Cage 

171 

Freeth  v.  Burr 

580 

Harsen,  Lattimore  v. 

207 

Frith,  Mactier  v. 

124 

Hart,  Pellman  v. 

383 

Frost  V.  Knight 

661 

Hartford  Ins.  Co.,  Semmes  v. 

504 

Hartman  v.  Pistorius 

358 

G 

Harvey  v.  Bateman 

366 

Gail  V.  Gail 

547 

"       V.  Merrill 

811 

Gammons  v.  Johnson 

841 

Hatton,  In  re 

998 

Ga  Nun  V.  Palmer 

676 

Haugh,  Roe   v. 

965 

Gardner  v.  Denison 

357 

Hawkins,  Babcock  v. 

991 

"       ,  Gray  v. 

500 

''         V.  Graham 

483 

Garst  V.  Harris 

793 

"       ,  Robinson  v. 

1031 

Geloso,  Rochester  District 

Hawley,  Mitchell  v. 

1001 

Co.  V. 

543 

Hayden  v.  Bradley 

616 

Getman,  Lacy  v. 

742 

Heard,  Commings  v. 

1020 

Gibbons  v.  Proctor 

81 

Heather,   Richards    v. 

411 

"        V.  Vouillon 

970 

Hedge,  Averill  v. 

37 

Gibbs  V.  Smith 

909 

Hedley,   Barnes   v. 

275 

Gidden,  Bank  of  Seattle  v. 

550 

Heim,   Kromer   v. 

993 

Gifford  V.  Corrigan 

347 

Heming,    Cherry    v. 

443 

Gillespy,  Thompson   v. 

536 

Henry,    Krell    v. 

761 

Gillingham    i>.    Brown 

298 

Hensey.  Mercantile  Trust  Co.  v 

.  490 

Gleason    v.    Fitzgerald 

968 

Henshaw,    Eliason    v. 

132 

XVI 


TABLE   OF    CASES 


Page 
Henthorn    v.  Fraser  103 

Herbert    v.   Bronson  375 

Herman  v.  Connecticut  Mut.  L. 

Ins.    Co.  387 

Hermitage    Co.,    Marks    Realty 


Co.  u. 
Herring    v.   Dorell 
Higgen's   Case 
Higgin,  Shadforth   v. 
Higgins,   Baker   v. 

"       ,  Dimlop  V. 
HilarJ^    Taylor    v. 
Hill,   Atkins   v. 
Hoare,  King   v. 

V.   Rennie 
Hochster   v.  De  la  Tour 
Hodgdon,   Mansfield    v. 
Hodge.   Warren    ur 
Hodgkin,   Brackenbury   v. 
Hoefelmeir,  Dietrich  v. 
Hoffman,  Tinn   u. 
Holcomb  V.  Weaver 
Holland,  Case  of  Corners  and 
Holman    v.    Johnson 
Holt    V.    Clarencieux 
Homer   v.   Shaw 
Hood,  Kane  v. 
Hopkins    v.   O'Kane 
Howard  Mineral  Park  Land  Co. 


771 
242 
1041 
468 
576 

97 
958 
268 
415 
577 
655 

70 
196 

64 
445 
120 
887 
955 
889 
172 
379 
523 
809 

735 


Howe  &  Rogers  Co.,  O'Grady  v.  324 

Howell    V.   Coupland  718 

Hoyt,  Dusenbury  v.  287 

Hugall  V.  McLean  615 

Hughes,  Rann  v.  163 

Hunt  V.  Bate  154 

■'     V.  Brown  996 

"     V.    Livermore  617 

Hunt,  Joynson  v.  143 

Hutley    V.   Hutley  827 

Hyde  v.  Wrench  44 


Ilsley  V.  Jewett  289 

Insurance  Co.,  Moody  v.  501 

International  Paper  Co.  v.  Rock- 
efeller 767 
J 

Jackson    v.   Pennsylvania  R.    R. 

Co.  1010 
Jacobaen,    Tri-BuUion     Smelting 

Co.  V.  690 

James  v.  Burchell  630 

"     V.  Newton  399 

Jefferson     County,     Oak  Grove 

Con.st.  Co.  V.  390 

Jell    V.    Douglas  414 

Jenkins,  Atwell    v.  174 

Jeremy    ?».  Goochman  158 

Jewett,    Ilsley    v.  289 

Jewett  Publishing  Co.  v.  Butler  911 

Johnson,   Gammons   v.  841 


Page 

Johnson,  Graves  v.  895 

"       ,  Holman   v.  889 

Johnston  v.  Rogers  15 

Johnstone   v.   Milling  666 

Jones,  Prescott  v.  147 

"      ,  Slater  v.  985 

Joynson  v.  Hunt  143 

K 

Kadish  v.  Young  695 
Kane  v.  Hood  523 
Kearney,  Liverpool,  &c.,  Insur- 
ance Co.  V.  462 
Keeley.  Winch  v.  369 
Keith  V.  Miles  229 
Kelley    Asphalt    Co.    v.    Barber 

Asphalt  Co.  77 

Kemp    V.   Baerselman  397 

Kester,    Maylard    v.  159 

Kimball,    Rindge    v.  286 

King   V.   Hoare  415 

"     V.   King  949 

Kingston  v.  Preston  511 

Kirksey  v.  Kirksey  187 

Klaholt,   Wheeler   v.  146 

Knight,  Frost  v.  661 

Koehler,   Shanley    v.  197 
Kokomo      Steel      Co.,      Vulcan 

Trading  Co.  v.  588 

Krell   V.  Codman  330 

Krell    V.  Henry  761 

Kromer  v.  Heim  993 

Kronprinzessin  Cecilia  758 

Kullman  v.  Greenebaum  907 


Lacy  V.  Getman  742 

Lakeman  v.  Pollard  746 

Lamb,  Morton    v.  519 

Lang.   Schweider   v.  259 

Langden  v.  Stokes  956 

Lattimore  v.  Harsen  207 

Lawrence   v.  Fox  342 

Laycock  v.  Pickles  1013 

Lea,  British  Waggon  Co.  v.  393 

Leavitt   v.   Fletcher  642 

Lee,  Loyd  v.  238 

"     ,    Muggeridge   v.  276 

Legg,  Graves  v.  529 
Leiston  Gas  Company  v.  Urban 

District    Council  566 

Leonard,  Stees  v.  723 

Leuthold  v.  Stickney  927 

Levan,  Armstrong  r'.  296 

Lewis  t>.  Browning  117 

Lindsell,  Adams  v.  4 
Lingenfelder        i'.       Wainwright 

Brewing    Co.  212 

Litcott,  Back  well  t).  366 

Littlefield  V.  Shee  279 

Littlcwood,  Millward  v.  934 

Livermore,  Hunt  v.  617 


TABLE  OF  CASES 


XVll 


Page 
Liverpool,  &c.  Insurance   Co.   v. 

Kearney  462 

Livingston   v.  Ralli  861 

London  and  Northern  Bank,  In 

re  107 

London     Commercial     Exchange 

Co.,  Williams  v.  1029 

Longridge   v.  Dorville  239 

Lorah  v.  Nissley  317 

Loring  v.  Boston  33 

Loyd  V.  Lee  238 

Lucas  V.  Western  Union  Tel.  Co.  112 
Lum,  Cook  v.  373 

Lumber   Underwriters   of   N.   Y. 

V.  Rife  494 

Lynch,  Warren  v.  314 

Lynn  v.  Bruce  253 


M 

McAllen,  Bisbee  v. 
M'Clure,  Ripley  v. 
McClure,  Zuck  v. 
McCormick,  Turner  v. 
McLean,  Hugall  v. 


925 
650 
682 
48 
615 


,  Stevenson  v.  51 

McMullan  v.  Dickinson  Co.  179 
MacMurphey,    Oil    Well   Supply 

Co.  V.  24 

Mactier  v.  Frith  124 

Makin  v.  Watkinson  610 

Mandeville.  Welch  v.  377 

Mansfield  v.  Hodgdon  70 

March  v.  Ward  408 

Marreco  v.  Richardson  305 
Marks  Realty  Co.  v.  Hermitage 

Co.  771 

Marsiglia,  Clark  v.  680 
Marston  v.  Marston  1035 
Martha's    Vineyard    R.    R.    Co., 

Osborn  v.  424 

Martin,  Crouch   v.  367 

"       V.  Crump  422 

"      V.  Meles  192 

Mason,  Bourne  v.  333 

Masters  Assoc,  Brooks  v.  930 

May,  Anderson  v.  721 

Maylard  v.  Kester  159 

Mayne's  Case  647 

Meguire  v.  Corwine  882 

Meigs  V.  Dexter  328 

Meles,  Martin  v.  192 
Mercantile  Trust  Co.  v.  Hensey    490 

Merrill,  Harvey  v.  811 

"       t'.  Peaslee  920 

"  ,  Tanner  v.  200 
Mersey  Steel  &  Iron  Co.  v.  Nay- 

lor  585 

Middlebrook,  Donovan  v.  406 
Middlesex    Railroad    Co.,    White 

V.  863 

Miles,  Keith  v.  229 

"     V.  New  Zealand  Co.  246 

"     V.  Schmidt  867 


Page 
Miller  v.  Miller  235 
Milling,  Johnstone  v.  666 
Mills  V.  Wyman  281 
Mill  ward  v.  Little  wood  934 
Milner,  Allen  v.  1018 
Mineral  Park  Land  Co.  v.  How- 
ard 735 
Mitchell  V.  Hawley  1001 
"  V.  Reynolds  784 
"  ,  Seward  v.  236 
Money  weight  Scale  Co.,  Stem  v  76 
Moody  V.  Insurance  Co.  501 
Moor,  Phillips  v.  150 
Moore  v.  Elmer  265 
Morgan  v.  Birnie  470 
"  ,  Harbor  v.  988 
Morris,  Waugh  v.  936 
Morton  v.  Lamb  519 
Mowse  V.  Edney  365 
Muggeridge,  Lee  v.  276 
Munroe  v.  Perkins  208 

N 

Nash  V.  Armstrong  255 

Nashua,  &c.  R.  R.  Co.,  Boston, 

&c.  R.  R.  Co.  V.  1023 

National  Bank  v.  Grand  Lodge  338 
National  Bank  and  Loan  Co.  v. 

Petrie  947 

National  Machine  Co.  v.  Stand- 
ard Machinery  Co.  571 
Naylor,  Mersey  Steel  &  Iron  Co. 

V.  585 

Nell,  Schnell  v.  168 

Newbury,  Stewart   v.  545 

New  England  Ins.  Co.,  Bowditch 

V.  943 

New  Zealand  Co..  Miles  v.  246 

"  "         "       ,  James  v.         399 

New  York  v.  Globe  Ins.  Co.  752 

Nichols,  Arnold  v.  363 

"       V.  Raynbred  508 

Nickelson  v.  Wilson  848 

Nissley,  Lorah  v.  317 

Noble,  Doll  V.  486 

Noice  V.  Brown  918 

Nolan  V.  Whitney  477 

Nunn,  Goodisson  v.  517 

Nutter,  Winchester  v.  821 

Nyulasy  v.  Rowan  5 

O 

Oak  Grove  Const.  Co.  v. 

Jefferson  County  390 
Odell  V.  Webendorfer  449 
Offord  V.  Davies  89 
O'Grady  v.  Howe  &  Rogers  Co.  324 
Oil  Well  Supply  Co.  v.  MacMur- 
phey 24 
O'Kane.  Hopkins  v.  809 
Oler,  Dinglej'  v.  669 
Ollive  V.  Booker  533 


xvm 


TABLE    OF    CASES 


Page 
Osbom  V.  Martha's  Vineyard  R. 

R.  Co.  424 

Owen,  Biggers   v.  63 

Oxley,  Cooke  v.  2 


Panoutsos    v.   Raymond  Hadley 

Corp.  496 

Parker  v.  Russell  673 

Payne  v.  Cave  1 

Pead  V.  Trull  570 

Pearce  v.  Brooks  891 

Peaslee,  Merrill  v.  920 

Peck  V.  United  States  645 

Pellman  v.  Hart  383 

Pelosi  V.  Bugbee  931 

Pennsj-lvania  R.  R.  Co.,  Jackson 

V.  1010 

Pepler,   Taunton  v.  313 

Perkins,  Munroe   v.  208 

Perrine,  Emley  v.  381 
Petrie.  National  Bank  and  Loan 

Co.  V.  947 

Philadelphia  v.  Reeves  409 

Philhps  V.  Moor  150 

Phipps,  Benson   v.  204 

Pickles,  Lavcock  v.  1013 

Pigot's  Case  1038 

Pistorius.  Hartman   v.  358 

Pixlev  I'.  BojTiton  819 

Piatt,  Cahen  v.  593 
Peel      f.     Brunswick-Balke-Col- 

lender   Co.  46 

Pollard,  Lakeman  v.  746 

Pool  V.  Boston  227 

Poole,  Dutton  v.  335 

Pope.  Bohanan  v.  361 

Pordage  v.  Cole  508 

Porter.  Grant  v.  273 

Postal    Telegraph- Cable  Co.    v. 

Willis  115 
Pottlitzer  Bros.  Fruit   Co.,  San- 
ders V.  10 
Poussard  v.  Spiers  552 
Poutre,  Trudeau  v.  966 
Powel,  Cro,-^  v.  1033 
Presbyterian  Church  v.  Cooper     188 
Prcscott  V.  Jones  147 
Preston,  Eames  v.  321 
"      ,  Kingston  v.  511 
Price  V.  Barker  419 
Proctor,  Church  v.  900 
,  Gibbons  v.  81 
Pulp    Wood   Co.   V.  Green   Bay 
etc.  Co.  794 
R 

Raffles  V.  Wichelhaus  66 

Ralii,  Livingston   v.  861 

Ranlctt  Co.,  Cavanaugh  v.             144 

Ransom,  Seavnr  r.  3-52 

Rann   t-.  Hughes  163 

Raybum  v.  Comstock  686 


Page 

Ra\-mond   v.  Sheldon's  Estate  21 

Raynbred,   XichoL?   v.  508 

Reagan  v.  L'nion  Life  Ins.  Co.  491 

Reeves,  Philadelphia   v.  409 

Reich,  Bacon  v.  1046 

Rennie.  Hoare  v.  577 

Reynolds,  Mitchell  v.  784 

''      ,  Thompson  v.  834 

"      ,  Withers  v.  521 

Richards  v.  Heather  411 

Richardson,  Marreco   v.  305 

Riches  v.  Briggs  158 

Rife,    Lumber    Underwriters  of 

X.  Y.  1.  494 
Riggs    V.   Bulhngham  260 
Rindge  t'.  Kimball  286 
Ripley    v.   M'Clure  650 
Roberts  v.  Security  Co.  325 
V.  Hawkins  1031 
Rochester  Dist.  Co.   r.  Geloso  543 
Rockefeller,  Int.  Paper  Co.,   v.  767 
Roe  V.  Haugh  965 
Rogers.  Fox  v.  953 
.  Johnston  v.  15 
Rosa,  Spalding  v.  739 
Roscorla  v.  Thomas  262 
Rosenbaum,  L'nited  States  Cred- 
it Co.  V.  938 
Row  V.  Dawson  367 
Rowan.  X>nilas\'  v.  i.5 
Runnamaker  v.  Cordray  1044     4 
Russell,  Parker  v.  673 
S 

Sadler,  Flower  v.  846 

St.  Albans  r.  Shore  513 
Sanders  v.  Pottlitzer  Bros.  Fruit 

Co.  10 

Satanita,  The  20 

Saunders  v.  Saunders  322 

Schmidt.   Miles   v.  867 

Schnell    v.   Xell  168 

Schweider  v.  Lang  259 

Schweizer,  De  Cicco  v.  221 

Scott  V.  Averv  854 

"       V.   Brow-n  904 

Scottish  American   Mtge.  Co.  v. 

Davis  109 

Seaver  v.  Ransom  352 

Security     Bank     of     X.     Y.  v. 

Finkelstein  307 

Security  Co.,  Roberts  v.  325 

Seignoret,  Shales  r.  649 

Security  Life  Assoc,  Black  v.  923 
Selfridge    &    Co.,    Dunlop    T^Te 

Co.  V.  334 
Semmes    v.    Hartford    Insurance 

Co.  504 

Seward   v.  Mitchell  236 

Sevmour   v.  Armstrong  18 

Shadforth  v.  Higein  468 

Shadwell    V.  Sha.hvell  216 

Shales  v.  Seignoret  649 

Shanley  v.  Koehler  197 


TABLE   OF    CASES 


XIX 


Page 

Sharington  v.  Strotton  329 

Shaw,  Devecmon  v.  185 

Shaw,   Homer   v.  379 

Shee,  Littlefield  v.  279 

Sheffield,  Strong  v.  251 

Sheldon,  State  Trust  Co.  v.  269 
Sheldon's  Estate,  Raymond   v.        21 

Shore,  St.  Albans  v.  513 

Shuey  v.  United  States  60 

Sidenham  v.  Worlington  155 

Sidway,  Hamer  v.  233 

Simons,  Barnard  v.  238 

Blade's  Case  159 

Slater  v.  Jones  985 

Slayback  v.  Alexander  1015 
Small  V.  The  C.  R.  I.  &  P.  R.  Co.  844 

Smith  V.  Ashanti  Explorers  447 

Smith,  Fink  v.  231 

"     ,  Gibbs  V.  909 

"     ,  Gray  v.  707 

"       u.  Monteith  i.279 

"     ,  Ziehen  v.  634 

Smith   and  Smith's   Case  154 
Southern    Pacific    Coast    R.    R. 

Co..  Canney  v.  22 
Spalding  v.  Rosa  739 
Spaulding,  Hale  v.  418 
Spencer  v.  Harding  8 
Spiers,  Poussard  v.  552 
Sperry,  Way  v.  293 
Standard  Auto  etc.  Co.,  Whit- 
taker  Chain  etc.  Co.  v.  1007 
Standard  Machinery  Co.,  Na- 
tional Machine  Co.  v.  571 
State  Trust  Co.  v.  Sheldon  296 
Steeds  v.  Steeds  1003 
Stees  V.  Leonard  723 
Stern  v.  Money  weight  Scale  Co.  76 
Stern,  Williams  v.  961 
Stewart  v.  Griffith  456 
Stewart  v.  Newbury  545 
Stewart  v.  Thayer  916 
Stevenson  v.  McLean  51 
Stickney,  Leuthold  v.  927 
Stokes,  Langden  v.  956 
Stone  V.  Bale  313 
Stowell.  Bush  V.  310 
Strangborough  v.  Warner  158 
Strong  V.  Sheffield  251 
Strotton,  Sharington  v.  329 
Sturlyn  v.  Albany  157 
Sturtevant  Co.  v.  Fireproof 
Film  Co.  26 
T 

Tanner  v.  Merrill  200 

Taunton  v.  Pepler  313 

Tavlor,  Darland  v.  1036 

.  Hilary  v.  958 
Texas  &  Pacific  Ry.  Co.,  Warner 

V.  427 

Thacker  v.  Hardy  ii.  379 

Thayer,  Stewart  v.  916 

Thinne.  Bosden  v.  261 


Page 

Thomas,  Roscorla  v.  262 

"       V.  Thomas  175 

Thompson  ;'.  Gillespy  536 

"       V.  Reynolds  834 

Thumell  v.  Balbimie  480 

Tichnor  v.  Evans  565 

Tillock  V.  Webb  914 

Tinn   v.  Hoffman  120 

Topp,  Ellen  v.  525 
Tri-Bullion      Smelting      Co.      v. 

Jacobsen  690 
Trinidad  etc.  Co.,  United  States 

Asphalt  Co.  V.  869 

Trist  V.  Child  876 

Trudeau  v.  Poutre  966 

Trueman    v.    Fenton  270 

Trull,  Pead  v.  570 

Turner  v.  Goldsmith  749 

Turner   v.   McCormick  48 

"       ,  Watson  V.  267 

Tweddle  t'.  Atkinson  336 

U 

Union  Life  Ins.  Co.,  Reagan  v.  491 
Union  School  District,  Dewey  v.  645 
United  States  v.  Peck  645 

"     .  Shuey  v.  60 

United    States    Asphalt    Co.    v. 

Trinidad  etc.  Co.  869 

United  States  Credit  Co.,  Rosen- 

baum  V.  938 

Urban  District   Council,   Leiston 

Gas  Co.  V.  566 

V 

Van  Buren,  Davis  v.  422 

Van  Tienhoven,  Byrne  v.                 42 

Vitty  V.  Eley  82 

Vouillon,  Gibbons  v.  970 
Vulcan  Trading  Co.  v.  Kokomo 

Steel  Co.  588 

Vyse,   Batterbury   v.  475 

■"       V.  Wakefield  601 


W 


Life 


Wagner,     Globe     Mutual 

Insurance   Assoc,  v. 
Wainwright    Brewing    Co.,    Lin- 

genf elder  v. 
Wakefield,  Vyse  v. 
WaUis,  Binnington  v. 
Walsh,  Hampden  v. 
Ward,  March  v. 
Warner,    Strangborough    v. 

"       V.  Texas  &  Pacific  Ry 
Warren  v.  Hodge 

"       V.  Lynch 
Watkinson,  Makin  v. 
Watson,  Clarke  v. 

"       V.  Tvirner 
Waugh   V.  Morris 
Way  V.  Sperry 


466 


212 
601 
278 
804 
408 
158 
Co.  427 
196 
314 
610 
472 
267 
936 
293 


XX 


TABLE   OF   CASES 


Page 
Weaver,  Holcomb  v.  887 

Webb,  Tillock   v.  914 

Webendorfer,  Odell  v.  449 

Weber  v.  Couch  964 

Weeks,  Edwards  v.  956 

Welch  V.  Mandeville  377 

Wells  V.  Alexandre  181 

"       V.  Calnan  561 

West  V.  Blakeway  959 

West    Chicago    Street    Ry.    Co., 

Williams  v.  84 

Western    Union    Telegraph    Co., 

Ayer  v.  73 

Western  Union  Tel.  Co.,  Chese- 

brough  V.  28 

Western  Union  Tel.  Co.,  Lucas  v.  112 
Wheat  V.  Cross  131 

Wheeler  v.  Klaholt  146 

White  V.  Corlies  135 

"  V.  Middlesex  Railroad  Co.  863 
Whitlock,  Austin  v.  320 

Whitman  v.  Anglum  738 

Whitney,  Nolan  v.  477 

Whitsett,  Chicago  Washed  Coal 

Co.  V.  693 

Whittaker    Chain    Tread    Co.    v. 

Standard  Auto  etc.  Co.  1007 

W^ichelhaus,   Raffles   v.  66 

WilUamg   v.   Carwardine  80 

Falck  V.  67 


Page 
Williams  v.  London  Commercial 

Exchange  Co.     1029 
"       V.  Stem  961 

"      V.  West   Chicago  Street 

Ry.  Co.  84 

Willis,     Postal     Telegraph-Cable 

Co.  V.  115 

Wilson,  Nickelson  v.  848 

Winch  V.  Keeley  369 

Winchester  v.  Nutter  821 

Witham,    Great     Northern     Ry. 

Co.  V.  137 

Withers  v.  Reynolds  521 

Wood,  Worsley  v.  459 

Work  V.  Beach  488 

Worlington,  Sidenham   v.  155 

Worsley  v.  Wood  459 

Wrench,  Hyde  v.  44 

Wyman,  Mills  v.  281 


Young,  Kadish  v. 

Z 

American 


695 


Lithograph 


Ziegler, 
Co.  V. 

Ziegler's  Ex.,  Albert's  Ex.  v 
Ziehen  v.  Smith 
Zuck  V.  McClure 


385 

1033 

634 

682 


CASES  ON  CONTRACTS 


CHAPTER  I 

FORMATION   OF    SIMPLE    CONTRACTS 


SECTIO]^   I 
MUTUAL   ASSENT 


A.  —  Offer 


PAYNE  V.  CAVE 

In  the  King's  Bench,  May  2,  1789 

[^Reported  in  3  Term  Reports,  148] 

This  was  an  action  tried  at  the  Sittings  after  last  term  at  Guild- 
hall, before  Lord  Kenyon,  wherein  the  declaration  stated  that  the 
plaintiff,  on  22d  September,  1788,  was  possessed  of  a  certain  worm- 
tub,  and  a  pewter  worm  in  the  same,  which  were  then  and  there  about 
to  be  sold  by  public  auction  by  one  S.  M.,  the  agent  of  the  plaintiff  in 
that  behalf,  the  conditions  of  which  sale  were  to  be  the  usual  condi- 
tions of  sale  of  goods  sold  by  auction,  &c.,  of  all  which  premises  the 
defendant  afterwards,  to  wit,  &c.,  had  notice;  and  thereupon  the  de- 
fendant, in  consideration  that  the  plaintiff,  at  the  special  instance 
and  request  of  the  defendant,  did  then  and  there  undertake  and 
promise  to  perform  the  conditions  of  the  said  sale  to  be  performed  by 
the  plaintiff  as  seller,  &c.,  undertook,  and  then  and  there  promised 
the  plaintiff  to  perform  the  conditions  of  the  sale  to  be  performed  on 
the  part  of  the  buyer,  &c.  And  the  plaintiff  avers  that  the  conditions 
of  sale  hereinafter  mentioned  are  usual  conditions  of  sale  of  goods 
sold  by  auction,  to  wit,  that  the  highest  bidder  should  be  the  pur- 
chaser, and  should  deposit  five  shillings  in  the  pound,  and  that  if  the 
lot  purchased  were  not  paid  for  and  taken  away  in  two  days'  time,  it 
should  be  put  up  again  and  resold,  &c.  [stating  all  the  conditions] .  It 
then  stated  that  the  defendant  became  the  purchaser  of  the  lot  in 
question  for  40/.  and  was  requested  to  pay  the  usual  deposit,  which 
he  refused,  &c.  At  the  trial,  the  plaintiff's  counsel  opened  the  case 
thus :  The  goods  were  put  up  in  one  lot  at  an  auction ;  there  were  sev- 


2  COOKE   V.   OXLEY  [CHAP.   I 

eral  bidders,  of  whom  the  defendant  was  the  last,  who  bid  401. ;  the 
auctioneer  dwelt  on  the  bidding,  on  which  the  defendant  said,  "Why 
do  you  dwell?  you  will  not  get  more."  The  auctioneer  said  that  he 
was  informed  the  worm  weighed  at  least  1300  cwt.,  and  was  worth 
more  than  401. ;  the  defendant  then  asked  him  whether  he  would  war- 
rant it  to  weigh  so  much,  and  receiving  an  answer  in  the  negative,  he 
then  declared  that  he  would  not  take  it,  and  refused  to  pay  for  it.  It 
was  resold  on  a  subsequent  day's  sale  for  30/.  to  the  defendant,  against 
whom  the  action  was  brought  for  the  difference.  Lord  Kenyon,  being 
of  opinion,  on  this  statement  of  the  case,  that  the  defendant  was  at 
liberty  to  withdraw  his  bidding  any  time  before  the  hammer  was 
knocked  down,  nonsuited  the  plaintiff. 

Walton  now  moved  to  set  aside  the  nonsuit,  on  the  ground  that  the 
bidder  was  bound  by  the  conditions  of  the  sale  to  abide  by  his  bidding, 
and  could  not  retract.  By  the  act  of  bidding  he  acceded  to  those  con- 
ditions, one  of  which  was,  that  the  highest  bidder  should  be  the  buyer. 
The  hammer  is  suspended,  not  for  the  benefit  of  the  bidder,  or  to  give 
him  an  opportunity  of  repenting,  but  for  the  benefit  of  the  seller;  in 
the  meantime,  the  person  who  did  bid  last  is  a  conditional  purchaser, 
if  nobody  bids  more.  Otherwise,  it  is  in  the  power  of  any  person  to 
injure  the  vendor,  because  all  the  former  biddings  are  discharged  by 
the  last;  and,  as  it  happened  in  this  very  instance,  the  goods  may 
thereby  ultimately  be  sold  for  less  than  the  person  who  was  last  outbid 
would  have  given  for  them.  The  case  of  Simon  v.  Motivos,^  which 
was  mentioned  at  the  trial,  does  not  apply.  That  turned  on  the 
Statute  of  Frauds. 

The  Court  thought  the  nonsuit  very  proper.  The  auctioneer  is 
the  agent  of  the  vendor,  and  the  assent  of  both  parties  is  necessary 
to  make  the  contract  binding;  that  is  signified  on  the  part  of  the  seller 
by  knocking  down  the  hammer,  which  was  not  done  here  till  the  de- 
fendant had  retracted.  An  auction  is  not  unaptly  called  locus  poeni- 
tenfioe.  Every  bidding  is  nothing  more  than  an  offer  on  one  side, 
which  is  not  binding  on  either  side  till  it  is  assented  to.  But  accord- 
ing to  what  is  now  contended  for,  one  party  would  be  bound  by  the 
offer,  and  the  other  not,  which  can  never  be  allowed. 

Rule  refused.' 

COOKE  V.  OXLEY 

In  the  King's  Bench,  May  14,  1790 

\Reported  in  3  Term  Reports,  653] 

TiiiH  was  an  action  upon  the  case;  and  the  third  count  in  the  dec- 
laration, upon  which  the  verdict  was  taken,  stated  that  on,  &c.,  a  cer- 

'  .3  Burr.  1921. 

»  Uniform  SaloH  Aft.  5  21(2);  Hibernia  Rav.  Soc.  v.  Bchnkc,  121  C:il.  339; 
Mallarfl  v.  riirran.  123  Cn.  872.  87.5;  Crotenkompor  v.  Arhtormyor,  11  Bush.  222; 
HrTi<l  V.  Clark,  88  Ky.  362.  304;  Fisher  v.  Seltzor.  23  Pa.  308;  German  Civ.  Code, 
(  150,  ace. 


SECT.    l]  COOKE    V.    OXLEY  3 

tain  discourse  was  had,  &c.,  concerning  the  buying  of  two  hundred 
and  sixty-six  hogsheads  of  tobacco;  and  on  that  discourse  the  de- 
fendant proposed  to  the  plaintiff  that  the  former  should  sell  and 
deliver  to  the  latter  the  said  two  hundred  and  sixty-six  hogsheads 
[at  a  certain  price]  ;  whereupon  the  plaintiff  desired  the  defendant 
to  give  him  (the  plaintiff)  time  to  agree  to  or  dissent  from  the  pro- 
posal till  the  hour  of  four  in  the  afternoon  of  that  day,  to  which  the 
<ief endant  agreed ;  and  thereupon  the  defendant  proposed  to  the  plain- 
tiff to  sell  and  deliver  the  same  upon  the  terms  aforesaid,  if  the  plain- 
tiff would  agree  to  purchase  them  upon  the  terms  aforesaid,  and  would 
give  notice  thereof  to  the  defendant  before  the  hour  of  four  in  the' 
afternoon  of  that  day;  the  plaintiff  averred  that  he  did  agree  to  pur- 
chase the  same  upon  the  terms  aforesaid,  and  did  give  notice  thereof 
to  the  defendant  before  the  hour  of  four  in  the  afternoon  of  that  day; 
he  also  averred  that  he  requested  the  defendant  to  deliver  to  him  the 
said  hogsheads,  and  offered  to  pay  to  the  defendant  the  said  price 
for  the  same,  yet  that  the  defendant  did  not,  &c. 

A  rule  having  been  obtained  to  show  cause  why  the  judgment  should 
not  be  arrested,  on  the  ground  that  there  was  no  consideration  for 
the  defendant's  promise, 

Erskine  and  Wood  now  showed  cause.  This  was  a  bargain  and  sale 
on  condition ;  and  though  the  plaintiff  might  have  rescinded  the  con- 
tract before  four  o'clock,  yet,  not  having  done  so,  the  condition  was 
complied  with,  and  both  parties  were  bound  by  the  agreement.  The 
declaration  considered  this  as  a  complete  bargain  and  sale;  for  the 
breach  of  the  agreement  is  for  not  delivering  the  tobacco,  and  not  for 
not  selling  it. 

LoED  Kenyon,  Ch.  J.  (stopping  Bearcroft,  who  was  to  have  argued 
in  support  of  the  rule)  :  Nothing  can  be  clearer  than  that,  at  the  time 
of  entering  into  this  contract  the  engagement  was  all  on  one  side ;  the 
other  party  was  not  bound ;  it  was  therefore  nudum  pactum. 

BuLLER,  J.  It  is  impossible  to  support  this  declaration  in  any  point 
of  view.  In  order  to  sustain  a  promise,  there  must  be  either  a  damage 
to  the  plaintiff,  or  an  advantage  to  the  defendant :  but  here  was 
neither  when  the  contract  was  first  made.  Then,  as  to  the  subsequent 
time,  the  promise  can  only  be  supported  on  the  ground  of  a  new  con- 
tract made  at  four  o'clock;  but  there  is  no  pretence  for  that.  It  has 
been  argued  that  this  must  be  taken  to  be  a  complete  sale  from  the 
time  when  the  condition  was  complied  with ;  but  it  was  not  complied 
with,  for  it  is  not  stated  that  the  defendant  did  agree  at  four  o'clock  to 
the  terms  of  the  sale;  or  even  that  the  goods  were  kept  till  that  time. 

Grose,  J.  The  agreement  was  not  binding  on  the  plaintiff  before 
four  o'clock;  and  it  is  not  stated  that  the  parties  came  to  any  subse- 
quent agreement ;  there  is,  therefore,  no  consideration  for  the  promise. 

Rule  absolute? 

'  This  judgment  was  affirmed  in  the  Exchequer  Chamber;  M.  32  Geo.  3.  Head  v. 
Diggon,  3  Man.  &  Ry.  97,  ace.     See  also  Routledge  v.  Grant,  4  Bing.  653. 


4  ADAMS    V.    LINDSELL  [CHAP.    I 

ADAMS  AND  Others  v.  LINDSELL  and  Another 

In  the  King's  Bench,  June  5,  1818 

[^Beported  in  1  Barnewall  &  Alderson,  681] 

Action  for  non-delivery  of  wool  according  to  agreement.  At  the 
trial  at  tlie  last  Lent  Assizes  for  the  county  of  Worcester,  before 
BuEROUGH,  J.,  it  appeared  that  the  defendants,  who  were  dealers  in 
wool  at  St.  Ives,  in  the  county  of  Huntingdon,  had  on  Tuesday,  the 
2d  of  September,  1817,  written  the  following  letter  to  the  plaintiffs, 
who  were  woollen  manufacturers  residing  in  Bromsgrove,  Worcester- 
shire: "We  now  offer  you  eight  hundred  tods  of  wether  fleeces,  of 
a  good  fair  quality  of  our  country  wool,  at  35s.  6d.  per  tod,  to  be 
delivered  at  Leicester,  and  to  be  paid  for  by  two  months'  bill  in  two 
months,  and  to  be  weighed  up  by  your  agent  within  fourteen  days, 
receiving  your  answer  in  course  of  post." 

This  letter  was  misdirected  by  the  defendants  to  Bromsgrove, 
Leicestershire,  in  consequence  of  which  it  was  not  received  by  the 
plaintiffs  in  Worcestershire  till  7  p.m.  on  Friday,  September  5th. 
On  that  evening  the  plaintiffs  wrote  an  answer,  agreeing  to  accept 
the  wool  on  the  terms  proposed.  The  course  of  the  post  between  St. 
Ives  and  Bromsgrove  is  through  London,  and  consequently  this  an- 
swer was  not  received  by  the  defendants  till  Tuesday,  September  9th, 
On  the  Monday,  September  8th,  the  defendants,  not  having,  as  they 
expected,  received  an  answer  on  Sunday,  September  7th  (which,  in 
case  their  letter  had  not  been  misdirected,  would  have  been  in  the 
usual  course  of  the  post),  sold  the  wool  in  question  to  another  person. 
Under  these  circumstances,  the  learned  Judge  held  that,  the  delay 
having  been  occasioned  by  the  neglect  of  the  defendants,  the  jury 
must  take  it  that  the  answer  did  come  back  in  due  course  of  post; 
and  that  then  the  defendants  were  liable  for  the  loss  that  had  been 
sustained :  and  the  plaintiffs  accordingly  recovered  a  verdict. 

Jervis  having  in  Easter  Term  obtained  a  rule  nisi  for  a  new  trial, 
on  the  ground  that  there  was  no  binding  contract  between  the 
parties, 

Dauncey,  Puller,  and  Richardson  showed  cause.  They  contended 
that,  at  the  moment  of  the  acceptance  of  the  offer  of  the  defendants 
by  the  plaintiffs,  the  former  became  bound.  And  that  was  on  Friday 
evening,  when  there  had  been  no  change  of  circumstances.  They 
were  then  stopped  by  the  Court,  who  called  upon 

Jnrvis  and  (himphrJl  in  snpport  of  the  rule.  They  relied  on  Payne 
V.  Cave,  and  more;  particularly  on  Cooke  v.  Oxley.  In  that  .case, 
Oxley,  who  had  proposed  to  sell  goods  to  Cooke,  and  given  him  a 
certain  time,  at  his  rcqnest,  to  determine  wliether  he  Avould  buy  them 
or  not,  was  held  not  Hal)lo  to  the  yxn-fonnaiiee  of  the  contract,  even 
though  Cooke,  within  the  specified  time,  had  determined  to  buy  them, 
and  giv(!n  Oxley  notice  to  that  effect.     So  here  the  defendants  who 


SECT.    l]  NYULASY    V.   ROWAN  5 

have  proposed  by  letter  to  sell  this  wool,  are  not  to  be  held  liable, 
even  though  it  be  now  admitted  that  the  answer  did  come  back  in 
due  course  of  post.  Till  the  plaintiffs'  answer  was  actually  re- 
ceived, there  could  be  no  binding  contract  between  the  parties;  and 
before  then  the  defendants  had  retracted  their  offer  by  selling  the 
wool  to  other  persons.     But 

The  Coubt  said,  that  if  that  were  so,  no  contract  could  ever  be 
completed  by  the  post.  For  if  the  defendants  were  not  bound  by  their 
offer  when  accepted  by  the  plaintiffs  till  the  answer  was  received, 
then  the  plaintiffs  ought  not  to  be  bound  till  after  they  had  received 
the  notification  that  the  defendants  had  received  their  answer  and 
assented  to  it.  And  so  it  might  go  on  ad  infinitum.  The  defendants 
must  be  considered  in  law  as  making,  during  every  instant  of  the 
time  their  letter  was  travelling,  the  same  identical  offer  to  the  plain- 
tiffs; and  then  the  contract  is  completed  by  the  acceptance  of  it  by 
the  latter.  Then  as  to  the  delay  in  notifying  the  acceptance,  that 
arises  entirely  from  the  mistake  of  the  defendants,  and  it  therefore 
must  be  taken  as  against  them  that  the  plaintiffs'  answer  was  re- 
ceived in  course  of  post.  Bule  discharged. 


NYULASY  V.  KOWAIT 

Supreme  Court  of  Victoria^,  May  7-June  23,  1891 

[Beported  in  17  Victorian  Law  Reports,  663] 

HiGiNBOTHAM,  C.  J.  TMs  is  an  appeal  from  a  judgment  of 
MoLEswoRTH,  J.  The  statement  of  claim  contains  three  alternative 
causes  of  action.  The  first  of  these,  for  shares  bargained  and  sold, 
was  abandoned  at  the  hearing.  The  second  was  founded  on  a  verbal 
agreement  alleged  to  have  been  made  by  and  between  the  plaintiff 
and  the  defendant  on  21st  July,  1890,  by  which  it  was  agreed,  in 
consideration,  that  the  plaintiff  would  not  proceed  at  that  time  to  sell 
400  shares,  which  he  held  in  the  Melbourne  Tramway  and  Omnibus 
Company,  at  the  then  market  price,  and  would  not  place  the  shares  at 
that  time  on  the  market  for  sale  at  that  price,  that  the  defendant 
should,  on  being  requested  by  the  plaintiff  so  to  do,  at  any  time  within 
three  months  from  21st  July,  1890,  purchase  from  the  plaintiff  his 
said  400  shares  at  the  price  of  8Z.  each.  The  plaintiff  alleged  per- 
formance of  this  agreement  on  his  part  —  a  request  made  by  him  to 
the  defendant  to  purchase  the  shares  on  or  about  21st  August,  1890, 
and  a  refusal  by  the  defendant  to  purchase.  The  learned  primary 
judge  held  that  this  agreement  was  made  between  the  parties  on  21st 
July,  and  that  it  was  broken  by  the  defendant,  and  he  gave  judgment 
for  the  plaintiff  on  this  claim.  The  third  alternative  cause  of  action 
was  founded  upon  a  verbal  offer  alleged  to  have  been  made  by  the  de- 
fendant to  the  plaintiff  on  or  about  21st  July  to  purchase  the  plain- 
tiff's 400  shares  at  the  price  of  8L  per  share,  such  offer  to  remain  open 


6  NYULASY    V.    ROWAN  [CHAP.    I 

three  months  from  that  date;  acceptance  of  the  offer  by  the  plaintiff 
on  or  about  21st  August,  within  the  three  months,  and  while  the  de- 
fendant's offer  was  still  open  and  unretracted,  and  refusal  by  the 
defendant  to  accept  the  shares.  The  learned  judge  found  that  the 
plaintiff  had  established  by  proof  this  claim  as  well  as  the  second, 
and  he  gave  judgment  on  it  for  the  plaintiff. 

The  defendant  now  appeals  against  this  judgment  on  both 
grounds.  With  regard  to  the  second  ground  of  claim'  it  has  been  con- 
tended that  there  was  no  agreement  between  the  parties  on  21st  July, 
as  there  was  no  consideration  for  the  promise  which  it  was  admitted 
the  defendant  gave  on  that  day.  The  plaintiff's  answer  to  this  argu- 
ment is  that  there  is  evidence  of  a  request  then  made  by  the  defend- 
ant that  the  plaintiff  should  not  immediately  sell  his  shares  or  place 
them  on  the  market,  and  that  such  request,  if  complied  with  by  the 
plaintiff,  was  a  good  consideration  for  the  defendant's  promise. 
Crears  v.  Hunter.^  The  question,  then,  that  is  raised  upon  this 
part  of  the  case  is  whether  there  was  any  evidence  upon  which  the 
judge  might  reasonably  act,  that  the  defendant  did  at  that  time 
really,  and  not  by  way  of  banter  only,^  request  the  plaintiff  not  to 
sell  his  shares  or  place  them  on  the  market.  We  are  of  opinion  that 
there  was  such  evidence.  The  defendant's  answer  to  the  whole  claim 
of  the  plaintiff  was  that,  having  been  asked  by  a  friend  of  the  plain- 
tiff, who  was  anxious  and  distressed  by  the  falling  state  of  the 
market,  to  comfort  the  plaintiff,  he  spoke  to  the  plaintiff  jocularly 
only,  intending  to  comfort  him,  and  that  he  gave  him  an  unreal  and 
false  promise  without  intending  to  perform  it.  The  defendant,  how- 
ever, admits  that  the  plaintiff  did  not  seem  to  take  his  words  of 
comfort  as  a  joke.  Now,  the  judge  has  found  upon  evidence  amply 
sufficient  that  this  defence  is  untrue,  that  the  defendant  spoke  to  the 
plaintiff,  not  in  joke,  but  in  earnest,  and  influenced  by  a  desire  to 
protect  the  stock  of  which  he  was  a  large  holder  himself.  Then, 
as  regards  a  request,  the  plaintiff  swore  that  the  defendant  said  to 
him  on  2l8t  July:  'T)on't  be  foolish  to  sell  now  and  lose  money." 
The  defendant,  in  answer  to  an  interrogatory,  stated  that  he  did  not, 
to  the  best  of  his  knowledge,  information,  or  belief,  say  to  the  plain- 
tiff: "Your  trams  are  all  right;  don't  be  so  foolish  as  to  sell  them 
at  a  loss ;"  but  he  admits  that  he  may  have  used  words  to  that  effect. 
Now,  assuming,  as  we  are  bound  to  do,  that  the  defendant  spoke  at 
this  conversation  seriously,  and  that  he  was  using  the  opportunity 
then  represented  to  him  to  make  in  his  own  interest  and  for  his  own 
advantage  a  hnna  fide  offer  to  the  plaintiff,  who  accepted  his  words 

>  10  Q.  B.  D.  341. 

'  Kcllir  71.  TToldcrrrmn,  11  Mich.  248,  was  an  action  on  a  check  given  for  a  silver 
wfitfh.  'I'hf-  trial  jtkIk''  foiiiif]  "tho  whole  transaction  was  a  frolic  and  banter  —  the 
I)lainti(T  iif)t,  fxix'ctiim  to  sell,  nor  th(?  defendant  intending  to  buy  the  watch  at  the 
mirri  frjr  wliieh  the  elieek  was  drawn,"  but  held  the  defendant  liable.  The  Supreme 
Court  reverwd  thin  judKnu-nt  on  tho  pcround  that  "no  coTitraet  was  ever  made  by  the 
parties."  MefMurn  v.  Terry,  21  N.  .1.  Eq.  225;  Bruce  v.  Bishop,  4.3  Vt.  161,  ace.  Cf. 
Deitriek  r.  Hinnott  (la.)  179  N.  W.424;    Armstrongs.  McGhoe,  Add.  (Pa.)  261. 


SECT.    l]  NYULASY    V.    ROWAN  7 

seriously,  what  is  the  meaning  that  should  be  given  to  these  words, 
or  Avords  to  the  like  effect  then  uttered  by  the  defendant?  The  judge 
has  found  that  forbearance  by  the  plaintiff  to  sell  his  shares  was  on 
account  of  an  implied,  though  perhaps  not  an  express,  request  by  the 
defendant.  I  should  be  inclined  to  say  that  these  words  might  be 
taken  to  convey  an  express  request  by  the  plaintiff  not  to  sell. 
"We  are  of  opinion  that  they  are  evidence,  either  express  or  by  im- 
plication, of  such  a  request;  that  the  judge  was  justified  in  con- 
cluding that  a  request  was  made  by  the  defendant,  and  that  it  was 
in  consequence  of  such  request  that  the  plaintiff  forbore  to  sell 
his  shares.  The  judgement,  therefore,  cannot  be  disturbed  on  this 
ground. 

With  respect  to  the  third  alternative  ground  of  action,  it  has  been 
contended,  for  the  defendant,  that  there  must  be  consideration  for 
a  continuing  offer  of  this  kind,  that  the  plaintiff  did  not  accept  the 
offer  at  the  time  it  was  made,  and  that  when  he  did  accept  it  the  de- 
fendant had  changed  his  mind;  so  that,  treating  the  transaction  of 
21st  July  as  an  offer  only  and  not  as  a  contract,  the  parties  never 
were  ad  idem,  and  no  contract  was  entered  into  between  them  subse- 
quently to  21st  July.  In  support  of  this  view,  Cooke  v.  Oxley^ 
was  relied  on.  The  effect  and  the  authority  of  that  case  have  been 
the  subject  of  some  controversy  which  is  still  unsettled.  See  Ben- 
jamin on  Sales  (4th.  ed.),  p.  69;  Pollock  on  Principles  of  Contract 
(5th  ed.),  p.  25,  note.  Cooke  v.  Oxley,^  which  was  decided  on  a 
motion  in  arrest  of  judgment,  may  be  supported  on  the  ground 
that  the  declaration  did  not  aver  that  the  defendant  actually  left 
the  offer  open  until  the  hour  named,  but  only  that  he  promised  to 
do  so.-  But  if  Cooke  ik  0x1  ey  is  to  be  supported  upon  this  ground 
of  pleading,  it  would  not  govern  the  present  case,  where  it  is  alleged 
in  the  statement  of  claim  and  proved  in  evidence,  that  the  'plaintiff 
by  letter  accepted  the  offer  while  it  was  still  open  and  unretracted. 
Unless,  therefore,  there  is  some  distinction  to  be  drawn  between  an 
offer  by  letter  or  telegram  and  an  offer  by  word  of  mouth,  and  we 
are  not  aware  of  any  reason  or  authority  for  such  a  distinction;  see 
per  Lush,  J.,  in  Stevenson  v.  McLean;^  the  present  case  comes 
within  the  artificial  but  convenient  explanatory  rule  laid  down  in 
Adams  v.  Lindsell,*  and  the  offer  of  the  defendant  on  21st  July, 
unsupported  by  any  consideration,  must  be  considered  in  law  as 
having  been  made  by  the  defendant  during  every  instant  of  the  in- 
tervening time  until  19th  August,  when  a  contract  was  made  be- 
tween the  parties  by  the  plaintiff's  letter,  accepting  the  offer  and 
tendering  his  shares  to  the  defendant.    The  defendant  has  failed,  in 

1    Ante,  p.  2. 

*  "The  offer  was  not  limited  in  time,  and  the  presumption  is,  that  it  was  open  on 
the  fifth  day  after  it  was  made,  nothing  to  the  contrary  appearing.  The  revocation 
of  it,  if  it  had  been  revoked,  was  matter  of  defence."  Wilson  v.  Stump,  103  Cal.  255, 
258.    See  also.  Quick  v.  Wheeler,  78  N.  Y.  300. 

»  5  Q.  B.  D.  351.  *  Ante,  p.  4. 


8  SPENCER    V.    HARDING  [CHAP.   I 

our  opinion,  on  this  ground  also  to  show  that  the  judgment  was 
wrong.  The  appeal  will  he  dismissed  with  costs. 


SPEl^CEK  A^-D   Another   v.    HARDIN'G    and   Others 

In  the  Common  Pleas,  June  29,  1870 
^Reported  in  Law  Reports,  5  Common  Pleas,  561] 

The  second  count  of  the  declaration  stated  that  the  defendants  by 
their  agents  issued  to  the  plaintiffs  and  other  persons  engaged  in  the 
wholesale  trade  a  circular  in  the  words  and  figures  following;  that 
is  to  say,  "28  King  Street,  Cheapside,  May  17th,  1869.  We  are 
instructed  to  oifer  to  the  wholesale  trade  for  sale  by  tender  the  stock 
in  trade  of  Messrs.  G.  Eilbeck  &  Co.,  of  JSTo.  1  Milk  Street,  amount- 
ing as  per  stock-book  to  2,503L  13s.  Id.,  and  which  will  be  sold  at 
a  discount  in  one  lot.  Payment  to  be  made  in  cash.  The  stock 
may  be  viewed  on  the  premises,  Wo.  1  Milk  Street,  up  to  Thursday, 
the  20th  instant,  on  which  day,  at  12  o'clock  at  noon  precisely,  the 
tenders  will  be  received  and  opened  at  our  offices.  Should  you 
tender  and  not  attend  the  sale,  please  address  to  us,  sealed  and  in- 
closed, 'Tender  for  Eilbeck's  stock.'  Stock-books  may  be  had  at 
our  office  on  Tuesday  morning.  Honey,  Humphreys  &  Co."  Arid 
the  defendants  offered  and  undertook  to  sell  the  said  stock  to  the 
highest  bidder  for  cash,  and  to  receive  and  open  the  tenders  de- 
livered to  them  or  their  agents  in  that  behalf,  according  to  the  true 
intent  and  meaning  of  the  said  circular.  And  the  plaintiffs  there- 
upon sent  to  the  said  agents  of  the  defendants  a  tender  for  the  said 
goods,  in  accordance  with  the  said  circular,  and  also  attended  the 
said  sale  at  the  time  and  place  named  in  the  said  circular.  And 
the  said  tender  of  the  plaintiffs  was  the  highest  tender  received  by 
the  defendants  or  their  agents  in  that  behalf.  And  the  plaintiffs 
were  ready  and  willing  to  pay  for  the  said  goods  according  to  the 
true  intent  and  meaning  of  the  said  circular.  And  all  conditions 
were  performed,  etc.,  to  entitle  the  plaintiffs  to  have  their  said 
tender  accepted  by  the  defendants,  and  to  be  declared  the  pur- 
chasers of  the  said  goods  according  to  the  true  intent  and  meaning; 
of  the  said  circular;  yet  the  (Icfc^ndants  refused  to  accept  the  said 
tcri'Icr  ()\  the  ])la]iititfs,  and  refused  to  sell  the  said  goods  to  the  plain- 
tiffs, and  rcfus(;(l  to  open  the  said  tender  or  proceed  with  the  sale 
of  the  said  goods,  in  accordance  with  their  said  offer  and  undertak- 
ing in  that  bfhiilf,  whereby  the  plaintiffs  had  been  deprived  of 
profit,  etc. 

Demurrer,  on  the  ground  that  the  count  showed  no  promise  to  ac- 
cept the  plaintiffs'  tender  or  sell  them  the  goods.    Joinder. 

JJnll,  in  supj)ort  of  the  demurrer. 

Morgan  Lloyd,  contra. 


f  \ 


SECT.    l]  SPENCER    V.    HARDING  9 

WiLLES,  J.  I  aBi  of  opinion  that  the  defendants  are  entitled  to 
judgment.  The  action  is  brought  against  persons  who  issued  a  cir- 
cular offering  a  stock  for  sale  by  tender,  to  be  sold  at  a  discount 
in  one  lot.  The  plaintiffs  sent  in  a  tender  which  turned  out  to  be 
the  highest,  but  which  was  not  accepted.  They  now  insist  that  the 
circular  amounts  to  a  contract  or  promise  to  sell  the  goods  to  the 
highest  bidder,  —  that  is,  in  this  case,  to  the  person  who  should 
tender  for  them  at  the  smallest  rate  of  discount;  and  reliance  is 
placed  on  the  eases  as  to  rewards  offered  for  the  discovery  of  an 
offender.  In  those  cases,  however,  there  never  was  any  doubt  that 
the  advertisement  amounted  to  a  promise  to  pay  the  money  to  the 
person  who  first  gave  information.  The  difficulty  suggested  was 
that  it  was  a  contract  with  all  the  world.  But  that,  of  course,  was 
soon  overruled.  It  was  an  offer  to  become  liable  to  any  person  who, 
before  the  offer  should  be  retracted,  should  happen  to  be  the  per- 
son to  fulfil  the  contract  of  which  the  advertisement  was  an  offer  or 
tender.  That  is  not  the  sort  of  difficulty  which  presents  itself  here. 
If  the  circular  had  gone  on  "and  we  undertake  to  sell  to  the  highest 
bidder,"  the  reward  cases  would  have  applied,  and  there  would  have 
been  a  good  contract  in  respect  of  the  persons.^  But  the  question 
is,  whether  there  is  here  any  offer  to  enter  into  a  contract  at  all, 
or  whether  the  circular  amounts  to  anything  more  than  a  mere  proc- 
lamation that  the  defendants  are  ready  to  chaffer  for  the  sale  of  the 
goods,  and  to  receive  offers  for  the  purchase  of  them.  In  advertise- 
ments for  tenders  for  buildings  it  is  not  usual  to  say  that  the  con- 
tract will  be  given  to  the  lowest  bidder,  and  it  is  not  always  that  the 
contract  is  made  with  the  lowest  bidder.  Here  there  is  a  total  ab- 
sence of  any  words  to  intimate  that  the  highest  bidder  is  to  be  the 
purchaser.  It  is  a  mere  attempt  to  ascertain  whether  an  offer  can 
be  obtained  within  such  a  margin  as  the  sellers  are  willing  to  adopt. 

Keating  and  Montague  Smith,  JJ.,  concurred. 

Judgment  for  the  defendants.' 

1  See  Warlow  v.  Harrison,  1  E.  &  E.  295;  Mainprice  v.  Westley,  6  B.  &  S.  420; 
Harris  v.  Nickerson,  L.  R.  8  Q.  B.  286;  South  Hetton  Coal  Co.  v.  Haswell,  [1898]  1  Ch. 
465;  Johnston  v.  Boyes,  [1899]  2  Ch.  73;  Tillman  v.  Dunman,  114  Ga.  406;  McNeil 
V.  Boston  Chamber  of  Commerce,  154  Mass.  277;   57  L.  R.  A.  note. 

^  In  Rooke  v.  Dawson  [1895]  1  Ch.  480,  the  announcement  of  an  examination  lor  a 
scholarship  was  held  not  to  amount  to  an  offer  to  award  the  scholarship  to  such  appli- 
cant as  should  fulfil  the  requirements  of  the  trust  deed  under  which  the  scholarship. 
fund  was  held.     Compare  Neidermeyer  v.  Univ.  of  Missouri,  61  Mo.  App.  654. 


1(J  SANDERS    V.   POTTLITZER   CO.  [CHAP.    I 

ARCHIE  D.  SAI^DERS  et  al.,  Appellants,  v.  POTTLITZER 
BROS.  FRUIT   COMPANY,  Respondent 

New  Yoek  Coukt  of  Appeals,  December  7-18,  1894 

[Reported  in  144  New  York,  209] 

O'Beien  J.  The  plaintiffs  in  this  action  sought  to  recover 
damages  for  the  breach  of  a  contract  for  the  sale  and  delivery  of  a 
quantity  of  apples.  The  complaint  was  dismissed  by  the  referee 
and  his  judgment  was  affirmed  upon  appeal.  The  only  question  to 
be  considered  is  whether  the  contract  stated  in  the  complaint,  as  the 
basis  for  damages,  was  ever  in  fact  made  so  as  to  become  bind- 
ing upon  the  parties.  On  the  28th  of  October,  1891,  the  plaintiffs 
submitted  to  the  defendant  the  following  proposition  in  writing: 

"Buffalo,  N.  Y.,  Oct.  28,  1891. 
"Messrs.  Pottlitzer  Bros.  Fruit  Co.,  Lafayette,  Ind.: 

"  Gentlemen,  —  We  offer  you  ten  carloads  of  apples  to  be  from  175  to  200  barrels 
per  car,  put  up  in  good  order,  from  stock  inspected  by  your  Mr.  Leo  Pottlitzer  at 
Nunda  and  Silver  Springs.  The  apples  not  to  exceed  one-half  green  fruit,  balance 
red  fruit,  to  be  shipped  as  follows:  — 

"First  car  between  1st  and  15th  December,  1891. 

"Second  car  between  15th  ,and  30th  December,  1891,  and  one  car  each  ten  days 
after  January  1,  1892,  until  all  are  shipped.  Dates  above  specified  to  be  considered 
as  approximate  a  few  days  either  way,  at  the  price  of  $2.00jper  barrel,  free  on  board 
cars  at  Silver  Springs  and  Nunda,  in  refrigerator  cars,  this  proposition  to  be  accepted 
not  later  than  the  31st  inst.,  and  you  to  pay  us  $500  upon  acceptance  of  the  proposi- 
tion, to  be  deducted  from  the  purchase  price  of  apples  at  the  rate  of  $100  per  car  on 
the  last  five  cars. 

"Yours  respectfully,  ''J.  Sanders  &  Son." 

To  this  proposition  the  defendant  replied  by  telegraph  on  October 
31st  as  follows: — 

"Lafayette,  Ind.,  31st  October. 
"J.  Sanders  &  Son: 

"We  accept  your  proposition  on  apples,  provided  you  will  change  it  to  read  'car 
every  eight  days  from  January  first,  none  in  December;'    wire  acceptance. 

"Pottlitzer  Bros.  Fruit  Co." 

On  the  same  day  the  plaintiffs  replied  to  this  despatch  to  the  effect 
that  they  could  not  accept  the  modification  proposed,  but  must  in- 
sist upon  the  original  offer.  On  the  same  day  the  defendant  an- 
swered the  plaintiffs'  telegram  as  follows :  — 

"Can  only  accept  condition  as  stated  in  last  message.  Only  way  wc  can  accept. 
AnBwer  if  accepted.     Mail  contract  and  wc  will  then  forward  draft. 

"Pottlitzer  liRos.  Fruit  Co." 

The  mattcT  thus  rested  till  November  4,  when  the  plaintiffs  re- 
ceived the  following  lf;tter  from  the  defendant:  — 

"Lafayette,  Ind.,  November  2,  1891. 
"J.  Sanders  (fe  Son,  Stafford,  N.  Y.: 

"Gents,  —  W(-  arc  in  receipt  of  your  telcgr.ams,  also  your  favor  of  the  31st  ult. 
Whiir;  we  no  doubt  think  wc  liavc^  offrTcd  you  a  fair  contract  on  apples,  still  the  dic- 
tator of  this  huh  if;arncd  on  hin  return  homo  that  thtsro  arc  so  many  near-by  apples 
coming  into  market  that  it  will  affect  the  sale  of  apples  in  December,  and,  therefore, 


SECT.    l]  SANDERS    V.    POTTLITZER   CO.  11 

we  do  not  think  it  advisable  to  take  the  contract  unless  you  made  it  read  for  shipment 
from  the  1st  of  January.  We  are  very  sorry  you  cannot  do  this,  but  perhaps  we  will 
be  able  to  take  some  fruit  from  you,  as  we  will  need  it  in  the  spring.  If  you  can  change 
the  contract  so  as  to  read  as  we  wired  you  we  will  accept  it  and  forward  you  draft  in 
payment  on  same.  "Poti'litzer  Fruit  Co."  ,.. 

On  receipt  of  this  letter  the  plaintiffs  sent  the  following  message 
to  the  defendant  by  telegraph :  — 

"November  4th. 
"PoTTLiTZER  BROTHERS  Fruit  Company,  Lafayette,  Ind.: 

"Letter  received.     Will  accept  conditions.     If  satisfactory,  answer  and  will  for- 
•ward  contract.  "J-  Sanders  &  Son." 

The  defendant  replied  to  this  message  by  telegraph  saying:  "All 
right,  send  contract  as  stated  in  our  message."  The  plaintiffs  did 
prepare  and  send  on  the  contract  precisely  in  the  terms  embraced  in 
the  foregoing  correspondence,  which  was  the  original  proposition 
made  by  the  plaintiffs,  as  modified  by  defendant's  telegram  above 
set  forth,  and  which  was  acceded  to  by  the  plaintiffs.  This  was  not 
satisfactory  to  the  defendant,  and  it  returned  it  to  the  plaintiffs 
with  certain  modifications,  which  were  not  referred  to  in  the  cor- 
respondence. These  modifications  were:  (1)  That  the  fruit  should 
be  well  protected  from  frost  and  well  hayed;  (2)  that  if,  in  the  judg- 
ment of  the  plaintiffs,  it  was  necessary  or  prudent  that  the  cars 
should  be  fired  through,  the  plaintiffs  should  furnish  the  stoves  for 
the  purpose,  and  the  defendant  pay  the  expense  of  the  man  to  be 
employed  in  looking  after  the  fires  to  be  kept  in  the  cars;  (3)  that 
the  plaintiffs  should  line  the  cars  in  which  the  fruit  was  shipped. 
These  conditions  Avere  more  burdensome  and  rendered  the  contract 
less  profitable  to  the  plaintiffs.  They  were  not  expressed  in  the  cor- 
respondence and  I  think  cannot  be  implied.  They  were  not  assented 
to  by  the  plaintiffs,  and  on  their  declining  to  incorporate  them  in 
the  paper  the  defendant  treated  the  negotiations  as  at  an  end  and 
notified  the  plaintiffs  that  it  had  placed  its  order  with  other  parties. 
There  was  some  further  correspondence,  but  it  is  not  material  to  the 
question  presented  by  the  appeal.  The  writings  and  telegrams  that 
passed  between  the  parties  contain  all  the  elements  of  a  complete'^ 
contract.  jSTothing  was  wanting  in  the  plaintiff's'  original  proposi- 
tion but  the  defendant's  assent  to  it  in  order  to  constitute  a  contract 
binding  upon  both  parties  according  to  its  terms.  This  assent  was 
given  upon  condition  that  a  certain  specified  modification  was  ac- 
cepted. The  plaintiffs  finally  assented  to  the  modification  and  called 
upon  the  defendant  to  signify  its  assent  again  to  the  whole  arrange- 
ment as  thus  modified,  and  it  replied  that  it  was  "all  right,"  which 
must  be  taken  as  conclusive  evidence  that  the  minds  of  the  parties  had 
met  and  agreed  upon  certain  specified  and  distinct  obligations  which 
were  to  be  observed  by  both.  It  is  true,  as  found  by  the  learned 
referee,  that  the  parties  intended  that  the  agreement  should  be  for- 
mally expressed  in  a  single  paper  which,  when  signed,  should  be  the 
evidence  of  what  had  already  been  agreed  upon.     But  neither  party 


12  SANDERS    V.    POTTLITZER   CO.  [CHAP.   I 

was  entitled  to  insert  in  the  paper  any  material  condition  not  referred 
to  in  the  correspondence,  and  if  it  was  inserted  without  the  consent 
of  the  other  party,  it  was  unauthorized.     Hence  the  defendant,  by 
insisting  upon  further  material  conditions  not  expressed  or  implied 
in  the  correspondence,  defeated  the  intention  to  reduce  the  agree- 
ment to  the  form  of  a  single  paper  signed  by  both  parties.     The 
plaintiffs  then  had  the  right  to  fall  back  upon  their  written  proposi- 
tion as  originally  made  and  the  subsequent  letters  and  telegrams, 
and  if  they  constituted  a  contract  of  themselves  the  absence  of  the 
formal   agreement   contemplated   was   not   under   the   circumstances 
.  I  material.     When  the  parties  intend  that  a  mere  verbal  agreement 
y***'^  shall  be  finally  reduced  to  writing  as  the  evidence  of  the  terms  of 
the  contract,  it  may  be  true  that  nothing  is  binding  upon  either 
^^'-'^flparty  until  the  writing  is  executed. 

r-p^-*"*^    But  here  the  contract  was  already  in  writing,  and  it  was  none  the 
less  obligatory  upon  both  parties  because  they  intended  that  it  should 
^        be  put  into'  another  form,  especially  when  their  intention  is  made 
'""^       impossible  by  the  act  of  one  or  the  other  of  the  parties  by  insisting 
I    .       upon  the  insertion  of  conditions  and  provisions  not  contemplated 
or  embraced  in  the  correspondence.    Vassar  v.  Camp,  11  N.  Y.  441; 
Brown  v.  Norton,  50  Hun,  248 ;  Pratt  v.  H.  E.  E.  E.  Co.,  21  :N".  Y. 
308.     The  principle  that  governs  in  such  cases  was  clearly  stated 
by  Judge  Selden  in  the  case  last  cited  in  these  words:  "A  contract 
to  make  and  execute  a  certain  written  agreement,  the  terms  of  which 
are  mutually  understood   and   agreed  upon,  is,   in  all  respects,   as 
valid   and   obligatory,   where   no   statutory   objection   interposes,   as 
the  written  contract  itself  would  be,  if  executed.     If,  therefore,  it 
should  appear  that  the  minds  of  the  parties  had  met ;  that  a  proposi- 
tion for  a  contract  had  been  made  by  one  party  and  accepted  by  the 
other;  that  the  terms  of  this  contract  were  in  all  respects  definitely 
understood  and  agreed  upon,  and  that  a  part  of  the  mutual  under- 
'standing  was,  that  a  written  contract,  embodying  these  terms,  should 
be  drawn  and  executed  by  the  respective  parties,  this  is  an  obliga- 
tory contract,  which  neither  party  is  at  liberty  to  refuse  to  perform." 
In  this  case  it  is  apparent  that  the  minds  of  the  parties  met 
through  the  correspondence  upon  all  the  terms  as  well  as  the  subject- 
matter  of  the  contract,  and  that  the  subsequent  failure  to  reduce  this 
contract  to  the  precise  form  intended,  for  the  reason  stated,  did  not 
affect  the  obligations  of  either  party,  which  had  already  attached, 
and  they  may  now  resort  to  the  primary  evidence  of  tbeir  mutual 
stipulations.    Any  other  rule  would  always  permit  a  party  Avho  has 
entered  into  a  contract  like  this  through  letters  and  telegraphic  mes- 
8ag(!S  to  violate;  it  wluniever  the  understanding  was  that  it  should  be 
reduced   to  iuiotluir  written  form,  by  simply  suggesting  other  and 
additional  t(!rni9  and  conditions.     If  this  Avere  the  rule  the  contract 
would  never  be  completed  in  cases  where  by  changes  in  the  market 
or  other  events  occurring  subsequent  to  the  written  negotiations  it 


SECT.    l]  SANDERS    V.    POTTLITZER   CO.  13 

became  the  interest  of  either  party  to  adopt  that  course  in  order  to 
escape  or  evade  obligations  incurred  in  the  ordinary  course  of  com- 
mercial business.  A  stipulation  to  reduce  a  valid  written  contract  to 
some  other  form  cannot  be  used  for  the  purpose  of  imposing  upon 
either  party  additional  burdens  or  obligations  or  of  evading  the 
performance  of  those  things  which  the  parties  have  mutually  agreed 
upon  by  such  means  as  made  the  promise  or  assent  binding  in  law. 
There  was  no  proof  of  any  custom  existing  between  the  shippers 
and  consignees  of  such  property  in  regard  to  the  payment  of  the 
expense  of  firing,  lining,  and  haying  of  cars.  If  it  be  said  that 
such  precautions  are  necessary  in  order  to  protect  the  property  while 
in  transit,  that  does  not  help  the  defendant.  The  question  still 
remains,  who  was  to  bear  the  expense  ?  The  plaintiffs  had  not  agreed 
to  pay  it  any  more  than  they  had  agreed  to  pay  the  freight  or  incur 
the  other  expenses  of '  transportation.  The  plaintiffs  sent  a  plain 
proposition  which  the  defendant  accepted  without  any  such  condi- 
tions as  it  subsequently  sought  to  attach  to  it.  That  the  parties 
intended  to  make  and  sign  a  final  paper  does  not  warrant  the  infer- 
ence that  they  also  intended  to  make  another  and  different  agree- 
ment. The  defendant  is  in  no  better  position  than  it  would  be  in 
case  it  had  refused  to  sign  the  final  writing  without  alleging  any 
reasons  whatever.  The  principle,  therefore,  which  is  involved  in  the 
case  is  this,  Can  parties  who  have  exchanged  letters  and  telegrams 
with  a  view  to  an  agreement,  and  have  arrived  at  a  point  where  a 
clear  and  definite  proposition  is  made  on  the  one  side  and  accepted 
on  the  other,  with  an  understanding  that  the  agreement  shall  be 
expressed  in  a  formal  writing,  ever  be  bound  until  that  writing  is 
signed  ?  If  they  are  at  liberty  to  repudiate  the  proposition  or  accept- 
ance, as  the  case  may  be,  at  any  time  before  the  paper  is  signed,  and  as 
the  market  may  go  up  or  down,  then  this  case  is  well  decided.  But  if 
at  the  close  of  the  correspondence  the  plaintiffs  became  bound  by  their 
offer  and  the  defendant  by  its  acceptance  of  that  offer,  whether  the 
final  writing  was  signed  or  not,  as  I  think  they  did,  under  such  cir- 
cumstances as  the  record  discloses,  then  the  conclusion  of  the  learned 
referee  was  erroneous.  To  allow  either  party  to  repudiate  the  obliga- 
tions clearly  expressed  in  the  correspondence,  unless  the  other  will 
assent  to  material  conditions,  not  before  referred  to,  or  to  be  implied 
from  the  transaction,  would  be  introducing  an  element  of  great  con- 
fusion and  uncertainty  into  the  law  of  contracts.  If  the  parties  did 
not  become  bound  in  this  case,  they  cannot  be  bound  in  any  case 
until  the  writing  is  executed. 

The  judgment  should  be  reversed  and  a  new  trial  granted,  costs 
to  abide  the  event. 

All  concur,  except  Earl,  Gray,  and  Bartlett,  JJ.,  dissenting. 

Judgment  reversed} 

^  In  the  following  cases  it  was  held  that  there  was  a  contract,  though  it  was  agreed 
that  a  written  contract  should  be  subsequently  prepared.  Bonnewell  v.  Jenkins,  8  Ch. 


14  DONNELLY    V.    THE    CURRIE    HARDWARE    CO.       [CHAP.    I 

DANIEL    R.    DONNELLY,    Defendant    in    Ekeor,    v.     THE 
CUREIE  HARDWARE  COMPANY,  Plaintiff  in  Error 

New  Jersey  Supreme  Court,  February  27-June  10,  1901. 

[Reported  in  66  New  Jersey  Law,  388.] 

Dixon,  J.  The  plaintiff,  being  about  to  bid  for  a  contract  to- 
build  a  music  pavilion  in  Atlantic  City,  submitted  the  plans  and 
specifications  to  the  defendant  for  an  estimate  as  to  the  price  at 
which  the  latter  would  do  the  metal  work  required,  and  on  March 
31st,  1899,  received  a  letter  from  the  defendant  saying  that  it  would 
do  the  work  for  $2,650.  Accordingly  the  plaintiff  put  in  his  bid 
for  the  construction  of  the  building,  and,  after  the  making  of  some 
changes,  not  affecting  the  metal  work,  the  job  was  awarded  to  him 
and  the  contract  was  signed  on  April  5th,  1899.  During  the  next 
morning  the  plaintiff  telephoned  to  the  defendant's  manager  that  he 
had  signed  a  contract  for  the  building,  and  would  be  prepared  to 
sign  a  written  contract  with  the  defendant  at  four  o'clock  that  after- 
noon, to  which  the  manager  answered  "all  right."  Shortly  before- 
that  hour  the  plaintiff  telephoned  to  the  manager  that  he  had  not  had 
time  to  prepare  the  contract,  and  would  sign  it  in  the  morning,  to 
which  the  manager  again  replied  "all  right."  The  next  morning  the 
plaintiff  called  on  the  manager,  and  the  latter  informed  the  plaintiff 
that  the  defendant  would  be  unable  to  perform  the  work  in  the  time 
agreed  upon  by  the  plaintiff,  and  had  not  room  to  do  the  work  so 
quickly,  and  refused  to  sign  the  proposed  contract.  Afterwards 
the  plaintiff  was  compelled  to  pay  a  higher  price  for  the  metal  work, 
«ind  brought  this  suit  for  breach  of  contract.  On  this  state  of  facts, 
shown  by  the  plaintiff's  evidence,  the  defendant  moved  for  a  nonsuit 
and  for  direction  of  a  verdict  in  favor  of  defendant.  These  motions 
being  overruled,  exceptions  were  sealed. 

The  case  is  governed  by  the  rule  established  in  Water  Commis- 
sioners V.  Brown,  3  Vroom,  504,  510,  where  Mr.  Justice  Elmer, 
speaking  for  the  Court  of  Errors,  said  :  "If  it  appears  that  the  parties, 
.ilthongh  they  have  agreed  on  all  the  terms  of  their  contract,  mean 
to  have  them  reduced  to  writing  and  signed  before  the  bargain  shall 
be  considered  as  complete,  neither  party  will  be  bound  until  that  is 
done,  80  long  as  the  contract  remains  without  any  acts  done  under 
it  on  f'itlKT  side."  Tlie  conversations  over  the  telephone  between 
the  plaintiff  and  the  defendant's  manager,  as  well  as  the  testimony 
of  the  plaintiff  himself,  make  it  clear  that  a  written  contract  was 
expected  by  botli  pnrtios.    Indeed,  it  cannot  reasonably  be  determined 

D.  70,  73:  BoltoFi  V.  Liunhrrt,  41  Ch.  D.  29.5;  Boll  v.  Offutt,  10  Bush,  6.S2;  Montague 
V.  W<il,  :W  Lji.  Ann.  r,U;  Allen  v.  C^honicau,  102  Mo.  309;  Green  v.  Cole  (Mo.),  24 
B.  W.  B.T).  lO-^iK;  Wharton  v.  StouU^nhurKh,  35  N.  .1.  Eq.  200;  Blaney  v.  Hoke,  14 
Ohio  Ht.  292;  Mfir-key  r.  Mackcy'H  Adm.  29  Gratt.  158;  Paige  v.  Fullerton  Woolen 
Co.,  27  Vt.  485;  Lawrence  v.  Milwaukee  &c.  Ry.  Co.,  84  Wia.  427;  Cohn  v.  Plumer., 
«8  WiH.  022. 


SECtT  I]        JOHNSTON   BROTHERS  V.    ROGERS   BROTHERS  15  ^.^rt, 

that  the  parties  had  agreed  upon  all  the  matters  which  they  would  *^    ^ 
expect  to  have  included  in  their  bargain,  for  the  time  allowed  for  ^— ^«4. 
the  beginning  and  completion  of  the  work  and  the  mode  of  payment  ^   ^^ 
are  generally  provided  for  expressly  in  such  arrangements,  and  on  ^     j 
these  points  their  negotiations  had  been  silent,  awaiting  probably  the^, 
outcome  of  the  plaintiff's  proposal  for  the  erection  of  the  building.  **** 

We  therefore  think  that  no  contract  was  made  by  the  defendant,  /^  A* 
and  that  the  motions  mentioned  should  have  prevailed.  /**  yVi«~»<L^ 

The  judgment  is  reversed.^  ^nji  <^ 


JOHNSTON  BKOTHEKS  v.   KOGEES  BEOTHERS 

Ontario  High  Court  of  Justice,  February  2,  1899 

[Reported  in  30  Ontario,  150] 

An  appeal  by  the  defendants  from  the  judgment  of  William 
Elliott,  senior  Judge  of  the  County  Court  of  Middlesex,  in  favour 
of  the  plaintiffs  in  an  action  in  that  Court,  the  facts  of  which  are 
fully  set  out  in  the  following  [portion  of  the]  opinion  delivered  by 
that  Judge :  — 

The  plaintiffs  are  bakers,  and  seek  to  recover  damages  from  the 
defendants  for  breach  of  a  contract  for  the  sale  and  delivery  of  a 
quantity  of  flour. 

The  following  letter  is  the  basis  of  the  plaintiffs'  claim :  — 

"Toronto,  April  26,  1898. 

"Dear  Sir,  —  We  wish  to  secure  your  patronage,  and,  as  we  have  found  the 
only  proper  way  to  get  a  customer  is  to  save  him  money,  we  therefore  are  going  to 
endeavor  to  save  you  money. 

"It  ia  hardly  prudent  for  us  to  push  the  sale  of  flour  just  now,  as  prices  are  sure 


^  In  the  following  cases  it  was  held  that  no  contract  existed  until  the  execution  of 
a  written  contract,  the  signing  of  which  was  one  of  the  terms  of  a  previous  agreement. 
Ridgwayj).  Wharton,  6  H.  L.  C.  238,  264,  268,  305;  Chinnock  v.  Marchioness  of  Ely 
4  De  G.  J.  &  S.  638,  646;  Winn  v.  Bull,  7  Ch.  D.  29;  Spinney  v.  Downing,  108  Cal. 
666;  Fredericks  v.  Fasnacht,  30  La.  Ann.  117;  Ferre  Canal  Co.  v.  Burgin,  106  La.  309; 
Mississippi,  &c.  S.  S.  Co.  v.  Swift,  86  Me.  248;  Willes  v.  Carpenter,  75  Md.  80;  Lyman 
V.  Robinson,  14  Allen,  242;  Sibley  v.  Felton,  156  Mass.  273;  Morrill  v.  Tehama  Co., 
10  Nev.  125;  Water  Commissioners  v.  Brown,  32  N.  J.  L.  504;  Brown  v.  N.  Y.  Cen- 
tral R.  R.  Co.,  44  N.  Y.  79;  Commercial  Tel.  Co.  v.  Smith,  47  Hun,  494;  NichoUs  v. 
Granger,  7  N.  Y.  App.  Div.  113;  Arnold  v.  Rothschild's  Sons  Co.,  37  N.  Y.  App.  Div. 
564,  aff'd  164  N.  Y.  562;  Franke  v.  Hewitt,  56  N.  Y.  App.  Div.  497;  Congdon  v. 
Darcy,  46  Vt.  478.    See  also  Jones  v.  Daniel,  [1894]  2  Ch.  332. 

In  Mississippi,  &c.  S.  S.  Co.  v.  Swift,  86  Me.  248,  258,  the  Court  said:  "From  these 
expressions  of  courts  and  jurists,  it  is  quite  clear  that,  after  all,  the  question  is  mainly 
one  of  intention.  If  the  party  sought  to  be  charged  intended  to  close  a  contract  prior 
to  the  formal  signing  of  a  written  draft,  or  if  he  signified  such  an  intention  to  the 
other  party,  he  will  be  bound  by  the  contract  actually  made,  though  the  signing  of  the 
written  draft  be  omitted.  If,  on  the  other  hand,  such  party  neither  had  nor  signi- 
fied such  an  intention  to  close  the  contract  until  it  was  fully  expressed  in  a  WTitten 
instrument  and  attested  by  signatures,  then  he  will  not  be  bound  until  the  signatures 
are  affixed.  The  expression  of  the  idea  may  be  attempted  in  other  words :1  if  the 
written  draft  is  viewed  by  the  parties  merely  as  a  convenient  memorial,  or  record  of 
their  previous  contract,  its  absence  does  not  affect  the  binding  force  of  the  contract; 
if,  however,  it  is  viewed  as  the  consummation  of  the  negotiation,  there  is  no  contract 
until  the  written  draft  is  finally  signed." 


16  JOHNSTON   BROTHERS    V.    ROGERS   BROTHERS     [CHAP.    I 

to  advance  at  least  50  cents  per  barrel  within  a  very  few  days,  and  give  you  the  ad- 
vantage of  a  cut  of  from  20  to  25  cents  per  barrel  seems  a  very  foolish  thing,  but 
nevertheless  we  are  going  to  do  it,  just  to  save  you  money  and  secure  your  patronage. 
"We  quote  you  (R.  O.  B.  or  F.  O.  B.)  your  station,  Hungarian  $5.40,  and  strong 
Bakers  $5.00,  car  lots  only,  and  subject  to  sight  draft  with  bill  of  lading. 

"We  would  suggest  your  using  the  wire  to  order,  as  prices  are  so  rapidly  advancing 
that  they  may  be  beyond  reach  before  a  letter  would  reach  us. 

' '  Yours  respectfully, 

"Rogers  Bros." 

This  communication  was  received  by  the  plaintiffs  on  the  27th 

April.     The  plaintiffs  telegraphed  the  defendants  the  same  morning 

as  follows :  — 

"Lo>rDON,  April  27,  1898. 
"To  Rogers  Bros.,  Confederation  Life  Building,  Toronto. 

"We  will  take  two  cars  Hungarian  at  your  offer  of  yesterday. 

"Johnston  Bros." 

On  the  same  day,  namely,  the  27th  April,  the  plaintiffs  received  the 
following  communication  by  telegraph :  — 

"Toronto,  Ont.,  April  27,  1898. 
"Flour  advanced  sixty.     Will  accept  advance  of  thirty  on  yesterday's  quotations. 
Further  advance  certain. 

"Rogers  Bros." 

Then  followed  a  letter,  dated  the  28th  April,  from  Messrs.  Hell- 
muth  &  Ivey,  solicitors  for  the  plaintiffs,  calling  upon  the  defendants 
to  fulfil  the  order  "according  to  the  offer  contained  in  your  letter  of 
the  26th  and  duly  accepted  by  them  by  wire  on  April  27th;  and  upon 
your  refusal  damages  will  be  demanded." 

The  appeal  was  heard  by  a  Divisional  Court  composed  of  Armoue, 
C.J.,  Falconbridge  and  Street,  JJ.,  on  the  26th  January,  1899. 

W.  CarleiU-Hall  and  J.  W.  Payne,  for  the  defendants. 

Hellmuth,  for  the  plaintiffs. 

Falconbridge,  J.  —  The  facts  and  the  correspondence  are  fully 
set  out  in  the  very  careful  judgment  of  the  learned  Judge. 

I  shall  not  refer  to  the  second  and  third  grounds  of  appeal  further 
than  to  say  that  they  have  been  fully  considered,  and,  to  my  mind, 
satisfactorily  disposed  of,  by  the  trial  Judge. 

The  real  crux  of  the  case  is  whether  there  is  a  contract. 

Leaving  out  the  matters  of  inducement  (in  both  the  legal  and  the 
ordinary  sense)  in  the  letter  of  the  26th,  the  contract,  if  there  is  one, 
is  contained  in  the  following  words :  — 

Letter,  Defendants  to  Plaintiffs 

"27th  April,  1898. 
"We  quote  you,  F.  O.  B.  your  station,  Hungarian  $5.40  and  strong  Bakers  $5.00, 
car  lots  only,  and  .subject  to  sight  drafts  with  bills  of  lading." 

Telegram,  Plaintiffs  to  Defendants 

"27th  April,  1896. 
"We  will  taker  2  cars  Hungarian  at  your  offer  of  yesterday." 

I  slioiil'l  expect  to  find  American  authority  as  to  the  phrase  "we 
quotf!  you,"  which  mu.st  })f!  in  very  common  use  amongst  brokers, 
manufacturcr.s,    and    dealers    in    the    United    States;    but    we    were 


SECT.    I]      JOHNSTON    BROTHERS    V.    ROGERS   BROTHERS  17 

referred   to   no   decided  case,   and   I  have  found   none  where   that 
phrase  was  used. 

In  the  "American  and  English  Encyclopedia  of  Law,"  2d  ed., 
vol.  7,  p.  138,  the  law  is  stated  to  be:  "A  quotation  of  prices  is 
not  an  offer  to  sell,  in  the  sense  that  a  complete  contract  will  arise 
out  of  the  mere  acceptance  of  the  rate  offered  or  the  giving  of  an 
order  for  merchandise  in  accordance  with  the  proposed  terms.  It 
requires  the  acceptance  by  the  one  naming  the  price,  of  the  order 
so  made,  to  complete  the  transaction.  Until  thus  completed  there 
is  no  mutuality  of  obligation." 

Of  the  cases  cited  in  support  of  this  proposition,  Moulton  v.  Ker- 
shaw (1884),  59  Wis.  316,  48  Am.  Rep.  516,  is  the  nearest  to  the 
present  one,  but  in  none  is  the  word  "quote"  used. 

The   meaning   of   "quote"    is   given   in   modern   dictionaries    as 
follows  :  — 

"Standard"  (Com.)  — To  give  the  current  or  market  price  of,  as 
bonds,  stocks,  commodities,  etc. 

"Imperial,"  ed.  1884  —  In  com.,  to  name  as  the  price  of  an  article; 
to  name  the  current  price  of;  as,  what  can  you  quote  sugar  at? 

"Century"  (Com.)  —  To  name  as  the  price  of  stocks,  produce,  etc.; 
name  the  current  price  of. 

"Webster"  (Com.)  —  To  name  the  current  price  of. 

"Worcester"  —  To  state  the  price  as  the  price  of  merchandise. 

See  also  "Black's  Law  Dictionary,"  subtit.  "Quotation." 

There  is  little  or  no  difference  between  any  of  these  definitions. 
Now  if  we  write  the  equivalent  phrase  into  the  letter  -^  "We  give 
you  the  current  or  market  price,  F.  O.  B.  your  station,  of  Hungarian 
Patent  $5.40  — "  can  it  be  for  a  moment  contended  that  it  is  an 
offer  which  needs  only  an  acceptance  in  terms  to  constitute  a 
contract  ? 

The  case  of  Harty  v.  Gooderham  (1871),  31  U.  C.  R.  18,  is  princi- 
pally relied  on  by  the  plaintiffs.  But  that  case  presents  more  than 
one  point  of  distinction.  There  the  first  inquiry  was  from  the  plain- 
tiff, which,  I  think,  is  an  element  in  the  case.  He  writes  the  defend- 
ants to  let  him  "know  your  lowest  prices  for  50  O.  P.  spirits,"  etc. 
To  which  defendants  answered,  mentioning  prices  and  particulars: 
"Shall  be  happy  to  have  an  order  from  you,  to  which  we  will  give 
prompt  attention,"  which  the  court  held  to  be  equivalent  to  saying 
"We  will  sell  it  at  those  prices.  Will  you  purchase  from  us  and  let 
us  know  how  much  ?"  And  so  the  contract  was  held  to  be  complete 
on  the  plaintiff's  acceptance. 

But  there  is  no  such  offer  to  sell  in  the  present  defendant's  letter. 
Harvey  v.  Facey  (1893),  A.  C.  552,  is  strong  authority  against  the 
plaintiffs. 

I  have  not  overlooked  the  concluding  paragraph  of  the  letter,  viz., 
"We  would  suggest  your  using  the  wire  to  order,  as  prices  are  so 
rapidly  advancing  that  they  may  be  beyond  reach  before  a  letter 


18  SEYMOUR    V.    ARMSTRONG    &    KASSEBAUM        [CHAP.   I 

would  reach  us."  The  learned  Judge  considers  this  to  be  one  of  the 
matters  foreign  to  a  mere  quotation  of  prices.  I  venture,  on  the 
contrary,  to  think  that  this  suggestion  is  more  consistent  with  a 
mere  quotation  of  prices,  which  might  vary  from  day  to  day  or  from 
hour  to  hour.  There  could  be  no  question  of  the  prices  becoming 
"beyond  reach"  in  a  simple  offer  to  sell  at  a  certain  price. 

In  my  opinion,  the  plaintiffs  have  failed  to  establish  a  contract, 
and  this  appeal  must  be  allowed  with  costs,  and  the  action  dismissed 
with  costs. 

See  also  Thorne  v.  Butterworth  (1866),  16  C.  P.  369;  Am.  &  Eng. 
Encyc.  of  Law,  2d  ed.,  vol.  7,  pp.  125,  128,  133,  138;  Ashcroft  v. 
Butterworth  (1884),  136  Mass.  511;  Fulton  v.  Upper  Canada  Furni- 
ture Co.  (1883),  9  A.  K.  211.^ 


T.  F.   SEYMOUR  v.  ARMSTRONG  &  KASSEBAUM 

jElansas   Supreme   Coitkt,   January   Term,   1901 

[Reported  in  62  Kansas,  720] 

Johnson,  J.^  This  was  an  action  to  recover  damages  for  the 
breach  of  an  alleged  contract.  On  February  15,  1896,  Armstrong 
&  Kassebaum,  commission  merchants  of  Topeka,  inserted  an  adver- 
tisement in  a  weekly  newspaper,  which,  among  other  things,  con- 
tained the  following  proposition :  — 

"We  will  pay  lOj  cents  net,  Topeka,  for  all  fresh  eggs  shipped  us  to  arrive  here 
by  Febnaary  22.  Acceptance  of  our  bid  with  number  of  cases  stated  to  be  sent  by 
February  20." 


^  In  Moulton  v.  Kershaw,  59  Wis.  316,  the  defendants,  salt  dealers,  wrote  to  the 
plaintiff,  a  dealer  in  salt,  accustomed  to  buy  salt  in  large  quantities  as  the  defendants 
knew,  as  follows:  — 

"Dear  Sir,  —  In  consequence  of  a  rupture  in  the  salt  trade  we  are  authorized  to 
offer  Michigan  fine  salt,  in  full  carload  lots  of  80  to  95  barrels,  delivered  at  your  city 
at  85  cents  per  barrel  to  be  shipped  per  C.  &  N.  W.  R.  H.  Co.  only.  At  this  price  it 
is  a  bargain,  as  the  price  in  general  remains  unchanged.  Shall  be  pleased  to  receive 
your  ordfT." 

The  plaintiff,  on  the  day  this  letter  reached  him,  telegraphed:  — 

"Your  letter  of  yesterday  received  and  noted.  You  may  ship  me  two  thousand 
(2,000)  barrels  Michigan  fine  salt  as  offered  in  3'our  letter.     Answer." 

The  defendants  replied  on  the  following  day,  refusing  to  fill  the  order. 

The  f'fmri  held  that  no  contract  had  been  created,  chiefly  because  the  defendants' 
letter  did  not  specify  any  limit  of  quantity. 

In  Beaupr6  v.  Pacific  &  Atlantic  Telegraph  Co.,  21  Minn.  155,  the  plaintiffs  wrote: 
"Have  you  any  more  northwestern  mess  pork?  also  extra  mess?  Telegraph  price  on 
reccifit  of  this."  The  reply  was  tcslegraphed:  "Letter  received.  No  light  mess  here. 
Extra  mess  828.75."  The  plairitiff.s  replied  by  telegraph:  "Despatch  received.  Will 
tak(,'  two  huiidrc:d  extra  me.ss,  i>riee  named."     The  Coiirt  held  there  was  no  contract. 

Hiirvey  v.  Facey,  [189:i]  A.  C.  552;  Talbot  v.  Pettigrew,  3  Dak.  141;  Knight  v. 
Cooley,  .'i4  la.  218;  Smith  v.  Cowdy,  8  Allen,  56G;  Schenectady  Stove  Co.  v.  Hol- 
brook,  101  N.  Y.  45,  (u:c.  See  also  Kinghorne  v.  Montreal  Tel.  Co.  U.  C.  18  Q.  B.  60; 
Seller.^  V.  Warren,  116  M(r.  .'i50;  Stein-Gray  Drug  Co.  v.  Michelsen  Drug  Co.  116  N.  Y. 
Supp.  78!). 

*  A  portion  of  the  opinion  is  omitted. 


SECT.    l]         SEYMOUR    V.   ARMSTRONG    &    ILA.SSEBAUM  19 

On  February  20,  1896,  T.  F,  Seymour,  a  rival  commission  mer- 
chant of  Topeka,  sent  the  following  note  to  Armstrong  &  Kassebaum 
in  response  to  their  proposition :  — 

"I  accept  your  offer  in  'Merchants'  Journal,'  lOj  cents,  Topeka,  for  fresh  eggs, 
and  will  ship  you  on  C.  R.  I.  &  P.  R.  R.  450  cases  fresh  eggs,  to  arrive  on  or  before 
February  22.  The  eggs  are  all  packed  in  new  No.  2  whitewood  cases,  and  I  will  accept 
fifteen  cents  each  for  them,  or  you  can  return  them  or  new  ones  in  place  of  them." 

On  receipt  of  this  note,  Armstrong  &  Kassebaum  at  once  notified 
Seymour  that  they  would  not  accept  the  eggs  on  the  terms  proposed 
by  him.  Notwithstanding  the  refusal,  Seymour  procured  a  car  and 
loaded  it  with  eggs.  Not  having  a  sufficient  number  of  cases  to  fill 
the  car,  he  found  two  other  commission  merchants  who  were  willing, 
to  co-operate  with  him,  and  who  furnished  190  of  the  450  cases, 
which  were  loaded  in  Topeka,  only  a  few  hundred  feet  away  from 
the  place  of  business  of  Armstrong  &  Kassebaum,  sealed  up,  and 
then  pushed  a  short  distance  over  to  their  business  house.  They 
refused  to  receive  the  eggs,  and  Seymour  shipped  them  to  Phila- 
delphia, where  they  were  sold  for  $391.83  less  than  they  would  have 
brought  at  the  price  named  in  Seymour's  note  of  acceptance.  For 
this  amount  the  present  action  was  brought,  and  the  plaintiff  is 
entitled  to  recover,  if  the  defendants'  offer  on  eggs  was  uncondition- 
ally accepted.  At  the  trial  a  verdict  was  returned  in  favor  of  the 
defendants,  and  the  result  of  the  general  finding  is  that  the  pretended 
acceptance  of  Seymour  was  not  unconditional,  and  that  no  contract 
was,  in  fact,  made  between  him  and  the  defendants. 

Did  the  negotiations  between  the  parties  result  in  a  contract?  A 
contract  may  originate  in  an  advertisement  addressed  to  the  public 
generally,  and  if  the  proposal  be  accepted  by  any  one  in  good  faith, 
without  qualifications  or  conditions,  the  contract  is  complete.  The 
fact  that  there  was  no  limit  as  to  number  or  quantity  of  eggs  in  the 
offer  did  not  prevent  an  acceptance.  The  number  or  quantity  was 
left  to  the  determination  of  the  acceptor,  and  an  unconditional  ac- 
ceptance naming  any  reasonable  number  or  quantity  is  sufficient  to 
convert  the  offer  into  a  binding  obligation.  It  is  essential,  however, 
that  the  minds  of  the  contracting  parties  come  to  the  point  of  agree- 
ment —  that  the  offer  and  acceptance  coincide ;  and  if  they  do  not 
correspond  in  every  material  respect  there  is  no  acceptance  or  com- 
pleted contract.  In  our  view,  the  so-called  acceptance  of  the  plain- 
tiff is  not  absolute  and  unconditional.  It  affixed  conditions  not 
comprehended  in  the  proposal,  and  there  could  be  no  agreement 
without  the  assent  of  the  proposer  to  such  conditions.  It  is  true  the 
plaintiff  agreed  to  furnish  eggs  at  10|  cents  per  dozen,  but  his 
acceptance  required  the  defendant  to  pay  fifteen  cents  each  for  the 
cases  in  which  the  eggs  were  packed  or  to  return  the  cases  or  new 
ones  in  place  of  them.  It  appears  from  the  record  that,  according 
to  the  usages  of  the  business,  the  cases  go  with  the  eggs. 


20  THE   SATANITA  [CHAP.   I 

THE    SATAN'ITA 

Court  of  Appeal^  March  28,  1895 

[Reported  in  Law  Reports,  [1895]  Probate,  248] 

Action  of  damage  by  collision.  The  "Valkyrie"  and  the  "Sata- 
nita"  were  manceuyring  to  get  into  position  for  starting  for  a  fifty- 
mile  race  at  the  Mudhook  Yacht  Club  regatta,  when  the  "Satanita" 
ran  into  and  sank  the  "Valkyrie." 

The  entry  of  the  "Satanita"  for  the  regatta  contained  this  clause : 
"I  undertake  that,  while  sailing  under  this  entry,  I  will  obey  and 
be  bound  by  the  sailing  rules  of  the  Yacht  Racing  Association  and 
the  by-laws  of  the  club." 

Among  the  rules  was  the  following :  Rule  24 :  "  .  .  .  If  a  yacht,  in 
consequence  of  her  neglect  of  any  of  these  rules,  shall  foul  another 
yacht  .  .  .  she  shall  forfeit  all  claim  to  the  prize,  and  shall  pay 
all  damages." 

Lord  Eshee,  M.R.  This  is  an  action  by  the  owner  of  a  yacht 
against  the  owner  of  another  yacht,  and,  although  brought  in  the 
Admiralty  Division,  the  contention  really  is  that  the  yacht  which  is 
sued  has  broken  the  rules  which  by  her  consent  governed  her  sailing 
in  a  regatta  in  which  she  was  contesting  for  a  prize. 

The  first  question  raised  is  whether,  supposing  her  to  have  broken 
a  rule,  she  can  be  sued  for  that  breach  of  the  rules  by  the  owner  of 
the  competing  yacht  which  has  been  damaged;  in  other  words. 
Was  there  any  contract  between  the  owners  of  those  two  yachts? 
Or  it  may  be  put  thus :  Did  the  owner  of  the  yacht  which  is  sued 
enter  into  any  obligation  to  the  owner  of  the  other  yacht,  that  if  his 
yacht  broke  the  rules,  and  thereby  injured  the  other  yacht,  he  would 
pay  damages?  It  seems  to  me  clear  that  he  did;  and  the  way  that 
he  has  undertaken  that  obligation  is  this.  A  certain  number  of 
gentlemen  formed  themselves  into  a  committee  and  proposed  to  give 
prizes  for  matches  sailed  between  yachts  at  a  certain  place  on  a  cer- 
tain day,  and  they  promulgated  certain  rules,  and  said :  "If  you 
want  to  sail  in  any  of  our  matches  for  our  prize,  you  cannot  do  so 
unless  you  submit  yourselves  to  the  conditions  which  we  have  thus 
laid  down.  And  one  of  the  conditions  is,  that  if  you  do  sail  for 
one  of  such  prizes  you  must  enter  into  an  obligation  with  the  owners 
of  the  yachts  who  are  competing,  which  they  at  the  same  time  enter 
into  similarly  with  you,  that  if  by  a  breach  of  any  of  our  rules  you 
do  damage  or  injury  to  the  owner  of  a  competing  yacht,  you  shall 
be  liable  to  make  good  the  damage  Avhich  you  have  so  done."  If 
that  is  HO,  then  wluui  they  do  sail,  and  not  till  then,  that  relation  is 
immediately  formed  between  the  yacht  owners.  There  are  other 
conditions  Avitli  regards  to  these  matches  which  constitute  a  relation 
between  each  of  tbc^  yaclit  owners  who  enters  his  yacht  and  sails  it 
and  the  committee;  but  that  does  not  in  the  least  do  away  with  what 


SECT.    l]  RAYMOND    V.    SHELDON's   ESTATE  21 

the  yacht  owner  has  undertaken,  namely,  to  enter  into  a  relation  with 
the  other  yacht  owners,  that  relation  containing  an  obligation. 

Here  the  defendant,  the  owner  of  the  "Satanita,"  entered  into  a 
relation  with  the  plaintiff  Lord  Dimraven,  when  he  sailed  his  yacht 
against  Lord  Dunraven's  yacht,  and  that  relation  contained  an  obli- 
gation that  if,  by  any  breach  of  any  of  these  rules,  he  did  damage 
to  the  yacht  of  Lord  Dunraven,  he  would  have  to  pay  the  damages.^ 

EMMA  EAYMOND  v.  CAKOLINE  E.  SHELDON'S  ESTATE 

Vermont  Supreme  Court,  June  21,  1918 
\JR,e'poried  in  92  Vermont,  396] 

Miles,  J.  The  ground  of  exception  to  the  refusal  to  direct  a  ver- 
dict in  the  defendant's  favor  is  that  there  was  no  evidence  in  the  case 
tending  to  prove  a  promise  implied  in  fact  on  the  part  of  Mrs.  Shel- 
don. It  is  true  as  argued  by  the  defendant,  that  the  implied  contract, 
such  as  here  under  consideration,  must  contain  all  the  elements  of  an 
express  contract,  and  that  it  only  differs  from  an  express  contract  in 
its  proof.  6  E.  C.  L.  587,  par.  6.  Each  depends  upon  questions 
of  fact,  and  if  there  is  any  substantial  evidence  fairly  and  reasonably 
tending  to  establish  such  contract,  that  question  must  be  submitted 
to  the  jury.  Fitzsimons  v.  Richardson,  86  Vt.  229,  84  Atl.  811; 
McGaffey  v.  Mathie,  68  Vt.  403,  35  Atl.  334;  Kelton  v.  Leonard,  54 
Vt.  230. 

In  reviewing  the  denial  of  defendant's  motion  for  a  directed 
verdict,  the  evidence  must  be  viewed  in  the  light  most  favorable 
to  the  plaintiff.  Hazen  v.  Eutland  E.  E.,  89  Vt.  94,  94  Atl.  296. 
Applying  these  well-established  rules  to  what  appears  in  this  case, 
we  examine  the  evidence  to  see  if  it  reasonably  and  fairly  tends  to 
show  an  implied  promise  on  the  part  of  Mrs.  Sheldon  to  pay  the 
plaintiff  what  her  services  were  reasonably  worth,  and  from  that 
examination  we  think  it  does  so  show. 

The  evidence  of  one  witness  was  to  the  effect  that  during  the 
time  covered  by  the  plaintiff's  bill  against  Mrs.  Sheldon's  estate, 
the  witness  had  on  frequent  occasions  received  requests  over  the  tele- 
phone from  the  Sheldon  house,  to  ask  the  plaintiff  to  call  there; 
that  when  the  witness  was  at  work  for  Mrs.  Sheldon,  the  plaintiff 
would  call  there  and  Mrs.  Sheldon  would  ask  her  on  those  occa- 
sions, why  she,  the  plaintiff,  had  not  called,  stating  to  the  plaintiff 
that  she  wanted  her  to  do  something  for  her;  that  she  knew  of  the 
plaintiff's  bringing  to  Mrs.  Sheldon  articles  purchased  at  the  store  for 

^  The  statement  of  the  case  is  abbreviated,  and  only  so  much  of  Lord  Esher's 
opinion  is  printed  as  relates  to  the  question  whether  a  contract  had  been  made.  Lopes, 
L.  J.,  and  Rigby,  L.  J.,  delivered  concurring  opinions.  The  judgment  for  the  plaintiff 
was  affirmed  in  Clarke  v.  Dunraven,  [1897]  A.  C.  59.  See  also  Vigo  Agricultural 
Society  v.  Brumfiel,  102  Ind.  146. 


22         CANNEY    V.    SOUTHERN   PACIFIC   COAST   R.    R.    CO.   [CHAP.    I 

lier;  that  at  one  time  Mrs.  Sheldon  said  to  the  witness  that  she  could 
not  pay  the  plaintiff  for  what  she  had  done  for  her.  There  was 
other  similar  evidence  in  the  case  which  had  a  tendency  to  prove 
that  the  plaintiff's  services  were  performed  at  the  request  of  Mrs. 
Sheldon.  This  was  enough  to  entitle  the  plaintiff  to  go  to  the  jury 
if  the  services  were  valuable.  It  is  said  in  40  Cyc.  2810 :  "Where 
valuable  services  are  rendered,  or  material  furnished,  by  one  person 
for  another  at  the  latter's  request,  in  the  absence  of  circumstances 
showing  that  the  services  or  material  were  intended  to  be  rendered  or 
furnished  gratuitously,  the  former  is  entitled  to  recover  for  such 
services  or  material,  although  there  was  no  express  contract  for 
remuneration." 

To  the  same  effect  is  6  R.  C.  L.  587,  par.  6.  Indeed  such  con- 
tracts are  of  daily  occurrence,  and  no  question  is  made  as  to  their 
legal  and  binding  force. 

An  examination  of  the  transcript  discloses  that  the  evidence  tended 
to  show  that  the  services  were  valuable;  that  the  plaintff  did  wash- 
ings weekly  and  special  washings  twice  a  year  for  Mrs.  Sheldon; 
that  the  washings  were  not  the  general  washings,  but  the  washings  of 
such  things  as  Mrs.  Sheldon's  wearing  apparel,  her  bureau  covers, 
towels,  napkins  and  blankets.  There  was  no  error  in  overruling 
the  motion  for  a  directed  verdict.^ 


F.  E.  J.  CAl^NEY,  Appellant,  v.  THE  SOUTHERN  PACIFIC 
COAST  RAILROAD  COMPANY,  Respondent 

California  Supreme  Court,  June  15,  1883 

[Reported  in  63  California,  501] 

McKee,  J.  The  action  in  this  case  was  brought  to  recover  the 
balance  of  an  alleged  indebtedness  for  services  rendered  by  the  plain- 
tiff as  a  physician  and  surgeon,  at  the  alleged  special  instance  and 
request  of  the  defendant.  Part  of  the  services,  included  in  the  state- 
ment of  the  cause  of  action,  were  rendered  at  the  Instance  and  re- 
quest of  the  defendant  and  were  paid.  The  contention  is  as  to  the 
services  which  were  rendered  to  a  number  of  persons  who  had  been 
injured,  on  the  23d  of  May,  1880,  by  a  railroad  accident  on  the  lino 
of  the  defendant's  road  In  the  county  of  Santa  Cruz.  It  is  for  these 
that  the  plaintiff  seeks  to  make  the  defendant  liable. 

Rut  at  the  trial,  the  plaintiff  was  sworn  as  a  witness  In  his  own 
behalf,  and  he  testified  as  follows :  "On  'the  morning  of  the  24th  of 
May,  1880,  T  was  cilled  by  the  wife  of  one  of  the  persons  injured 
to  treat  her  husband,  and  on  that  day  T  was  called  by  eleven  of  said 
injured  parties  to  treat  them.     I  attended  upon  them.  In  pursuance 

'  A  portion  of  the  opinion  is  omitted. 


SECT.   l]    CANNEY    V.    SOUTHERN    PACIFIC    COAST   R.    R.    CO.  23 

of  my  original  calling,  from  that  time  until  they  were  all  recovered. 
My  services  were  reasonably  worth  eleven  thousand  dollars."  Ac- 
cording to  that  testimony  the  services  were  rendered  by  the  plaintiff 
upon  an  employment  between  him  and  the  persons  injured.  That 
contract  fixed  the  rights  and  liabilities  of  the  parties  to  it.  The 
persons,  for  whose  benefit  and  at  whose  instance  and  request  the 
services  were  rendered,  were  bound  to  pay  for  them.  No  other  or 
different  contract  could  be  implied.     Of  course,  the  parties  to  the 


contract  might  have  wholly  freed  themselves  from  their  rights  and  ^ 
liabilities  under  it  by  a  discharge  of  the  contract.     A  contract  may  ^**^^ 
be  discharged  or  put  an  end  to  at  any  time,  by  mutual  consent,  or  ^^^e, 
by  an  alteration  in  its  terms  which,  in  effect,  substitutes  for  it  a  <^v*. 
new  arrangement  between  the  parties  themselves  or  between  one  of  x  ^^^ 
them  and  a  third  party.     (§  1531,  Civ.  Code.)     And  it  is  claimed  ^^^Z. 
that,  while  the  plaintiff  was  engaged  in  performing  the  services  under  ^'^^ 
his  original  employment,  the  defendant  informed  the  plaintiff  that    %  *%^v-* 
the  injured  were  allowed  to  select  any  physician  they  saw  proper, 
and  defendant  would  be  responsible  for  the  indebtedness. 

Yet,  as  a  witness,  the  plaintiff  admitted  that  no  new  promise  about 
the  services  had  been  made  to  him.  The  only  thing  upon  which  he 
relies  is,  that  the  president  of  the  railroad  company  "said  to  the 
injured  parties,"  after  they  had  employed  the  plaintiff,  "that  they 
should  employ  whatever  physician  they  saw  proper  and  the  defend- 
ant would  pay  the  bills."  But  that  was  not  said  to  the  plaintiff, 
nor  was  he  present  when  it  was  said.  It  appears  that  the  parties  to 
whom  it  was  said  communicated  it  to  the  plaintiff;  but  neither  the 
promise  to  them,  nor  the  communication  of  that  promise  to  the 
plaintiff  constituted  a  contract  between  the  defendant  and  the  plain- 
tiff either  as  accessory,  or  by  way  of  novation,  to  his  original  employ- 
ment which  he  was  engaged  in  performing.  The  plaintiff  had  no 
communication  from  or  with  the  defendant  upon  the  subject;  there 
was  therefore  no  mutuality  or  consent  between  them,  and  in  law, 
however  it  might  be  in  morals,  no  liability  attached  to  the  defendant 
for  the  services  of  the  plaintiff  to  the  persons  who  employed  him. 

It  is  not  necessary  to  decide  whether  the  promise  made  by  the 
president  of  the  company  to  the  wounded  constituted  a  contract  be- 
tween them,  collectively  or  individually,  and  the  company,  which 
might  be  enforced  for  the  benefit  of  the  plaintiff.  ITo  such  claim 
seems  to  have  been  made  or  transferred  by  any  of  them  to  the  plain- 
tiff, nor  is  the  plaintiff's  cause  of  action  founded  upon  such  a  claim. 
Trenor  v.  C.  P.  E.  E.  Company,  50  Cal.  222,  is  not  applicable  to 
the  case  in  hand.  That,  it  is  true,  was  also  a  case  for  the  services 
of  a  physician  and  surgeon  rendered  to  persons  wounded  by  a  rail- 
road accident;  but  there  was,  in  the  case,  some  evidence  tending  to 
show  that  the  services  were  rendered  at  the  instance  and  request  of 
the  defendant,  and  the  case  was  decided  upon  a  conflict  of  evidence. 
But  in  the  case  in  hand  there  was  no  conflict  of  evidence.     The 


24  OIL   WELL    SUPPLY    CO.    V.    MACMURPHEY       [CHAP.   I 

plaintiff  in  Ms  testimony  and  on  the  trial,  admitted,  and  his  wit- 
nesses proved,  that  the  services  were  rendered  in  pursuance  of  his 
original  employment  by  those  who  were  wounded  and  not  otherwise. 
There  was,  therefore,  no  contract,  express  or  implied,  between  the 
plaintiff  and  the  defendant  in  relation  to  the  services  which  are  the 
subject  of  the  suit,  and  as  there  is  no  prejudicial  error  in  the  record, 
the  judgment  and  order  are  affirmed. 
McKiNSTRY,  J.,  and  Eoss,  J.,  concurred. 


OIL  WELL  SUPPLY  COMPAISTY  v.  GEOKGE  MacMUKPHEY 

Minnesota  Supreme  Court,  December  6,  1912 
[Reported  in  119  Minn.   500] 

Holt,  J.  The  action  is  for  a  breach  of  an  alleged  agreement  to 
honor  a  draft.  The  court  directed  a  verdict  for  plaintiff,  and  de- 
fendant appeals  from  an  order  denying  him  a  new  trial. 

These  are  the  uncontroverted  facts:  One  Hukill,  residing  and 
doing  business  at  Pittsburgh,  Pennsylvania,  applied  to  i)laintiff  to 
cash  or  buy  a  sight  draft  for  $300  drawn  by  Hukill,  payable  to 
his  own  order,  upon  defendant,  a  relative  of  Hukill  residing  at 
Ortonville,  Minnesota.  Plaintiff  promised  to  do  so  if  defendant, 
by  telegram,  would  agree  to  accept  the  draft.  Thereupon,  on  the 
same  day,  to  wit,  December  30,  1907,  Hukill  sent  a  telegram  to  de- 
fendant at  Ortonville,  reading:  "Will  you  wire  me  that  you  will 
honor  draft  for  $300  ?"  The  same  day,  in  response  to  said  message, 
defendant  sent  a  telegram  from  Ortonville  to  E.  M.  Hukill  at  Pitts- 
burgh, which  reads :  "I  will."  Hukill  thereupon  presented  the  draft 
and  the  two  telegrams  to  plaintiff,  which  bought  the  draft,  and  in 
due  course  of  business  caused  it  to  be  presented  to  defendant  for 
acceptance  and  payment.  Defendant  refused.  When  plaintiff  learned 
this,  it  wrote  defendant  as  follows : 

"Oil  Well  Supply  Co., 
"Pittsburgh,  Pa. 

"January  7,  1908, 
"Subject  E.  M.  Hukill  draft. 
"Mr.  Geo.  MacMurphey, 
"Ortonville,  Minn. 

"Dear  Sir: 

"On  Dfif-omhcr  31.st,  we  cashed  for  Mr.  E.  M.  Hukill  a  sight  draft  drawn  on  you 
for  S'.'M),  which  has  boon  returned  to  us  under  protest,  marked  'payment  refused,' 
the  fees  aniountiiiK  to  ^'-i.QH.  We  advanced  saifl  nion(\v  on  the  strenpth  of  the  telegram 
from  you  to  Mr.  Hukill,  dated  December  .SOth,  reading  'I  will,'  which  he  told  us  was 
in  reply  to  a  tejegrani  sent  to  you  by  him  on  December  IJOth,  reading,  'Will  you  wire 
nie  that  you  will  honor  flraft  for  $.'UK).'  We  would  like  to  know  at  once  your  reason 
for  not  honoring  (he  draft;  also  wh(?ther  or  not  your  telegram  reading  'I  will'  was 
in  answer  to  a  telegram  sent  by  Mr.  Hukill  to  you  as  (luoted  al>ove.  Trusting  to  hear 
from  you  by  return  mail,  and  thanking  you  in  advance, 

"We  remain 

"Yours  truly, 

"Louis  Brown,  Treas." 


SECT.    I J        OIL   WELL   SUPPLY    CO.    V.    MACMURPHEY  25 

To  this  letter  defendant  appended  this  reply: 

"Louis  Brown, 
"Dear  Sir: 

"I  will  say  in  reply  to  the  above  that  my  telegram  'I  will,'  was  in  answer  to  above 
telegram  from  Mr.  Hukill  on  December  30th.  I  was  out  of  funds  myself  and  tendered 
a  check  from  Mr.  H.  and  it  was  not  accepted,  hence  the  protest.  I  presume  this  is 
all  cleared  up  ere  this. 

"Yours  truly, 

"Geo.  MacMurphey." 

It  seems  to  us  that  the  two  telegrams  constitute  a  clear  and  definite 
contract  on  the  part  of  defendant  to  honor  a  draft  for  $300.  The 
manifest  purpose  of  Hukill's  telegram  was  to  get  defendant  to  agree 
to  honor  or  accept  a  draft.  It  was  not  to  ask  for  a  telegram,  except 
as  a  means  of  conveying  an  agreement  or  refusal  to  honor  the  pro- 
posed draft.  There  can  be  no  doubt  that  plaintiif  took  the  telegrams 
to  be  an  agreement  by  defendant  to  honor  the  draft.  Defendant  ap- 
pears to  be  an  intelligent  professional  man,  and  it  is  safe  to  assume 
that  he  was  not  unacquainted  with  business  methods.  Hence  he 
must  have  inferred  from  the  telegram  that  Hukill  wished  to  nego- 
tiate the  draft  on  the  strength  of  defendant's  agreement  to  honor  it. 
That  defendant  so  understood  the  purport  of  the  telegram  admits  of 
no  doubt,  when  the  subsequent  correspondence  between  him  and 
plaintiff  is  considered.  In  construing  written  contracts,  the  meaning 
of  the  language  employed,  taken  in  its  ordinary  and  popular  sense 
with  reference  to  the  matter  in  hand,  controls  unless,  when  so  viewed, 
an  ambiguity  still  remains.  If  there  be  uncertainty  after  thus  ex- 
amining the  agreement,  the  situation  of  the  parties  and  the  circum- 
stances surrounding  the  transaction  may  be  considered,  in  order  to 
arrive  at  the  true  and  intended  meaning  of  the  ambiguous  expres- 
sions used.  However,  we  cannot  find  any  ambiguity  in  the  tele- 
grams constituting  the  agreement  here,  when  applied  to  the  subject 
matter.  In  contracts  made  by  telegrams,  the  fewest  possible  Avords 
are  used,  and  often  omitted  words  in  a  message  are  to  be  supplied 
from  the  sense  or  context  of  a  message  to  which  it  is  an  answer.  This 
is  so  usual  an  occurrence  in  the  business  world  that  courts  must 
take  notice  of  the  fact.  Upon  the  undisputed  facts,  plaintiff  was 
entitled  to  recover,  and  the  court  rightly  directed  the  verdict,  unless 
there  was  error  in  excluding  certain  evidence  offered  by  defendant. 

The  defendant  offered  to  prove  that  long  prior  to  December  30, 
1907,  he  had  been  in  the  habit  of  honoring  drafts  made  upon  him  by 
Hukill;  that  during  such  time  defendant  was  in  possession  of  val- 
uable stock  pledged  by  Hukill  to  secure  defendant  against  loss  from 
such  acceptances;  that  prior  to  said  date,  after  he  had  surrendered 
this  stock,  Hukill  requested  defendant  to  honor  further  drafts, 
whereupon  defendant  stated  that  he  would  not  do  so  unless  his, 
defendant's,  financial  condition  at  the  bank  at  Ortonville  was  such 
that  he  could  conveniently  do  so,  and  that  Hukill  should  also  again 
pledge  with  defendant  the  securities  he  before  had;   that  he  told 


26  STURTEVANT   CO.    V.    FIREPROOF   FILM    CO.       [CHAP.    I 

Hukill  not  to  draw  any  drafts  on  the  defendant,  until  he  had  first 
wired  to  determine  whether  defendant  would  honor  them ;  and  that  no 
such  telegram  or  request  should  be  sent  to  defendant,  unless  Hukill 
should,  at  the  same  time,  place  the  said  securities  with  defendant. 
And  further  that,  when  defendant  received  the  telegram  and  he 
answered  the  same,  it  was  with  the  expectation  that  the  security 
would  be  sent  him;  that  such  security  was  not  sent,  and  defendant 
was  in  such  financial  condition  in  his  accounts  at  the  bank  that  he 
could  not  conveniently  honor  the  draft.  We  fail  to  see  how  the 
proffered  proof  could  affect  the  plaintiff  which  bought  the  draft  on 
the  strength  of  the  telegrams.  Defendant  did  not  offer  to  show  that 
plaintiff  had  any  knowledge  of  either  the  first  arrangement  under 
which  defendant  honored  Hukill's  drafts  or  this  last  one. 
The  order  must  be  affirmed. 


B.  F.  STURTEVANT  COMPANY,  Eespondent, 

V. 

FIREPROOF  FILM   COMPANY,   Appellant 

New  York  Court  of  Appeals,  October  11-November  16,  1915 

[Reported  in  216  New  York,  199] 

Seabury,  J.^  This  action  is  brought  to  recover  damages  for  the 
breach  of  an  alleged  contract.  On  December  29,  1911,  the  plaintiff 
submitted  to  the  defendant  in  the  form  of  a  type-written  letter  "pro- 
posal and  specifications"  for  a  heating  and  ventilating  plant;  and 
in  the  same  letter  also  quoted  prices  of  certain  apparatus.  The 
letter  was  signed  on  behalf  of  the  plaintiff  by  J.  L.  Williamson,  and 
endorsed  upon  it  is  —  "Accepted :  The  Fireproof  Film  Company.  H. 
Kuhn,  Vice-President  &  Treasurer.  Date,  December  30th,  1911." 
The  plaintiff  began  the  work  on  January  1st.  1912. 

After  some  correspondence  the  defendant  notified  the  plaintiff 
that  it  proposed  to  cancel  the  contract.  Upon  the  trial  the  defendant 
set  up  lack  of  authority  on  the  part  of  Mr.  Kuhn,  the  officer  who 
attempted  to  enter  into  the  contract  on  its  behalf.  Satisfactory 
proof  of  his  authority  was,  however,  presented  and  the  trial  court 
submitted  the  question  to  the  jury. 

The  defendant  still  adheres  to  the  same  contention,  but  the  prin- 
cipal ground  urged  for  the  reversal  of  the  judgment  is  that  there 
was  no  foiitrnct  between  the  parties  because  at  the  bottom  of  the 
first  page  of  thf;  plaintiff's  office  stationery,  upon  which  the  proposal 
was  written,  appear  the  words:  "all  agreements  are  contingent  upon 
strikes,  fire,  accirlonts  or  flelays  beyond  our  control.     All  prices  are 

'  Tho  statement  of  facts  in  the  opinion  is  abbreviated,  and  a  portion  of  the  opinion 
omittf'(]. 


SECT.    l]        STURTEVANT    CO.    V.    FIREPROOF    FILM    CO.  27 

subject  to  change  without  notice,  and  all  contracts  and  orders  taken 
are  subject  to  the  approval  of  the  executive  office  at  Hyde  Park, 
Mass."  These  sentences  are  printed  in  very  small  type  and  the  first 
typewritten  numeral  that  indicates  the  page  number  is  typewritten 
over  this  printedmatter.  The  appellant  clalfflS  ih'Al  the  proposal  was 
given  "subject  to  the  approval  of  the  executive  office  at  Hyde  Park, 
Mass.,"  and  that  as  there  was  no  proof  that  this  approval  was  given 
and  communicated  to  it,  there  was  no  contract.  It  appears  clearly 
•that  Williamson  had  authority  to  make  the  contract  and  that  his 
action  in  so  doing  was  ratified  by  the  executive  office  of  the  plaintiff  at 
Hyde  Park,  Mass.  The  plaintiff  actually  commenced  to  perform 
•the  work  and  continued  working  under  the  contract  until  it  re- 
ceived the  notice  of  the  defendant  that  it  had  canceled  the  contract. 
The  point  now  earnestly  insisted  upon  was  not  litigated  upon  the 
trial  and  seems  to  be  an  afterthought  that  occurred  to  the  defendant 
when  it  failed  to  defeat  the  plaintiff's  claim  on  the  ground  that  its 
vice-president  and  treasurer,  Kuhn,  was  not  authorized  to  make  the 
contract  in  its  behalf.  The  claim  that  is  now  urged  rests  entirely 
upon  the  contention  that  the  clause  "all  contracts  or  orders  taken 
■are  subject  to  the  approval  of  the  executive  office  at  Hyde  Park, 
Mass.,"  is  to  be  deemed  a  part  of  the  proposal.  If  this  provision  was 
a  part  of  the  proposal,  there  could  be  no  proof  of  a  contract  in  the 
absence  of  evidence  that  the  order  was  approved  and  that  the  defend- 
ant had  been  notified  of  that  fact.  In  view  of  the  manner  in  which 
this  provision  is  printed  upon  the  stationery  of  the  plaintiff  it  can- 
not be  held,  as  a  matter  of  law,  that  it  was  incorporated  in  and  a 
part  of  the  proposal.  The  language  of  the  proposal  is  clear  and  ex- 
plicit, and  this  provision,  which  is  printed  in  small  type,  cannot  be 
allowed  to  change,  alter  or  modify  it,  unless  it  was  a  part  of  the  pro- 
posal. It  was  not  incorporated  in  the  body  of  the  proposal  or  re- 
ferred to  in  it.  ISTo  suggestion  was  made,  either  in  the  pleadings  or 
the  proof,  that  it  was  a  part  of  the  proposal.  If  an  issue  had  been 
raised  upon  the  trial,  whether  it  was  a  part  of  the  proposal  that 
issue  would  have  presented  a  question  of  fact  to  be  determined  by 
the  jury.  As  no  such  question  was  raised  upon  the  trial,  and  as  it 
does  not  appear  from  an  inspection  of  the  proposal  that  this  pro- 
vision was  a  part  of  it,  the  defendant  is  not  now  in  a  position  to 
secure  the  reversal  of  this  judgment  upon  this  ground.  When  an 
offer,  proposal  or  contract  is  expressed  in  clear  and  explicit  terms, 
matter  printed  in  small  type  at  the  top  or  bottom  of  the  office  sta- 
tionery of  the  writer,  where  it  is  not  easily  seen,  which  is  not  in  the 
body  of  the  instrument  or  referred  to  therein,  is  not  necessarily  to 
be  considered  as  a  part  of  such  offer,  proposal  or  contract.  In 
Sturm  V.  Boker  (150  TJ.  S.  312,  327)  it  was  said  that  "The  con- 
tract being  clearly  expressed  in  writing,  the  printed  billhead  of  the 
invoice  can,  upon  no  well  settled  rule,  control,  modify,  or  alter  it." 
In  Summers  v.  Hubbard  &  Co.  (153  111.  102,  109)  the  court  said: 


28  CHESEBROUGH    V.   WESTERN   UNION   TEL.    CO.     [CHAP.   I 

"The  printed  words  were  not  in  the  body  of  the  letter  or  referred 
to  therein.  The  fact  that  they  were  printed  at  the  head  of  their 
letter-heads  would  not  have  the  effect  of  preventing  appellants  from 
entering  into  an  unconditional  contract  of  sale."  In  Menz  Lumber 
Company  v.  McNeeley  &  Company  (58  Wash.  223,  229),  it  was  said 
that  "The  printed  matter  on  the  letter-heads  was  not  referred  to 
in  either  the  order  or  the  acceptance,  and  is  not  a  part  of  the  con- 
tract. .  .  .  The  construction  contended  for  by  the  respondent  would 
make  that  which  is  an  absolute,  unqualified  acceptance  upon  its 
face,  a  conditional  one  by  reference  to  a  letter-head  which  was  not 
referred  to  by  either  parties. 

The  other  grounds  upon  which  the  appellant  asks  a  reversal  of  the 
judgment  are  not  such  as  to  warrant  discussion. 

I  advise  that  the  judgment  be  affirmed,  with  costs. 

CuDDERBACK,  Caedozo  and  Pound,  J  J.,  concur;  Collin,  J.,  con- 
curs in  result;  Willard  Baetlett,  Ch.  J.,  and  Chase,  J.,  dissent. 

Judgment  ajflrmed. 


EGBERT    A.    CHESEBROUGH,    Respondent,    v.    WESTER:N" 
Ui^^ION  TELEGRAPH  COMPxVNY,  Appellant 

New  York  Supreme  Court,  Appellate  Term,  May,  1912 

[Reported  in  76  Neiv  Yorh  Miscellaneous  516] 

Seaburt,  J.  This  is  an  action  to  recover  damages  alleged  to  have 
been  sustained  by  the  plaintiff  in  consequence  of  the  delayed  de- 
livery of  a  telegraph  message.  The  facts  are  conceded.  On  Sep- 
tember 12,  1910,  the  plaintiff,  who  was  residing  in  AUenhurst,  IST.  J., 
by  letter  instructed  one  Bayne,  a  broker,  to  purchase  2,000  bags  of 
coffee  for  August  delivery  at  eight  and  fifty-three  one  hundredths 
cents  per  pound.  The  letter  was  received  by  Bayne  during  the  fore- 
noon of  September  13,  1910.  Bayne  attempted  to  purchase  the  coffee 
at  eight  and  fifty-three  one  hundredths  cents  per  pound  during  the 
forenoon  of  September  13th,  but  was  unable  to  purchase  nt  this  price, 
as  the  market  had  advanced.  At  about  noon  of  that  day  Bayne  did 
purchase  the  required  amount  of  coffee  at  eight  and  fifty-four  one 
hundredths  cents  per  pound.  Upon  completing  this  purchase  Bayne 
delivered  the  following  message  to  the  defendant  for  transmission 
to  the  plaintiff: 

"To  TloDT.  A.  r'liKsronnouGH, 
"21H  KllKTr.ii  Av.'., 

XllcnIiur.Hi.  N.  J.: 
"Lc.tU'T  just  roccivf!(l  bought  two  thousand  August  eight  fifty  four  subject  your 
approval  eight  fifty  five  now  bid  must  have  immediate  reply  by  wire. 

"■Rutli-  "       C.  E.  Ratne." 

Tliis    nie.s.sago    was    rec(iived    at    Allcnlmrst    a    little    before    one 
P.M.    on    September   tliirte(;nth.      Tt    was    not   sent   to   the   plnintiff'^ 


SECT.    l]       CHESEBROUGH    V.    WESTERN   UNION   TEL.    CO.  29 

residence,  and  was  not  delivered  until  two  fifty  p.m.  on  that  day  at 
the  defendant's  office  at  Allenhurst.  Immediately  upon  its  re- 
ceipt the  plaintiff  wired  the  following  reply  to  Bayne: 

"Telegram  just  received.     Purchase  approved  at  eight  fifty  four." 

This  message  was  received  by  Bayne  at  his  office  at  three  forty 
P.M.  It  was  stipulated  upon  the  trial  that  the  time  consumed,  about 
fifty  minutes,  in  transmitting  and  delivering  plaintiff's  reply  "w^as 
the  requisite  length  of  time  for  the  transmission  and  delivery  of 
said  message."  At  the  time  of  the  receipt  of  the  last  message,  the 
coffee  exchange  had  closed,  and  it  was  impossible  to  purchase  coffee 
at  less  than  eight  and  eighty  one  hundredths  cents  per  pound.  The 
market  price  of  August  coffee  was  not  less  than  eight  and  eighty  one 
hundredths  cents  per  pound  at  any  time  on  September  fourteenth, 
fifteenth  and  sixteenth,  and  up  to  the  time  that  the  plaintiff  actually 
purchased  another  lot  of  2,000  bags  of  August  coffee  at  eight  and 
eighty  one  hundredths  cents  per  pound  on  September  fourteenth. 

It  is  claimed  that,  by  reason  of  the  defendant's  delay  in  trans- 
mitting the  message  on  September  thirteenth  from  Bayne  to  the 
plaintiff,  the  plaintiff  lost  the  benefit  of  the  purchase  which  Bayne 
had  made  subject  to  the  approval  of  the  plaintiff,  and  that  his  loss 
is  the  difference  between  eight  and  fifty-four  one  hundredths  cents 
per  pound  and  eight  and  eighty  one  hundredths  cents  per  pound, 
or  $676,  which,  with  interest,  is  the  amount  for  which  the  plaintiff 
recovered  judgment.  Upon  this  appeal,  the  defendant  makes  no 
claim  that  the  contract,  in  pursuance  of  which  the  message  was 
received  by  it  for  transmission,  relieved  it  of  liability.  The  claim 
upon  which  the  appellant  now  relies  is,  that  the  plaintiff  suffered  no 
loss,  because,  at  the  instant  the  plaintiff  filed  his  message  of  accept- 
ance, he  became,  as  against  Bayne,  the  owner  of  2,000  bags  of  August 
coffee  which  had  been  purchased  for  his  account  by  Bayne. 

It  is  necessary,  therefore,  to  determine  as  to  whether,  as  between 
the  plaintiff  and  Bayne,  the  plaintiff  lost  his  right  to  have  the 
purchase  treated  as  having  been  made  for  his  benefit.  If  he  did 
not,  he  sustained  no  loss,  and  has  no  cause  of  action  against  this 
defendant.  If  Bayne,  the  broker,  was  within  his  rights  in  treating 
the  purchase  as  made  for  his  own  account,  in  view  of  the  delay, 
then  the  plaintiff  has  a  cause  of  action  against  this  defendant.  Bayne 
selected  the  telegraph  as  a  means  of  communicating  his  offer  to  the 
plaintiff.  Under  the  offer,  the  broker  was  obliged  to  hold  the  coffee 
purchased  for  the  account  of  the  customer,  if  the  latter,  immedi- 
ately on  receipt  of  the  offer,  wired  his  acceptance.  This  the  cus- 
tomer did.  As  soon  as  he  sent  the  message  accepting  the  broker's 
offer,  the  contract  between  the  customer  and  the  broker  was  com- 
plete, and  the  coffee  purchased  was  the  property  of  the  plaintiff. 
The  fact  that,  owing  to  the  delay  in  the  delivering  of  the  broker's 
message,  the  customer's  reply  was  not  received  until  several  hours 


30  CHESEBROUGH    V.   WESTERN   UNION   TEL.    CO.     [CHAP.   I 

later  than  the  broker  anticipated  that  he  would  receive  a  reply,  does 
not  affect  the  legal  relations  existing  between  the  customer  and  the 
broker.  The  offer  contained  in  the  broker's  message  manifested  a 
willingness  on  his  part  to  contract,  and,  in  the  absence  of  any  limita- 
tion being  prescribed,  this  willingness  is~presumed  to  continue  untiT 
revoked.  The  customer  accepted  the  offer  before  it  was  revoked  when 
he  sent  the  telegram  accepting  the  offer.  The  instant  that  this  was 
done,  the  contract  was  complete,  and,  under  the  contract  then  made, 
the  coffee  which  the  broker  had  purchased  became  the  property  of  the 
customer.  The  general  principle  here  applied  is  so  well  settled,  and 
has  been  so  frequently  commented  upon,  that  it  is  needless  to 
do  more  than  cite  some  of  the  cases  which  show  its  origin,  develop- 
ment and  application.  Adams  v.  Lindsell,  1  Barn.  &  Aid.  681 ;  Dun- 
lop  V.  Higgins,  12  Jur.  292 ;  Household  Fire  Ins,  Co.  v.  Grant,  L.  R. 
4  Exch.  216;  Mactier  v.  Frith,  6  Wend.  103;  Vassar  v.  Camp,  11 
N.  Y.  441;  Trevor  v.  Wood,  36  id.  307;  Watson  v.  Eussell,  149  id. 
391;  United  Merchants  Realty  &  Imp.  Co.  v.  Roth,  193  id.  581. 
!N"or  is  the  theory  at  all  tenable  that  the  offer  of  the  broker 
was  to  be  considered  by  the  customer  as  continuing,  only  in  the  event 
of  its  prompt  delivery.  In  Trevor  v.  Wood,  supra,  the  court  said : 
"I  cannot  conceive  upon  what  principle  an  agreement  to  communi- 
cate by  telegraph  can  be  held  to  be  in  effect  a  warranty  by  each  party 
that  his  communication  to  the  other  shall  be  received.  On  the  con- 
trary, by  agreeing  beforehand  to  adopt  that  means  of  communication, 
the  parties  mutually  assume  its  hazards,  which  are  principally  as 
to  the  prompt  receipt  of  the  dispatches." 

As  between  the  plaintiff  and  Bayne,  the  coffee  purchased  by  the 
latter  became,  by  virtue  of  the  plaintiff's  prompt  acceptance  of  the 
offer  of  the  broker,  the  property  of  the  plaintiff.  Such  being  the 
case,  it  is  plain  that  the  plaintiff  has  no  cause  of  action  against  this 
defendant.  If  the  broker  deprived  the  plaintiff  of  the  coffee  pur- 
chased, then  the  plaintiff  has  a  cause  of  action  against  him,  and 
if  the  broker  sustained  a  loss  he  has  a  cause  of  action  against  this 
defendant.  I  can  see  no  basis  or  legal  theory  upon  which  the  plain- 
tiff can  assert  a  claim  against  this  defendant. 

It  follows  that  the  judgment  should  be  reversed,  with  costs  to 
the  appellant,  and  the  complaint  dismissed  with  costs. ^ 

*  The  decision  was  affirmed  in  157  N.  Y.  App.  D.  914. 


SECT.    l]        BOSTON   AND    MAINE   RAILROAD    V.    BARTLETT  31 


B.  —  Duration  and  Termination  of  Offers 


THE  BOSTON  AND  MAINE  KAILROAD  v.  JOSEPH  H. 
BARTLETT  and  Another 

Supreme  Judicial  Court  of  Massachusetts,  March  Term,  1849 

[Reported  in  3  Cushing,  224] 

This  was  a  bill  in  equity  for  tlie  specific  performance  of  a  contract 
in  writing. 

The  plaintiffs  alleged  that  the  defendants,  on  the  1st  of  April,  1844, 
being  the  owners  of  certain  land  situated  in  Boston,  and  particularly 
described  in  the  bill,  "in  consideration  that  said  corporation  would 
take  into  consideration  the  expediency  of  buying  said  land  for  their 
use  as  a  corporation,  signed  a  certain  writing,  dated  April  1st,  1844," 
whereby  they  agree  to  convey  to  the  plaintiffs  "the  said  lot  of  land 
for  the  sum  of  twenty  thousand  dollars,  if  the  said  corporation  would 
take  the  same  within  thirty  days  from  that  date;"  that  afterwards, 
and  within  the  thirty  days,  the  defendants,  at  the  request  of  the 
plaintiffs,  "and  in  consideration  that  the  said  corporation  agreed  to 
keep  in  consideration  the  expediency  of  taking  said  land,"  &c.,  ex- 
tended the  said  term  of  thirty  days,  by  a  writing  underneath  the  writ- 
ten contract  above  mentioned,  for  thirty  days  from  the  expiration 
thereof;  that,  on  the  29th  of  May,  1844,  while  the  extended  contract 
was  in  full  force  and  unrescinded,  the  plaintiffs  elected  to  take  the' 
land  on  the  terms  specified  in  the  contract,  and  notified  the  defend- 
ants of  their  election  and  offered  to  pay  them  the  agreed  price  (pro- 
ducing the  same  in  money)  for  a  conveyance  of  the  land,  and  re- 
quested the  defendants  to  execute  a  conveyance  thereof,  which  the 
plaintiffs  tendered  to  them  for  that  purpose ;  and  that  the  defendants 
refused  to  execute  such  conveyance,  or  to  perform  the  contract,  and 
had  ever  since  neglected  and  refused  to  perform  the  same. 

The  defendants  demurred  generally. 

J.  P.  Healy,  for  the  defendants. 

G.  Minot  (with  whom  was  R.  Choate),  for  the  plaintiffs. 

Healy,  in  reply,  said  that  in  all  the  cases  cited  for  the  plaintiffs 
except  the  last,  there  was  a  consideration, 

Fletcher,  J.  In  support  of  the  demurrer  in  this  case,  the  only 
ground  assumed  and  insisted  on  by  the  defendants  is,  that  the  agree- 
ment on  their  part  was  without  consideration,  and  therefore  not 
obligatory.  In  the  view  taken  of  the  case  by  the  Court,  no  impor- 
tance is  attached  to  the  consideration  set  out  in  the  bill;  namely, 
"that  the  plaintiffs  would  take  into  consideration  the  expediency  of 
buying  the  land."     The   argument  for  the  defendants,   that   their 


32  BOSTON   AND   MAINE   RAILROAD    V.    BARTLETT       [CHAP.   I 

agreement  was  not  binding  because  without  consideration,  errone- 
ously assumes  that  the  writing  executed  by  the  defendants  is  to  be 
considered  as  constituting  a  contract  at  the  time  it  was  made.  The 
decision  o£  the  court  in  Maine  in  the  case  of  Bean  v.  Burbank,  4 
Shepl.  458,  which  was  referred  to  for  the  defendants,  seems  to  rest 
on  the  ground  assumed  by  them  in  this  case. 

In  the  present  case,  though  the  writing  signed  by  the  defendants 
was  but  an  offer,  and  an  offer  which  might  be  revoked,  yet,  while  it 
remained  in  force  and  unrevoked,  it  was  a  continuing  offer  during 
the  time  limited  for  acceptance ;  and,  during  the  whole  of  that  time, 
it  was  an  offer  every  instant ;  but  as  soon  as  it  was  accepted  it  ceased 
to  be  an  offer  merely,  and  then  ripened  into  a  contract.  The  counsel 
for  the  defendants  is  most  surely  in  the  right,  in  saying  that  the 
writing  when  made  was  without  consideration;  and  did  not  there- 
fore form  a  contract.  It  was  then  but  an  offer  to  contract;  and  the 
parties  making  the  offer  most  undoubtedly  might  have  withdrawn 
it  at  any  time  before  acceptance. 

But  when  the  offer  was  accepted,  the  minds  of  the  parties  met,  and 
the  contract  was  complete.  There  was  then  the  meeting  of  the  minds 
of  the  parties,  which  constitutes  and  is  the  definition  of  a  contract. 
The  acceptance  by  the  plaintiffs  constituted  a  sufficient  legal  consid- 
eration for  the  engagement  on  the  part  of  the  defendants.  There  was 
then  nothing  wanting,  in  order  to  perfect  a  valid  contract  on  the  part 
of  the  defendants.  It  was  precisely  as  if  the  parties  had  met  at  the 
time  of  the'  acceptance,  and  the  offer  had  then  been  made  and  ac- 
cepted, and  the  bargain  completed  at  once, 

A  different  doctrine,  however,  prevails  in  France  and  Scotland  and 
Holland.  It  is  there  held,  that  whenever  an  offer  is  made,  granting 
to  a  party  a  certain  time  within  which  he  is  to  be  entitled  to  decide 
Avhether  he  will  accept  it  or  not,  the  party  making  such  offer  is  not 
at  liberty  to  withdraw  it  before  the  lapse  of  the  appointed  time.  There 
are  certainly  very  strong  reasons  in  support  of  this  doctrine.  Highly 
respectable  authors  regard  it  as  inconsistent  with  the  plain  principles 
of  equity  that  person  Avho  has  been  induced  to  rely  on  such  an  engage- 
ment, should  have  no  remedy  in  case  of  disappointment.  But, 
whether  wisely  and  equitably  or  not,  the^  common  law  unyieldingly 
insists  upon  a  consideration,  or  a  paper  with  a  seal  attached. 

The  authorities,  both  English  and  x\mcrican,  in  support  of  this 
view  of  the  subject,  are  very  numerous  and  decisive;  but  it  is  not 
deemed  to  be  needful  or  expedient  to  refer  particularly  to  them,  as 
they  are  collected  and  commentod  oti  in  several  reports  as  well  as  in 
the  text  books.  The  case  of  Cooke  v.  Oxlcv.  3  Term  Rep.  6.53,  in 
which  a  different  doctrine  was  held,  has  occasioned  considerable  dis- 
cussion, and,  in  one  or  two  instances,  has  probably  influenced  the 
docisioii.  Tliat  case  has  been  supposed  to  be  inaccurately  reported, 
fiiul  tliat  in  fiirt  tbr-re  was  in  tliat  case  no  npceptnnfe.  But,  however 
that,  may  bf,  if  tlir;  case;  has  not  been  directly  overruled,  it  has  cer- 


SECT.    l]  LORING    V.    CITY   OF   BOSTON  33 

tainly  in  later  cases  been  entirely  disregarded,  and  cannot  now  be 
considered  as  of  any  authority. 

As  therefore,  in  the  present  case,  the  bill  sets  out  a  proposal  in 
writing,  and  an  acceptance  and  an  offer  to  perform,  on  the  part  of 
the  plaintiffs,  within  the  time  limited,  and  while  the  offer  was  in  full 
force,  all  which  is  admitted  by  the  demurrer,  so  that  a  valid  contract 
in  writing  is  shown  to  exist,  the  demurrer  must  be  overruled. 


WILLIAM  LOKING  and  Another  v.  CITY  OF  BOSTON 

SuPKEME  Judicial  Court  of  Massachusetts,  March  Term,  1844 

[Reported  in  7  Metcalf,  409] 

Assumpsit  to  recover  a  reward  of  $1000,  offered  by  the  defendants 
for  the  apprehension  and  conviction  of  incendiaries.  Writ  dated 
September  30th,  1841. 

At  the  trial  before  Wilde,  J.,  the  following  facts  were  proved :  On 
the  26th  of  May,  1837,  this  advertisement  was  published  in  the  daily 
papers  in  Boston :  "$500  reward.  The  above  reward  is  offered  for  the 
apprehension  and  conviction  of  any  person  who  shall  set  fire  to  any 
building  within  the  limits  of  the  city.  May  26,  1837.  Samuel  A. 
Eliot,  Mayor."  On  the  27th  of  May,  1837,  the  following  advertise- 
ment was  published  in  the  same  papers:  "$1000  reward.  The  fre- 
quent and  successful  repetition  of  incendiary  attempts  renders  it 
necessary  that  the  most  vigorous  efforts  should  be  made  to  prevent 
their  recurrence.  In  addition  to  the  other  precautions,  the  reward 
heretofore  offered  is  doubled.  One  thousand  dollars  will  be  paid  by 
the  city  for  the  conviction  of  any  person  engaged  in  these  nefarious 
practices.  May  27,  1837.  Samuel  A.  Eliot,  Mayor."  These  adver- 
tisements were  continued  in  the  papers  but  about  a  week;  but  there 
was  no  vote  of  the  city  government,  or  notice  by  the  mayor,  revoking 
the  advertisements,  or  limiting  the  time  during  which  they  should  be 
in  force.  Similar  rewards  for  the  detection  of  incendiaries  had  been 
before  offered,  and  paid  on  the  conviction  of  the  offenders ;  and  at  the 
time  of  the  trial  of  this  case,  a  similar  reward  was  daily  published  in 
the  newspapers. 

In  January,  1841,  there  was  an  extensive  fire  on  Washington 
Street,  when  the  Amory  House  (so  called)  and  several  others  were 
burnt.  The  plaintiffs  suspected  that  Samuel  Marriott,  who  then 
boarded  in  Boston,  Avas  concerned  in  burning  said  buildings.  Soon 
after  the  fire  said  Marriot  departed  for  'New  York.  The  plaintiffs 
declared  to  several  persons  their  intention  to  pursue  him  and  prose- 
cute him,  with  the  intention  of  gaining  the  reward  of  $1000  which 
had  been  offered  as  aforesaid.  They  pursued  said  Marriott  to  ISTew 
York,  carried  with  them  a  person  to  identify  him,  arrested  him,  and 
brought  him  back  to  Boston.  They  then  complained  of  him  to  the 
2 


34  LORING    V.    CITY   OF   BOSTON  [CHAP.   I 

county  attorney,  obtained  other  witnesses,  procured  him  to  be  indicted 
and  prosecuted  for  setting  fire  to  the  said  Amory  House.  And  at 
the  March  Term,  1841,  of  the  Municipal  Court,  on  the  apprehension 
and  prosecution  of  said  Marriott,  and  on  the  evidence  given  and  pro- 
cured by  the  plaintiffs,  he  was  convicted  of  setting  fire  to  said  house, 
and  sentenced  to  ten  years'  confinement  in  the  State  Prison. 

William  Barnicoat,  called  as  a  witness  by  the  defendants,  testified 
that  he  was  chief  engineer  of  the  fire  department  in  Boston,  in  1837, 
and  for  several  years  after;  that  alarms  of  fire  were  frequent  before 
the  said  advertisement  in  May,  1837;  but  that  from  that  time  till 
the  close  of  the  year  1841,  there  were  but  few  fires  in  the  city. 

As  the  only  question  in  the  case  was,  whether  said  offer  of  reward 
continued  to  be  in  force  when  the  Amory  House  was  burnt,  the  case 
was  taken  from  the  jury  by  consent  of  the  parties,  under  an  agree- 
ment that  the  defendants  should  be  defaulted,  or  the  plaintiffs  be- 
come nonsuit,  as  the  full  Court  should  decide. 

Peabody  &  J.  P.  Rogers,  for  the  plaintiffs. 

./.  Pickering  (City  Solicitor),  for  the  defendants. 

Shaw,  C.  J.  There  is  now  no  question  of  the  correctness  of  the 
legal  principle  on  which  this  action  is  founded.  The  offer  of  a  reward 
for  the  detection  of  an  offender,  the  recovery  of  property,  and  the 
like,  is  an  offer  or  proposal,  on  the  part  of  the  person  making  it,  to 
all  persons,  which  any  one  capable  of  performing  the  service  may 
accept  at  any  time  before  it  is  revoked,  and  perform  the  service;  and 
such  offer  on  one  side,  and  acceptance  and  performance  of  the  service 
on  the  other,  is  a  valid  contract  made  on  good  consideration,  which 
the  law  will  enforce.^  That  this  principle  applies  to  the  offer  of  a 
reward  to  the  public  at  large  was  settled  in  this  Commonwealth  in 
Symmes  v.  Frazier,  6  Mass.  344;  and  it  has  been  frequently  acted 
upon,  and  was  recognized  in  the  late  case  of  Wentworth  v.  Day,  3 
Met.  352. 

The  ground  of  defence  is,  that  the  advertisement,  offering  the  re- 
ward of  $1000  for  the  detection  and  conviction  of  persons  setting  fire 
to  buildings  in  the  city,  was  issued  almost  four  years  before  the  time 
at  which  the  plaintiffs  arrested  Marriott  and  prosecuted  him  to  con- 
viction ;  that  this  reward  was  so  offered  in  reference  to  a  special 
emergency  in  consequence  of  several  alarming  fir(>s;  that  the  adver- 
tisement was  withdrawn  and  discontinued;  that  the  recollection  of  it 
had  passed  away ;  that  it  was  obsolete,  and  by  most  persons  forgotten ; 
and  that  it  could  not  be  regarded  as  a  perpetually  continuing  offer 
on  tlif  part  of  tlie  city. 

'  "Th"  f)ff'T  of  fi  reward  or  oomp('n.s.T,tJoii,  citlicr  to  n,  particular  person  or  class 
of  p'Tsons,  or  to  any  and  ail  porsons,  is  a  conditional  promise;  and  if  any  ono  to 
whom  Kiich  offer  in  made  sliall  jjcrform  the  service  hefon?  the  offer  is  revoked,  such 
jK-rformance  \h  a  good  consideration,  and  the  offer  becomes  a  legal  and  binding  con- 
tract. Of  course,  until  the  perff)rmance,  the  ofTcr  of  a  reward  is  a  proposal  merely, 
anrl  not  a  contract,  and  therefore  may  be  rr-voked  .at  the  pleasure  of  him  who  made 
it."    Shaw,  C.  J.,  Freeman  v.  City  of  Boston,  6  Met.  50,  57. 


SECT.   l]  LORING    V.    CITY   OF   BOSTON  35 

We  are  then  first  to  look  at  the  terms  o£  the  advertisement,  to  see 
what  the  offer  was.  It  is  competent  to  the  party  offering  such  reward 
to  propose  his  own  terms;  and  no  person  can  entitle  himself  to  the 
promised  reward  without  a  compliance  with  all  its  terms.  The  first 
advertisement  offering  the  reward  demanded  in  this  action  was  pub- 
lished May  26th,  1837,  offering  a  reward  of  $500;  and  another  on 
the  day  following,  increasing  it  to  $1000.  No  time  is  inserted  in  the 
notice,  within  which  the  service  is  to  be  done  for  which  the  rcAvard  is 
claimed.  It  is  therefore  relied  on  as  an  unlimited  and  continuing 
offer. 

In  the  first  place,  it  is  to  be  considered  that  this  is  not  an  ordinance 
of  the  city  government,  of  standing  force  and  effect ;  it  is  an  act  tem- 
porary in  its  nature,  emanating  from  the  executive  branch  of  the  city 
government,  done  under  the  exigency  of  a  special  occasion  indicated 
l)y  its  terms,  and  continued  to  be  published  but  a  short  time.  Although 
not  limited  in  its  terms,  it  is  manifest,  we  think,  that  it  could  not  have 
been  intended  to  be  perpetual,  or  to  last  ten  or  twenty  years  or  more ; 
and  therefore  must  have  been  understood  to  have  some  limit.  It  was 
insisted,  in  the  argument,  that  it  had  no  limit  but  the  Statute  of  Limi- 
tations. But  it  is  obvious  that  the  Statute  of  Limitations  would  not 
operate  so  as  to  make  six  years  from  the  date  of  the  offer  a  bar.  The 
offer  of  a  reward  is  a  proposal  made  by  one  party,  and  does  not  become 
a  contract  until  acted  upon  by  the  performance  of  the  service  by 
the  other,  which  is  the  acceptance  of  such  offer,  and  constitutes  the 
agreement  of  minds  essential  to  a  contract.  The  six  years,  therefore, 
would  begin  to  run  only  from  the  time  of  the  service  performed  and 
the  cause  of  action  accrued,  which  might  be  ten,  or  twenty,  or  fifty 
years  from  the  time  of  the  offer,  and  would  in  fact  leave  the  offer 
unlimited  by  time. 

Supposing,  then,  that  by  fair  implication  there  must  be  some  limit 
to  this  offer,  and  there  being  no  limit  in  terms,  then  by  a  general  rule 
of  law  it  must  be  limited  to  a  reasonable  time;  that  is,  the  service 
must  be  done  within  a  reasonable  time  after  the  offer  is  made. 

What  is  a  reasonable  time,  when  all  the  facts  and  circumstances  are  ^  h 
proved  on  which  it  depends,  is  a  question  of  law.    To  determine  it,  we  //y 
are  tirst  to  consider  the  objects  and  purposes  for  which  such  reward  is     yj 
offered.     The  principal  object  obviously  must  be  to  awaken  the  atten-    V^ 
tion  of  the  public,  to  excite  the  vigilance  and  stimulate  the  exertions  of 
police  officers,  watchmen,  and  citizens  generally,  to  the  detection  and 
punishment  of  offenders.     Possibly,  too,  it  may  operate  to  prevent 
offences,  by  alarming  the  fears  of  those  who  are  under  temptation  to 
commit  them,  by  inspiring  the  belief  that  the  public  are  awake,  that 
any  suspicious  movement  is  watched,  and  that  the  crime  cannot  be 
committed  with  impunity.    To  accomplish  either  of  these  objects,  such 
offer  of  a  reward  must  be  notorious,  known  and  kept  in  mind  by 
the  public  at  large ;  and  for  that  purpose  the  publication  of  the  offer, 
if  not  actually  continued  in  newspapers,  and  placarded  at  conspicuous 


36  LORING    V.    CITY   OF   BOSTON  [CHAP.   I 

places,  must  have  been  recent.  After  the  lapse  of  years,  and  after  the 
publication  of  the  offer  has  been  long  discontinued,  it  must  be  pre- 
sumed to  be  forgotten  by  the  public  generally,  and,  if  known  at  all, 
known  only  to  a  few  individuals  who  may  happen  to  meet  with  it  in 
an  old  newspaper.  The  expectation  of  benefit  then  from  such  a 
promise  of  reward  must  in  a  great  measure  have  ceased.  Indeed, 
every  consideration  arising  from  the  nature  of  the  case  confirms  the 
belief  that  such  offer  of  reward,  for  a  special  service  of  this  nature, 
is  not  unlimited  and  perpetual  in  its  duration,  but  must  be  limited 
to  some  reasonable  time.  The  difficulty  is  in  fixing  it.  One  circum- 
stance (perhaps  a  slight  one)  is  that  the  act  is  done  by  a  board  of 
officers,  who  themselves  are  annual  officers.  But  as  they  act  for  the 
city,  which  is  a  permanent  body,  and  exercise  its  authority  for  the 
time  being,  and  as  such  a  reward  might  be  offered  near  the  end  of 
the  year,  we  cannot  necessarily  limit  it  to  the  time  for  which  the 
same  board  of  mayor  and  aldermen  have  to  serve;  though  it  tends  to 
mark  the  distinction  between  a  temporary  act  of  one  branch  and  a 
permanent  act  of  the  whole  city  government. 

"We  have  already  alluded  to  the  fact  of  the  discontinuance  of  the 
advertisement,  as  one  of  some  weight.  It  is  some  notice  to  the  public 
that  the  exigency  has  passed  for  which  such  offer  of  a  reward  was 
particularly  intended.  And  though  such  discontinuance  is  not  a 
revocation  of  the  offer,  it  proves  that  those  who  made  it  no  longer  hold 
it  forth  conspicuously  as  a  continuing  offer;  and  it  is  not  reasonable 
to  regard  it  as  a  continuing  offer  for  any  considerable  term  of  time 
afterwards. 

But  it  is  not  necessary,  perhaps  not  proper,  to  undertake  to  fix  a 
precise  time  as  reasonable  time;  it  must  depend  on  many  circum- 
stances. It  is  somewhat  analogous  to  the  case  of  notes  payable  on 
demand,  where  the  question  formerly  was,  within  what  time  such 
note  must  be  presented,  and,  in  case  of  dishonor,  notice  be  given,  in 
order  to  charge  the  indorser.  In  the  earliest  reported  case  on  the 
subject  (Field  ?;.  Nickerson,  13  Mass.  131),  the  Court  went  no 
farther  than  to  decide  that  eight  months  was  not  a  reasonable  time 
for  that  purpose. 

Under  the  circumstances  of  the  present  case,  the  Court  are  of  the 
opinion  that  three  years  and  eight  months  is  not  a  reasonable  time 
within  which,  or  rather  to  the  extent  of  which,  the  offer  in  question 
can  be  considered  as  a  continuing  offer  on  the  part  of  the  city.  In 
that  length  of  time,  the  exigency  under  which  it  was  made  having 
passed,  it  must  be  presumed  to  have  been  forgotten  by  most  of  the 
officers  and  citizens  of  the  community,  and  cannot  be  presumed  to 
have  ])f;cn  before  the  public  as  an  actuating  motive  to  vigilance  and 
exertion  on  this  subject;  nor  could  it  justly  and  reasonably  have  been 
so  uridfrstoofl  by  the  pl.-iintiffs.  "We  are  therefore  of  opinion  that  the 
offer  of  the  city  had  ceased  before  the  plaintiffs  accepted  and  acted 
upon   it  as  such,  and   that  consequently  no  contract  existed  upon 


SECT.   l]  AVERILL    V.    HEDGE  37 

wliicli  this  action,  founded  on  an  alleged  express  promise,  can  be 
maintained.  Plaintiffs  nonsuit.^ 


AVERILL  AND  Another  v.  HEDGE 

Supreme  Court  of  Errors  of  Connecticut,  June,  1838 

[Reported  in  12  Connecticut  Reports,  424] 

This  was  an  action  of  assumpsit,  alleging  that  the  defendant,  who 
conducted  business  at  Wareham,  Mass.,  under  the  name  of  the 
"Washington  Iron  Company,"  promised  to  deliver  to  the  plaintiffs 
a  quantity  of  rods,  shapes,  and  band-irqn,  in  March,  1836. 

The  cause  was  tried  at  Hartford,  February  Term,  1838,  before 
Williams,  C.  J. 

The  plaintiffs  claimed  to  have  proved  their  case  by  a  corre- 
spondence between  the  parties  in  the  year  1836;  particularly  by  a 
letter  from  the  plaintiffs  to  the  defendant,  dated  the  29th  of  Febru- 
ary; the  defendant's  answer  of  the  2d  of  March;  a  letter  from  the 
plaintiffs,  dated  the  14th  of  March ;  and  the  answer  of  the  defendant, 
also  dated  the  14th  of  March  by  mistake,  in  fact  written  the  16th 
of  March;  and  the  plaintiffs'  reply  thereto  dated  the  19th  of  March. 
The  whole  correspondence  between  the  parties  was  read  in  evidence; 
the  substance  of  which  was  as  follows : — 

Hartford,  29th  February,  1836.  Dear  Sir,  —  Regarding  the  future  disposal  of 
your  nails  as  settled,  it  would  be  improper  to  importune  you  further  on  that  point. 
Perhaps,  however,  you  will  not  object  to  sending  us  a  supply  of  rods  and  shapes  for 
our  spring  sales.  Please  to  say  on  what  terms  you  will  send  us  ten  or  fifteen  tons, 
assorted,  by  first  packet  in  the  spring.  We  shall  also  be  glad  to  purchase  our  hollow 
ware  of  you  on  the  same  terms  as  heretofore.  Shall  be  pleased  to  hear  from  you  soon. 
[Signed,  "J.  &  H.  Averill,"  the  plaintiffs;   and  addressed  to  John  Thomas,  Esq.] 

Wareham,  2d  March,  1836.  On  the  writer's  return  from  the  South  last  evening, 
he  found  your  favor  of  the  29th  ult.,  to  which  we  now  reply.  We  will  deliver  to  you 
in  Hartford  ten  or  fifteen  tons  of  rods,  shapes,  and  band-iron,  as  follows:  say  — 
shapes  and  band-iron,  at  $110  per  gross  ton,  six  months;  and  old  sable  rods,  at  $116, 
six  months.  Old  sable  iron  is  now  quick  at  $110  per  ton  in  Boston;  and  there  is  but 
very  little  iron  there  at  any  price.  We  will  deliver  you  at  Hartford  a  common  assort- 
ment of  hollow  ware,  at  $28  per  ton,  six  months.  [Signed  "Washington  Iron  Com- 
pany, per  John  Thomas,  Agent;"    and  addressed  to  the  plaintiffs.] 

Hartford,  14  March,  1836.  Dear  Sir,  —  We  have  bought  of  Ripley  &  Averill 
their  stock  of  hollow  ware,  with  the  understanding  that  we  were  to  receive  the  benefit 
of  their  orders  given  you  last  July.  The  balance  of  this  order  wo  believe  was  in  readi- 
ness last  fall;  but,  owing  to  the  early  closing  of  our  navigation,  was  not  shipped.  Will 
you  ship  us  this  lot  of  ware  by  first  packet,  on  terms  then  agreed  on  with  R.  &  A.? 
Please  advise  us  by  return  mail  if  we  may  expect  it.  [Signed  by  plaintiffs,  and  ad- 
dressed to  John  Thomas,  Esq. 

1  In  Drummond  v.  United  States,  35  Ct.  CI.  356,  it  was  held  that  a  right  to  a  reward 
offered  for  the  arrest  of  a  criminal  was  gained  by  making  the  arrest  ten  years  after 
the  offer  was  made,  the  criminal  being  still  a  fugitive  from  justice. 

In  Mitchell  v.  Abbott  86  Me.  338,  it  was  held  that  a  lapse  of  twelve  years  between 
the  time  when  the  reward  has  offered  and  the  time  of  performance  was  more  than  a 
reasonable  time. 

In  the  matter  of  Keily,  39  Conn.  159,  it  was  held  that  an  offer  of  reward  for  a  par- 
ticular crime  would  not  lapse  until  the  Statute  of  Limitations  barred  conviction  for 
the  crime.     See  also  Shaub  v.  Lancaster,  156  Pa.  362. 


"38  AVERILL    V.    HEDGE  [CHAP.   I 

Wareham,  March  14,  1836.  Dear  Sirs,  —  Your  favor  of  the  14th  inst.  is  at  hand, 
and  contents  noted.  We  shall  most  cheerfully  comply  with  your  request  to  ship  to 
you  the  balance  of  Ripley  &  Averill's  order  of  hardware,  not  filled  in  consequence  of 
the  early  frost  last  autumn;  such  being  the  understanding  between  yourselves  and 
Mr.  Ripley.  We  learn  from  our  neighbors,  engaged  in  the  manufacture  of  this  article, 
that  they  now  hold  it  at  $30  per  ton,  and  shall  not  sell  it  at  a  less  price  through  the 
season;  and  consequently  we  shall  not  consider  ourselves  holden  to  the  offer  made  to 
you  on  the  2d  inst.,  unless  you  signify  your  acceptance  thereof  by  return  mail,  but 
shall  furnish  the  balance  of  Ripley  &  Averill's  order  in  conformity  with  the  contracts 
made  wath  them. 

Do  3'ou  accept  of  our  proposal  for  supplying  you  with  rods,  shapes,  and  band-iron; 
and  if  so,  what  quantity  of  each  shall  we  send  you?  [Signed,  "Washington  Iron 
•Company,  per  John  Thomas,  Agent;"    and  addressed  to  the  plaintiffs.] 

Hartford,  March  19th,  1836.  Dear  Sir,  —  Your  favor  of  the  17th  came  to  hand 
last  evening,  too  late  to  be  answered  before  this  morning.  We  note  and  duly  appre- 
ciate your  prompt  assent  to  send  us  the  balance  of  R.  &  A.'s  order  for  hollow  ware, 
at  old  prices.  In  our  future  purchases  of  that  article,  we  will  buy  of  you  at  $28  per 
ton,  six  months,  as  offered  in  your  favor  of  the  2d.  We  will  also  take  the  following 
shapes,  &c.,  on  your  terms  there  given:  160  bundles  of  new  sable  or  Swedes,  different 
shapes,  specified;  also  40  bundles  smaller  shapes,  to  be  of  old  sable,  assorted;  120 
bundles  band-iron,  assorted;  60  bundles  half-inch  spike  rods;  200  bundles  P  S  I  horse- 
nail  rods,  or  a  ton,  if  convenient,  in  28  lb. bundles,  sending  5  tons  in  all.  [Signed  by 
the  plaintiffs,  and  addressed  to  John  Thomas,  Esq. 


In  a  letter  dated  March  21st,  1836,  addressed  to  John  Thomas,  Esq., 
the  plaintiffs  alter  their  order  for  band-iron,  varying  the  sorts. 

The  letter  written  by  the  defendant  on  the  16th  of  March,  dated 
14th,  arrived  at  Hartford  on  the  18th  of  March,  about  2  o'clock 
-pji^  The  plaintiff's  answer  to  the  letter,  dated  the  19th  of  March, 
was  post-marked  the  20th,  and  the  letter  written  by  the  plaintiffs  on 
the  21st  of  March  was  post-marked  on  the  day  of  its  date;  and  both 
letters  arrived  at  "Wareham  together  on  the  23d  of  March. 

The  defendant  introduced  a  witness  to  prove  that  letters  mailed  at 
Hartford  for  Wareham  were,  by  the  usual  course  of  mail,  sent  by 
Providence,  and  would  reach  that  place  on  the  evening  of  the  day 
after  leaving  Hartford,  —  but  might  be  sent  by  Boston ;  although, 
when  sent  by  Boston,  on  the  days  that  both  mails  went,  a  letter  would 
be  one  day  longer  in  reaching  Wareham;  that  a  mail  was  sent  every 
day  from  Hartford  to  Boston,  and  every  day  but  Sunday  from  Hart- 
ford to  Providence;  that  the  Providence  mail  usually  left  the  post- 
office  in  Hartford  about  t^  o'clock  every  morning,  except  Sunday,  when 
no  mail  was  sent,  and  Monday,  when  it  left  about  10  o'clock  a.m. 
The  mails  were,  in  the  course  of  business,  closed  one  hour  before  they 
left  the  office.  TTpon  the  19th  of  March,  1836,  the  Providence  mail 
left  tbo  office  at  25  minutes  past  5  o'clock  in  the  morning,  and  on  the 
21st  at  6  minutes  past  ten  in  the  morning.  The  20th  was  Sunday; 
and  letters  put  into  the  office  on  Saturday  evening  and  on  Sunday 
evening  would  be  forwarded  by  the  same  mail.  The  usual  course  of 
bii.sincHs  at  tbo  post-office  in  Hartford  was  to  stamp  or  post-mark  all 
letters,  not  on  tlic;  day  they  were  forwarded,  but  tlie  day  they  were 
received  into  tbe  office,  —  unless  received  aft(;r  9  o'clock  in  the  even- 
ing, wlien  tbf'V  wfTf  post-marked  as  of  the  succeeding  day. 

The  court  instructfH]  tbe  jury  tliat  if  the  letter  dnted  March  19tll 


SECT.   l]  AVERILL    V.    HEDGE  39^ 

was  inai]pr}  nn  t"hp,  20th  of  March  it  was  not  a  seasonable  acceptance. 
On  verdict  for  the  defendant,  the  plaintilts  moved  lor  a  new  trial. 

Eungerford,  in  support  of  the  motion. 

T.  C.  Perkins,  contra. 

BissELL,  J.^  The  great  question  in  the  case  is,  whether  there  has 
been  such  an  acceptance  of  the  defendant's  offer  as  that  he  is  bound 

The  jury  were  instructed  that  if  the  letter  written  by  the  plaintiffs, 
accepting  the  proposal  of  the  defendant,  was  not  delivered  into  the 
post-office  at  Hartford  until  the  20th  of  March,  it  was  not  sent  in; 
such  reasonable  time  as  to  make  their  acceptance  obligatory  on  the 
defendant. 

Several  questions,  not  immediately  growing  out  of  the  charge,  but 
Avhich,  if  decided  in  favor  of  the  defendant,  make  an  end  of  the  case, 
have  been  much  discussed  at  the  bar. 

1.  It  has  been  contended  that  the  proposal  of  the  defendant,  in  his 
letter  of  the  2d,  was  not  renewed  by  his  letter  of  the  16th  of  March.. 
Upon  this  point  no  opinion  was  given  by  the  judge  on  the  circuit,, 
unless  an  opinion  may  be  inferred  from  the  ground  on  which  he 
rested  the  case  in  his  instructions  to  the  jury.  Nor  is  it  essential  that 
a  decided  opinion  on  the  question  should  be  expressed  by  this  Court; 
because  there  are  other  grounds  on  which  we  are  unanimously  of 
opinion  that  the  ruling  of  the  judge  below  must  be  sustained. 

Were  this,  however,  a  turning  point  in  the  case,  we  should  probably 
be  prepared  to  say  that  the  defendant's  letter  of  the  16th  of  March 
does  contain  a  distinct  renewal  of  his  former  proposal.  His  language 
is  certainly  very  strong  to  show  that  such  was  his  intention.  He 
says :  "Do  you  accept  of  our  proposal  for  supplying  you  with  rods, 
shapes,  and  band-iron;  and  if  so,  what  quantity  of  each  shall  we 
send  you  ?"  ISTow  we  cannot  but  think  that  the  fair  and  obvious  con- 
struction of  this  language  is  that  the  defendant  then  stood  ready 
to  supply  the  articles  upon  the  terms  already  specified.  And  such 
appears  to  have  been  his  own  view  of  the  case,  as  is  manifest  from 
his  subsequent  letter  of  the  8th  of  April. 

2.  It  has  been  urged,  that  admitting  this  letter  to  contain  a  renewal 
of  the  former  proposal,  yet,  hy  the  terms  of  it,  the  plaintiffs  were 
bound  to  signify  their  acceptance  by  return  of  mail.  The  question,  in 
this  aspect  of  it,  is  manifestly  independent  of  any  mercantile  usage. 
That  the  defendant  had  a  right  to  attach  this  condition  to  his  offer 
is  undeniable.  The  question  is,  whether  he  has  done  so;  and  whether 
such  is  the  true  construction  of  his  letter. 

In  his  letter  of  the  2d  of  March,  the  defendant  had  offered  to  sup- 
ply the  plaintiffs  an  assortment  of  hollow  ware  at  certain  prices ;  and 
in  regard  to  this  offer,  in  his  letter  of  the  16th,  he  says:  "We  shall 
not  consider  ourselves  holden  to  the  offer  made  you  on  the  2d  inst., 
unless  you  signify  your  acceptance  thereof  by  return  of  mail ;"  and  he 
^  A  portion  of  the  opinion  is  omitted. 


40  AVERILL   V.    HEDGE  [CHAP.   I 

then  puts  the  inquiry  with  regard  to  rods,  shapes,  and  band-iron, 
that  has  been  already  mentioned.  JSTow,  it  should  be  borne  in  mind, 
that  the  defendant's  proposal,  in  regard  to  these  articles,  had  already 
been  before  the  plaintiffs  for  at  least  ten  or  twelve  days;  and  one 
claim  put  forth  by  them  on  the  trial  was,  that  during  the  month  of 
March  the  price  of  these  articles  was  constantly  advancing  in  the 
market.  The  question  then  arises,  whether  under  these  circumstances 
it  was  the  intention  of  the  defendant  to  give  them  further  time;  and 
whether  such  intention  can  be  fairly  inferred  from  the  language  of 
his  communication.  In  regard  to  the  hollow  ware,  there  can  be  no 
question.  The  plaintiffs  were  positively  required  to  signify  their 
acceptance  by  return  mail.  And  when,  in  the  same  letter  and  under 
similar  circumstances,  they  are  also  required  to  decide  upon  the 
proposal  in  regard  to  the  rods,  &c.,  it  is  certainly  not  easy  to  see 
why  the  defendant  should  have  made,  or  should  have  intended  to 
make,  a  distinction  between  these  classes  of  articles.  Had  the  judge 
directed  the  jury  that  the  defendant  was  not  bound,  unless  the 
plaintiffs  signified  their  acceptance  by  return  of  mail,  we  are  by  no 
means  satisfied  that  the  direction  would  have  been  wrong.  As, 
however,  he  placed  the  case  on  grounds  more  favorable  to  the  plain- 
tiff's claim,  a  decision  upon  this  point  is  unnecessary.  Any  further 
discussion  of  it  is  therefore  waived. 

3.  We  come  then  to  the  inquiry,  whether  the  instruction  actually 
given  to  the  jury  is  correct  in  point  of  law.  And  here  it  may  be 
remarked,  that  it  is  very  immaterial  when  the  letter  of  the  plaintiffs 
was  written:  until  sent,  it  was  entirely  in  their  power  and  under  their 
control,  and  was  no  more  an  acceptance  of  the  defendant's  offer  than 
a  bare  determination,  locked  up  in  their  own  bosoms  and  uncom- 
municated,  would  have  been.  And  it  surely  will  not  be  claimed  that 
mere  volitions,  a  mere  determination  to  accept  a  proposal,  constitute 
a  contract.  The  plaintiffs  then  did  not  accept  the  defendant's  prop- 
osition until  the  20th,  and  for  aught  that  appears  [not]  until  the 
evening  of  that  day.  That  they  were  bound  to  accept  within  a  reason- 
able time  was  distinctly  admitted  in  the  argument;  and  if  not  ad- 
mitted, the  position  is  undeniable.  The  case  of  the  plaintiffs  then 
comes  to  this,  and  this  is  the  precise  ground  of  their  claim :  That 
thoy  had  a  right  to  hold  the  defendant's  offer  under  advisement  for 
more  than  forty-eight  hours,  and  to  await  the  arrival  of  three  mails 
from  Xew  York,  advising  them  of  the  state  of  the  commodity  in 
tlie  market;  and  having  then  determined  to  accept,  the  defendant  was 
hound  by  his  off(!r;  and  tliat  this  constitutes  a  valid  mercantile  con- 
tract. Now,  in  regard  to  such  a  claim,  we  can  only  say,  that  it  ap- 
pears to  us  to  bo  in  the  highest  degree  unreasonable;  and  that  we 
know  of  no  principle,  of  no  authority,  from  which  it  derives  the 
slightest  support. 

Indeed,  it  seemH  to  us  to  bo  subversive  of  the  whole  law  of  con- 
tracts. For  it  is  most  obvious  that,  if  during  the  interval  the  defendant 


SECT.    I]  AVERILL    V.    HEDGE  41 

was  bound  by  his  oifer,  there  was  an  entire  want  of  mutuality: 
the  one  party  was  bound,  while  the  other  was  not.  Had  the  propo- 
sition been  made  at  a  personal  intervieAv  between  the  parties,  there 
can  be  no  pretence  that  it  would  have  bound  the  defendant  beyond  the 
termination  of  the  interview. 

In  Mactier  v.  Frith,  6  Wend.  103,  which  goes  as  far  as  any  case 
on  the  subject,  the  rule  is  laid  down,  that  the  offer  continues  until 
the  letter  containing  it  is  received,  and  the  party  has  had  a  fair 
opportunity  to  answer  it.  And  it  is  further  said,  that  a  letter  written 
would  not  be  an  acceptance,  so  long  as  it  remained  in  the  possession  <■  j  r\ 
or  under  the  control  of  the  writer.  An  offer  then,  made  through  a 
letter,  is  not  continued  beyond  the  time  that  the  party  has  a  "lair  7"^,-^  ^^^ 
opportunity"  to  answer  it.     This  is  substantially  the  doctrine  of  the  2. 

charge.  And  it  is  not  only  highly  reasonable,  but  is  supported  by 
all  the  analogies  of  the  law.  Once  establish  the  principle  that  a 
party  to  whom  an  offer  is  made  may  hold  it  under  consideration 
more  than  forty-eight  hours,  watching  in  the  mean  time  the  fluctua- 
tions of  the  market,  and  then  bind  the  other  party  by  his  acceptance, 
and  it  is  believed  that  you  create  a  shock  throughout  the  commercial 
community,  utterly  destructive  of  all  mercantile  confidence.  !No 
offers  would  be  made  by  letter.     It  would  be  unsafe  to  make  them. 

It  is  only  necessary  to  apply  these  principles  to  the  case  before  us 
and  their  application  is  exceedingly  obvious.  The  proposal  of  the 
defendant,  which  had  already  been  several  days  before  the  plaintiffs, 
was  renewed  early  on  the  afternoon  of  the  18th.  They  show  no  act 
done  by  them  signifying  their  acceptance,  until  the  evening  of  the 
20th.  Was  this  within  a  reasonable  time?  Was  this  the  first  fair 
opportunity  of  manifesting  their  acceptance?  We  think  this  can 
hardly  be  claimed.  Had  the  defendant  had  an  agent  in  Hartford, 
through  whom  the  offer  was  made,  might  the  plaintiffs  thus  have 
delayed  the  communication  of  their  acceptance  to  him?  This  would 
not  be  pretended.  And  can  it  vary  the  principle,  that  the  offer,  in- 
stead of  being  thus  made,  was  made  through  the  agency  of  the  post- 
office?  Had  the  offer  of  the  defendant  been  promptly  accepted,  in- 
formation of  the  acceptance  would  have  reached  the  defendant  on 
the  evening  of  the  20th,  in  due  course  of  mail.  He  waited  until  the 
22d;  and  hearing  nothing  from  the  plaintiffs,  he  then  virtually  re-  ? 
tracted  bis  offer,  by  making  such  arrangements  as  made  it  impossible  ' 
for  him  to  fill  their  order.  We  think  he  was  fully  justified  in  so 
doing;  and  that  upon  every  sound  principle  the  rule  in  this  case 
must  be  discharged. 

In  this  opinion  the  other  Judges  concurred. 

Netv  trial  not  to  he  granted.'^ 

^  In  Kempner  v.  Cohn,  47  Ark.  519,  it  was  held  that  in  the  case  of  an  offer  to  sell 
real  estate,  a  delay  of  five  days  in  accepting  was  not  as  matter  of  law  unreasonable. 
In  Ortman  v.  Weaver,  11  Fed.  Rep.  358,  a  delay  of  two  weeks  in  accepting  such  an 
offer  was  held  unreasonable.  In  Hargadine,  McKittrick  Co.  v.  Reynolds,  64  Fed.  Rep. 
560,  a  delay  of  six  days  in  accepting  an  offer  to  sell  cotton  manufactured  goods  was 


42  BYRNE    &    CO.    V.    VAN   TIENHOVEN    &    CO.       [CHAP.   I 


EYENE  &  CO.  V.  LEON  VAN  TIEFHOVE]^  &  CO. 

In  the  Common  Pleas  Division,  Marcli  6,  1880 

[Reported  in  5  Common  Pleas  Division,  344] 

LiNDLEY,  J.^  This  was  an  action  for  the  recovery  of  damages  for 
the  non-delivery  by  the  defendants  to  the  plaintiffs  of  1000  boxes  of 
tinplates  pursuant  to  an  alleged  contract. 

The  defendants  carried  on  business  at  Cardiff  and  the  plaintiffs  at 
I^^ew  York,  and  it  takes  ten  or  eleven  days  for  a  letter  posted  at  either 
place  to  reach  the  other.  The  defendants  by  letter  of  October  1 
offered  the  plaintiffs  1000  boxes  of  tinplates  at  15s.  6d.  a  box  "sub- 
-ject  to  vour  cable  on  or  before  the  15th  inst.  here."  The  plaintiffs 
sent  a  telegram  on  October  11th  accepting  this  offer,  and  confirmed  it 
by  letter  dated  October  15th.  On  October  8th  the  defendants  wrote 
a  letter  withdrawing  their  offer.  This  letter  reached  the  plaintiffs 
on  October  20th,  but  they  claimed  the  revocation  was  ineffectual  and 
■brought   this   action. 

There  is  no  doubt  that  an  offer  can  be  withdrawn  before  it  is 
accepted,  and  it  is  immaterial  whether  the  offer  is  expressed  to  be 
open  for  acceptance  for  a  given  time  or  not.  Eoutledge  v.  Grant, 
4  Bing.  653.  Eor  the  decision  of  the  present  case,  however,  it  is 
necessary  to  consider  two  other  questions,  viz. :  1.  Whether  a  with- 
drawal of  an  offer  has  any  effect  until  it  is  communicated  to  the 
person  to  whom  the  offer  has  been  sent?  2.  Whether  posting  a  let- 
ter of  withdrawal  is  a  communication  to  the  person  to  whom  the 
letter  is  sent  ? 

It  is  curious  that  neither  of  these  questions  appears  to  have  been 
actually  decided  in  this  country.  As  regards  the  first  question,  I 
am  aware  that  Pothier  and  some  other  writers  of  celebrity  are  of 
opinion  that  there  can  be  no  contract  if  an  offer  is  withdrawn  before 
it  is  accepted,  although  the  withdrawal  is  not  communicated  to  the 
person  to  whom  the  offer  has  been  made.  The  reason  for  this 
opinion  is  that  there  is  not  in  fact  any  such  consent  by  both  parties 
as  is  essential  to  constitute  a  contract  between  them.  Against  this 
view,  however,  it  has  been  urged  that  a  state  of  mind  not  notified 
caimot  be  regarded  in  dealings  between  man  and  man;  and  that  an 
uncommunicated   revocation   is   for   all   practical   purposes    and    in 

h(M  iinroasonabln.  In  Minnesota  Oil  Co.  v.  Collior  Lead  Co.,  4  Dill.  431,  it  was  held 
that  in  tho  case  of  an  offer  hy  telej^ram  to  sr<ll  oil,  then  the  snhjeet  of  rapid  fluctuation 
in  price,  a  telegraphic  ref>ly  after  twcsnty-four  honrs'  delay  was  too  late. 

See  also  HainsKate  irr>tei  Co.  v.  Montefiore,  L.  11.  1  Ex.  109;  Rr  Bowron,  L.  R.  ,'5  Eq. 
428  L.  K.  H  C:h.  r>'.)2;  Dc.  Witt  v.  Chicago,  &(-..  Ry.  Co.,  41  Fed.  Rep.  4S4;  Furrier  v. 
Stfjrer,  (V.i  la.  4H4;  Tronristine  v.  Sellers,  ^.'j  Kan.  447;  Park  v.  Whitney,  MS  Mass. 
'27H;  StoTK!  V.  Harmon,  .HI  Minn.  512;  Tl.-ilioek  v.  Insurance  Co.,  2  Dutch,  208;  Mizell 
V.  Hurnett,  4  .lonr's,  L.  240;    liaker  v.  Holt,  r,(\  Wis.  100;    Rherley  v.  Peehl,  84  Wis.  46. 

'  A  brief  statement  f)f  facts  has  hfien  substituted  for  the  statement  of  the  court. 
•Only  HO  m\lc^l  of  the  opinion  is  given  aa  relates  to  the  question  of  revocation. 


SECT.    l]        BYRNE   &    CO.    V.   VAN   TIENHOVEN    &    CO.  43 

point  of  law  no  revocation  at  all.     This  is  the  view  taken  in  the 
United  States :  see  Tayloe  v.  Merchants  Fire  Insurance  Co.,  9  How. 
Sup.  Ct.  Kep.  390,  cited  in  Benjamin  on  Sales,  pp.  56-58,  and  it  is 
adopted  by  Mr.  Benjamin.     The  same  view  is  taken  by  Mr.  Pollock 
in  his  excellent  work  on  Principles  of  Contract,  ed.  ii.,  p.  10,  and 
by  Mr.  Leake  in  his  Digest  of  the  Law  of  Contracts,  p.  43.     This 
view,  moreover,  appears  to  me  much  more  in  accordance  with  the 
general   principles   of   English   law   than   the  view   maintained   by 
Pothier.    I  pass,  therefore,  to  the  next  question,  viz.,  whether  posting 
the  letter  of  revocation  was  a  sufficient  communication  of  it  to  the 
plaintiff.    The  offer  was  posted  on  the  1st  of  October,  the  withdrawal 
was  posted  on  the  8th,  and  did  not  reach  the  plaintiff  until  after  he 
had  posted_^is__letter  of  the  11th,  accepting  the  offer.     It  may  be 
"taken"  asnow  settled  that  where  an  offer  is  made  and  accepted  by 
letters  sent  through  the  post,  the  contract  is  completed  the  moment 
the  letter  accepting  the  offer  is  posted:  Harris'  Case,  Law  Rep.  7 
Ch.  587;  Dunlop  i\  Higgins,  1  H.  L.  381,  even  although  it  never 
reaches  its  destination.    "When,  however,  these  authorities  are  looked 
at,  it  will  be  seen  that  they  are  based  upon  the  principle  that  the 
v^riter  of  the  offer  has  expressly  or  impliedly  assented  to  treat  an 
answer  to  him  by  a  letter  duly  posted  as  a  sufficient  acceptance  and 
notification  to  himself,  or,  in  other  words,  he  has  made  the  post- 
office  his  agent  to  receive  the  acceptance  and  notification  of  it.     But 
this  principle  appears  to  me  to  be  inapplicable  to  the  case  of  the 
withdrawal  of  an  offer.     In  this  particular  case  I  find  no  evidence 
of  any  authority  in  fact  given  by  the  plaintiffs  to  the  defendants  to 
notify  a  withdrawal  of  their  offer  by  merely  posting  a  letter;  and 
there  is  no  legal  principle  or  decision  which  compels  me  to  hold,  con- 
trary to  the  fact,  that  the  letter  of  the  8th  of  October  is  to  be  treated 
as  communicated  to  the  plaintiffs  on  that  day  or  on  any  day  before  the 
20th,   when   the  letter  reached   them.      But   before   that   letter   had 
reached  the  plaintiffs  they  had  accepted  the  offer,  both  by  telegram 
and  by  post ;  and  they  had  themselves  resold  the  tinplates  at  a  profit. 
In  my  opinion   the  withdrawal   by   the   defendants   on   the   8th   of 
October  of  their  offer  of  the  1st  was  inoperative;  and  a  complete 
contract  binding  on  both  parties  was  entered  into  on  the  11th  of 
October,   when  the  plaintiffs  accepted  the  offer  of  the  1st,  which 
they  had  no  reason  to  suppose  had  been  withdrawn.    Before  leaving 
this  part  of  the'  case  it  may  be  as  well  to  point  out  the  extreme  in- 
justice and  inconvenience  which   any  other  conclusion  would   pro- 
duce.    If  the  defendants'  contention  were  to  prevail  no  person  who 
had  received  an  offer  by  post  and  had  accepted  it  would  know  his 
position  until  he  had  waited  such  a  time  as  to  be  quite  sure  that  a 
letter  withdrawing  the  offer  had  not  been  posted  before  his  acceptance 
of  it.    It  appears  to  me  that  both  legal  principles  and  practical  con-  .  / 
venience  require  that  a  person  who  has  accepted  an  offer  not  known  jC-^ 
to  him  to  have  been  revoked,  shaTTbe  in  a  position  safely  to  act  upon 


44  HYDE    V.    WRENCH  [CHAP.    I 

the  footing  that  the  offer  and  acceptance  constitute  a  contract  bind- 
ing on  both  parties.^ 


HYDE  V.  WEENCH 

In  Chancery,  December  8,  1840 
[Reported  in  3  Beavan,  334] 

This  case  came  on  upon  general  demurrer  to  a  bill  for  specific  per- 
formance, which  stated  to  the  effect  f olloMang :  — 

The  defendant,  being  desirous  of  disposing  of  an  estate,  offered,  by 
his  agent,  to  sell  it  to  the  plaintiff  for  1,200?.,  which  the  plaintiff, 
by  his  agent,  declined;  and  on  the  6th  of  June  the  defendant  wrote 
to  his  agent  as  follows :  "I  have  to  notice  the  refusal  of  your  friend 
to  give  me  1,200/.  for  my  farm;  I  will  only  make  one  more  offer, 
which  I  shall  not  alter  from ;  that  is,  1,000L  lodged  in  the  bank  until 
Michaelmas,  when  title  shall  be  made  clear  of  expenses,  land,  tax,  &c. 
I  expect  a  reply  by  return,  as  I  have  another  application."  This 
letter  was  forwarded  to  the  plaintiff's  agent,  who  immediately  called 
on  the  defendant;  and,  previously  to  accepting  the  offer,  offered  to 
give  the  defendant  950L  for  the  purchase  of  the  farm,  but  the  de- 
fendant wished  to  have  a  few  days  to  consider. 

On  the  11th  of  June,  the  defendant  wrote  to  the  plaintiff's  agent 
as  follows :  "I  have  written  to  my  tenant  for  an  answer  to  certain 
inquiries,  and,  the  instant  I  receive  his  reply,  will  communicate 
with  you,  and  endeavor  to  conclude  the  prospective  purchase  of  my 
farm.  I  assure  you  I  am  not  treating  with  any  other  person  about 
said  purchase." 

The  defendant  afterwards  promised  he  would  give  an  answer  about 
accepting  the  950/.  for  the  purchase  on  the  26th  of  June;  and  on  the 
27th  he  wrote  to  the  plaintiff's  agent,  stating  he  was  sorry  he  could 
not  feel  disposed  to  accept  his  offer  for  his  farm  at  Luddenham  at 
present. 

This  letter  being  received  on  the  29th  of  June,  the  plaintiff's  agent 
on  that  day  wrote  to  the  defendant  as  follows :  "I  beg  to  acknowledge 

»  Stevenson  v.  McLean,  5  Q.  B.  D.  346;  Henthorn  v.  Fraser,  [1892]  2  Ch.  27;  Re 
London  &  Northern  Bank,  [1900]  1  Ch.  220;  Tayloe  v.  Merchants'  Fire  Ins.  Co.,  9 
How.  390;  Patrick  v.  Bowman,  149  U.  S.  411,  424;  The  Palo  Alto,  2  Ware,  343; 
Kcnipn(!r  v.  Cohn,  47  Ark.  519;  Sherwin  v.  Nat.  Cash  Register  Co.,  5  Col.  App.  162; 
Wheat  V.  Cros.s,  31  Mfl.  99;  liraiicr  v.  Shaw,  168  Mass.  198,  ace.  Th(>  (contrary  impli- 
cations in  Cooke  v.  Oxley,  3  T.  R.  653;  Adams  v.  Lindscll,  1  B.  &  Aid.  681;  Head  v. 
DiKKon,  .3  Man.  Ac  K.  97;    Hebh's  Case,  L.  R.  4  Eq.  9,  must  be  regarded  as  overruled. 

In  Patrifk  v.  Tiowman,  149  U.  S.  411,  the  Court,  after  holding  that  a  revocation  of 
an  offer  was  inf^ffectual  if  not  received  before  acceptance,  said  (at  p.  424):  "There  is 
ind<;ed,  in  a  cjwc!  of  this  kinrl,  some  reason  for  iirging  that  the  party  making  the  revo- 
cation should  h<!  estor)7>(!d  tf>  filaim  that  his  attemijtcd  withdrawal  was  not  l)inding 
ur)on  himself;  but  this  f;ould  not  l)e  done  without  infringing  upon  the  inexorable  rule 
that  one  party  to  a  contract  <!aniiot  lie  Ixmnd  unless  the  oth(!r  be  also,  notwithstanding 
that  the  princii)l(!  of  mutuality  thus  applied  may  enable  a  party  to  take  advantage  of 
the  invalidity  of  iiia  own  act." 


SECT.    l]  HYDE    V.    WRENCH  45 

the  receipt  of  your  letter  of  the  27th  instant,  informing  me  that  you 
are  not  disposed  to  accept  the  sum  of  950L  for  your  farm  at  Lud- 
denham.  This  being  the  case,  I  at  once  agree  to  the  terms  on  which 
you  offered  the  farm;  viz.,  1,000L  through  your  tenant,  Mr.  Kent, 
by  your  letter  of  the  6th  instant.  I  shall  be  obliged  by  your  instruct- 
ing your  solicitor  to  communicate  with  me  without  delay,  as  to  the 
title,  for  the  reason  which  I  mentioned  to  you." 

The  bill  stated,  that  the  defendant  "returned  a  verbal  answer  to  the 
last-mentioned  letter,  to  the  eif ect  he  would  see  his  solicitor  thereon ;" 
and  it  charged  that  the  defendant's  offer  for  sale  had  not  been  with- 
drawn previous  to  its  acceptance. 

To  this  bill,  filed  by  the  alleged  purchaser  for  a  specific  perform- 
ance, the  defendant  filed  a  general  demurrer, 

Mr.  Kindersley  and  Mr.  Keene,  in  support  of  the  demurrer. 
To  constitute  a  valid  agreement  there  must  be  acceptance  of  the 
terms  proposed.  Holland  v.  Eyre.^  The  plaintiff,  instead  of  ac- 
cepting the  alleged  proposal  for  sale  for  1,000/.  on  the  6th  of  June, 
rejected  it,  and  made  a  counter  proposal;  this  put  an  end  to  the 
defendant's  offer,  and  left  the  proposal  of  the  plaintiff  alone  under 
discussion;  that  has  never  been  accepted,  and  the  plaintiff  could  not, 
without  the  concurrence  of  the  defendant,  revive  the  defendant's 
original  proposal. 

Mr.  Pemherton  and  Mr.  Freeling,  contra.  So  long  as  the  offer 
of  the  defendant  subsisted,  it  was  competent  to  the  plaintiff  to  accept 
it;  the  bill  charges  that  the  defendant's  offer  had  not  been  with- 
drawn previous  to  its  acceptance  by  the  plaintiff ;  there  therefore  ex- 
ists a  valid  subsisting  contract.  Kennedy  v.  Lee,^  Johnson  v.  King,^ 
were  cited. 

The  Master  of  the  Eolls 

Under  the  circumstances  stated  in  this  bill,  I  think  there  exists  no 
valid  binding  contract  between  the  parties  for  the  purchase  of  the 
property.  The  defendant  offered  to  sell  it  for  1,000?.,  and  if  that 
had  been  at  once  unconditionally  accepted,  there  would  undoubtedly 
have  been  a  perfect  binding  contract;  instead  of  that,  the  plaintiff 
made  an  offer  of  his  own  to  purchase  the  property  for  950?..  and  he 
thereby  rejected  the  offer  previously  made  by  the  defendant.  I 
think  that  it  was  not  afterwards  competent  for  him  to  revive  the 
proposal  of  the  defendant,  by  tendering  an  acceptance  of  it;''  and 
that  therefore  there  exists  no  obligation  of  any  sort  between  the 
parties;  the  demurrer  must  be  allowed.^ 

1  2  Sim.  &  St.  194.  2  3  Mer.  454. 

3  2  Bing.  270.  4  Lord  Langdale.  —  Ed. 

6  National  Bank  v.  Hall,  101  U.  S.  43,  50;  Minneapolis,  &c.  Ry.  Co.  v.  Columbus 
Rolling  Mills,  119  U.  S.  149;  Ortman  v.  Weaver,  11  Fed.  Rep/358;  W.  &  H.  M. 
Goulding  Co.  v.  Hammond,  54  Fed.  Rep.  639  (C.  C.  A.);  Baker  v.  Johnson  Co.,  37  la. 
186,  189;  Cartmel  v.  Newton,  79  Ind.  1,8;  Fox  v.  Turner,  1  111.  App.  153;  Egger  v. 
Nesbit,  122  Mo.  667;  Harris  v.  Scott,  67  N.  H.  437;  Russell  v.  FaUs  Mfg.  Co..  106 
Wis.  329,  ace.    See  further  1  WilUston,  Contracts,  §  51. 


46  POEL    V.   BRUNSWICK-BALKE-COLLENDER   CO.       [CHAP.  I 

TEA^^Z  POEL,  et  al,  Eespondents,  v.  BRUNSWICK-BALKE- 
COLLEOT)ER  COMPANY  OF  :N^EW  YORK,  Appellant 

New  York  Couet  of  Appeals,  October  22-]Sroveinber  23,  1915 

[Reported  in  216  New  York,  310] 

Seabuey,  J.^  In  pursuance  of  a  conversation  by  telepbone,  cor- 
respondence ensued  between  the  parties  culminating  in  a  letter  of 
April  4th,  1910,  from  the  plaintiff,  enclosing  a  draft  contract  for 
about  twelve  tons  of  Upriver  fine  Para  rubber  at  $2.42  a  pound,  in 
equal  monthly  shipments  from  January  to  June,  1911.  In  reply  to 
this  offer  the  defendant  on  April  6th,  1910,  sent  the  following 
letter :  — 

^'Please  deliver  at  once  the  following,  and  send  invoice  with  goods : 

About  12  tons  Upriver  Fine  Para  Rubber  at  2.42  per  lb.    Equal 

[onthly  shipments  January  to  June,  1911. 

JU^  J  CONDITIONS    ON    WHICH    ABOVE    OKDER   IS    GIVEN 

'Goods  on  this  order  must  be  delivered  when  specified.     In  case 

ou  cannot  comply,  advise  us  by  return  mail  stating  earliest  date 

of  delivery  you  can  make,  and  await  our  further  orders. 

vThe  acceptance  of  this  order  which  in  any  event  you  must  promptly 

acknowledge  will  be  considered  by  us  as  a  guarantee  on  your  part 
y)f  prompt  delivery  within  the  specified  time. 
Vjerms  F.  O.  B." 

The  fundamental  question  in  this  case  is  whether  these  writings 
constitute  a  contract  between  the  parties.  If  they  do  not,  no  ques- 
tion as  to  whether  these  writings  meet  the  requirements  of  the 
Statute  of  Frauds  need  be  considered.  An  analysis  of  their  provisions 
will  show  that  they  do  not  constitute  a  contract.  It  is  not  intended, 
and  in  face  of  the  provisions  of  the  plaintiff's  letter  of  April  4th  it 
cannot  be  claimed,  that  that  letter  is  in  itself  a  contract.  It  is 
merely  an  offer  or  proposal  by  the  plaintiffs  that  the  defendant  should 
accept  the  proposed  contract  inclosed  which  is  said  to  embody  an 
oral  order  that  the  defendant  had  that  day  given  the  plaintiffs.  The 
object  of  this  letter  was  to  have  the  terms  of  the  oral  agreement 
reduced  to  writing  so  that  there  could  be  no  uncertainty  as  to  the 
terms  of  the  contract.  The  letter  of  the  defendant  of  April  6th  did 
not  accept  this  offer.  If  the  intention  of  the  defendant  had  been 
to  accept  the  offer  made  in  the  plaintiff's  letter  of  April  4th,  it 
would  have  been  a  simple  matter  for  the  defendant  to  have  indorsed 
its  acceptance  upon  thf;  proposed  contract  which  the  plaintiff's  let- 
tr-r  of  April  4tb  hiid  inclosed.  Instead  of  adopting  this  simple  and 
obvious  method  of  itidieatiufi;  iin  intent  to  accept  the  contract  pro- 
*  A  portion  of  the  opinion  is  omitted. 


vcrv- 


SECT.    l]      POEL    V.    BRUNSWICK-BALKE-COLLENDER   CO.  47 

posed  by  the  plaintiffs  the  defendant  submitted  its  own  proposal 
and  specified  the  terms  and  conditions  upon  which  it  should  be 
accepted.  The  defendant's  letter  of  April  6th  was  not  an  acceptance 
of  this  offer  made  by  the  plaintiffs  in  their  letter  of  April  4th.  It 
was  a  counter-offer  or  proposition  for  a  contract.  Its  provisions 
make  it  perfectly  clear  that  the  defendant  (1)  asked  the  plaintiffs 
to  deliver  rubber  of  a  certain  quality  and  quantity  at  the  price 
specified  in  designated  shipments;  (2)  it  specified  that  the  order 
'-"  therein  given  was  conditional  upon  the  receipt  of  its  order  being 
c^^  promptly  aclcnowledged,  and  (3)  upon  the  further  condition  that  the 
*  y  plaintiffs  would  guarantee  delivery  within  the  time  specified.  It 
■^  ***p'/  may  be  urged  that  the  condition  specified  in  the  defendant's  order 
\„,,,,tA^  that  the  plaintiffs  would  guarantee  the  delivery  of  the  goods  within 
the  time  specified  added  nothing  of  substance  to  the  agreement,  be- 
"^•^^jJL cause  if  the  offer  was  accepted  the  acceptance  itself  would  involve 
'"^tf^T^  this  obligation  on  the  part  of  the  plaintiffs.  The  other  condition 
.^r^^^^<^      specified  by  the  defendant  cannot  be  disposed  of  in  the  same  man- 

fner.     That  provision  of  the  defendant's  offer  provided  that  the  offer 
t,jtjjS^,..^*j^^^  conditional  upon  the  receipt  of  the  order  being  promptly  ac- 
^^y^      knowledged.     It  embodied  a  condition  that  the  defendant  had  the 
right  to  annex  to  its  offer.     The  import  of  this  proposal  was  that  the 
r  defendant  should  not  be  bound  until  the  plaintiffs  signified   thTn- 
assent  to  the  terms  set  tortk!     When  this  assent  was  given  and  the 
acknowledgment  made,  this  contract  was  then  to  come  into  existence 
and  would  be  completely  expressed  in  writing.     The  plaintiffs  did 
not  acknowledge  the  receipt  of  this  order  and  the  proposal  remained 
^  unaccepted.     As  the  party  making  this  offer  deemed  this  provision 
'  material  and  as  the  offer  was  made  subject  to  compliance  with  it 
by  the  plaintiffs  it  is  not  for  the  court  to  say  that  it  is  immaterial. 
When  the  plaintiffs  submitted  this  offer  in  their  letter  of  April  4th 
to  the  defendant  only  one  of  two  courses  of  action  was  open  to  the 
defendant.     It  could  accept  the  offer  made  and  thus  manifest  that 
assent  which  was  essential  to  the  creation  of  a  contract  or  it  could 
reject  the  offer.     There  was  no  middle  course.     If  it  did  not  accept 
the  offer  proposed  it  necessarily  rejected  it.     A  proposal  to  accept 
the  offer  if  modified  or  an  acceptance  subject  to  other  terms  and 
conditions  was  equivalent  to  an  absolute  rejection  of  the  offer  made 
by  the  plaintiffs.     Mactier's  Admrs.  v.  Frith,  6  Wend,  103;  Vassar 
V.  Camp,  11  N".  Y.  441 ;  Chicago  k  G.  E.  R.  Co.  v.  Dane,  43  ^T.  Y. 
240;  Sidney  Glass  Works  v.  Barnes  &  Co.,  86  Hun,  374;  Mahar  v. 
Compton,  18  App.  Div.  536,  540;  ]^undy  v.  Matthews,  34  Hun,  74; 
Barrow  Steamship  Co.  v.  Mexican  C.  R.  Co.,  134  IST.  Y.  15. 


48  TURNER   V.   M'^CORMICK  [CHAP.   I 

TUENEK  V.  McCOKMICK 

West  Virginia  Supeeme  Coukt  of  Appeals,  June  6-November 

1,  1904 
[Reported  in  56  West  Virginia,  161] 

Poffexbargee,  President.^  In  the  Circuit  Court  a  demurrer  to  a 
bill  for  the  specific  performance  of  two  alleged  contracts  for  the 
sale  of  a  vein  of  coal  was  sustained  on  the  ground  that  the  acceptance 
of  the  plaintiff  was  insufficient.  The  acceptance  in  question  was 
as  follows  : 

''Morgantown,  W.  Va.,  Feb.  21,  1902.  Mr.  William  McCormick: 
I  hereby  notify  you  that  your  coal  will  be  accepted  according  to 
terms  of  the  option  given  to  me  on  same  and  respectfully  request 
you  to  make  delivery  of  deed,  with  abstract  of  title,  to  me,  in  Mor- 
gantown,  W.  Va.,  on  Saturday,  June  28th,  1902,  hour  and  place  to 
be  decided  later.    Yours  truly,  E.  D.  Turner." 

Counsel  for  appellee  say  that  if  the  first  clause  standing  alone 
would  amount  to  unconditional  acceptance,  converting  the  option 
into  a  contract,  binding  upon  both  parties,  the  addition  of  the  re- 
quest that  delivery  of  the  deed  be  made  on  the  28th  day  of  June, 
a  date  more  than  ninety  days  after  acceptance  and  after  the  time 
in  which  acceptance  could  be  made,  renders  the  notice  insufficient. 
They  say  this  request  does  not  relate  to  performance  of  the  contract 
after  the  making  thereof  as  proposed,  and  that  the  insertion  thereof 
in  the  written  notice  was  an  attempt  to  engraft  upon  the  contract 
proposed  conditions  or  terms  not  embodied  in  the  original  propo- 
sition ;  and,  as  the  bill  does  not  show  any  acceptance  in  writing  of  this 
new  condition,  the  effort  to  change  the  original  proposition  has 
failed  and  no  contract  has  been  made.  .If  this  last  clause  of  the  deed 
thus  fiualified  the  first,  it  would  Avork  a  change  as  to  the  time  of 
paynifiit  of  the  j)urchase  money  and  delivery  of  the  deed.  It  woulcT" 
also  (Jesigriate  a  place  of  payment  as  to  which  the  options  are  silent. 

The  contention  of  counsel  for  appellee  is  unsupported  by  authority. 
"If  an  offer  is  accepted  as  made,  the  acceptance  is  not  conditional 
and  dofs  not  vary  from  the  offer  because  of  inquiries  whether  the 
offcrfT  will  change  his  terms,  or  as  to  future  acts,  or  the  expression 
of  a  hope,  or  suggestions,  etc."  9  Cyc.  269.  "Plaintiff  answered  a 
proposition  to  lease  *I  will  accept  your  offer  to  lease  to  you  at  $200 
per  year  for  three  or  five  years  as  you  choose.'  Defendant 
anawered,  'Make  out  lease  for  place  for  five  years  at  $200 
per  year.'  He  also  said  in  this  letter  that  he  would  like  to  build  on  a 
cookroom,  Avith  privilege  to  remove  it.     Plaintiff  recognized  that  a 

•    A  portion  of  the  opinion  is  omitted. 


SECT.    l]  TURNER    V.    m'^CORMICK  49 

lease  for  five  years  existed.  Held,  these  letters  made  a  lease,  and  the 
request  as  to  the  cookroom  did  not  attach  a  condition  to  defendant's 
acceptance."     Culton  v.  Gilchrist,  92  la.  718. 

A  case  relied  upon  is  Sawyer  v.  Brossart  67  la.  678.  In  that  case, 
the  defendant,  a  resident  of  Los  Angeles,  California,  offered  for  sale, 
by  letter,  two  business  rooms  in  Iowa  City,  saying  to  the 
plaintiff:  "You  can  have  that  building  for  thirty-five  hundred  dol- 
lars, or  the  two  for  $5,000,  Let  me  hear  from  you  at  once."  The 
alleged  acceptance  was  by  telegram  from  Iowa  City,  saying :  "Accept 
your  offer  for  two  buildings  at  five  thousand  dollars.  Money  at  your 
order  at  first  National  Bank  here."  The  court  held  that  the  de- 
fendant "was  entitled  under  his  offer  to  have  the  money  paid  to  him 
at  his  place  of  residence  and  to  deliver  the  deed  there,  and  that,  as  the 
acceptance  of  plaintiff  was  not  an  acceptance  of  the  offer  as  made, 
it  did  not  bind  B.,"  the  plaintiff.  It  is  to  be  noted  here  that  the 
plaintiff  did  not  request  permission  to  pay  the  money  into  the  bank  to 
the  defendant's  credit  at  Iowa  City,  but  said,  in  effect,  that  the  money 
had  been  paid  there  to  his  credit.  Therefore,  the  payment  into  the 
bank  at  Iowa  City  was  made  a  part  of  the  acceptance.  By  such 
payment  and  notice  plaintiff  attempted  to  add  a  new  condition  to 
the  contract  proposed,  which  was  silent  as  to  the  place  of  payment 
and,  therefore,  in  law,  contemplated  payment  at  Los  Angeles.  It 
was  not  an  unqualified  acceptance  coupled  with  a  request  for  permis- 
sion to  pay  at  Iowa  City. 

Three  cases  referred  to  in  one  of  the  briefs  for  appellee,  are,  in 
all  material  respects,  alike.  They  are  Robinson  v.  Weller,  8  S.  E, 
449;  Northwestern  Iron  Co.  v.  Meade,  94  Am.  Dec.  557;  and  Egger 
V.  Nesbitt,  43  Am.  St.  596.  They  enunciate  the  proposition  that 
an  acceptance  of  an  offer  to  sell  land,  but  fixing  a  different  place  for 
the  delivery  of  the  deed  and  payment  of  the  money  than  the  resi- 
dence of  the  offerer,  or  the  place  named  in  the  offer,  is  not  an  un- 
conditional acceptance  so  as  to  bind  the  seller.  This  is  asserted  by 
several  cases.  Bilbert  v.  Baxter,  71  la.  327;  Langellier  v.  Schaefer, 
36  Minn  361.  But  they  are  all  cases  arising  uj)on  loose,  informal 
correspondence,  making  it  necessary  to  look  to  the  whole  of  each 
paper  to  ascertain  the  true  meaning  and  intent  of  the  parties.  None 
of  the  letters  relied  upon  as  acceptances  said  an  offer  was  accepted 
in  accordance  with  its  terms,  or  that  the  property  would  be  taken 
according  to  the  terms  of  the  letter  of  proposal.  In  none  of  them 
was  the  word  "request"  used,  after  language  of  unequivocal  and 
definite  acceptance  as  in  this  case.  In  Robinson  v.  "Weller,  the  reply 
said:  "Offer  accepted;  money  ready;  send  deeds  at  once."  In 
N,  W.  Iron  Co.  v.  Meade  the  letter  said:  "If  this  is  the  very  best 
offer  you  can  make,  you  may  properly  execute  the  within  deed," 
etc.  In  Egger  v:  Nesbitt,  the  reply  said:  "I  will  accept  your 
proposition,  with  the  understanding  that  you  will  deliver  to  me  all 
papers,"  etc.    Owing  to  the  distinctions  pointed  out,  these  precedents 


50  TURNER    V.    MCCORMICK  [CHAP.   1 

are  not  regarded  as  applicable  or  controlling  in  the  present  case. 

Moreover,  the  reasoning  in  some  of  these  cases  is  not  entirely 
satisfactory.  Nor  does  it  seem  to  accord  with  principles  announced 
in  Watson  v.  Coast,  35  W.  Va.  463.  If  a  man  says  "I  accept  your 
offer,"  that  makes  a  contract.  It  assents  to  all  the  terms  of  the 
offer.  What  more  is  necessary?  There  is  a  complete  "aggregatio 
Tnentium."  The  acceptance  conforms  to  the  offer  in  every  par- 
ticular. How  can  a  mere  request  relating,  not  to  the  making  of  the 
contract,  but  to  its  performance,  be  deemed  to  change  it?  Would 
the  acceptor  be  permitted  to  excuse  himself  from  performance  on 
the  ground  of  such  request?  No  precedent  of  that  kind  has  been 
found.  They  are  all  cases  in  which  the  proposer,  desiring  to  escape 
from  the  consequences  of  his  offer,  because  somebody  else  has  pro- 
posed a  higher  price  than  the  first  asked,  seeks  to  repudiate  the 
transaction  and  sell  to  the  other  party.  Property  rights  are  sacred 
and  should  be  well  guarded  by  the  law,  but  when  a  man  has  de- 
liberately made  a  fair  contract  of  sale,  he  ought  not  to  be  permitted 
to  avoid  it  on  some  flimsy  pretext,  in  order  to  avail  himself  of  a 
better  bargain.  Time  and  place  of  payment,  when  not  mentioned 
in  an  accepted  offer,  are  fixed  by  law,  and  are  matters  of  performance, 
carrying  out  the  contract,  a  thing  wholly  distinct  and  separate  from 
the  making  of  the  agreement.  If,  contemporaneously  with,  or  subse- 
quent to  the  making  of  the  contract,  either  party  suggest,  request 
or  propose  a  time,  place  or  mode  of  performance,  different  from 
that  agreed  upon  that  does  not  of  itself  effect  such  change  nor  does 
it  cause  a  breach,  giving  right  of  action  or  rescission  to  the  other 
party.  Swiger  v.  Hayman  et  als,  56  W.  Va.  123.  Either  can 
compel  the  other  to  perform  the  contract  as  made.  He  may  ignore 
the  suggested,  requested  or  proposed  alteration  of,  or  deviation  from, 
the  contract,  as  to  the  performance  thereof.  Watson  v.  Coast,  35  W. 
Va.  463.  But,  if  the  suggested  departure  in  performance  is  not 
accompanied  by  a  declaration  of  unqualified  and  unconditional  ac- 
ceptance of  the  offer,  it  would  be  otherwise  of  course.  Some  of  the 
cases  here  referred  to  disclosed  such  acceptance  and  others  did  not. 
The  former  do  not  harmonize  with  the  principles  enunciated  by  this 
Court,  and  the  latter  do. 

This  somewhat  lengthy  review  of  the  authorities  bearing  upon 
the  question  seems  to  establish  the  following  propositions :  First  — 
A  rfrMu;st  for  a  change  or  modification  of  a  proposed  fontr^ipt.  made 
before  an  accr^ptance  thereof,  amounts  to  a  rejection  of  it.  Second  — 
A  mere  inquiry  as  to  whether  the  proposer  will  alter  or  modify 
its  terms,  made  before  acceptance  or  rejection,  docs  not  amount  to  a 
rejer-tion,  and  if  the  offer  be  not  withdrawn  before  acceptance  made 
witliiri  a  reasonable  time,  the  offer  becomes  a  binding  contract. 
Third  —  A  request,  suggestion  or  proposal  of  alteration  or  modifica- 
tion, made  after  unconditional  acceptance,  and  not  assented  to 
by  the  opposite  party,  does  not  affect  the  contract  put  in  force  and 


SECT.    l]  STEVENSON,   JAQUES    &    CO.    V.    M'^LEAN  51 

effect  by  the  acceptance,  nor  amount  to  a  breach  thereof,  giving 
right  of  rescission.  Fourth  —  Acceptance  of  a  formal  and  care- 
fully prepared  option  of  sale  of  land,  within  the  time  by  it  allowed, 
and  according  to  its  terms,  although  accompanied  by  a  request  for 
a  departure  from  its  terms  as  to  the  time  and  place  of  perform- 
ance, is  an  unconditional  acceptance  and  converts  the  option  into 
an  executory  contract  of  sale,  provided  the  request  be  not  so  worded 
as  to  limit  or  qualify  the  acceptance. 

The  bill  alleges  a  verbal  acceptance  of  both  options  at  the  time 
of  delivery  of  the  acceptance  in  writing,  and  a  verbal  agreement 
extending  the  time  of  performance  until  June  28th.  These  allega- 
tions have  provoked  a  good  deal  of  argument  on  the  subject  of  an 
extension  of  time  of  performance  and  alterations  of  written  con- 
tracts by  parol  agreement.  The  conclusion  above  indicated  renders 
it  unnecessary  to  go  into  these  questions  or  to  examine  the  authorities 
cited  as  bearing  upon  them. 

Our  conclusion  is  that  the  acceptance  in  writing  of  the  second  pro- 
posal is  unconditional  and  converts  the  proposal  into  a  binding 
contract.  The  other  option  does  not  require  the  acceptance  to  be 
in  writing.  It  was  verbally  accepted,  and  that  is  sufficient  when  the 
option  does  not  require  a  written  acceptance.  Weaver  v.  Burr,  31  W. 
Va.  776;  Watson  v.  Coast,  35  W.  Va.  463;  Barrett  v.  McCallister, 
33  W.  Va.  745 ;  Creigh  v.  Boggs,  19  W.  Va.  240 ;  Capehart  v.  Hale, 
6  W.  Va.  547. 

For  the  foregoing  reasons,  the  decree  complained  of  is  reversed, 
the  demurrer  overruled  and  the  cause  is  remanded  for  further  pro- 
ceedings. Reversed. 


STEVEISTSO]^,  JAQUES  &  CO.  v.  McLEAN" 

In  the  Queen's  Bench  Division,  May  25,  1880 

{^Reyorted  in   5    Queen's  Bench  Division,   346] 

Ltjsh,  J.  This  is  an  action  for  non-delivery  of  a  quantity  of  iron 
which  it  was  alleged  the  defendant  contracted  to  sell  to  the  plaintiffs 
at  405.  per  ton,  nett  cash.  The  trial  took  place  before  me  at  the 
last  assizes  at  Leeds,  when  a  verdict  was  given  for  the  plaintiffs  for 
1900L,  subject  to  further  consideration  on  the  question  whether, 
under  the  circumstances,  the  correspondence  between  the  parties 
amounted  to  a  contract,  and  subject  also,  if  the  verdict  should  stand, 
to  a  reference,  if  required  by  the  defendant,  to  ascertain  the  amount 
of  damages.  The  question  of  law  was  argued  before  me  on  the  7th 
of  May  last. 

The  plaintiffs  are  makers  of  iron,  and  iron  merchants  at  Middles- 
borough.  The  defendant  being  possessed  of  warrants  for  iron,  which 
he  had  originally  bought  of  the  plaintiffs,  wrote  on  the  24th  of  Sep- 


/^^ 


52  STEVENSON,   JAQUES    &    CO.    V.    M'^LEAN  [CHAP.    I 

tember  to  the  plaintiffs  from  London,  where  he  carries  on  his  busi- 
ness :  "I  see  that  No.  3  has  been  sold  for  immediate  delivery  at  39s., 
which  means  a  higher  price  for  warrants.  Could  you  get  me  an 
offer  for  the  whole  or  part  of  my  warrants?  I  have  3800  tons,  and 
the  brands  you  know." 

On  the  26th  one  of  the  plaintiffs  wrote  from  Liverpool:  "Your 
letter  has  followed  me  here.  The  pig-iron  trade  is  at  present  very 
excited,  and  it  is  difficult  to  decide  whether  prices  will  be  maintained 
or  fall  as  suddenly  as  they  have  advanced.  Sales  are  being  made 
freely  for  forward  delivery  chiefly,  but  not  in  warrants.  It  may, 
however,  be  found  advisable  to  sell  the  warrants  as  maker's  iron.  I 
would  recommend  you  to  fix  your  price,  and  if  you  will  write  me 
your  limit  to  Middlesborough,  I  shall  probably  be  able  to  wire  you 
something  definite  on  Monday."  This  letter  was  crossed  by  a  letter 
written  on  the  same  day  by  the  clerk  of  one  Fossick,  the  defendant's 
broker  in  London,  and  which  was  in  these  terms :  — 

"Referring  to  R.  A.  McLean's  letter  to  you  re  warrants,  I  have  seen  him  again 
to-day,  and  he  considers  .39s,  too  low  for  same.  At  40s.  he  says  he  would  consider  an 
offer.  However,  I  shall  be  obliged  by  your  kindlV  wiring  me,  if  possible,  your  best 
offer  for  all  or  part  of  the  warrants  he  has  to  dispose  of." 

On  the  27th  (Saturday)  the  plaintiffs  sent  to  Fossick  the  following 
telegram :  — 

"Cannot  make  an  offer  to-day;  warrants  rather  easier.  Several  sellers  think  might 
get  39s.  &d.  if  you  would  wire  firm  offer  subject  reply  Tuesday  noon." 

In  answer  to  this  Fossick  wrote  on  the  same  day :  — 

"Your  telegram  duly  to  hand  re  warrants.  I  have  seen  Mr.  McLean,  but  he  is 
not  inclined  to  make  a  firm  offer.  I  do  not  think  he  is  likely  to  sell  at  39s.  6rf.,  but 
will  probably  prefer  to  wait.  Please  let  me  know  immediately  you  get  any  likely 
offer." 

On  the  same  day  the  defendant,  who  had  then  received  the  Liver- 
pool letter  of  the  26th,  wrote  himself  to  the  plaintiffs  as  follows :  — 

"Mr.  Fossick's  clerk  showed  me  a  telegram  from  him  yesterday  mentioning  39s. 
^  for  No.  3  as  present  price,  40s.  for  forward  delivery.     I  instructed  the  clerk  to  wire 
you  that  I  would  now  sell  for  40s.,  nett  cash,  open  till  Monday." 

No  such  telegram  was  sent  by  Fossick's  clerk. 

The  plaintiffs  were  thus  on  the  28th  (Sunday)  in  possession  of 
both  letters,  the  one  from  Fossick  stating  that  the  defendant  was  not 
inclined  to  make  a  firm  offer;  and  the  other  from  the  defendant  him- 
self, to  the  effect  that  he  would  sell  for  40s.,  nett  cash,  and  would 
hold  it  open  all  Monday.  This  it  was  admitted  must  have  been  the 
meaning  of  "opon  till  Monday." 

On  the  Monday  morning,  at  9.42,  the  plaintiffs  telegraphed  to  the 
dfifendant :  — 


y\ 


"Plnasn  wire  whc:thfT  yrni  would  accept  forty   for  delivery  over  two  months,  or  if 
not,  longest  limit  you  would  give." 


SECT.    I]  STEVENSON,   JAQUES    &    CO.    V.    M'^LEAN  53 

This  telegram  was  received  at  tlie  office  at  Moorgate  at  10  a.m., 
and  was  delivered  at  the  defendant's  office  in  the  Old  Jewry  shortly 
afterwards. 

No  answer  to  this  telegram  was  sent  by  the  defendant,  but  after 
its  receipt  he  sold  the  warrants,  through  Fossick,  for  40s.;,  nett  cash, 
and  at  1.25  sent  off  a  telegram  to  the  plaintiffs: —   ^^*4'l •  T 

"Have  sold  all  my  warrants  here  for  forty  nett  to-day."  ^^i/UX-—- '^'^*-''^ 

This  telegram  reached  Middlesborough  at  1.46,  and  was  delivered 
in  due  course. 

Before  its  arrival  at  Middlesborough,  however,  and  at  1.34,  the 
plaintiffs  telegraphed  to  defendant :  —  {Pji  j 

"Have  secured  your  price  for  payment  next  Monday  —  write  you  fully  by  post."  '>-'*-**{**-< 

By  the  usage  of  the  iron  market  at  Middlesborough,  contracts  made  ,^,,jzit^ 
on  a  Monday  for  cash  are  payable  on  the  following  Monday.  ~iLu^la^ 

At  2.6  on  the  same  day,  after  receipt  of  the  defendant's  telegram  < 

announcing  the  sale  through  Fossick,  the  plaintiffs  telegraphed: 

"Have  your  telegram  following  our  advice  to  you  of  sale,  per  your  instructions, 
which  we  cannot  revoke,  but  rely  upon  your  carrying  out." 

The  defendant  replied : 

"Your  two  telegrams  received,  but  your  sale  was  too  late;  your  sale  was  not  per 
my  instructions." 

And  to  this  the  plaintiffs  rejoined :  — 

"Have  sold  your  warrants  on  terms  stated  in  your  letter  of  twenty-seventh." 

The  iron  was  sold  by  plaintiffs  to  one  "Walker  at  41s.  6d.,  and  the 
contract  note  was  signed  before  1  o'clock  on  Monday.  The  price  of 
iron  rapidly  rose,  and  the  plaintiffs  had  to  buy  in  fulfillment  of  their 
contract  at  a  considerable  advance  on  40s. 

The  only  question  of  fact  raised  at  the  trial  was,  whether  the  rela- 
tion between  the  parties  was  that  of  principal  and  agent,  or  that  of 
buyer  and  seller.  The  jury  found  it  was  that  of  buyer  and  seller, 
and  no  objection  has  been  taken  to  this  finding. 

Two  objections  were  relied  on  by  the  defendant:  first,  it  was  con- 
tended that  the  telegram  sent  by  the  plaintiffs  on  the  Monday  morn- 
ing was  a  rejection  of  the  defendant's  offer  and  a  new  proposal  on 
the  plaintiffs'  part,  and  that  the  defendant  had  therefore  a  right  to 
regard  it  as  putting  an  end  to  the  original  negotiation. 

Looking  at  the  form  of  the  telegram,  the  time  when  it  was  sent,  and 
the  state  of  the  iron  market,  I  cannot  think  this  is  its  fair  meaning.  ^ 

The  plaintiff  Stevenson  said  he  meant  it  only  as  an  inquiry,  expect-        '  ''' 
ing  an  answer  for  his  guidance,  and  this,  I  think,  is  the  sense  in    (^^^^^^ 
which  the  defendant  ought  to  have  regarded  it^  CCS^f- 

It  is  apparent  throughout  the  correspondence,  that  the  plaintiffs 
did  not  contemplate  buying  the  iron  on  speculation,  but  that  their 
acceptance  of  the  defendant's  offer  depended  on  their  finding  some 


54  STEVENSON,   JAQUES   &    CO.    V.    M'^LEAN  [CHAP.    I 

one  to"  take  the  warrants  off  their  hands.  All  parties  knew  that  the 
market  was  in  an  unsettled  state,  and  that  no  one  could  predict  at  the 
early  hour  when  the  telegram  was  sent  how  the  prices  would  range 
during  the  day.  It  was  reasonable  that,  under  these  circumstances, 
they  should  desire  to  know  before  business  began  whether  they  were 
to  be  at  liberty  in  case  of  need  to  make  any  and  what  concession  as 
to  the  time  or  times  of  delivery,  which  would  be  the  time  or  times 
of  payment,  or  whether  the  defendant  was  determined  to  adhere  to 
the  terms  of  his  letter;  and  it  was  highly  unreasonable  that  the 
plaintiffs  should  have  intended  to  close  the  negotiation  while  it  was 
uncertain  whether  they  could  find  a  buyer  or  not,  having  the  whole 
of  the  business  hours  of  the  day  to  look  for  one.  Then,  again,  the 
form  of  the  telegram  is  one  of  inquiry.  It  is  not  "I  offer  forty  for 
delivery  over  two  months,"  which  would  have  likened  the  case  to 
Hyde  v.  Wrench,  3  Beav.  334,  where  one  party  offered  his  estate  for 
1000/.,  and  the  other  answered  by  offering  950/.  Lord  Langdale, 
in  that  case,  held  that  after  the  950/.  had  been  refused,  the  party 
offering  it  could  not,  by  them  agreeing  to  the  original  proposal,  claim 
the  estate,  for  the  negotiation  was  at  an  end  by  the  refusal  of  his. 
counter  proposal.  Here  there  is  no  counter  proposal.  The  words 
are,  "Please  wire  whether  you  would  accept  forty  for  delivery  over 
two  months,  or,  if  not,  the  longest  limit  you  would  give."  There 
is  nothing  specific  by  way  of  offer  or  rejection,  but  a  mere  inquiry, 
which  should  have  been  answered  and  not  treated  as  a  rejection  of 
the  offer.    This  ground  of  objection  therefore  fails. 

The  remaining  objection  was  one  founded  on  a  well-known  passage 
in  Pothier,  which  has  been  supposed  to  have  been  sanctioned  by  the 
Court  of  Queen's  Bench  in  Cooke  v.  Oxley,  3  T.  R.  653,  that  in  order 
to  constitute  a  contract  there  must  be  the  assent  or  concurrence  of 
the  two  minds  at  the  moment  when  the  offer  is  accepted;  and  that  if,, 
when  an  offer  is  made,  and  time  is  given  to  the  other  party  to  deter- 
mine whether  he  will  accept  or  reject  it,  the  proposer  changes  his 
mind  before  the  time  arrives,  although  no  notice  of  the  withdrawal , 
has  been  given  to  the  other  party,  the  option  of  accepting  it  is  gone. 
The  case  of  Cooke  v.  Oxley,  3  T.  R.  653,  does  not  appear  to  me  to 
warrant  the  inference  which  has  been  drawn  from  it,  or  the  supposi- 
tion that  the  judges  ever  intended  to  lay  down  such  a  doctrine.  The 
declaration  stated  a  proposal  by  the  defendant  to  sell  to  the  plaintiff 
266  hogsheads  of  sugar  at  a  specific  price,  that  the  plaintiff  desired 
time  to  agree  to,  or  dissent  from,  the  proposal  till  4  in  the  afternoon, 
and  that  defendant  agreed  to  give  the  time,  and  promised  to  sell 
and  deliver  if  the  plaintiff  would  agree  to  purchase  and  give  notice 
thereof  before  4  o'eloek.  The  Court  arrested  the  judgment  on  the 
ground  tliat  there  was  no  consideration  for  the  defendant's  agree- 
ment to  wait  till  4  o'eloek,  nrid  that  the  alleged  promise  to  wait  was 
nufhim  par  him. 

All  that  the  judgment  affirms  is,  that  a  party  who  gives  time  to 


SECT.   l]  STEVENSON,   JAQUES    &    CO.    V.    M'^LEAN  55 

another  to  accept  or  reject  a  proposal  is  not  bound  to  wait  till  the 
time  expires.  And  this  is  perfectly  consistent  with  legal  principles 
and  with  subsequent  authorities,  which  have  been  supposed  to  con- 
flict with  Cooke  v.  Oxley,  3  T.  R.  653.  It  is  clear  that  a  unilateral 
promise  is  not  binding,  and  that  if  the  person  who  makes  an  offer 
revokes  it  before  it  has  been  accepted,  which  he  is  at  liberty  to  do, 
the  negotiation  is  at  an  end:  see  Routledge  v.  Grant,  4  Bing.  653. 
But  in  the  absence  of  an  intermediate  revocation,  a  party  who  makes 
a  proposal  by  letter  to  another  is  considered  as  repeating  the  offer 
every  instant  of  time  till  the  letter  has  reached  its  destination  and 
the  correspondent  has  had  a  reasonable  time  to  answer  it :  Adams  v. 
Lindsell,  1  B.  &  A.  681.  "Common  sense  tells  us,"  said  Lord  Cot- 
tenham,  in  Dunlop  v.  Higgins,  1  H.  L.  C.  381,  "that  transactions 
cannot  go  on  without  such  a  rule."  It  cannot  make  anv  difference 
whether  the  negotiation  is  carried  on  by  post,  or  by  telegrRph.  or  bv 
oral  message.  If  the  offer  is  not  retracted,  it  is  in  force  as  a  con- 
tinuing offer  till  the  time  for  accepting  or  rejecting  it  has  arrived. 
But  if  it  is  retracted,  there  is  an  end  of  the  proposal.  Cooke  v. 
Oxley,  3  T.  E.  653,  if  decided  the  other  way,  would  have  negatived 
the  right  of  the  proposing  party  to  revoke  his  offer. 

Taking  this  to  be  the  effect  of  the  decision  in  Cooke  v.  Oxley, 
3  T.  R.  653,  the  doctrine  of  Pothier  before  adverted  to,  which  is 
undoubtedly  contrary  to  the  spirit  of  English  law,  has  never  been 
affirmed  in  our  Courts.  Singularly  enough,  the  very  reasonable 
proposition  that  a  revocation  is  nothing  till  it  has  been  communi- 
cated to  the  other  party,  has  not,  until  recently,  been  laid  down,  no 
case  having  apparently  arisen  to  call  for  a  decision  upon  the  point. 
In  America  it  was  decided  some  years  ago  that  "an  offer  cannot  be 
withdrawn  unless  the  withdrawal  reaches  the  party  to  whom  it  is 
addressed  before  his  letter  of  reply  announcing  the  acceptance  has 
been  transmitted :"  Tayloe  v.  Merchants'  Fire  Insurance  Co.,  9  How. 
Sup.  Court  Rep.  390;  and  in  Byrne  &  Co.  v.  Leon  Van  Tienhoven  & 
Co.,  49  L.  J.  (C.  P.)  316,  my  brother  Lindley,  in  an  elaborate  judg- 
ment, adopted  this  view,  and  held  that  an  uncommunicated  revocation 
is,  for  all  practical  purposes  and  in  point  of  law,  no  revocation  at  all. 

It  follows,  that  as  no  notice  of  withdrawal  of  his  offer  to  sell  at 
40s.,  nett  cash,  was  given  by  the  defendant  before  the  plaintiffs  sold 
to  Walker,  they  had  a  right  to  regard  it  as  a  continuing  offer,  and 
their  acceptance  of  it  made  the  contract,  which  was  initiated  by  the 
proposal,  complete  and  binding  on  both  parties. 

My  judgment  must,  therefore,  be  for  the  plaintiffs  for  19001.,  but 
this  amount  is  liable  to  be  reduced  by  an  arbitrator  to  be  agreed  on 
by  the  parties,  or,  if  they  cannot  agree  within  a  week,  to  be  nomi- 
nated by  me.  If  no  arbitrator  is  appointed,  or  if  the  amount  be  not 
reduced,  the  judgment  will  stand  for  19007.  The  costs  of  the  arbitra- 
tion to  be  in  the  arbiter's  discretion. 

Judgment  for  the  plaintiffs. 


56  DICKINSON    V.   DODDS  [CHAP.   I 

DICKINSON  V.  DODDS 

In  the  High  Coukt  of  Justice,  January  25,  26,  1876 
In  the  Coukt  of  Appeal,  March  31,  April  1,  1876 

[Rejpoy'ted  in  2  Chancery  Division,  463] 

On  "Wednesday,  the  10th  of  June,  1874,  the  defendant  John  Dodds 
signed  and  delivered  to  the  plaintiff,  George  Dickinson,  a  memoran- 
dum, of  which  the  material  part  was  as  follows :  — 

I  hereby  agree  to  sell  to  Mr.  George  Dickinson  the  whole  of  the  dwelling  houses, 
garden  ground,  stabling,  and  outbuildings  thereto  belonging,  situate  at  Croft,  belong- 
ing to  me,  for  the  sum  of  800Z.    As  witness  my  hand  this  tenth  day  of  June,  1874. 

800L  (Signed)  John  Dodds. 

P.S.  —  This  offer  to  be  left  over  until  Friday,  9  o'clock,  a.m.  J.D.  (the  twelfth), 
12th  June,  1874.  (Signed)  J.  Dodds. 

The  bill  alleged  that  Dodds  understood  and  intended  that  the 
plaintiff  should  have  until  Friday,  9  a.m.,  within  which  to  determine 
whether  he  would  or  would  not  purchase,  and  that  he  should  abso- 
lutely have,  until  that  time,  the  refusal  of  the  property  at  the  price 
of  800?.,  and  that  the  plaintiff  in  fact  determined  to  accept  the  offer 
on  the  morning  of  Thursday,  the  11th  of  June,  but  did  not  at  once 
signify  his  acceptance  to  Dodds,  believing  that  he  had  the  power  to 
accept  it  until  9  a.m.  on  the  Friday. 

In  the  afternoon  of  the  Thursday  the  plaintiff  was  informed  by  a 
Mr.  Berry  that  Dodds  had  been  offering  or  agreeing  to  sell  the  prop- 
erty to  Thomas  Allan,  the  other  defendant.  Thereupon  the  plaintiff, 
at  about  half-past  seven  in  the  evening,  went  to  the  house  of  Mrs. 
Burgess,  the  mother-in-law  of  Dodds,  where  he  was  then  staying,  and 
left  with  her  a  formal  acceptance,  in  writing,  of  the  offer  to  sell  the 
property.  According  to  the  evidence  of  Mrs.  Burgess,  this  document 
never  in  fact  reached  Dodds,  she  having  forgotten  to  give  it  to  him. 

On  the  following  (Friday)  morning,  at  about  seven  o'clock.  Berry, 
who  was  acting  as  agent  for  Dickinson,  found  Dodds  at  the  Darling- 
ton railway  station,  and  handed  to  him  a  duplicate  of  the  acceptance 
by  Dickinson,  and  explained  to  Dodds  its  purport.  He  replied  that  it 
was  too  late,  as  he  had  sold  the  property.  A  few  minutes  later  Dick- 
inson himself  found  Dodds  entering  a  railway  carriage,  and  handed 
him  another  duplicate  of  the  notice  of  acceptance,  but  Dodds  declined 
to  receive  it,  saying,  "You  are  too  late.     I  have  sold  the  pro]>erty." 

It  appeared  that  on  the  day  before,  Thursday,  the  11th  of  June, 
Dodd.s  had  signed  a  formal  contract  for  the  sale  of  the  property  to 
the  dofondant  Allan  for  800/.,  and  had  received  from  him  a  deposit 
of  40/. 

The  bill  in  this  suit  prayed  that  the  defendant  Dodds  might  be 
decreed  specifically  to  perform  the  contract  of  the  10th  of  June,  1874; 
that  he  might  be  restrained  from  conveying  the  property  to  Allan; 
that  Allan  might  be  restrained  from  taking  any  such  conveyance; 


SECT.    l]  DICKINSON    V.    DODDS  57 

that,  if  any  such  conveyance  had  been  or  should  be  made,  Allan  might 
be  declared  a  trustee  of  the  property  for,  and  might  be  directed  to 
convey  the  property  to,  the  plaintiff;  and  for  damages. 

The  cause  came  on  for  hearing  before  Vice-Chaucellor  Bacon  on 
the  25th  of  January,  1876. 

Kay,  Q.  C,  and  Caldecott,  for  the  plaintiff. 
Sivanston,  Q.  C,  and  Grossley,  for  the  defendant  Dodds. 
Jackson,  Q.  C,  and  Gazdar,  for  the  defendant  Allan, 
[Bacon,  V.  C,  decreed  specific  performance  in  favor  of  the  plain- 
tiff, on  the  ground  that  by  the  original  offer  or  agreement  with  the 
plaintiff,  and  by  relation  back  of  the  acceptance  to  the  date  of  the 
offer,  Dodds  had  lost  the  power  to  make  a  sale  to  Allan.    From  this 
decision  the  defendants  appealed.] 

James,  L.J.,  after  referring  to  the  document  of  the  10th  of  June, 
1847,  continued:  — 

The  document,  though  beginning  "I  hereby  agree  to  sell,"  was 
nothing  but  an  offer,  and  was  only  intended  to  be  an  offer,  for  the 
plaintiff  himself  tells  us  that  he  required  time  to  consider  whether  he 
would  enter  into  an  agreement  or  not.    Unless  both  parties  had  then 
agreed,  there  was  no  concluded  agreement  then  made ;  it  was  in  effect 
and  substance  only  an  offer  to  sell.    The  plaintiff,  being  minded  not 
to   complete   the  bargain   at   that   time,   added   this   memorandum: 
"This  offer  to  be  left  over  until  Friday,  9  o'clock  a.m.,  12th  June, 
1874."    That  shows  it  was  only  an  offer.    There  was  no  consideration 
given  for  the  undertaking  or  promise,  to  whatever  extent  it  may  be 
considered  binding,  to  keep  the  property  unsold  until  9  o'clock  on 
Friday  morning;   but   apparently  Dickinson  was   of   opinion,    and 
probably  Dodds  was   of   the   same  opinion,   that  he    (Dodds)    was 
bound  by  that  promise,  and  could  not  in  any  way  withdraw  from  it, 
or  retract  it,  until  9  o'clock  on  Friday  morning,  and  this  probably 
explains  a  good  deal  of  what  afterwards  took  place.    But  it  is  clear 
settled  law,  on  one  of  the  clearest  principles  of  law,  that  this  promise, 
being  a  mere  nudum  pactum,  was  not  binding,  and  that  at  any  mo- 
ment before  a  complete  acceptance  by  Dickinson  of  the  offer,  Dodds 
was  as  free  as  Dickinson  himself.     Well,  that  being  the  state  of 
things,  it  is  said  that  the  only  mode  in  which  Dodds  could  assert  that 
freedom  was  by  actually  and  distinctly  saying  to  Dickinson,  "Now 
I  withdraw  my  offer."    It  appears  to  me  that  there  is  neither  prin- 
ciple nor  authority  for  the  proposition  that  there  must  be  an  express 
and  actual  withdrawal  of  the  offer,  or  what  is  called  a  retraction.    It 
must,  to  constitute  a  contract,  appear  that  the  two  minds  were  at 
one  at  the  same  moment  of  time;  that  is,  that  there  was  an  offer  con- 
tinuing up  to  the  time  of  the  acceptance.     If  there  was  not  such 
a  continuing  offer,  then  the  acceptance  comes  to  nothing.     Of  course 
it  may  well  be  that  the  one  man  is  bound  in  some  way  to  let  the  other 
know  that  his  mind  with  regard  to  the  offer  has  been  changed;  but 
in  this  case,  beyond  all  question,  the  plaintiff  knew  that  Dodds  was  no 


58  DICKINSON    V.   DODDS  [CHAP.    I 

longer  minded  to  sell  the  property  to  him  as  plainly  and  clearly  as 
if  Dodds  had  told  him  in  so  many  words,  "I  withdraw  the  offer." 
This  is  evident  from  the  plaintiff's  own  statements  in  the  hill. 

The  plaintiff  says  in  effect  that,  having  heard  and  knowing  that 
Dodds  was  no  longer  minded  -to  sell  to  him,  and  that  he  was  selling 
or  had  sold  to  some  one  else,  thinking  that  he  could  not,  in  point  of 
law,  withdraw  his  offer,  meaning  to  fix  him  to  it,  and  endeavoring  to 
bind  him,  "1  went  to  the  house  where  he  was  lodging,  and  saw  his 
mother-in-law,  and  left  with  her  an  acceptance  of  the  offer,  knowing 
all  the  while  that  he  had  entirely  changed  his  mind.  I  got  an  agent 
to  watch  for  him  at  7  o'clock  the  next  morning,  and  I  went  to  the 
train  just  before  9  o'clock,  in  order  that  I  might  catch  him  and  give 
him  my  notice  of  acceptance  just  before  9  o'clock,  and  when  that 
occurred  he  told  my  agent,  and  he  told  me,  you  are  too  late,  and  he 
then  threw  back  the  paper."  It  is  to  my  mind  quite  clear  that,  before 
there  was  any  attempt  at  acceptance  by  the  plaintiff,  he  was  per- 
fectly well  aware  that  Dodds  had  changed  his  mind,  and  that  he  had 
in  fact  agreed  to  sell  the  property  to  Allan.  It  is  impossible,  there- 
fore, to  say  there  was  ever  that  existence  of  the  same  mind  between 
the  two  parties  which  is  essential  in  point  of  law  to  the  making  of  an 
agreement.  I  am  of  opinion,  therefore,  that  the  plaintiff  has  failed 
to  prove  that  there  was  any  binding  contract  between  Dodds  and 
himself. 

Mellish,  L.J.  I  am  of  the  same  opinion.  The  first  question  is, 
whether  this  document  of  the  10th  of  June,  1874,  which  was  signed  by 
Dodds,  was  an  agreement  to  sell,  or  only  an  offer  to  sell,  the  property 
therein  mentioned  to  Dickinson;  and  I  am  clearly  of  opinion 
that  it  was  only  an  offer,  although  it  is  in  the  first  part  of  it,  inde- 
pendently of  the  postscript,  worded  as  an  agreement.  I  apprehend 
that,  until  acceptance,  so  that  both  parties  are  bound,  even  though 
an  instrument  is  so  worded  as  to  express  that  both  parties  agree,  it 
is  in  point  of  law  only  an  offer,  and,  until  both  parties  are  bound, 
neither  party  is  bound.  It  is  not  necessary  that  both  parties  should 
be  bound  within  the  Statute  of  Frauds,  for,  if  one  party  makes  an 
offer  in  writing,  and  the  other  accepts  it  verbally,  that  will  be  suffi- 
cient to  bind  the  person  who  has  signed  the  written  document.  But, 
if  thfire  be  no  agreement,  cither  verbally  or  in  writing,  then,  until 
acceptance,  it  is  in  point  of  law  an  offer  only,  although  worded  as  if 
it  were  an  agreement.  But  it  is  hardly  necessary  to  resort  to  that 
doctrine  in  tlie  prosent  case,  because  the  postscript  calls  it  an  offer, 
and  says,  "Tbis  offer  to  be  left  over  until  Friday,  9  o'clock  a.m." 
W<11,  tlieti,  tbis  being  only  ,'tn  offer,  the  law  says  —  and  it  is  a  per- 
fectly clear  rule  of  laAV  —  that,  nlthough  it  is  said  that  the  offer  is  to 
be  left  open  until  Friday  morning  at  9  o'clock,  that  did  not  bind 
Dodds.  He  was  not  in  point  of  l;iw  bound  to  bold  the  offer  over  until 
9  o'clock  on  Friday  morning.  TTr'  w.ms  not  so  bound  either  in  law 
or  in  equity.    Well,  that  being  so,  when,  on  the  next  day,  he  made  an 


SECT.    l]  DICKINSON    V.    DODDS  59 

agreement  with  Allan  to  sell  the  property  to  him,  I  am  not  aware  of 
any  ground  on  which  it  can  be  said  that  contract  with  Allan  was  not 
as  good  and  binding  a  contract  as  ever  was  made.  Assuming  Allan 
to  have  known  (there  is  some  dispute  about  it,  and  Allan  does  not 
admit  that  he  knew  of  it,  but  I  will  assume  that  he  did)  that  Dodds 
had  made  the  offer  to  Dickinson,  and  had  given  him  till  Friday 
morning  at  9  o'clock  to  accept  it,  still,  in  point  of  law,  that  could  not 
prevent  Allan  from  making  a  more  favorable  offer  than  Dickinson, 
and  entering  at  once  into  a  binding  agreement  with  Dodds. 

Then  Dickinson  is  informed  by  Berry  that  the  property  has  been 
sold  by  Dodds  to  Allan.  Berry  does  not  tell  us  from  whom  he  heard 
it,  but  he  says  that  he  did  hear  it,  that  he  knew  it,  and  that  he  in- 
formed Dickinson  of  it.  ISTow,  stopping  there,  the  question  which 
arises  is  this :  If  an  offer  has  been  made  for  the  sale  of  property,  and, 
before  that  offer  is  accepted,  the  person  who  has  made  the  offer  enters 
into  a  binding  agreement  to  sell  the  property  to  somebody  else,  and 
the  person  to  whom  the  offer  was  first  made  receives  notice  in  some 
way  that  the  property  has  been  sold  to  another  person,  can  he  after 
that  make  a  binding  contract  by  the  acceptance  of  the  offer?  I  am 
of  opinion  that  he  cannot.  The  law  may  be  right  or  wrong  in  saying 
that  a  person  wdio  has  given  to  another  a  certain  time  within  which  to 
accept  an  offer  is  not  bound  by  his  promise  to  give  that  time;  but. 
if  he  is  not  bound  by  that  promise,  and  may  still  sell  the  property  to 
some  one  else,  and  if  it  be  the  law  that,  in  order  to  make  a  contract, 
the  two  minds  must  be  in  agreement  at  some  one  time,  that  is,  at  the 
time  of  the  acceptance,  how  is  it  possible  that  when  the  person  to 
whom  the  offer  has  been  made  knows  that  the  person  who  has  made 
the  offer  has  sold  the  property  to  some  one  else,  and  that,  in  fact,  he 
has  not  remained  in  the  same  mind  to  sell  it  to  him,  he  can  be  at 
liberty  to  accept  the  offer  and  thereby  make  a  binding  contract?  It 
seems  to  me  that  would  be  simply  absurd.  If  a  man  makes  an  offer 
to  sell  a  particular  horse  in  his  stable,  and  says,  "I  will  give  you  until 
the  day  after  to-morrow  to  accept  the  offer,"  and  the  next  day  goes 
and  sells  the  horse  to  somebody  else,  and  receives  the  purchase-money 
from  him,  can  the  person  to  whom  the  offer  was  originally  made  then 
■come  and  say,  "I  accept,"  so  as  to  make  a  binding  contract,  and  so  as 
to  be  entitled  to  recover  damages  for  the  non-delivery  of  the  horse? 
If  the  rule  of  law  is  that  a  mere  offer  to  sell  property,  which  can  be 
withdrawn  at  any  time,  and  which  is  made  dependent  on  the  accept- 
ance of  the  person  to  whom  it  is  made,  is  a  mere  nudum  pactum,  how 
is  it  possible  that  the  person  to  whom  the  offer  has  been  made  can, 
by  acceptance,  make  a  binding  contract  after  he  knows  that  the 
person  who  has  made  the  offer  has  sold  the  property  to  some  one  else  ? 
It  is  admitted  law  that,  if  a  man  who  makes  an  offer  dies,  the  offer 
cannot  be  accepted  after  he  is  dead,^  and  parting  with  the  property 

1  The  Palo  Alto,  2  Ware,  343,  359;  Pratt  v.  Baptist  Soc,  93  111.  475:  Beach  v.  First 
M.  E.  Church,  96  111.  179;   Wallace  v.  Townsend,  43  Ohio  St.  537;    Phipps  v.  Jones, 


60  SHUEY    V.    UNITED   STATES  [CHAP.   I 

has  very  much  the  same  effect  as  the  death  o£  the  owner,  for  it  makes 
the  performance  of  the  offer  impossible.  I  am  clearly  of  opinion 
that,  just  as,  when  a  man  who  has  made  an  offer  dies  before  it  is 
accepted,  it  is  impossible  that  it  can  be  accepted,  so  when  once  the 
person  to  whom  the  offer  was  made  knows  that  the  property  has  been 
sold  to  some  one  else,  it  is  too  late  for  him  to  accept  the  offer,  and  on 
that  ground  I  am  clearly  of  opinion  that  there  was  no  binding  con- 
tract for  the  sale  of  this  property  by  Dodds  to  Dickinson,  and  even 
if  there  had  been,  it  seems  to  me  that  the  sale  of  the  property  to 
Allan  was  first  in  point  of  time.  However,  it  is  not  necessary  to 
consider,  if  there  had  been  two  binding  contracts,  which  of  them 
would  be  entitled  to  priority  in  equity,  because  there  is  no  binding 
contract  between  Dodds  and  Dickinson.^ 


SHUEY,  Executor,  v.  UNITED  STATES 

SuPEEME  Court  of  the  United  States,  October  Term,  1875 

{^Reported  in  92  United  States,  73] 

Appeal  from  the  Court  of  Claims. 

Henry  B.  Ste.  Marie  filed  his  petition  in  the  Court  of  Claims  to 
recover  the  sum  of  $15,000,  being  the  balance  alleged  to  be  due  him 
of  the  reward  of  $25,000  offered  by  the  Secretary  of  War,  on  the 
20th  of  April,  1865,  for  the  apprehension  of  John  H.  Surratt,  one 
of  Booth's  alleged  accomplices  in  the  murder  of  President  Lincoln. 

The  court  below  found  the  facts  as  follows  :  — 

1.  On  the  20th  April,  1865,  the  Secretary  of  War  issued,  and 
caused  to  be  published  in  the  public  newspapers  and  otherwise,  a 
proclamation,  whereby  he  announced  that  there  would  be  paid  by  the 
War  Department  "for  the  apprehension  of  John  H.  Surratt,  one  of 
Booth's  accomplices,"  $25,000  rcAvard,  and  also  that  "liberal  re- 
wards will  be  paid  for  any  information  that  shall  conduce  to  the 
arrest  of  either  of  the  above-named  criminals  or  their  accomplices;" 
and  such  proclamation  was  not  limited  in  terms  to  any  specific 
period,  and  it  was  signed  "Edwin  M.  Stanton,  Secretary  of  War." 
On  the  14th  ISTovomber,  1865,  the  President  caused  to  be  published 
his  order  revoking  the  reward  offered  for  the  arrest  of  John  H.  Sur- 
ratt.   13  Stilt.  778.  " 


20  Pa.  200  Ilolfonstcin's  Est.,  77  Pa.  328;  Foust  v.  Board  of  Publication,  8  Lea,  555, 
ace.  This  nilf  is  tho  samo  in  tho  civil  law.  Val/iry,  Contrats  par  Corrospondancc, 
5  204;  Winfl.sfhcid.  Pandc-ktcnrccht,  §307  (2).  The  'RurKcrliches  Gosctzbuch,  how- 
ever, hmt  chanped  the  nile  in  f'.ermany.  Tt  provides,  §  153,  "A  contract  is  not  pre- 
vcntefl  from  cominK  into  existence  by  the  death  or  incapacit.v  of  the  offerer  before 
accfptance,  unless  the  offerer  has  expressed  a  contrary  intention." 

'  BatrKnllay,  .T.  A.,  concurred,  and  the  bill  was  dismissed  with  costs.  Coleman  v. 
ApplcRarth,  OH  Md.  21,  was  very  similar  in  its  facts  to  Dickinson  v.  Dodds,  and  that 
case  was  fit<'fl  and  followed.  Tf)  the  same  effect  arc  Watters  v.  Lincoln,  29  S.  Dak.  98; 
Frank  v.  Stratford-Hancock,  13  Wyo.  37.     Compare  Shcrley  v.  Peehl,  84  Wis.  46. 52. 


SECT.    l]  SHUEY    V.    UNITED    STATES'  61 

2.  In  April,  1866,  John  H.  Surratt  was  a  zouave  in  tlie  military 
service  of  the  Papal  government,  and  the  claimant  was  also  a  zouave 
in  the  same  service.  During  that  month  he  communicated  to  Mr. 
King,  the  American  minister  at  Rome,  the  fact  that  he  had  dis- 
covered and  identified  Surratt,  who  had  confessed  to  him  his  par- 
ticipation in  the  plot  against  the  life  of  President  Lincoln.  The 
claimant  also  subsequently  communicated  further  information  to  the 
same  eifect,  and  kept  watch,  at  the  request  of  the  American  minister, 
over  Surratt.  Thereupon  certain  diplomatic  correspondence  passed 
between  the  government  of  the  United  States  and  the  Papal  govern- 
ment relative  to  the  arrest  and  extradition  of  Surratt;  and  on  the 
6th  ]^^ovember,  1866,  the  Papal  government,  at  the  reqiiest  of  the 
United  States,  ordered  the  arrest  of  Surratt,  and  that  he  be  brought 
to  Rome,  he  then  being  at  Yeroli.  Under  this  order  of  the  Papal 
government,  Surratt  was  arrested;  but,  at  the  moment  of  leaving 
prison  at  Veroli,  he  escaped  from  the  guard  having  him  in  custody, 
and,  crossing  the  frontier  of  the  Papal  territory,  embarked  at  Naples, 
and  escaped  to  Alexandria  in  Egypt.  Immediately  after  his  escape 
and  both  before  and  after  his  embarkation  at  ISTaples,  the  American 
minister  at  Rome,  being  informed  of  the  escape  by  the  Papal  govern- 
ment, took  measures  to  trace  and  rearrest  him,  which  was  done  in 
Alexandria.  From  that  place  he  was  subsequently  conveyed  by  the 
American  government  to  the  United  States;  but  the  American  min- 
ister, having  previously  procured  the  discharge  of  the  claimant  from 
the  Papal  military  service,  sent  him  forward  to  Alexandria  to  iden- 
tify Surratt.  At  the  time  of  the  first  interview  between  the  claimant 
and  the  American  minister,  and  at  all  subsequent  times  until  the  final 
capture  of  Surratt,  they  were  ignorant  of  the  fact  that  the  reward 
offered  by  the  Secretary  of  "War  for  his  arrest  had  been  revoked  by 
the  President.  The  discovery  and  arrest  of  Surratt  were  due  entirely 
to  the  disclosures  made  by  the  claimant  to  the  American  minister  at 
Rome;  but  the  arrest  was  not  made  by  the  claimant,  either  at  Veroli, 
or  subsequently  at  Alexandria. 

3.  There  has  been  paid  to  the  claimant  by  the  defendants,  under 
the  act  of  27th  July,  1868  (15  Stat.  234,  sect.  3),  the  sum  of  $10,000. 
Such  payment  was  made  by  a  draft  on  the  treasury  payable  to  the 
order  of  the  claimant,  which  draft  was  by  him  duly  indorsed. 

The  Court  found  as  a  matter  of  law  that  the  claimant's  service,  as 
set  forth  in  the  foregoing  finding,  did  not  constitute  an  arrest  of  Sur- 
ratt within  the  meaning  of  the  proclamation,  but  was  merely  the 
giving  of  information  which  conduced  to  the  arrest.  For  such  infor- 
mation the  remuneration  allowed  to  him  under  the  act  of  Congress 
was  a  full  satisfaction,  and  discharges  the  defendants  from  all  lia- 
bility. 

The  petition  was  dismissed  accordingly :  whereupon  an  appeal  was 
taken  to  this  Court. 

Ste.  Marie  having  died  pendente  lite,  his  executor  was  substituted 
in  his  stead. 


'62  SHUEY    V.    UNITED   STATES  [CHAP.    I 

Mr.  D.  B.  Meany  and  Mr.  F.  Carroll  Brewster,  for  the  appellant. 

Mr.  Assistant  Attorney-General  Edwin  B.  Smith,  contra. 

Mr.  Justice  Strong  delivered  the  opinion  o£  the  Court. 

We  agree  with  the  Court  of  Claims,  that  the  service  rendered  by 
the  plaintiff's  testator  was,  not  the  apprehension  of  John  H.  Surratt, 
for  which  the  War  Department  had  offered  a  reward  of  $25,000,  but 
giving  information  that  conduced  to  the  arrest.  These  are  quite  dis- 
tinct things,  though  one  may  have  been  a  consequence  of  the  other. 
The  proclamation  of  the  Secretary  of  War  treated  them  as  different ; 
and,  while  a  reward  of  $25,000  was  offered  for  the  apprehension,  the 
offer  for  information  was  only  a  "liberal  reward."  The  findings  of 
the  Court  of  Claims  also  exhibit  a  clear  distinction  between  making 
the  arrest  and  giving  the  information  that  led  to  it.  It  is  found  as 
a  fact,  that  the  arrest  was  not  made  by  the  claimant,  though  the  dis- 
covery and  arrest  were  due  entirely  to  the  disclosures  made  by  him. 
The  plain  meaning  of  this  is,  that  Surratt's  apprehension  was  a  con- 
sequence of  the  disclosures  made.  But  the  consequences  of  a  man's 
act  are  not  his  acts.  Between  the  consequence  and  the  disclosure 
that  leads  to  it  there  may  be,  and  in  this  case  there  were,  intermedi- 
ate agencies.  Other  persons  than  the  claimant  made  the  arrest,  — 
persons  who  were  not  his  agents,  and  who  themselves  were  entitled  to 
the  proffered  reward  for  his  arrest,  if  any  persons  were.  We  think, 
therefore,  that  at  most  the  claimant  was  entitled  to  the  "liberal  re- 
ward" promised  for  information  conducing  to  the  arrest;  and  that 
reward  he  has  received. 

But,  if  this  were  not  so,  the  judgment  given  by  the  Court  of  Claims 
is  correct. 

The  offer  of  a  reward  for  the  apprehension  of  Surratt  was  revoked 
on  the  twenty-fourth  day  of  November,  1865 ;  and  notice  of  the  revo- 
cation was  published.  It  is  not  to  be  doubted  that  the  offer  was 
revocable  at  any  time  before  it  was  accepted,  and  before  anything 
had  been  done  in  reliance  upon  it.  There  was  no  contract  until  its 
terms  were  complied  with.  Like  any  other  offer  of  a  contract,  it 
might,  therefore,  be  withdrawn  before  rights  had  accrued  under  it_; 
and  it  was  withdrawn  through  the  same  channel  in  which  it  was 
made.  The  same  notoriety  was  given  to  the  revocation  that  was 
given  to  the  offer;  and  the  findings  of  fact  do  not  show  that  any  in- 
formation was  given  by  the  claimant,  or  that  he  did  anything  to 
entitle  him  to  the  reward  offered,  until  five  months  after  the  offer  had 
been  withdrawn.  True,  it  is  found  that  tlion,  and  at  all  times  until 
the  arrest  was  actually  made,  he  was  ignorant  of  the  withdrawal;  but 
that  is  an  immaterial  fact.  The  offer  of  tlie  reward  not  having  been 
made  to  him  directly,  but  by  means  of  a  pu])lished  proclamation,  he 
should  have  known  that  it  could  be  revoked  iii  tlie  manner  in  Avhich 
it  was  made.  Jvdr/mrnt  affirmed.^ 

*  See  also  Hudson  Real  Estate  Co.  v.  Tower,  161  Mass.  10. 


/..3  V -f  "^-^^ -'^^^"'^ 

SECT.    ll  BIGGERS    V.    OWEN  Cr>^ 


^  U^A^^^^ir*^ 


BIGGERS  ET.  AL.  V.  OWEN  et  al.     ?»  ^  "^    Jk^rn/^^*^ 

Georgia  Supreme  Court,  October  Term,  1887  £>  /?         ^  V  ^ 

\Eeyorted  in  79  Ga.  658.]  P-7  ^ 

Blandford,  Justice.  McMichael  and  Owens  brought  their  action 
of  assumpsit  against  B.  A.  Biggers,  P.  J.  Biggers,  Jr.,  and  T.  J. 
Pearce  (the  plaintiff  in  error  here)  in  the  city  court  of  Columbus,  to 
recover  a  reward  of  $500,  which  they  alleged  had  been  offered  by  the 
defendants.  The  offer  of  reward  was  printed  as  an  advertisement  in 
a  newspaper  in  Columbus,  as  follows :  — 

"We  will  pay  $500,  the  above  reward,  for  the  delivery  to  the  sheriff  of  Muscogee 
County  of  the  party  or  parties,  with  evidence  to  convict,  who  administered  the  poison 
in  the  meal  which  proved  fatal  to  J .  w .  niggers  and  J .  V.  Burgess  and  wife  on  the  11th 
of  November." 

Signed  B.  A.  Biggebs,  P.  J.  Biggers,  Jr.,  T.  J.  Pearce. 

Upon  the  trial  of  the  case,  the  jury  rendered  a  verdict  in  favor  of 
the  plaintiffs  for  the  amount  of  the  reward,  $500. 

It  appeared  from  the  evidence  that  when  this  reward  was  offered, 
the  plaintiffs  arrested  a  certain  woman,  and  delivered  her  to  the 
sheriff  of  Muscogee  County;  that  a  committing  trial  was  had  before 
a  justice  of  the  peace  and  the  woman  discharged  for  the  want  of 
sufficient  evidence  to  commit.  The  reward  was  then  withdrawn;  but 
McMichael  testifies  that  after  it  was  withdrawn,  Pearce  told  him  to 
go  on,  that  he  would  pay  him  w^hat  his  services  were  worth.  After 
this,  a  warrant  was  sued  out  for  the  same  woman  by  Mr.  Pearce. 
McMichael,  being  a  bailiff  in  the  Court,  executed  the  warrant  and 
arrested  her.  She  was  indicted  for  the  poisoning,  was  tried  and  con- 
victed. The  judge  in  the  Court  below  charged  the  jury  that  if  this 
reward  was  offered,  and  the  plaintiffs  thereupon  furnished  evidence 
going  to  show  that  this  woman  was  guilty  of  the  crime,  they  were 
entitled  to  recover  the  amount  of  the  reward.  The  Court  was  re- 
quested to  charge  that  if,  after  this  reward  was  offered,  it  was  with- 
drawn before  the  plaintiffs  performed  the  services  contemplated  by 
the  reward,  that  no  recovery  could  be  had,  under  the  declaration  in 
this  case.  The  Court  refused  to  give  this  in  charge  as  requested, 
but  charged  to  the  contrary. 

We  think  the  Court  erred  in  declining  to  charge  as  requested,  and 
in  charging  as  he  did.  An  offer  of  reward  is  nothing  more  than  a 
proposition;  it  is  an  offer  to  the  public,  and  until  some  one  com- 
plies with  the  terms  or  conditions  of  that  offer,  it  may  be  withdrawn. 
This  is  Avell-settled  law,  as  to  which  there  can  be  no  dispute,  and 
counsel  in  this  case  did  not  contend  otherwise.  When  this  offer  of 
reward  was  withdrawn,  and  Pearce  afterwards  told  McMichael  to  go 
on  with  the  case,  that  he  would  pay  for  his  services,  Pearce  did 
not  thereby  become  liable  to  pay  him  the  amount  of  this  reward,  but 
only  to  pay  him  for  the  value  of  his  services.     And  this  is  not  an 


64  BRACKENBURY    V.    HODGKIN  [CHAP.   I 

action  upon  a  quantum  meruit  to  recover  tlie  value  of  such  services; 
but  is  an  action  to  recover  specifically  the  amount  of  this  reward, 
$500,  There  was  no  evidence  introduced  in  the  Court  below  to  show 
what  the  value  of  the  services  was,  and  the  record  does  not  distinctly 
show  w^at  services  were  performed. 

The  Court  having  erred  in  failing  to  change  as  requested,  and  in 
charging  the  jury  as  above  set  out,  we  consider  it  unnecessary  to  say 
more  about  the  case;  and  we  therefore  reverse  the  judgment. 

Judgment  reversed. 


JOSEPH  A.  BRACKENBUKY  et  al.  v.  SAEAH  D.  P. 

HODGKIN   ET   AL. 

Supreme  Judicial  Court  of  Maine,  October  27,  1917 
[Reported  in  116  Maine,  399] 

Cornish,  C.J.^  The  defendant,  Mrs.  Sarah  D.  P.  Hodgkin,  on  the 
eighth  day  of  Pebruary,  1915,  was  the  owner  of  certain  real  estate, 
her  home  farm,  situated  in  the  outskirts  of  Lewiston.  She  was  a 
widow  and  was  living  alone.  She  was  the  mother  of  six  adult  chil- 
dren, five  sons,  one  of  whom,  Walter,  is  the  co-defendant,  and  one 
daughter,  who  is  the  co-plaintiff.  The  plaintiffs  were  then  re- 
siding in  Independence,  Missouri.  Many  letters  had  passed  be- 
tween mother  and  daughter  concerning  the  daughter  and  her  hus- 
band returning  to  the  old  home  and  taking  care  of  the  mother,  and 
finally,  on  February  8,  1915,  the  mother  sent  a  letter  to  the  daughter 
and  her  husband  which  is  the  foundation  of  this  bill  in  equity.  In 
this  letter  she  made  a  definite  proposal,  the  substance  of  which  was 
that  if  the  Brackenburys  would  move  to  Lewiston  and  maintain  and 
care  for  Mrs.  Hodgkin  on  the  home  place  during  her  life,  and  pay 
the  moving  expenses,  they  were  to  have  the  use  and  income  of  the 
premises,  together  with  the  use  of  the  household  goods,  with  certain 
exceptions,  Mrs.  Hodgkin  to  have  what  rooms  she  might  need.  The 
letter  closed,  by  way  of  postscript,  with  the  words:  "you  to  have 
the  place  when  I  have  passed  away." 

Relying  upon  this  offer,  which  was  neither  withdrawn  nor  modi- 
fied, and  in  acceptance  thereof,  the  plaiutiiTs  moved  from  Missouri 
late  in  April,  1915,  went  upon  the  premises  described  and  entered 
upon  the  performance  of  the  contract.  Trouble  developed  after  a 
few  weeks  and  the  relations  between  the  parties  grew  most  disagree- 
able. The  mother  brought  two  snits  against  her  son-in-law  on 
trifling  matters  and  finally  ordered  the  plaintiffs  from  the  place,  but 
they  refused  to  leave.  Then  on  November  7,  1916,  she  executed  and 
delivered  to  her  son,  Walter  C.  Hodgkin,  a  deed  of  the  premises, 
reserving  a  life  estate  in  herself,  Walter,  however,  was  not  a  bona 
*  A  portion  of  the  opinion  is  omitted. 


SECT.    l]  BRACKENBURY    V.    HODGKIN  65 

fide  purchaser  for  value  without  notice  but  took  the  deed  with  full 
knowledge  of  the  agreement  between  the  parties  and  for  the  sole 
purpose  of  evicting  the  plaintiffs :  On  the  very  day  the  deed  was 
executed  he  served  a  notice  to  quit  upon  Mr.  Brackenbury,  as  pre- 
liminary to  an  action  of  forcible  entry  and  detainer  which  was 
brought  on  JSTovember  13,  1916.  This  bill  in  equity  was  brought  by 
the  plaintiffs  to  secure  a  reconveyance  of  the  farm  from  Walter  to 
his  mother,  to  restrain  and  enjoin  Walter  from  further  prosecuting 
his  action  of  forcible  entry  and  detainer  and  to  obtain  an  adjudi- 
cation that  the  mother  holds  the  legal  title  impressed  with  a  trust  in 
favor  of  the  plaintiffs  in  accordance  with  their  contract. 

The  sitting  Justice  made  an  elaborate  and  carefully  considered 
finding  of  facts  and  signed  a  decree,  sustaining  the  bill  with  costs 
against  Walter  C.  Hodgkin  and  granting  the  relief  prayed  for.  The 
case  is  before  the  Law  Court  on  the  defendants'  appeal  from  this 
decree. 

Four  main  issues  are  raised. 

1.  As  to  the  completion  and  existence  of  a  valid  contract. 

A  legal  and  binding  contract  is  clearly  proven.  The  offer  on  the 
part  of  the  mother  was  in  writing  and  its  terms  cannot  successfully  be 
disputed.  There  was  no  need  that  it  be  accepted  in  words  nor  that  a 
counter  promise  on  the  part  of  the  plaintiffs  be  made.  The  offer 
was  the  basis,  not  of  a  bilateral  contract,  requiring  a  reciprocal 
promise,  a  promise  for  a  promise,  but  of  a  unilateral  contract  re- 
quiring an  act  for  a  promise.  /'In  the  latter  case  the  only  acceptance 
of  the  offer  that  is  necessary  is  the  performance  of  the  act.  In 
other  words  the  promise  becomes  binding  when  the  act  is  performed." 
6  E.  C.  L.,  607.     This  is  elementary  law. 

The  plaintiffs  here  accepted  the  offer  by  moving  from  Missouri  to 
the  mother's  farm  in  Lewiston  and  entering  upon  the  performance  of 
the  specified  facts,  and  they  have  continued  performance  since  that" 
time  so  far  as  they  have  been  permitted  by  the  mother  to  do  so. 
The  existence  of  a  completed  and  valid  contract  is  clear. ^ 

'  By  express  provision  of  the  codes  in  many  European  countries,  an  offer  is  irrev- 
ocable until  the  person  addressed  has  had  a  reasonable  time  to  answer  it.  See  Valery, 
Contrats  par  Correspondance,  p.  167.  In  the  absence  of  such  legislation  the  weight 
of  opinion  in  the  civil  law  is  that  an  offer  may  be  revoked,  ibid.  There  has  been  much 
discussion  and  difference  of  opinion,  however,  as  to  the  liability  of  an  offerer  who 
revoked  his  offer  for  such  damage  as  the  person  addressed  may  have  incurred  by 
acting  in  reliance  on  the  offer.  The  theory  of  the  offerer's  liability  was'^first  carefully 
elaborated  by  von  Ihering,  Jahrbiicher  fiir  Dogmatick,  IV.  p.  1  seq.,  under  the  head- 
ing of  cvlpa  in  contrahendo.  For  the  varying  views  of  other  writers,  see  Windscheid, 
Lehrbuch  des  Pandektenrechts,  II,  §307,  n.  8  (8th  ed.);   Valery,  §  185. 


66  RAFFLES    V.    WICHELHAUS  [CHAP.   I 


C.  —  Acceptance 


KAFFLES   V.   WICHELHAUS   and   Another 

In  the  Exchequer,  January  20,   1864 

\_Reported  in  2  Hurlstone  &  Coltman,  906] 

Declaration  :  for  that  it  was  agreed  between  the  plaintiff  and 
the  defendants,  to  wit,  at  Liverpool,  that  the  plaintiff  should  sell  to 
the  defendants,  and  the  defendants  buy  of  the  plaintiff,  certain  goods, 
to  wit,  125  bales  of  Surat  cotton,  guaranteed  middling  fair  merchant's 
Dhollerah,  to  arrive  ex  "Peerless"  from  Bombay ;  and  that  the  cotton 
should  be  taken  from  the  quay,  and  that  the  defendants  would  pay 
the  plaintiff  for  the  same  at  a  certain  rate,  to  wit,  at  the  rate  oi  11\d. 
per  pound,  within  a  certain  time  then  agreed  upon  after  the  arrival 
of  the  said  goods  in  England.  Averments :  that  the  said  goods  did 
arrive  by  the  said  ship  from  Bombay  in  England,  to  wit,  at  Liverpool, 
and  the  plaintiff  was  then  and  there  ready  and  willing  and  offered 
to  deliver  the  said  goods  to  the  defendants,  &c.  Breach :  that  the 
defendants  refused  to  accept  the  said  goods  or  pay  the  plaintiff  for 
them. 

Plea :  that  the  said  ship  mentioned  in  the  said  agreement  was 
meant  and  intended  by  the  defendants  to  be  the  ship  called  the 
"Peerless,"  which  sailed  from  Bombay,  to  wit,  in  October;  and  that 
the  plaintiff  was  not  ready  and  willing  and  did  not  offer  to  deliver  to 
the  defendants  any  bales  of  cotton  which  arrived  by  the  last-men- 
tioned ship,  but  instead  thereof  was  only  ready  and  willing  and 
offered  to  deliver  to  the  defendants  125  bales  of  Surat  cotton  which 
arrived  by  another  and  different  ship,  which  was  also  called  the 
"Peerless,"  and  Avhich  sailed  from  Bombay,  to  wit,  in  December. 

Demurrer,  and  joinder  therein. 

'Milward,  in  support  of  the  demurrer.  The  contract  was  for  the 
sale  of  a  number  of  bales  of  cotton  of  a  particular  description,  which 
the  plaintiff  was  ready  to  deliver.  It  is  immaterial  by  what  ship 
the  cotton  was  to  arrive,  so  that  it  was  a  ship  called  the  "  Peerless," 
The  words  "  to  arrive  ex  'Peerless' "  only  mean  that,  if  the  vessel 
Ib  lost  on  the  voyage,  the  contract  is  to  be  at  an  end.  [Pollock,  C.  B. 
It  would  be  a  question  for  the  jury  whether  both  parties  meant 
the  same  ship  called  the  "Peerless."]  That  would  be  so  if  the  con- 
tract was  for  the  sale  of  a  ship  called  the  "Peerless;"  but  it  is  for 
the  sale  of  cotton  on  board  a  ship  of  that  name.  [Pollock,  C.  B. 
The  defendant  only  bought  that  cotton  which  was  to  arrive  by  a  par- 
tinular  ship.  It  may  as  Avell  be  saiM,  that,  if  there  is  a  contract  for 
the  purchase  of  certain  goods  in  warehouse  A.,  that  is  satisfied  by  the 
delivery  of  goods  of  the  same  description  in  warehouse  B.]     In  that 


SECT.    l]  FALCK    V.    WILLIAMS  67 

case  there  would  be  goods  in  both  warehouses ;  here  it  does  not  appear 
that  the  plaintiff  had  any  goods  on  board  the  other  ''Peerless." 
[Martin^  B.  It  is  imposing  on  the  defendant  a  contract  different 
from  that  which  he  entered  into.  Pollock,  C.  B.  It  is  like  a  con- 
tract for  the  purchase  of  wine  coming  from  a  particular  estate  in 
France  or  Spain,  where  there  are  two  estates  of  that  name.]  The  de- 
fendant has  no  right  to  contradict  by  parol  evidence  a  written  con- 
tract good  upon  the  face  of  it.  He  does  not  impute  misrepresenta- 
tion or  fraud,  but  only  says  that  he  fancied  the  ship  was  a  different 
one.  Intention  is  of  no  avail,  unless  stated  at  the  time  of  the 
contract.  [Pollock,  C.  B.  One  vessel  sailed  in  October  and  the 
other  in  December.]     The  time  of  sailing  is  no  part  of  the  contract. 

Mellish  (Cohen  with  him),  in  support  of  the  plea.  There  is 
nothing  on  the  face  of  the  contract  to  show  that  any  particular  ship 
called  the  "Peerless"  was  meant ;  but  the  moment  it  appears  that  two 
ships  called  the  "Peerless"  were  about  to  sail  from  Bombay,  there 
is  a  latent  ambiguity,  and  parol  evidence  may  be  given  for  the  pur- 
pose of  showing  that  the  defendant  meant  one  "Peerless"  and  the 
plaintiff  another.  That  being  so,  there  was  no  consensus  ad  idem, 
and  therefore  no  binding  contract.  [He  was  then  stopped  by  the 
Court.] 

Pee  Cukiam.    There  must  be  judgment  for  the  defendants. 

Judgment  for  the  defendants. 


FALCK  V.   WILLIAMS 

In  the  Privy  Council,  on  Appeal  from  the  Supreme  Court  of 
ISTew  South  Wales,  December  6,  9,  1899. 

[Reported  in  [1900]  Appeal  Cases,  176] 

The  judgment  of  their  Lordships  was  delivered  by 

Lord  Macnaghten.  Mr.  Falck,  who  was  plaintiff  in  the  action 
and  is  now  the  appellant,  was  a  shipowner  residing  in  Norway; 
Williams,  the  respondent,  was  a  shipbroker  in  Sydney,  New  South 
Wales. 

Through  one  Buch,  who  was  a  shipbroker  and  chartering  agent 
at  Stavanger,  in  Norway,  Falck  did  a  good  deal  of  business  with 
Williams. 

Buch  and  Williams  corresponded  by  means  of  a  telegraphic  code, 
or  rather  a  combination  of  two  codes  arranged  between  them.  It  was 
owing  to  a  misunderstanding  of  a  code  message  relating  to  one  of 
Falck's  vessels  called  the  "Semiramis"  that  the  difficulty  arose  which 
led  to  the  present  litigation. 

Falck  sued  Williams  for  breach  of  a  contract  of  affreightment  to 
load  the  "Semiramis"  with  a  cargo  of  copra  in  Fiji  for  delivery  in 


68  FALCK    V.   WILLIAMS  [CHAP.    I 

the  United  Kingdom  or  some  port  in  Europe.  Williams  understood 
the  proposal  made  to  him  to  be  a  proposal  for  carriage  of  a  cargo 
of  shale  to  be  loaded  at  Sydney  and  delivered  at  Barcelona,  and  he 
accepted  the  proposal  under  this  impression.  It  was  conceded  that 
both  parties  acted  in  good  faith,  and  that  the  mistake  was  unin- 
tentional, whoever  might  be  to  blame  for  the  misunderstanding. 

The  case  came  on  for  trial  before  Owen,  J.,  and  a  jury.  A  verdict 
was  taken  by  consent  for  the  defendant.  .  The  amount  of  damages, 
if  damages  were  recoverable,  was  fixed  by  agreement.  All  other 
questions  were  reserved  for  the  Full  Court.  The  Full  Court  dis- 
missed the  action  with  costs. 

The  first  question  is,  Was  there  a  contract?  If  there  was  no  con- 
tract in  fact,  Was  the  proposal  made  on  Falck's  behalf  so  clear  and 
unambiguous  that  Williams  cannot  be  heard  to  say  that  he  misunder- 
stood it?  If  that  question  be  answered  in  the  negative,  all  other 
questions  become  immaterial. 

The  negotiation  in  reference  to  the  "Semiramis"  began  apparently 
on  February  7,  1895,  by  a  telegram  from  Williams  to  Buch.  Williams 
offered  to  load  the  "Semiramis"  with  shale  at  Sydney  Wharf  for 
Barcelona  "at  freight  per  ton  dead  weight  27s."  Buch  replied  by 
telegram,  dated  February  9,  asking  2250Z,  as  a  lump  sum  for  freight. 
On  February  12  Williams  offered  27s.  Qd.  "per  ton  dead  weight." 
On  the  13th  Buch  offered  to  accept  that  sum  on  the  ship's  dead  weight 
"capacity."  By  telegram  on  the  14th  Williams  explained  that  the 
rate  offered  was  "per  ton  dead  weight  discharged."  On  the  15th 
Buch  replied  that  the  freight  was  to  be  payable  "on  guaranteed 
dead  weight  capacity,"  or  to  be  a  lump  sum  of  2100?.,  adding  a  word 
interpreted  to  mean  "Do  your  best  to  obtain  our  figures,  vessel  will 
not  accept  less."  Then,  on  the  16th,  Williams  asked  what  was  the 
guaranteed  dead  weight  capacity  of  the  ship.  The  answer  on  the 
17th  was  "1550"  tons.  On  the  18th  Williams  telegraphed,  "Shippers 
will  not  pay  more  than  they  have  already  offered  at  per  ton  dead 
weight  discharged."  He  also  offered  in  the  same  telegram  to  engage 
a  vessel  to  load  shale  at  Sydney  for  Liverpool,  at  freight  per  ton  dead 
weight  23s. 

Having  had  no  reply  to  his  telegram  of  the  18th,  Williams,  on  the 
2l8t,  telegraphed  to  Buch,  "Why  do  you  not  reply  to  our  last  tele- 
graph? It  is  very  important  that  we  have  immediate  reply." 
And  he  went  on  to  offer  to  engage  a  vessel  to  load  copru  at  two 
ports  in  the  Fiji  Islands,  deliverable  in  the  United  Kingdom,  or  some 
port  on  the  Continent,  at  47s,  6rZ.  per  ton  cargo  delivered. 

'I'bcii  wc  come  to  the  disputed  message.  On  February  22  Buch 
telegraphed  as  follows:  "Slialc  Coj)yriglit  Somiramis  Begloom 
Estcortf!  Sultana  Brilliant  Argentina  Bronchil."  That  message 
with  the  code  words  interpreted  runs  thus:  "Shale.  Your  rate  is  too 
low,  impossible  to  work  business  at  yonr  figures.  Scmiramis.  Have 
closed  in  accordance  with  your  order.     Confirm.     Two  ports  Fiji 


SECT.    l]  FALCK    V.    WILLIAMS  69 

Islands.  Sultana.  Brilliant.  Argentina.  Keep  a  good  look-out 
for  business  for  this  vessel  and  wire  us  when  anything  good  offers." 

On  the  following  day  Williams  telegraphed,  "Semiramis,  we  con- 
firm charter."  And,  in  accordance  with  his  reading  of  the  telegram 
of  February  22,  he  at  once  proceeded  in  the  name  and  on  behalf  of 
Falck  to  charter  the  "Semiramis"  to  carry  a  cargo  of  shale  from 
Sydney  to  Barcelona.  So  the  controversy  arose.  And  after  mutual 
explanations  or  mutual  recrimination  the  action  was  brought. 

Now,  it  is  impossible  to  contend  that  there  was  a  contract  in  fact. 
Obviously  the  parties  were  not  at  one.  Obviously  the  acceptance  by 
Williams  as  he  meant  it  to  be  understood  had  no  connection  with 
or  reference  to  the  proposal  which  Buch  intended  to  make  and 
thought  he  was  making. 

But  then,  said  the  learned  counsel  for  the  appellant,  the  message 
of  February  22  was  too  plain  to  be  misread.  An  intelligent  child 
would  have  understood  it.  Business  cannot  go  on  if  men  of  business 
are  allowed  to  shelter  themselves  under  such  a  plea.  Their  Lord- 
ships are  unable  to  take  that  view  of  the  disputed  message.  When 
the  message  was  sent  there  were  three  matters  under  consideration. 
There  was  the  Barcelona  charter  for  the  "Semiramis,"  there  was  the 
offer  for  a  Liverpool  charter,  and  there  was  the  Fiji  proposal.  •  Of 
these  the  most  important  and  the  most  pressing  was  the  Barcelona 
charter.  True,  the  negotiation  was  at  a  deadlock  for  the  moment,  but 
the  parties  were  so  nearly  at  one  that  it  was  only  reasonable  to  expect 
that  they  would  come  to  terms,  and  it  is  to  be  observed  that  during 
the  negotiation,  which  seems  to  have  been  unusually  protracted,  the 
"Semiramis"  was  never  once  mentioned  in  connection  with  any  other 
voyage.  Whether  the  appellant's  view  or  the  respondent's  view 
be  correct,  the  telegram  of  February  22  seems  to  deal  with  all 
three  points.  The  appellant  says  that  the  first  two  words  of  the  code 
message  deal  compendiously  with  both  the  Barcelona  charter  and 
the  Liverpool  proposal,  and  that  the  next  three  words  deal  with  the 
"Semiramis,"  the  last  word  of  the  three  indicating  clearly  that 
she  was  to  be  sent  to  Fiji.  The  respondent  says  that  the  first  two 
words  refer  to  the  Liverpool  proposal,  the  second  two  to  the  Bar- 
celona charter,  and  that  the  fifth  word,  "estcorte,"  is  to  be  read  with 
what  follows.  Indeed,  the  whole  controversy  when  the  matter  is 
threshed  out  seems  to  be  narrowed  down  to  this  question  —  "Is  the 
word  "estcorte"  to  be  read  with  what  has  gone  before  or  with  what 
follows?  In  their  Lordships'  opinion  there  is  no  conclusive  reason 
pointing  one  way  or  the  other.  The  fault  lay  with  the  appellant's 
agent.  If  he  had  spent  a  few  more  shillings  on  his  message,  if  he  had 
even  arranged  the  words  he  used  more  carefully,  if  he  had  only 
put  the  word  "estcorte"  before  the  word  "begloom"  instead  of  after 
it,  there  would  have  been  no  difficulty.  It  is  not  for  their  Lordships 
to  determine  what  is  the  true  construction  of  Buch's  telegram. 
It  was  the  duty  of  the  appellant  as  plaintiff  to  make  out  that  the 


70  MANSFIELD    V.    HODGDON  [CHAP.    I 

construction  whicli  he  put  upon  it  was  the  true  one.  In  that  he  must 
fail  if  the  message  was  ambiguous,  as  their  Lordships  hold  it  to  be. 
If  the  respondent  had  been  maintaining  his  construction  as  plaintiff 
he  would  equally  have  failed. 

Their  Lordships  will  therefore  humbly  advise  Her  Majesty  that 
this  appeal  must  be  dismissed.  The  appellant  will  pay  the  costs 
of  the  appeal. 


NATHANIEL  B.  MANSFIELD  v.  BENJAMIN  E.  HODGDON 

SuPEEME  Judicial  Couet  of  Massachusetts,  March  23-June  21, 

1888 

[^Reported  in  147  Massachusetts,  304] 

Holmes,  J. :  This  is  a  bill  specifically  to  enforce  a  covenant  to 
sell  to  the  plaintiff  "the  farm  situated  in  that  part  of  Mount  Desert 
Island  called  Pretty  Marsh,  and  consisting  of  between  two  hundred 
and  sixty  and  two  hundred  and  seventy  acres,  and  standing  in  the 
name  of  Benjamin  Hodgdon,  for  the  sum  of  fifteen  hundred  dollars 
cash,  at  any  time  within  thirty  days  from  the  date  hereof."  The 
instrument  is  dated  January  15,  1887,  and  is  signed  by  the  defendant 
Hodgdon,  but  not  by  his  wife.  The  defendant  Clara  E.  Allen  is  a 
subsequent  grantee  of  the  premises,  and  the  remaining  defendant, 
"William  H.  Allen,  is  her  husband.  The  judge  who  heard  the  wit- 
nesses made  a  decree  for  the  plaintiff,  and,  the  evidence  having  been 
reported,  the  defendants  appealed. 

Giving  to  the  finding  of  the  judge  the  weight  which  it  must  have, 
we  think  the  evidence  must  be  taken  to  establish  the  following  facts. 
The  instrument  was  sealed  by  Hodgdon,  and  has  not  been  altered. 
The  plaintiff  expressed  his  election  to  purchase  within  the  thirty 
days  allowed.  There  was  evidence  of  a  message  to  that  effect  having 
been  left  at  Hodgdon's  house  within  ten  days.  It  appears  that  a 
blank  deed  to  the  plaintiff  and  another  was  left  there  about  the  same 
time,  and  there  was  evidence  that  a  message  was  sent  to  Hodgdon 
to  execute  it  if  he  found  it  correct.  There  was  also  evidence  that 
the  deed  was  returned  unexecuted,  with  the  message  that  Mrs. 
Hodgdon  refused  to  sign  it,  and  with  no  other  objection  in  the 
first  instance.  These  facts  warranted  a  finding  that  sending  the  deed 
implif'fl,  and  was  understood  to  imply,  notice  that  the  plaintiff  in- 
tended to  buy,  at  least  if  the  deed  corresponded  to  the  contract  (see 
Warner  ?;.  Willington,  3  Drew.  523,  533),  and  perhaps  whether  it  cor- 
rcsporifled  or  not,  as  the  message,  even  as  testified  to  by  Hodgdon, 
imported  a  willingness  to  correct  mistakes. 

The  defendants  take  the  ground  that  this  deed  did  not  correspond 
to  the  contract,  because  the  deed  included  a  mountain  lot  which  is 
alleged  not  to  be  included  in  the  land  described  by  the  contract.    The 


SECT.    l]  MANSFIELD    V.    HODGDON  71 

question  whether  that  lot  is  included  in  the  contract  is  also  im- 
portant, of  course,  in  deciding  what  land,  if  any,  the  defendant 
Allen  should  be  required  to  convey.  The  words  used  must  be  con- 
strued in  the  light  of  the  circumstances,  and  thus  construed  they 
might  well  have  been  found  to  import,  and  to  have  warranted  the 
plaintiff  in  understanding  that  they  imported,  all  the  defendant 
Hodgdou's  land  in  Mount  Desert. 

Hodgdon  owned  only  three  lots  in  Mount  Desert.  Two,  of  seventy 
and  eighty  acres  respectively,  are  admitted  to  be  embraced  in  the 
contract.  The  mountain  lot,  seemingly  then  regarded  as  of  little  or 
no  value,  and  said  to  contain  sixty  acres,  brings  the  total  up  to  two 
hundred  and  ten  acres.  The  contract  was  for  between  two  hundred 
and  sixty  and  two  hundred  and  seventy  acres.  Hodgdon  says  that 
the  plaintiff  was  introduced  to  him  by  a  letter  saying  that  he  wished 
the  refusal  of  the  property  down  East  for  thirty  days,  evidently 
suggesting  a  bargain  for  the  whole.  The  plaintiff  testifies  that, 
before  signing,  Hodgdon  said  that  he  had  not  so  much  land  as  was 
mentioned,  but  had  so  many  acres  in  one  lot,  so  many  in  another, 
and  so  many  in  a  third,  amounting  in  all  to  two  hundred  and  fifteen 
acres,  and  that  was  all  he  owned;  that  the  plaintiff  said  it  did  not 
make  any  difference  whether  it  was  two  hundred  and  fifteen,  or  two 
hundred  and  sixty,  or  two  hundred  and  seventy  acres;  and  that 
thereupon  Hodgdon  signed.  Hodgdon  acquired  all  the  land  by  one 
deed,  had  previously  offered  the  whole  land  as  two  hundred  and  sixty 
acres  to  others,  subsequently  made  a  deed  of  the  three  lots  to  the 
plaintiff,  which  was  not  delivered,  and  conveyed  them  by  a  similar 
deed  to  the  defendant  Mrs.  Allen. 

It  is  suggested  that  Hodgdon  understood  that  the  plaintiff  was  to 
pay  him  $1,500  for  the  land,  subject  to  a  mortgage.  But  the  agree- 
ment contains  no  such  qualification,  and  must  be  construed  as  an 
agreement  to  convey  a  good  title  free  from  incumbrances,  which 
there  is  evidence  tending  to  show  was  the  meaning  of  the  parties. 
Linton  v.  Hichborn,  126  Mass.  32.  If,  without  the  plaintiff's 
knowledge,  Hodgdon  did  understand  the  transaction  to  be  different 
from  that  which  his  words  plainly  expressed,  it  is  immaterial,  as  his 
obligations  must  be  measured  by  his  overt  acts.  Western  Railroad 
V.  Babcock,  6  Met.  346,  352;  O'Donnell  v.  Clinton,  145  Mass.  461, 
463.1 

1  See  also  Baines  v.  Woodlall,  6  C.  B.  N.  s.  657;  Smith  v.  Hughes,  L.  R.  6  Q.  B. 
607;  Ireland  v.  Livingston,  L.  R.  5  H.  L.  395;  Preston  i;.  Luck,  27  Ch.  D.  497;  Van 
Praagh  v.  Everidge,  [1902]  2  Ch.  266;  Thompson  v.  Ray,  46  Ala.  224;  Wood  v.  Du- 
yal,  100  la.  724;  Lull  v.  Anamosa  Nat.  Bank  110  la.  537;  Wood  v.  AUen,  111  la.  97 
Miller  i;.  Lord,  11  Pick,  11;  Stoddard  ?;.  Ham,  129  Mass.  383;  Tallant  v.  Stedman,  176 
Mass.  460,  466;  Home  F.  I.  Co.i).  Bredehoft,  49  Neb.  152;  Phillip  v.  Gallant,  62  N.  Y. 
256;  Neufville  v.  Stuart. Hill  Esq.  (S.C.)  159;  J.  A.  Coates  &  Son  v.  Buck,  93  Wis. 
128.  But  see  Green  v.  Bateman,  2  Wood  &  M.  359:  Lamar  Elevator  Co.  v.  Crad- 
dock,  5  Col.  App.  203;  Hartford,  &c.  R.  R.  Co.  v.  Jackson,  24  Conn.  514;  Rowland 
New  York,  &c.  R.  R.  Co.  61  Conn.  103;  Brant  v.  Gallup,  5  111.  App.  262;  Clav  v. 
Rickets.  662;  la.  363;  Hogue  v.  Mackey,  44  Kan.  277;   Frazer  d.  Small,  59  Hun.  619. 


72  MANSFIELD    V.    HODGDON  [CHAP.   I 

The  plaintiff,  although  he  signified  his  election  to  take  the  land 
within  thirty  days,  did  not  pay  or  tender  the  money  within  that 
time.  But  there  is  evidence  that  Hodgdon  was  responsible  for  this. 
At  or  soon  after  the  time  when  word  was  sent  that  Mrs.  Hodgdon 
refused  to  sign,  a  demand  or  request  was  made  that  Mrs.  Hodgdon 
should  have  three  acres  out  of  one  of  the  other  lots  as  a  consideration 
for  her  signing  the  deed.  Of  course,  under  the  contract  the  plaintiff 
had  a  right  to  call  upon  Mr.  Hodgdon  to  give  a  good  title  to  the 
whole,  but  he  was  disposed  to  yield  something.  A  discussion  ensued, 
of  course  on  the  footing  that  the  plaintiff  was  desirous  of  making  the 
purchase,  which  of  itself  was  evidence  that  the  defendant  Hodgdon 
had  notice  of  the  fact,  and  this  was  prolonged  beyond  the  thirty 
days.  When  the  parties  came  to  terms,  a  new  deed  was  prepared  and 
tendered,  was  executed  by  the  Hodgdons,  and  was  handed  to  a  Mr. 
Chapin,  who  had  acted  as  a  go-between.  But  later  in  the  same 
day  Chapin  was  ordered  not  to  deliver  the  deed,  and  the  bargain 
with  the  plaintiff  was  repudiated.  There  is  no  dispute  that  the 
plaintiff  was  ready  to  pay  for  the  land  at  any  time  when  he  could 
get  a  conveyance. 

Afterwards  Hodgdon  conveyed  to  Mrs.  Allen,  Mrs.  Hodgdon  re- 
leasing dower.  But  Mrs.  Allen  had  full  notice  of  the  agreement 
with  the  plaintiff  before  the  conveyance  to  her,  and  before  any 
agreement  was  made  with  her  or  her  husband,  and,  although  in- 
formed that  the  thirty  days  had  gone  by,  she  had  notice  that  the 
plaintiff  was  expecting  a  conveyance,  and  that  Hodgdon  might  have 
trouble  by  reason  of  his  refusal  to  convey  to  the  plaintiff.  Connihan 
V.  Thompson,  111  Mass.  270;  Hansard  v.  Hardy,  18  Ves.  455,  462. 
Mr.  Allen  was  asked  whether  he  knew  that  the  plaintiff  had  sued 
Hodgdon  for  damages  before  the  purchase.  This  must  have  meant 
before  the  final  conveyance  to  Mrs.  Allen,  as  Mrs.  Allen  was  party  to 
getting  the  deed  back  from  Mr.  Chapin,  and  had  notice  of  the  plain- 
tiff's rights  at  that  time,  before  any  suit  was  begun.  But  the  evidence 
was  excluded,  and  Mr.  Allen's  answer  is  not  properly  before  us. 
He  did  not  suggest  that  he  was  led  by  his  knowledge  to  assume  that 
the  plaintiff  would  not  seek  specific  performance,  and  must  be  taken 
to  have  known  that  the  plaintiff  still  had  the  right  to  do  so.  Connihan 
V.  Thompson,  hhi  supra. 

The  defendant  Hodgdon's  undertaking  not  having  been  a  mere 
offnr,  but  a  conditional  covenant  to  sell,  bound  him  irrevocably  to 
sell  in  case  the  plaintiff  should  elect  to  buy,  and  should  pay  the 
price  within  thirty  days.  The  usual  doctrine  as  to  conditions  applies 
to  siK'h  a  covenant,  and  as  the  covenantor  by  his  own  conduct  caused 
a  failure  to  comply  with  the  condition  in  respect  of  time,  he  Avaived 
it  to  that  extent.  And  upon  the  same  principle  he  exonerated  the 
plaintiff  from  making  any  tender  when  the  new  terms  had  been 
atrrcfd  npon,  ])y  wholly  repudiating  the  contract.  Carpenter  v. 
Holcomb,  105  Mass.  280,  282;  Ballon  v.  Billings,  136  Mass.  307; 


SECT.    l]       AYER    V.    WESTERN   UNION    TELEGRAPH    CO.  73 

Gormley  v.  Kyle,  137  Mass.  189;  Lowe  v.  Harwood,  139  Mass,  133, 
136.  If  it  be  true,  as  testified  for  the  defendant,  that  he  also  objected 
to  signing  a  deed  conveying  the  mountain  lot,  this  was  a  further 
excuse  for  the  delay.    Galvin  v.  Collins,  128  Mass.  525,  527. 

Decree  affirmed.^ 


FRED   W.  AYER  v.  WESTERN   UNION   TELEGRAPH 

COMPANY 

Supreme  Judicial  Court  of    Maine^  August  24,  1887 

[Reported  in  79  Maine,  493] 

.  Emery,  J.  On  report.  The  defendant  telegraph  company  was 
engaged  in  the  business  of  transmitting  messages  by  telegraph 
between  Bangor  and  Philadelphia,  and  other  points.  The  plaintiff, 
a  lumber  dealer  in  Bangor,  delivered  to  the  defendant  company  in 
Bangor,  to  be  transmitted  to  his  correspondent  in  Philadelphia,  the 
following  message :  — 

"  Will  sell  800M.  laths,  delivered  at  your  wharf,  two  ten  net  cash.  July  shipment. 
Answer  qiiick." 

The  regular  tariff  rate  was  prepaid  by  the  plaintiff  for  such  trans- 
mission. The  message  delivered  by  the  defendant  company  to  the 
Philadelphia   correspondent  was   as   follows :  — 

"Will  sell  800M.  laths  delivered  at  your  wharf  two  net  cash.  July  shipment. 
Answer  quick." 

It  will  be  seen  that  the  important  word  "ten"  in  the  statement  of 
price  was  omitted. 

The  Philadelphia  party  immediately  returned  by  telegraph  the 
following  answer :  — 

"Accept  your  telegraphic  offer  on  laths.  Cannot  increase  price  spruce." 
Letters  afterward  passed  between  the  parties  which  disclosed  the 
error  in  the  transmission  of  the  plaintiff's  message.  About  two 
weeks  after  the  discovery  of  the  error,  the  plaintiff  shipped  the  laths, 
as  per  the  message  received  by  his  correspondent,  to  wit,  at  $2.00 
per  M.  He  testified  that  his  correspondent  insisted  he  was  entitled 
to  the  laths  at  the  price,  and  they  were  shipped  accordingly. 

The  defendant  telegraph  company  offered  no  evidence  whatever, 
and  did  not  undertake  to  account  for,  or  explain  the  mistake  in  the 
transmission  of,  the  message.  The  presumption  therefore  is,  that  the 
mistake  resulted  from  the  fault  of  the  telegraph  company.  We  can- 
not consider  the  possibility  that  it  may  have  resulted  from  causes 
beyond  the  control  of  the  company.  In  the  absence  of  evidence  on 
that  point  we  must  assume  that  for  such  an  error  the  company  was  in 
fault.    Bartlett  v.  Tel.  Co.,  62  Maine,  221. 

'  A  portion  of  the  opinion  is  omitted. 


74  AYER    V.    WESTERN   UNION   TELEGRAPH    CO.     [CHAP.    I 

The  fault  and  consequent  liability  of  the  defendant  company 
being  thus  established,  the  only  remaining  question  is  the  extent  of 
that  liability  in  this  case.  The  plaintiif  claims  it  extends  to  the 
difference  between  the  market  price  of  the  laths  and  the  price  at 
which  they  were  shipped.  The  defendant  claims  its  liability  is 
limited  to  the  amount  paid  for  the  transmission  of  the  message.  It 
claims  this  limitation  on  two  grounds.^ 

11,  The  defendant  company  also  claims  that  the  plaintiff  was  not 
in  fact  damaged  to  a  greater  extent  than  the  price  paid  by  him  for 
the  transmission.  It  contends  that  the  plaintiff  was  not  bound  by 
the  erroneous  message  delivered  by  the  company  to  the  Phila- 
delphia party,  and  hence  need  not  have  shipped  the  laths  at  the  lesser 
price.  This  raises  the  question,  whether  the  message  written  by  the 
sender  and  entrusted  to  the  telegraph  company  for  transmission,  or 
the  message  written  out  and  delivered  by  the  company  to  the  re- 
ceiver at  the  other  end  of  the  line,  as  and  for  the  message  intended  to 
be  sent,  is  the  better  evidence  of  the  rights  of  the  receiver  against  the 
sender. 

The  question  is  important  and  not  easy  of  solution.  It  would  be 
hard,  that  the  negligence  of  the  telegraph  company,  or  any  error  in 
transmission  resulting  from  uncontrollable  causes,  should  impose 
upon  the  innocent  sender  of  a  message  a  liability  he  never  author- 
ized nor  contemplated.  It  would  be  equally  hard  that  the  innocent 
receiver,  acting  in  good  faith  upon  the  message  as  received  by  him, 
should,  through  such  error,  lose  all  claim  upon  the  sender.  If  one, 
owning  merchandise,  write  a  message  offering  to  sell  at  a  certain 
price,  it  would  seem  unjust  that  the  telegraph  company  could  bind 
him  to  sell  at  a  less  price  by  making  that  error  in  the  transmission. 
On  the  other  hand,  the  receiver  of  the  offer  may,  in  good  faith,  upon 
the  strength  of  the  telegram  as  received  by  him,  have  sold  all  the 
merchandise  to  arrive,  perhaps  at  the  same  rate.  It  would  seem 
unjust  that  he  should  have  no  claim  for  the  merchandise.  If  an 
agent  receive  instructions  by  telegraph  from  his  principal,  and  in 
good  faith  act  upon  them  as  expressed  in  the  message  delivered  him 
by  the  company,  it  would  seem  he  ought  to  be  held  justified,  though 
there  were  an  error  in  the  transmission. 

It  is  evident  that  in  case  of  an  error  in  the  transmission  of  a  tele- 
gram, either  the  sender  or  receiver  must  often  suffer  loss.  As  be- 
tween the  two,  upon  whom  should  the  loss  finally  fall.  "We  think  the 
safer  and  more  equitable  rule,  and  the  rule  the  public  can  most  easily 
adapt  itself  to,  is,  that,  as  between  sender  and  receiver,  the  party 
who  selects  the  telegraph  as  the  means  of  communication  shall  bear 
the  loss  caused  by  the  errors  of  the  telegraph.  The  first  proposer  can 
selfct  one  of  many  modes  of  commnnir'ntion,  both  for  the  proposal 

'  Thr;  firnt  (n-onrul  wfis  n  stipulation  printed  on  the  tcl<>Kr.'vph  blank,  purporting  to 
limit  th»-  lirihility  of  thf  conipHiiy  for  unrcpoatod  messages.  A  part  of  the  opinion  in 
whi'-h  this  dc.Umcc  was  hold  invalid  is  omittod. 


SECT.    l]       AYER    V.    WESTERN    UNION   TELEGRAPH    CO.  75 

and  the  answer.  The  receiver  has  no  such  choice,  except  as  to  his 
answer.  If  he  cannot  safely  act  upon  the  message  he  receives 
through  the  agency  selected  by  the  proposer,  business  must  be  seri- 
ously hampered  and  delayed.  The  use  of  the  telegraph  has  become 
so  general,  and  so  many  transactions  are  based  on  the  words  of  the 
telegram  received,  any  other  rule  would  now  be  impracticable. 

Of  course  the  rule  above  stated  presupposes  the  innocence  of  the 
receiver,  and  that  there  is  nothing  to  cause  him  to  suspect  an  error. 
If  there  be  anything  in  the  message,  or  in  the  attendant  circum- 
stances, or  in  the  prior  dealings  of  the  parties,  or  in  anything  else,. 
indicating  a  probable  error  in  the  transmission,  good  faith  on  the 
part  of  the  receiver  may  require  him  to  investigate  before  acting. 
Neither  does  the  rule  include  forced  messages,  for  in  such  case  the 
supposed  sender  did  not  make  any  use  of  the  telegraph. 

The  authorities  are  few  and  somewhat  conflicting,  but  there  are 
several  in  harmony  with  our  conclusion  upon  this  point.  In  Durkee 
V.  Vt.  C.  E.  K.  Co.,  29  Vt.  137,  it  was  held,  that  where  the  sender 
himself  elected  to  communicate  by  telegraph,  the  message  received  by 
the  other  party  is  the  original  evidence  of  any  contract.  In  Saveland 
V.  Green,  40  Wis.  431,  the  message  received  from  the  telegraph  com- 
pany was  admitted  as  the  original  and  best  evidence  of  a  contract^ 
binding  on  the  sender.  In  Morgan  v.  People,  59  111.  58,  it  was  said 
that  the  telegram  received  was  the  original,  and  it  was  held  that  the 
sheriff,  receiving  such  a  telegram  from  the  judgment  creditor,  was 
bound  to  follow  it,  as  it  read.  There  are  dicta  to  the  same  effect,  in 
Wilson  V.  M.  &  N.  Ky.  Co.,  31  Minn.  481,  and  Howdey  v.  Whipple, 
48  N.  H.  488. 

Tel.  Co.  V.  Schotter,  71  Ga.  760,  is  almost  a  parallel  case.  The 
sender  wrote  his  message,  ''Can  deliver  hundred  turpentine  at  sixty- 
four."  As  received  from  the  telegraph  company  it  read,  "Can  deliver 
hundred  turpentine  at  sixty,"  the  word  four  being  omitted.  The 
receiver  immediately  telegraphed  an  acceptance.  The  sender  shipped 
the  turpentine  and  drew  for  the  price  at  sixty-four.  The  receiver 
refused  to  pay  more  than  sixty.  The  sender  accepted  the  sixty,  and 
sued  the  telegraph  company  for  the  difference  between  sixty  and  the 
market.  It  was  urged,  as  here,  that  the  sender  was  not  bound  to 
accept  the  sixty,  as  that  was  not  his  offer.  The  Court  held,  however, 
that  there  was  a  complete  contract  at  sixty  —  that  the  sender  must 
fulfil  it,  and  could  recover  his  consequent  loss  of  the  telegraph 
company. 

It  follows,  that  the  plaintiff  in  this  case  is  entitled  to  recover  the 
difference  between  the  two  dollars  and  the  market,  as  to  laths.  The 
evidence  shows  that  the  difference  was  ten  cents  per  M. 

Judgment  for  plaintiff  for  eighty  dollars,  loith  interest  from  the 
date  of  the  writ} 

^  Western  Union  Tel.  Co.  v.  Flint  River  Lumber  Co.  114  Ga.  576;  Haubelt  v.  Rea 
&  Page  Mill  Co.,  77  Mo.  App.  672;    J.  L.  Price  Brokerage  Co.  v.  Chicago  &c.  R. 


76    N.  STERN    V.    MONEYWEIGHT   SCALE    COMPANY    [CHAP.    I 


kA 


A  "^      STEKN   V.    MONEYWEIGHT    SCALE    COMPANY 


J 


District  of  Columbia  Coukt  of  Appeals,  March  4-April  6,  1914 
[Reported  in  42  Appeal  Cases,  District  of  Columbia,  162] 

[ )J-        Action  by  the  Moneyweight  Scale  Company  based  on  a  written 
■^  order  for  a  scale.     The  defendant  made  affidavit  of  defence  alleging 

jr  that  the  plaintiff's  agent  called  upon  him,  and,  after  importuning 
him  to  buy  a  scale  and  being  refused,  "shoved  the  paper  partly 
printed  and  partly  written  at  affiant,  who  can  neither  read  nor  write 
English,  saying:  'that  paper  was  the  necessary  authorization  to  send 
said  scale  on  approval.'  " 

Mr.  Justice  Eobb  delivered  the  opinion  of  the  Court: 
If  the  averments  in  the  affidavit  of  defense  are  true,  and  we  must 
here  assume  them  to  be,  the  defendant  was  induced  to  sign  the  order 
and  note  through  the  misrepresentations  of  plaintiff's  agent.  May 
he  defend  this  action  upon  such  a  ground?  It  is  true  that  it  is  as 
much  the  duty  of  a  person  who  cannot  read  the  language  in  which 
a  contract  is  written,  to  have  someone  read  it  to  him  before  he  signs 
it  as  it  is  the  duty  of  one  who  can  read  to  peruse  it  himself  before 
signing  it.  Toledo  Computing  Scale  Co.  v.  Garrison,  28  App. 
D.  C.  243.  But  this  general  rule  does  not  reach  the  case  before  us. 
As  between  the  parties  to  a  written  contract,  the  party  who,  though 
able  to  read,  was  induced  through  the  misrepresentations  of  the  other 
party  as  to  its  contents  to  sign  it  without  reading,  may  avoid  it  on 
the  ground  of  fraud.  Thus,  in  Providence  Jewelry  Co.  v.  Crowe,  113 
Miim.  209,  129  N.  W.  224,  the  action  was  upon  a  written  contract 
for  goods  sold  and  delivered.  The  defendant  was  a  business  man 
who  signed  the  written  contract  without  reading  it,  having  been 
induced  to  do  so  by  the  representations  of  the  plaintiff's  agent  to  the 
effect  that  its  terms  were  in  accordance  with  the  oral  agreement 
preceding  it.  The  court  ruled  that,  although  the  defendant  had 
shown  "want  of  ordinary  business  procedure  in  signing  the  contract 
without  reading  it,"  he  could  nevertheless  defend  on  the  ground  of 
fraud  as  against  the  other  party.  The  court  said :  "Plaintiff  cannot 
escape  from  the  consequences  of  its  fraud  by  asserting  that  the 
defendant  ought  not  to  have  confided  in  its  integrity."  To  the 
same  effect  are  American  Fine  Art  Co.   v.  Eeeves  Pulley  Co.   62 

(Mo.  App.)  109  S.  W.  Kcp.  732;  Howley  v.  Whipple,  48  N.  H.  487  ace;  Henkel  v. 
Pape,  L.  71.  0  Ex.  7;  Vcrdin  v.  Robertson,  10  Ct.  Scss.  Cas.  (3d  scries)  35;  Jackson 
Lumber  Co.  v.  Western  Union  Tel.  Co.  7  Ala.  App.  644;  Postal  Tel.  Co.  v.  Schaefer 
110  Ky.  907;  ShinKlcur  v.  Western  Union  Tel.  Co.  72  Miss.  1030;  Pepper  v.  Telegraph 
Co.,  87  Tenn.  .'».'J4,  contra.  See  also  Penobscot  Fish  Co.  v.  Western  Union  Tel.  Co. 
Conn.  3.0,  and  eompare  Cc^rniaiii  Fruit  Co.  v.  Western  Union  Tel.  Co.  137  Cal.  598; 
Central  of  fleornia  Ky.  v.  Cortatowsky,  123  Ga.  306. 

The    (piestion   has   be<ai   flisputed   on   the   <n)iitinent   of   Europe  also.     See  Lyon- 
Caen  et  Renault,  'I'rait^  de  Droit  Commercial,  Vol.  III.  §  23. 


SECT.   l]     KELLEY   ASPHALT   CO.    V.    BARBER   ASPHALT   CO.  77 

C.  C.  A.  488,  127  Fed.  808 ;  Elizabeth  v.  Mitchell,  74  N.  J.  L,  342, 
68  Atl.  89 ;  J.  Weil  &  Co.  v.  Quidnick  Mfg.  Co.  33  R.  I.  58,  80  Atl. 
447;  Linington  v.  Strong,  107  111.  295;  Prestwood  v.  Carlton,  162 
Ala.  327,  50  So.  254.  It  is  apparent,  from  the  foregoing,  that  the 
affidavit  of  defense  should  have  been  held  sufficient  to  entitle  the 
defendant  to  a  hearing  upon  the  merits.  Codington  v.  Standard 
Bank,  40  App.  D.  C.  409.^ 


KELLEY    ASPHALT     BLOCK    COMPANY,     Respondent,     v. 
BARBER    ASPHALT    PAYING    COMPANY,    Appellant 

New  York  Couet  of  Appeals,  March  26-April  14,  1914 

[Reported   in  211    New    York,    68] 

Caedozo,  J. :  The  plaintiff  sues  to  recover  damages  for  breach  of 
an  implied  warranty.  The  contract  was  made  between  the  defendant 
and  one  Booth.  The  plaintiff  says  that  Booth  was  in  truth  its 
agent,  and  it  sues  as  undisclosed  principal.  The  question  is  whether 
it  has  the  right  to  do  so. 

The  general  rule  is  not  disputed.  A  contract  not  under  seal  made 
in  the  name  of  an  agent  as  ostensible  principal,  may  be  sued  on  by 
the  real  principal  at  the  latter's  election.  (Henderson,  Hull  &  Co. 
V.  McNally,  48  App.  Div.  134;  affirmed  on  opinion  below,  168  N.  Y. 
646;  Cothway  v.  Eennell,  10  B.  &  C.  671.)  The  defendant  says 
that  we  should  establish  an  exception  to  that  rule,  where  the  identity 
of  the  principal  has  been  concealed  because  of  the  belief  that,  if  it 
were  disclosed,  the  contract  would  not  be  made.  We  are  asked 
to  say  that  the  reality  of  the  defendant's  consent  is  thereby  destroyed, 
and  the  contract  vitiated  for  mistake. 

The  plaintiff  and  the  defendant  were  competitors  in  business.  The 
plaintiff's  president  suspected  that  the  defendant  might  refuse  to 
name  him  a  price.  The  suspicion  was  not  based  upon  any  previous 
refusal,  for  there  had  been  none;  it  had  no  other  origin  than  their 
relation  as  competitors.  Because  of  this  doubt  the  plaintiff  availed 
itself  of  the  services  of  Booth,  who,  though  interested  to  the  defend- 
ant's knowledge  in  the  plaintiff's  business  was  also  engaged  in  a  like 
business  for  another  corporation.  Booth  asked  the  defendant  for  a 
price  and  received  a  quotation,  and  the  asphalt  blocks  required  for  the 
plaintiff's  pavement  were  ordered  in  his  name.  The  order  was  ac- 
cepted by  the  defendant,  the  blocks  were  delivered  and  payment  was 
made  by  Booth  with  money  furnished  by  the  plaintiff.  The  paving 
blocks  were  unmerchantable,  and  the  defendant,  retaining  the  price 
contests  its  liability  for  damages  on  the  ground  that  if  it  had  known 
that  the  plaintiff  was  the  principal,  it  would  have  refused  to  make  the 
sale. 

^  The  statement  of  facts  is  abbreviated  and  a  portion  of  the  opinion  omitted. 


78  KELLEY   ASPHALT   CO.    V.    BARBER   ASPHALT    CO.   [CHAP.   I 

We  are  satisfied  that  upon  the  facts  before  us  the  defense  cannot 
prevail.  A  contract  involves  a  meeting  of  the  minds  of  the  con- 
tracting parties.  If  "one  of  the  supposed  parties  is  wanting,"  there 
is  an  absence  of  "one  of  the  formal  constituents  of  a  legal  transac- 
tion." (Rodliif  V.  Dallinger,  141  Mass.  1,  6.)  In  such  a  situation 
there  is  no  contract.  A  number  of  cases  are  reported  where  A  has 
ordered  merchandise  of  B,  and  C  has  surreptitiously  filled  the  order. 
The  question  has  been  much  discussed  whether  C,  having  thrust  him- 
self without  consent  into  the  position  of  a  creditor,  is  entitled  to 
recover  the  value  of  his  wares.  (Boston  Ice  Co.  v.  Potter,  123  Mass. 
28;  Boulton  v.  Jones,  2  H.  &  JST.  564;  Gordon  v.  Street,  L.  E.  (2  Q.  B. 
1899)  641;  Barcus  v.  Dorries,  64  App.  Div.  109;  Kling  v.  Irving 
Nat  Bank,  21  App.  Div.  373;  160  N.  Y.  698;  Randolph  Iron  Co. 
V.  Elliot,  34  N.  J.  L.  184;  7  Halsbury,  The  Laws  of  England,  title 
Contracts,  pp.  354,  355.)  That  question  is  not  before  us,  but  we 
express  no  opinion  concerning  it.  We  state  it  merely  to  accentuate 
the  distinction  between  the  cases  which  involve  it  and  the  case  at 
hand.  Neither  of  the  supposed  parties  was  wanting  in  this  case.  The 
apparent  meeting  of  the  minds  between  determinate  contracting  par- 
ties was  not  unreal  or  illusory.  The  defendant  was  contracting  with 
the  precise  person  with  whom  it  intended  to  contract.  It  was  contract- 
ing with  Booth.  It  gained  whatever  benefit  it  may  have  contemplated 
from  his  character  and  substance.  (Humble  v.  Hunter,  12  Ad.  &  El. 
(N.S.)  311;  Arkansas  Smelting  Co.  v.  Belden  Co.,  127  U.  S.  379, 
387;  American  Colortype  Co.  v.  Continental  Colortype  Co.,  188 
U.  S,  104.)  An_agent  who  contracts  in  his  own  name  for  an  un- 
disclosed principal  does  not  cease  to  be  a  party  because  of  his 
agency.  (Higgins  v.  Senior,  8  M.  &  W.  834,  844.)  Indeed,  such  an 
agent,  having  made  himself  personally  liable,  may  enforce  the  con- 
tract though  the  principal  has  renounced  it.  (Short  v.  Spackman, 
2  B.  &  Ad.  962.  See  also,  Briggs  v.  Partridge,  64  N.  Y.  357,  362 ; 
Jemison  v.  Citizens'  S.  Bank,  122  N.  Y.  135,  143.)  As  between 
himself  and  the  other  party,  he  is  liable  as  principal  to  the  same 
extent  as  if  he  had  not  been  acting  for  another.  It  is  impossible  in 
such  circumstances  to  hold  that  the  contract  collapses  for  want  of 
parties  to  sustain  it.  The  contract  tie  cannot  exist  where  there  are 
not  persons  to  be  bound,  but  here  persons  were  bound,  and  those 
the  very  persons  intended.  If  Booth  had  given  order  in  his  own 
right  and  for  his  own  benefit,  but  with  the  expectation  of  later 
assigning  it  to  the  plaintiff,  that  undisclosed  expectation  would  not 
have  nullified  the  contract.  His  undisclosed  intention  to  act  for  a 
principal  who  was  known  to  the  defendant,  was  equally  inefl"ective 
to  destroy  the  contract  in  its  inception. 

If,  therefore,  the  contract  did  not  fail  for  want  of  parties  to  sustain 
it,  the  unsuspected  existence  of  an  undisclosed  principal  can  supply 
no  gronnr!  ff)r  the  iivoi<hinc(!  of  a  contract  unless  fraud  is  provf^d. 
We  must  distinguish   between  mistake  such  as  we  have  been  dis- 


SECT.    Ij     KELLEY   ASPHALT    CO.    V.   BARBER   ASPHALT    CO.  79 

cussing,  which  renders  the  contract  void  ab  initio,  because  the  con- 
tractual tie  has  never  been  completely  formed,  and  fraud,  which 
renders  it  voidable  at  the  election  of  the  defrauded  party.  (Kodliff 
V.  Dallinger,  141  Mass.  1,  6.)  In  the  language  of  Kolmhh,  J.,  in 
the  case  cited :  "Fvaud  only  becomes  important  as  such  when  a 
contract  is  complete  in  its  formal  elements,  and  therefore 
valid  unless  repudiated,  but  the  right  is  claimed  to  rescind  it." 
If  one  who  is  in  reality  an  agent  denies  his  agency  when  questioned, 
and  falsely  asserts  that  his  principal  has  no  interest  in  the  transaction, 
the  contract,  it  may  be,  becomes  voidable,  not  because  there  is  a  want 
of  parties,  but  because  it  has  been  fraudulently  procured.  That  was 
substantially  the  situation  in  Winchester  v.  Howard  (97  Mass. 
303).  When  such  a  case  arises,  we  shall  have  to  consider 
whether  a  misrepresentation  of  that  kind  is  always  so  material  as  to 
justify  rescission  after  the  contract  has  been  executed.  (Leake  on 
Contracts  (6th  ed.),  pp.  19,  340.)  But  no  such  situation  is  disclosed 
in  the  case  at  hand.  Booth  made  no  misrepresentation  to  the  de- 
fendant. He  was  not  asked  anything,  nor  did  he  say  anything,  about 
the  plaintiff's  interest  in  the  transaction.  Indeed,  neither  he  nor  the 
plaintiff's  officers  knew  whether  the  defendant  would  refuse  to  deal 
with  the  plaintiff  directly.  They  suspected  hostility,  but  none  had 
been  expressed.  The  validity  of  the  contract  turns  thus,  according  to 
the  defendant,  not  on  any  overt  act  of  either  the  plaintiff  or  its 
agent,  but  on  the  presence  or  absence  of  a  mental  state.  We  are 
asked  to  hold  that  a  contract  complete  in  form,  becomes  a  nullity  in 
fact  because  of  a  secret  belief  in  the  mind  of  the  undisclosed  prin- 
cipal that  the  disclosure  of  his  name  would  be  prejudicial  to  the 
completion  of  the  bargain.  We  cannot  go  so  far.  (Stoddard  v. 
Ham,  129  Mass.  383.)  It  is  unnecessary,  therefore,  to  consider 
whether,  even  if  fraud  were  shown,  the  defendant,  after  the  contract 
was  executed,  could  be  permitted  to  rescind  without  restoring  the 
difference  between  the  price  received  for  the  defective  blocks  and 
their  reasonable  value.  It  is  also  unnecessary  to  analyze  the  evidence 
for  the  purpose  of  showing  that  the  defendant,  after  notice  of  the 
plaintiff's  interest  in  the  transaction,  continued  to  make  delivery, 
and  thereby  waived  the  objection  that  the  contract  was  invalid. 
(Cincinnati  S.-L.  111.  Gas  Co.  v.  Western  Siemens-L.  Co.,  152  TJ.  S. 
200,  202;  Mudge  v.  Oliver,  1  Allen,  74.) 

Other  rulings  complained  of  by  the  defendant  have  been  considered, 
but  no  error  has  been  found  in  them. 

The  judgment  should  be  affirmed,  with  costs. 

WiLLARD  Bartlett,  Ch.  J.,  Werner,  Chase,  Collin,  Cuddeback 
and  HoGAN,  JJ.,  concur. 

Judgment  affirmed.^ 

1  In  Werlin  v.  Eqiiitable  Surety  Co.  227  Mass.  157,  it  was  held  that  an  individual 
person  cannot  maintain  an  action  against  a  surety  company  on  a  bond  in  which  the 
obligee  is  described    only  as  the  "New  Boston  Biscuit    Company,  corporation  of 


80  WILLIAMS    V.   CARWARDINE  [CHAP.   I 

MARY   ANN"   WILLIAMS   v.   WILLIAM   CARWARDII^E 

In  the  King's  BencH;,  April  18,  1833 

[Reported  in  4  Barneivall  &  Adoiphus,  621] 

Assumpsit  to  recover  201.,  which  the  defendant  promised  to  pay  to 
any  person  who  should  give  such  information  as  might  lead  to  the 
discovery  of  the  murder  of  Walter  Carwardine.  Plea,  general  issue. 
At  the  trial  before  Park,  J.,  at  the  last  Spring  Assizes  for  the  county 
of  Hereford,  the  following  appeared  to  be  the  facts  of  the  case: 
One  Walter  Carwardine,  the  brother  of  the  defendant,  was  seen  on  the 
evening  of  the  24th  of  March,  1831,  at  a  public  house  at  Hereford, 
and  was  not  heard  of  again  till  his  body  was  found  on  the  12th  of 
April  in  the  river  Wye,  about  two  miles  from  the  city.  An  inquest 
was  held  on  the  body  on  the  13  th  of  April  and  the  following  days 
till  the  19th;  and  it  appearing  that  the  plaintiff  was  at  a  house  with 
the  deceased  on  the  night  he  was  supposed  to  have  been  murdered,  she 
was  examined  before  the  magistrates  but  did  not  give  them  any  in- 
formation which  led  to  the  apprehension  of  the  real  offender.  On  the 
25th  of  April  the  defendant  caused  a  handbill  to  be  published, 
stating  that  whoever  would  give  such  information  as  should  lead  to 
a  discovery  of  the  murder  of  Walter  Carwardine,  should,  on  con- 
viction, receive  a  reward  of  201.;  and  any  person  concerned  therein, 
or  privy  thereto  (except  the  party  who  actually  committed  the 
offence),  should  be  entitled  to  such  reward,  and  every  exertion  used 
to  procure  a  pardon;  and  it  then  added,  that  information  was  to 
be  given,  and  application  for  the  above  reward  was  to  be  made,  to 
William  Carwardine,  Holmer,  near  Hereford.  Two  persons  were 
tried  for  the  murder  at  the  Summer  Assizes,  1831,  but  acquitted. 
Soon  after  this,  the  plaintiff  was  severely  beaten  and  bruised  by  one 
Williams;  and  on  the  23d  of  August,  1831,  believing  she  had  not 
long  to  live,  and  to  ease  her  conscience,  she  made  a  voluntary  state- 
ment, containing  information  which  led  to  the  subsequent  con- 
viction of  Williams.  Upon  this  evidence  it  was  contended,  that  as 
the  plaintiff  was  not  induced  by  the  reward  promised  by  the  de- 
fendant to  give  evidence,  the  law  would  not  imply  a  contract  by  the 
defendant  to  pay  her  the  201.     The  learned  Judge  was  of  opinion, 


Maiden,  Massachusetts,"  where  the  plaintiff  testifies  that  there  was  no  such  corpora- 
tion as  the  New  Boston  Biscuit  Company  in  existence,  and  the  defendant's  agent, 
who  exofmted  the  bond  for  it,  testifies  that  acting  for  the  defendant  ho  believed  at  the 
time  of  the  (!Xf;cution  and  delivery  of  the  bond  that  the  surety  company  was  making 
a  contract  with  a  Massachusetts  corporation  and  not  with  the  plaintiff  indi\'idually, 
and  that,  if  he  had  been  informed  that  th(!  New  Boston  Biscuit  Company  did  not 
exist  aa  a  corporation  but  that  the  plaintiff  individually  was  the  projmetor  of  the 
b\iHincss  mentioned  in  the  bond,  he  would  not  hav('  executed  tlu;  bond  in  behalf  of 
the  d'-f'iidant,  at  least  not  witliout  further  investiKation,  and  where  it  also  appears 
that  thf;  defendant  was  not  informed  initil  the  action  was  brought  that  the  plaintiff 
claimed  to  \x:  thf;  obligee  named  in  the  l)ond;  tliere  being  no  evidence  of  a  contract 
between  the  plaintiff  and  the  defendant. 


SECT.    l]  GIBBONS    V.    PROCTOR  81 

that  the  plaintiff,  having  given  the  information  which  led  to  the 
conviction  of  the  murderer,  had  performed  the  condition  on  which 
the  201.  was  to  become  payable,  and  was  therefore  entitled  to  re- 
cover it;  and  he  directed  the  jury  to  find  a  verdict  for  the  plaintiff, 
but  desired  them  to  find  specially  whether  she  was  induced  to  give 
the  information  by  the  offer  of  the  promised  reward.  The  jury 
found  that  she  was  not  induced  by  the  offer  of  the  reward,  but  by 
other  motives. 

Curwood  now  moved  for  a  new  trial.  There  was  no  promise 
to  pay  the  plaintiff  the  sum  of  20L  That  promise  could  only  be 
enforced  in  favor  of  persons  who  should  have  been  induced  to  make 
disclosures  by  the  promise  of  the  reward.  Here  the  jury  have 
found  that  the  plaintiff  was  induced  by  other  motives  to  give  the 
information.  They  have,  therefore,  negatived  any  contract  on  the 
part  of  the  defendant  with  the  plaintiff. 

Denman,  C.  J.  The  plaintiff,  by  having  given  information  which 
led  to  the  conviction  of  the  murderer  of  Walter  Carwardine,  has 
brought  herself  within  the  terms  of  the  advertisement,  and  therefore 
is  entitled  to  recover. 

LiTTLEDALE,  J.  The  advertisement  amounts  to  a  general  promise 
to  give  a  sum  of  money  to  any  person  who  shall  give  information 
which  might  lead  to  the  discovery  of  the  offender.  The  plaintiff 
gave  that  information. 

Paeke,  J.  There  was  a  contract  with  any  person  who  performed 
the  condition  mentioned  in  the  advertisement. 

Pattesoist,  J.  I  am  of  the  same  opinion.  We  cannot  go  into  the 
plaintiff's  motives.  Rule  refused.^ 


GIBBONS   V.   PKOCTOR 
In  the  Queen's  Bench  Division,  April  22,  1891 
[Reported  in  64  Law  Times,  New  Series,  594] 

Motion  to  set  aside  a  nonsuit. 

Day,  J.  This  action  is  brought  to  recover  a  reward,  which  the 
defendant  advertised  as  payable  to  the  person  who  should  prosecute 
to  conviction  the  perpetrator  of  a  certain  crime.  The  facts  are 
simple.  The  defendant  published  on  the  29th  May  a  handbill,  in 
which  he  stated  that  he  would  give  25?.  to  any  person  who  should 
give  information  leading  to  the  conviction  of  the  offender  in  ques- 
tion, such  information  to  be  given  to  a  superintendent  of  police  of 
the  name  of  Penn.  The  plaintiff  is  a  police  officer,  and,  in  the  early 
morning  of  the  29th  May,  the  day  of  the  afternoon  of  which  the  bill 

^  It  may  be  inferred  from  the  report  of  the  case  at  nisi  prius  in  5  C.  &  P.  566  that 
the  plaintiff  knew  of  the  offer  of  reward  when  she  gave  the  requested  information. 


82  VITTY    V.    ELEY  [CHAP.    I 

was  published,  communicated  important  information  which  led  to  the 
conviction  of  the  offender  to  a  comrade  and  fellow  policeman  called 
Coffin,  telling  Coffin,  as  his  agent,  to  carry  the  information  to  the 
proper  authority.  Coffin,  in  accordance  with  the  rules  of  the  force, 
first  informed  his  superior  officer.  Inspector  Lenuan,  and  Lennan 
sent  on  the  information  to  Superintendent  Penn.  Both  Coffin  and 
Lennan  were  the  agents  of  the  plaintiff  to  carry  on  a  message  set 
going  by  him,  and  it  reached  Penn  at  a  time  when  he  had  notice  that 
the  person  sending  him  such  information  was  entitled  to  the  reward 
of  25L  The  condition  was  fulfilled  after  the  publication  of  the  hand- 
bill and  the  announcement  therein  contained  of  the  defendant's  offer 
of  the  reward  to  the  informant. 

Lawrence,  J.     I  entirely  agree. 

Nonsuit  set  aside,  and  verdict  entered  for  the  plaintiff  for  25Z.^ 


JOHN"   VITTY,    Appellant,  v.    THOMAS    ELEY,    Trustee   of 
School  Disteict,  No.  16 

Appellate    Division'    of    New    York    Supreme    Court,    April 

Term,  1900 

{^Reported  in  51  New  York,  Appellate  Division,  44] 

Spring,  J. :  The  defendant  is  trustee  of  a  school  district  in  the 
town  of  Lockport.  In  January,  1899,  the  schoolhouse  in  this  district 
was  broken  into  by  one  Joe  White,  and  a  quantity  of  property  stolen 
therefrom  or  destroyed.  The  trustee,  probably  by  authority  of  the 
citizens  o£  the  district,  although  his  authority  is  not  in  question, 
offered  a  reward  of  twenty-five  dollars  "for  the  arrest  and  conviction 
of  the  party  or  parties"  who  perpetrated  the  crime.  The  evidence 
shows  that  White  and  the  plaintiff  lived  together  and  were  cronies. 
White,  after  breaking  into  the  schoolhouse  in  the  night,  returned  to 
the  plaintiff's  house  bringing  with  him  chalk,  flags,  window  catches, 
and  other  stuff  which  he  had  taken  from  the  schoolhouse.  He  also 
had  two  chickens,  evidently  stolen,  which  were  eaten  in  the  house- 
hold. The  plaintiff  saw  White  burn  two  of  these  flags  and  secrete 
the  other  stuff  under  a  board  of  the  floor.  White  told  the  plaintiff 
not  to  "say  anything  about  this."  The  testimony,  therefore,  shoAvs 
that  the  plaintiff  knew  that  White  had  stolen  this  stuff.  Later  on, 
after  tlie  reward  and  with  notice  of  it,  he  testified  that  he  told  the 
bartender  in  the  saloon  of  Mahar  &  Byrnes  thiit  Joe  White  broke 
into  the  schoolhouse;  that  Peter  Hayes,  who  was  working  up  the 
case,  was  called  in  from  the  back  room  and  the  plaintiff  then  volun- 

'  EbkIo  v.  Hmith,  4  lloiist,  293;  Driwkins  r.  SappinRton,  20  Jnd.  199;  Auditor  V. 
Ballfird,  9  HuhIi,  r,72;  Coffey  v.  (';<)nnrK)riwc!ilf li  (Ky.),  37  S.  W.  Rep.  575;  Russoll  v. 
Stewart,  44  Vt.  170,  ace.    Sec  also  Drunimond  v.  United  States,  35  Ct.  Claims,  356. 


'1 


-tX^t-IK.       t^l"—.        S-t>-<«_ 


SECT.    l]  VITTY    V.   ELEY  83 

tarily  told  him  what  he  had  seen,  incriminating  White.  Hayes  con- 
tradicted the  plaintiff  and  said  he  was  called  from  the  back  room,  and 
the  following  occurred :  ''I  said,  'I  want  you  to  come  up  to  the 
sheriff's  office  and  make  a  statement  as  to  what  you  know  about 
breaking  into  this  schoolhouse.'  He  says,  'I  don't  know  anything 
about  it;  I  was  home  in  bed  the  night  the  schoolhouse  was  broken 
into.'  I  said  'From  what  I  hear,  either  you  or  Joe  or  both  of  you 
went  into  that  schoolhouse.'  He  said,  'I  didn't  go  in  there.'  I 
said,  'If  you  don't  come  up  to  the  sheriff's  office  and  tell  what  you 
know  about  it,  I  will  swear  out  a  warrant  against  you.'  He  said 
that  if  he  told  what  he  knew  about  it,  he  would  have  no  place  to  stay. 
I  said,  'I  will  find  you  a  place  to  stay,  come  with  me,'  and  went 
to  the  courthouse  and  called  the  sheriff  out.  I  said,  'This  man  will 
make  a  statement.'  We  went  into  a  side  room.  He  said  about 
what  he  testified  this  forenoon."  If  his  version  of  the  transaction  is 
correct,  the  plaintiff  did  not  voluntarily  give  up  this  information  with 
the  expectation  of  obtaining  the  reward,  but  it  was  extorted  from  him 
through  fear  that  he  might  be  arrested  himself  for  complicity  with 
White. 

There  is  considerable  contrariety  in  the  decisions  as  to  the  real 
basis  of  the  right  to  a  reward.  It,  however,  seems  to  be  settled  in 
this  State  that  it  is  in  the  nature  of  a  contract  inuring  to  the  benefit 
of  the  person  who  gives  the  information.  A  few  principles  out  of 
the  conflicting  cases  I  think  may  be  stated,  although  there  is  no  uni- 
formity among  them. 

1.  The  information  must  be  given  with  knowledge  of  the  reward. 
Fitch  V.  Snedaker,  38  N.  Y.  248;  Howland  v.  Lounds,  51  id.  604.^ 

I  think  the  evidence  warrants  the  conclusion  that  plaintiff  knew  of 
the  reward,  although  it  is  a  little  shadowy,  for  apparently  he  could 
not  read. 

2.  As  I  have  suggested,  it  is  a  contract  obligation.  This  being 
so,  it  must  be  the  voluntary  giving  up  of  the  information  by  the 
person.  If  cork-screwed  out  of  him  by  threats  inducing  fear  of 
prosecution,  I  take  it  no  recovery  could  be  had.  That  would  destroy 
the  contract  element.  In  the  early  English  case  of  Williams  v.  Car- 
wardine  (4  Barn.  &  Aid.  621)  the  question  of  the  motive  was  held  to 
be  unimportant,  but  the  text  writers  and  American  authorities  do  not 
seem  to  have  followed  this  doctrine  strictly,  although  I  find  no  case 
in  this  State  distinctly  overruling  it.     That  case  cannot  be  good  law 

1  Morrell  v.  Quarles,  35  Ala.  544;  Wilson  v.  Stump,  103  Cal.  255;  Chicago,  &c. 
R.  R.  Co.  V.  Sebring,  16  111.  App.  181;  Ensminger  v.  Horn,  70  111.  App.  605;  Williams 
V.  West  Chicago  St.  Ry.  Co.,  191  111.  610;  Lee  v.  Flemingsburg,  7  Dana,  28  (over- 
ruled); Ball  V.  Newton,  7  Cuch.  599;  Forsythe  v.  Murnane,  113  Minn.  181;  Smith 
V.  Vernon  County,  180  Mo.  501;  Mayor  of  Hoboken  v.  Bailey,  36  N.  J.  L.  490;  Fitch 
V.  Snedaker,  38  N.  Y.  248;  Sheldon  v.  George,  132  N.  Y.  App.  D.  470;  Stamper  v. 
Temple,  6  Humph,  113;  Broadnax  v.  Ledbetter,  100  Tex.  375  ace.  See  also  City 
Bank  v.  Bangs,  2  Edw.  Ch.  95;  Brecknock  School  District  v.  Frankhouser,  5S  Pa.  380. 
Compare  Taft  v.  Hyatt,  105  Kans.  35;  Choice  v.  Dallas,  (Tex.  Civ.  App.)  210  S.  W. 
Rep.  753. 


84  WILLIAMS    V.    WEST    CHICAGO   STREET   R.   R.    CO.    [CHAP.    I 

if  the  liability  is  contractual,  as  assent  and  a  voluntary  surrender  of 
the  information  would  be  essential. 

3.  The  authorities  hold  that  the  information  must  be  imparted 
with  a  view  to  obtaining  the  reward.  18  Encyc.  of  PI.  &  Pr.  1155; 
Hewitt  V.  Anderson,  56  Cal.  476.  And  in  Holland  v.  Lounds 
{supra)  the  court  says,  at  page  609  :  "That  a  party  claiming  a  reward 
of  this  character  must  give  some  information  or  do  something  having 
some  reference  of  the  reward  offered,  is  very  obvious.  The  action 
is,  in  fact,  upon  contract.  Where  a  contract  is  proposed  to  all  the 
world,  in  the  form  of  a  proposition,  any  party  may  assent  to  it, 
and  it  is  binding,  but  he  cannot  assent  without  knowledge  of  the 
proposition." 

In  the  present  case  the  plaintiff  does  not  claim  that  there  was  any 
talk  between  him  and  Hayes  to  the  effect  that  he  expected  any  reward. 
The  information  given  by  the  plaintiff  was  undoubtedly  valuable,  and 
even  essential  to  secure  the  conviction  of  White.  The  justice,  how- 
ever, on  conflicting  evidence,  or  upon  inferences  properly  deducible 
from  the  evidence,  has  decided  adversely  to  the  plaintiff.  This  deci- 
sion implies  that  he  reached  the  conclusion  that  the  information  was 
imparted  through  fear  of  arrest,  or  without  any  expectation  of  receiv- 
ing the  reward.  The  conclusion  is  supported  by  the  proofs,  and  we 
are  not  inclined  to  interfere  with  the  disposition  of  the  case  made  by 
the  justice. 

The  Judgment  is  affirmed,  with  costs  to  the  respondent. 


JAMES    WILLIAMS    v.    THE    WEST    CHICAGO    STKEET 

EAILWAY    CO. 

Illinois  Supreme  Court,  October  24,  1901 

[Reported  in  191  Illinois,  610] 

Mr.  Justice  Hand  delivered  the  opinion  of  the  Court:  — 

This  is  an  action  of  assumpsit  brought  by  the  appellant,  against 

the  appellee,  in   the  Circuit  Court  of  Cook  County,  to  recover  a 

reward  offered  by  the  appellee  for  the  arrest  and  conviction  of  the 

murderer  or  murderers  of  C.  B.  Birch,  who  was  killed  while  in  the 

service  of  the  appellee,  which  as  published,  was  in  the  following 

terms :  — 

"$5,000  Howard. 

"Office  West  Chicago  Street  Railroad  Co., 
"Juno  24,  1805. 

"Tho  abovo  reward  will  bo  paid  by  tho  Wost,  ChioaKO  Stroot  Railroad  Company 
for  thf;  arroHt  and  convirtion  of  tho  murdoror  or  nnirdorcrs  of  C.  B.  Birch,  wlio  was 
fatally  shot  while  in  discharge  of  his  duty  as  receiver,  on  the  morning  of  .June  23,  at 
the  Armitage  Avenue  barn. 

"Charles  T.  Yerkes,  Prcs't." 


SECT,    l]    WILLIAMS    V.    WEST    CHICAGO    STREET   R.    R.    CO.  85 

At  the  close  of  all  the  evidence  the  Court  directed  the  jury  to  find 
the  issues  for  the  defendant,  which  was  accordingly  done,  and  a  judg- 
ment having  been  rendered  on  said  verdict,  which  judgment  has  been 
affirmed  by  the  Appellate  Court  for  the  First  District,  a  further 
appeal  has  been  prosecuted  to  this  Court. 

At  about  two  o'clock  on  Sunday  morning,  June  23,  1895,  Birch, 
whose  duty  it  was  to  receive  the  money  brought  in  by  the  conductors, 
was  fatally  shot  at  the  barn  of  appellee  located  at  Armitage  Avenue, 
in  the  city  of  Chicago.  The  appellant,  who  was  also  an  employee  of 
the  appellee,  and  whose  duty  consisted  of  going  from  barn  to  barn 
each  night  to  inspect  the  cash  registers,  was  in  the  barn  from  mid- 
night until  two  o'clock  in  the  morning,  and  left  just  before  the  killing 
of  Birch.  As  he  drove  away  in  his  buggy  he  noticed  two  men  coming 
across  the  street  toward  the  barn.  They  looked  sharply  at  him  and 
he  looked  at  them.  On  Monday  morning,  June  24,  the  appellant 
went  to  the  appellee's  office,  where  he  met  his  general  superintendent, 
who  inquired  of  him  if  he  saw  any  men  near  the  barn  as  he  drove 
away.  Appellant  told  him  that  he  had  seen  two  men  and  that  he 
thought  he  could  identify  them,  whereupon  the  superintendent  gave 
him  a  note  and  told  him  to  go  and  see  Captain  Larson  of  the  police 
force.  He  called  upon  Captain  Larson  that  afternoon,  told  him  what 
he  had  seen  and  gave  him  a  description  of  the  two  men,  whereupon 
the  officer  said  that  he  had  a  man  in  custody  at  that  time  who  he 
thought  answered  the  description  of  one  of  the  men  described  by 
him.  The  man,  whose  name  was  Julius  Mannow,  was  brought  up 
and  was  identified  by  the  appellant  as  one  of  the  men  he  had  seen  near 
the  barn  as  he  drove  away.  Captain  Larson  told  him  to  come  to  the 
station  the  next  day,  and  in  the  meantime  he  would  hunt  up  and  have 
arrested  the  other  man  he  had  described.  The  murder  of  Birch  led 
the  police  authorities  to  at  once  issue  what  was  termed  a  "drag-net 
order,"  —  that  is,  an  order  to  the  various  patrolmen  to  arrest  all 
suspicious  characters  in  their  respective  districts  and  bring  them  in 
for  examination  as  to  their  whereabouts  at  the  time  of  the  commis- 
sion of  the  crime.  Mannow  was  thus  arrested  and  brought  to  the 
station.  A  police  officer  named  Jurs  testified  upon  the  trial  of  this 
cause  that  about  two  months  before  the  time  of  the  murder  Man- 
now had  narrated  to  him  a  plan  for  the  robbing  of  a  coal  office  in  the 
manner  in  which  the  Armitage  Avenue  robbery  was  accomplished,  and 
had  described  Joseph  Windrath  as  concerned  in  the  plan,  and  that 
after  the  Armitage  Avenue  robbery  and  the  murder  of  Birch  the  wit- 
ness at  once  recalled  this  fact  and  suspected  Mannow  and  Windrath 
and  took  steps  to  cause  their  arrest.  This  was  before  the  informa- 
tion was  given  by  the  appellant.  On  Tuesday  morning,  the  25th  day 
of  June,  the  appellant  for  the  first  time  learned  of  the  offered  reward 
by  reading  the  same  as  published  in  the  "Chicago  Tribune."  After- 
wards, on  that  day,  he  went  again  to  the  police  station  and  identified 
Windrath,  who  had  been  arrested  in  the  meantime,  as  the  man  he 


86  WILLIAMS    V.    WEST   CHICAGO   STREET   R.    R.    CO,    [CHAP.    I 

had  seen  in  company  with  Mannow  near  the  barn  just  before  the 
killing.  The  services  rendered  by  the  appellant  in  connection  with 
the  arrest  and  conviction  of  Mannow  and  Windrath  after  he  kneAv  of 
the  offered  reward,  consisted  in  his  identification  of  Windrath,  and 
his  testifying  before  the  coroner's  jury,  the  grand  jury,  and  upon  the 
trial  in  the  criminal  court,  that  he  had  seen  Mannow  and  Windrath 
together  near  the  Armitage  Avenue  barn  on  the  night  and  near  the 
time  of  the  commission  of  the  crime.  Other  information  was  ob- 
tained by  the  police  authorities  shortly  after  the  identification  of 
Mannow  and  Windrath  which  fastened  the  crime  upon  the  two  men. 
Mannow  pleaded  guilty  and  Windrath  was  tried  and  convicted.  The 
offered  reward  was  paid  by  the  appellee  to  another  claimant. 

The  offer  of  a  reward  remains  conditional  until  it  is  accepted  by 
the  performance  of  the  service,  and  one  who  offers  a  reward  has  the 
right  to  prescribe  whatever  terms  he  may  see  fit,  and  such  terms  must 
be  substantially  complied  with  before  any  contract  arises  between 
him  and  the  claimant.  Thus,  if  the  reward  is  offered  for  the  arrest 
and  conviction  of  a  criminal,  or  for  his  arrest  and  the  recovery  of  the 
money  stolen,  both  the  arrest  and  conviction  or  arrest  and  recovery 
of  the  money  are  conditions  precedent  to  the  recovery  of  the  reward; 
and  when  the  offer  is  for  the  delivery  of  a  fugitive  at  a  certain  place 
the  reward  cannot  be  earned  by  the  delivery  of  him  at  another  place, 
and  an  offer  for  a  capture  of  two  is  not  acted  upon  by  the  capture  of 
one.  The  reward  cannot  be  apportioned.  The  offer  is  an  entirety, 
and  as  such  must  be  enforced,  or  not  at  all.  21  Am.  &  Eng.  Ency. 
of  Law,  1st  ed.,  391-397;  Hogan  v.  Stophlet,  179  111.  150;  Furman 
V.  Parke,  21  N.  J.  L.  310;  Fitch  v.  Snedaker,  38  N.  Y.  248;  Juniata 
County  V.  McDonald,  122  Pa.  St.  115;  Shuey  v.  United  States,  92 
U.  S.  73. 

In  Hogan  v.  Stophlet,  supra,  which  Avas  an  action  for  the  recovery 
of  a  reward  offered  for  the  "apprehension  and  conviction  of  a  crim- 
inal," this  Court  said  (p.  153)  :  "The  reward  was  offered  for  the 
apprehension  and  conviction  of  the  person  or  persons  who  burned  or 
caused  the  building  to  be  burned.  It  thus  appears  that  the  reward 
was  offered,  not  for  the  conviction  alone,  but  for  the  apprehension 
and  conviction  of  the  guilty  party.  Appellant  is  entitled  to  recover 
for  both  or  he  cannot  recover  at  all.  The  reward  cannot  be  appor- 
tioned, —  that  is  to  say,  there  can  be  no  apportionment  of  it  between 
what  is  due  for  the  apprehension  and  what  is  (hie  for  the  conviction. 
The  offer  must  be  enforced  as  an  entirety,  or  not  at  all." 

In  Fnrnian  v.  Parke,  supra,  the  reward  was  "for  the  apprehension 
and  conviction  of  such  person  or  persons  as  may  have  been  impli- 
cated in  the  murder  of  John  B.  Parke,  John  Castner,  Maria  Castner 
and  child."  The  Court  say :  "The  reward  is  to  bo  paid  for  the 
apprehension  and  conviction,  not  of  one  of  several  persons  impli- 
catcf],  but  of  tbf  pcrHoii  fif  one)  or  the  pfrsoTis  (\f  more  than  one) 
who  w(!re  implicatec],  not  in  the  murder  of  John  B.  Parke  alone,  but 


SECT,    l]    WILLIAMS    V.    WEST   CHICAGO   STREET   R.    R.    CO.  87 

of  John  B.  Parke  and  three  other  persons.  .  .  .  The  person,  there- 
fore, to  be  entitled  to  the  reward,  must  aver  and  prove  that  the  person 
or  persons  implicated  in  each  of  the  four  murders  has  or  have  been 
apprehended  and  convicted." 

In  Fitch  V.  Snedaker,  38  IsT.  Y.  248,  the  offer  was  "to  any  person 
or  persons  who  will  give  such  information  as  shall  lead  to  the  ap- 
prehension and  conviction  of  the  person  or  persons  guilty  of  the 
murder,"  etc.  It  appeared  that  the  claimant  gave  evidence  which 
led  to  the  conviction  of  the  offender  but  did  nothing  towards  secur- 
ing his  discovery  or  arrest,  and  it  was  held  that  he  was  not  entitled 
to  the  reward.  The  Court  said  (p.  250)  :  "It  is  entirely  clear  that 
in  order  to  entitle  any  person  to  the  reward  offered  in  this  case  he 
must  give  such  information  as  shall  lead  to  both  apprehension  and 
conviction  —  that  is,  both  must  happen,  and  happen  as  a  conse- 
quence of  information  given.  ISTo  person  could  claim  a  reward  whose 
information  caused  the  apprehension,  until  conviction  followed.  Both 
are  conditions  precedent.  ISTo  one  could  therefore  claim  the  reward 
who  gave  no  information  whatever  until  after  the  apprehension,  al- 
though the  information  he  afterward  gave  was  the  evidence  upon 
which  conviction  was  had,  and  however  clear  that  had  the  informa- 
tion been  concealed  or  suppressed  there  could  have  been  no  convic- 
tion. This  is  according  to  the  plain  terms  of  the  offer  of  the  re- 
ward." 

In  Juniata  County  v.  McDonald,  supra,  the  reward  was  for  the 
capture  and  delivery  of  a  criminal  to  the  jail,  and  a  person  who  fur- 
nished information  from  which  the  capture  resulted,  but  who  did 
not  deliver  the  prisoner  or  cause  him  to  be  delivered,  was  held  not 
to  be  entitled  to  the  reward.  The  Court  said :  "A  mere  reading  of 
this  paper  settles  the  whole  controversy.  The  reward  was  not  offered 
for  information  as  to  the  prisoner's  whereabouts,  but  for  his  capture 
and  delivery.  How,  then,  could  one  be  entitled  to  that  reward  who 
neither  captured  nor  delivered  him  ?  Admitting,  then,  that  the  plain- 
tiff gave  the  sheriff  accurate  information  as  to  where  the  culprit  could 
be  found,  and  that  he  v/ent  with  him  and  acted  as  one  of  his  posse, 
yet  on  that  officer  fell  the  duty  of  arrest  and  the  plaintiff  was  re- 
lieved of  all  responsibility." 

And  in  Shuey  v.  United  States,  supra,  which  was  a  suit  for  a  re- 
ward offered  by  the  Secretary  of  "War  "for  the  apprehension  of  John 
H.  Surratt,  one  of  Booth's  accomplices,"  it  was  held  that  one  who 
had  made  disclosures  to  which  were  due  the  discovery  and  arrest 
of  Surratt  was  not  entitled  to  the  reward  for  his  apprehension.  The 
Court  say:  "It  is  found  as  a  fact  that  the  arrest  was  not  made  by 
the  claimant,  though  the  discovery  and  arrest  were  due  entirely  to 
the  disclosures  made  by  him.  The  plain  meaning  of  this  is,  that 
Surratt's  apprehension  was  a  consequence  of  the  disclosures  made. 
But  the  consequences  of  a  man's  act  are  not  his  acts.  Between  the 
consequence  and  the  disclosure  that  leads  to  it  there  may  be,  and  in 


88  WILLIAMS    V.    WEST    CHICAGO   STREET   R.    R.    CO.    [CHAP.    I 

this  case  there  were,  intermediate  agencies.  Other  persons  than  the 
claimant  made  the  arrest  —  persons  who  were  not  his  agents,  and 
who  themselves  were  entitled  to  the  proffered  reward  for  his  arrest, 
if  any  persons  were." 

Under  the  authorities  above  cited  the  appellant  cannot  recover 
unless  the  evidence  shows  he  caused  the  arrest  and  conviction  of  both 
Mannow  and  Windrath.  He  did  neither.  At  most  he  furnished 
some  information  to  the  police  which  led  to  the  arrest  of  Windrath, 
and  identified  both  men  as  having  been  in  the  vicinity  of  the  barn 
at  the  time  of  the  commission  of  the  crime,  which  does  not  bring  him 
within  the  terms  of  the  offered  reward,  which  was  for  "the  arrest 
and  conviction  of  the  murderer  or  murderers  of  C.  B.  Birch." 

We  are  of  the  opinion  that  the  appellant  is  not  entitled  to  recover 
in  this  case  for  the  further  reason  that  the  services  performed  by 
him  were  substantially  all  rendered  before  the  reward  was  offered  or 
at  a  time  when  he  was  ignorant  of  the  fact  that  a  reward  had  been 
offered.  After  the  appellant  had  informed  the  superintendent  of 
appellee  and  the  captain  of  police  that  he  had  seen  Mannow  and 
his  companion  near  the  scene  of  the  murder  at  about  the  time  the 
same  was  committed,  he  did  nothing  towards  securing  the  conviction 
of  the  prisoners  other  than  what  he  could  have  been  required  to  do 
as  a  witness.  The  reward  was  not  offered  for  information  which  was 
already  in  the  possession  of  the  officers  nor  for  witnesses  who  would 
come  forward  and  testify  to  facts  which  were  then  known  to  be 
within  their  knowledge,  but  for  the  arrest  and  conviction  of  the  mur- 
derer or  murderers.  The  right  to  recover  a  reward  arises  out  of  the 
contractual  relation  which  exists  between  the  person  offering  the 
reward  and  the  claimant,  which  is  implied  by  law  by  reason  of  the 
offer  on  the  one  hand  and  the  performance  of  the  service  on  the  other, 
the  reason  of  the  rule  being  that  the  services  of  the  claimant  are  ren- 
dered in  consequence  of  the  offered  reward,  from  which  an  implied 
promise  is  raised  on  the  part  of  the  person  offering  the  reward  to 
pay  him  the  amount  thereof  by  reason  of  the  performance  by  him 
of  such  service,  and  no  such  promise  can  be  implied  unless  he  knew 
at  the  time  of  the  performance  of  the  service  that  the  reward  had 
been  offered,  and  in  consideration  thereof,  and  with  a  view  to  earning 
the  same,  rendered  the  service  specified  in  such  offer.  Fitch  v.  Sned- 
akor,  supra;  Howlands  v.  Lounds,  51  N.  Y.  604;  Stamper  v.  Temple, 
6  Humph.  (Term.)  113;  44  Am.  Dec.  296. 

In  Stamper  v.  Temple,  supra,  which  was  an  action  to  recover  the 
amount  of  a  reward,  the  Court  say :  "To  make  a  good  contract  there 
must  be  an  aggrcfjatio  mentium,  —  an  agreement  on  the  one  part  to 
give  and  on  the  other  to  receive.  How  could  there  be  such  an  agree- 
ment if  the  plaintiffs  in  this  case  made  the  arrest  in  ignorance  that 
a  reward  had  been  offered?" 

Tn  Fitch  /'.  Snedakcr,  supra,  on  the  trial  several  questions  were 
asked  of  the  plaintiff,  who  was  a  witness  in  his  own  belialf,  relative 


SECT.    l]  OFFORD    V.    DAVIES  89 

to  the  person  to  whom  he  gave  information  in  relation  to  the  murder 
before  the  reward  was  offered  or  before  he  heard  of  it.  The  Court 
sustained  objections  thereto  and  excluded  the  evidence.  The  ruling 
of  the  trial  court  in  this  regard  on  appeal  was  held  to  be  correct, 
and  the  Court  on  page  251  say :  "The  form  of  action  in  all  such  cases 
is  assumpsit.  The  defendant  is  proceeded  against  as  upon  his  con- 
tract to  pay,  and  the  first  question  is,  was  there  a  contract  between 
the  parties?  To  the  existence  of  a  contract  there  must  be  mutual 
assent,  or,  in  another  form,  offer  and  consent  to  the  oifer.  .  .  . 
Without  that  there  is  no  contract.  How,  then,  can  there  be  consent 
or  assent  to  that  of  which  the  party  has  never  heard?  .  .  .  The 
offer  could  only  operate  upon  plaintiffs  after  they  heard  of  it." 

And  in  Howlands  v.  Lounds,  supra,  the  Court  say  (p.  605)  :  "In 
order  to  entitle  a  party  to  recover  a  reward  offered,  he  must  establish 
between  himself  and  the  person  offering  the  reward,  not  only  the 
offer  and  his  acceptance  of  it,  but  his  performance  of  the  services  for 
which  the  reward  was  offered;  and  upon  principle,  as  well  as  upon 
authority,  the  performance  of  this  service  by  one  who  did  not  know 
of  the  offer  and  could  not  have  acted  in  reference  to  it  cannot  re- 
cover." 

We  are  of  the  opinion  the  appellant  failed  to  make  out  a  cause  of 
action,  and  that  the  trial  court,  for  the  reasons  above  suggested, 
properly  directed  a  verdict  for  the  appellee.  The  judgment  of  the 
Appellate  Court  will  therefore  be  affirmed.       Judgment  affirmed. 


OFFORD  V.  DAVIES  AND  ANOTHER 

In  the  Common  Pleas,  June  2,  1862 
[Reported  in  12   Common  Bench  Reports,  New  Series,  748] 

This  was  an  action  upon  a  guaranty.  The  first  count  of  the  dec- 
laration stated,  that  by  a  certain  instrument  in  writing  signed  by 
the  defendants,  and  addressed  and  delivered  by  the  defendants  to 
the  plaintiff,  the  defendants  undertook,  promised,  and  agreed  with 
the  plaintiff  in  the  words  and  figures  following,  that  is  to  say:  "We, 
the  undersigned,  in  consideration  of  your  discounting,  at  our  re- 
quest, bills  of  exchange  for  Messrs.  Davies  &  Co.,  of  Newtown,  Mont- 
gomeryshire, drapers,  hereby  jointly  and  severally  guarantee  for  the 
space  of  tivelve  calendar  months  the  due  payment  of  all  such  bills 
of  exchange,  to  the  extent  of  600L  And  we  further  jointly  and 
severally  undertake  to  make  good  any  loss  or  expenses  you  may  sus- 
tain or  incur  in  consequence  of  advancing  Messrs.  Davies  &  Co.  such 
moneys."  Averment,  that  the  plaintiff,  relying  on  the  said  promise 
of  the  defendants,  after  the  making  of  the  said  promise,  and  within 


90  OFFORD    V.    DAVIES  [CHAP.   I 

the  space  of  twelve  calendar  mouths  thereafter,  did  discount  divers 
bills  of  exchange  for  the  said  Messrs.  Davies  &  Co.,  of  Newtown  afore- 
said, certain  of  which  bills  of  exchange  became  due  and  payable  be- 
fore the  commencement  of  this  suit,  but  were  not  then  or  at 
any  other  time  duly  paid,  and  the  said  bills  respectively  were  dis- 
honored ;  and  that  the  plaintiff,  after  the  making  of  the  said  promise, 
and  within  the  said  twelve  calendar  months,  advanced  to  the  said 
Messrs.  Davies  &  Co.  divers  sums  of  money  on  and  in  respect  of  the 
discount  of  the  said  last-mentioned  bills  so  dishonored  as  aforesaid, 
certain  of  which  moneys  were  due  and  owing  to  the  plaintiff 
before  and  at  the  time  of  the  commencement  of  this  suit;  and  that 
all  things  had  happened  and  all  times  had  elapsed  necessary,  &c. ; 
yet  that  the  defendants  broke  their  said  promise,  and  did  not  pay 
to  the  plaintiff,  or  to  the  respective  holders  for  the  time  being  of 
the  said  bills  of  exchange  so  dishonored  as  aforesaid,  or  to  any  other 
person  entitled  to  receive  the  same,  the  respective  sums  of  money 
payable  by  the  said  bills  of  exchange;  nor  did  the  defendants  pay 
to  the  plaintiff  the  said  sums  of  money  so  advanced  by  the  plaintiff 
as  aforesaid,  or  any  part  thereof;  whereby  the  sums  payable  by  the 
said  bills  of  exchange  so  dishonored  as  aforesaid  became  lost  to  the 
plaintiff,  and  he  became  liable  to  pay  and  take  up  certain  of  the 
said  bills  of  exchange,  and  did  pay  and  take  up  certain  of  the  said 
bills  of  exchange,  and  was  forced  and  obliged  to  and  did  expend  cer- 
tain moneys  in  endeavoring  to  obtain  part  of  certain  of  the  said 
bills  of  exchange,  and  the  plaintiff  lost  the  interest  which  he  might 
have  made  of  his  moneys,  if  the  said  bills  had  been  duly  paid  at 
maturity. 

Fourth  plea,  to  the  first  count,  —  so  far  as  the  same  relates  to 
the  sums  payable  by  the  defendants  in  respect  of  the  sums  of  money 
payable  by  the  said  bills  of  exchange,  and  the  said  sums  so  advanced, 
—  that,  after  the  making  of  the  said  guaranty,  and  before  the  plain- 
tiff had  discounted  such  bills  of  exchange,  and  before  he  had  ad- 
vanced such  sums  of  money,  the  defendants  countermanded  the  said 
guaranty,  and  requested  the  plaintiff  not  to  discount  such  bills  of 
exchange,  and  not  advance  such  moneys. 

To  this  plea  the  plaintiff  demurred;  the  ground  of  demurrer  stated 
in  the  margin  being  "that  the  fourth  plea  offers  no  defence  to  that 
part  of  the  declaration  to  which  it  is  pleaded,  for  that  a  party  giv- 
ing a  guaranty  [for  a  definite  period  |  has  no  power  to  countermand 
it  without  tlie  assent  of  the  person  to  whom  it  is  given."     Joinder. 

Prentice  (with  whom  was  Brandt),  in  support  of  the  demurrer. 
A  guaranty  lik(!  this,  to  secure  advances  for  twelve  months,  is  a  con- 
tract which  cannot  be  rescinded  or  countermanded  within  that  time 
without  the  assent  of  the  person  to  whom  it  is  given.  [Byles,  J. 
What  consideration  have  these  defendants  received?]  For  any  thing 
disclosed  by  the  plea,  the  plaintiff  might  have  altered  his  position 
in  consequence  of  the  guaranty,  l)y  having  (entered  into  a  contract 


SECT.    l]  OFFORD    V.   DAVIES  91 

with  Davies  &  Co.,  of  Newtown,  to  discount  their  bills  for  twelve 
months.  In  Calvert  v.  Gordon,  1  M.  &  R.  497,  7  B.  &  C.  809,  3  M. 
&  R.  124,  it  was  held  that  the  obligor  of  a  bond  conditioned  for  the 
faithful  service  of  A.  whilst  in  the  emijloy  of  B.  cannot  discharge 
himself  by  giving  notice  that  after  a  certain  period  he  will  be  no 
longer  answerable;  nor  can  the  personal  representative  of  the  obligor 
discharge  himself  by  such  a  notice.^  Lord  Tenterden,  in  giving 
judgment  in  that  case,  says  (3  M.  &  R.  128):  "The  oiily  question 
raised  by  the  defendant's  second  plea  is,  whether  it  is  competent  to 
the  surety  to  put  an  end  to  his  liability  by  giving  a  notice  which  is 
to  take  effect  from  the  very  day  on  which  it  is  given.  It  would  be 
Si  hardship  upon  the  master  if  this  could  be  done.  It  is  said  that  it 
would  be  a  hardship  on  the  surety  if  this  liability  must  necessarily 
continue  during  the  whole  time  that  the  principal  remains  in  his 
service;  but,  looking  at  the  instrument  itself,  it  would  appear  that 
it  was  the  intention  of  the  testator  to  enter  into  this  unlimited  en- 
gagement. It  was  competent  to  him  to  stipulate  that  he  should  be 
discharged  from  all  future  liability  after  a  specified  time,  after  no- 
tice given.  This  he  has  not  done."  Here,  the  defendants  have  stipu- 
lated that  their  liability  shall  discontinue  at  the  end  of  twelve 
calendar  months.  What  pretence  is  there  for  relieving  them  from 
that  bargain?  [Byles,  J.  Suppose  a  man  gives  an  open  guaranty, 
with  a  stipulation  that  he  will  not  withdraw  it,  —  what  is  there  to 
bind  him  to  that?]  If  acted  upon  by  the  other  party,  it  is  submitted 
that  that  would  be  a  binding  contract.  Hassell  v.  Long,  2  M.  & 
Selw.  363,  is  an  authority  to  the  same  effect  as  Calvert  v.  Gordon. 
E.  James,  Q.  C.  (with  whom  was  T.  Jones),  contra.  The  cases 
upon  bonds  for  guaranteeing  the  honesty  of  clerks  or  servants  are 
inapplicable :  there  the  contract  attaches  as  soon  as  the  clerk  or  serv- 
ant enters  the  service,  and  it  is  not  separable.  This,  however,  is  not 
a  case  of  contract  at  all.  It  is  a  mere  authority  to  discount,  and 
a  promise  to  indemnify  the  plaintiff  in  respect  of  each  bill  dis- 
counted; and  it  was  perfectly  competent  to  the  defendants  at  any 
time  to  withdraw  that  authority  as  to  future  transactions  of  dis- 
count. This  is  more  like  the  mandatum  pecunice  credendce  treated 
of  by  Pothier  —  on  Obligations,  Part  II.  c.  6,  §  8,  art.  1.  If  so,  it 
is  subject  to  all  incidents  of  a  mandate  or  authority.  [Willes,  J. 
Mandatum  does  not  mean  a  bare  authority  which  may  be  revoked.] 
...  A  mutual  agreement  to  rescind  can  only  be  necessary  where 
there  is  a  mutual  contract.  But,  in  a  case  like  this,  where 
there  is  no  complete  contract  until  something  is  done  by  the  manda- 
tory, the  assent  of  both  parties  cannot  be  required.  Suppose  Davies 
&  Co.,  of  ISTewtown,  had  become  notoriously  insolvent,  would  the 
defendants  continue  bound  by  their  guaranty,  if  the  plaintiffs,  with 
notice  of  that  fact,  chose  to  go  oii  discounting  for  them  ?     [Williams, 

^  And  see  Gordon  v.  Calvert,  2  Rim.  253,  4  Russ.  581,  where  an  injunction  to  restrain 
proceedings  at  law  upon  the  bond  was  dissolved. 


92  OFFORD    V.   DAVIES  [CHAP.   I 

J.  Suppose  I  guarantee  the  price  of  a  carriage,  to  be  built  for  a 
third  party  who,  before  the  carriage  is  finished,  and  consequently 
before  I  am  bound  to  pay  for  it,  becomes  insolvent,  —  may  I  recall 
my  guaranty?]  Not  after  the  coach-builder  has  commenced  the 
carriage.  [Erle,  C.  J.  Before  it  ripens  into  a  contract,  either  party 
may  withdraw,  and  so  put  an  end  to  the  matter.  But  the  moment 
the  coach-builder  has  prepared  the  materials,  he  would  probably  be 
found  by  the  jury  to  have  contracted.]  In  an  American  work  of  con- 
siderable authority,  Parsons  on  Contracts,  p.  517,  it  is  said,  "A 
promise  of  guaranty  is  always  revocable,  at  the  pleasure  of  the 
guarantor,  by  sufficient  notice,  unless  it  be  made  to  cover  some  specific 
transaction  which  is  not  yet  exhausted,  or  unless  it  be  founded  upon 
a  continuing  consideration,  the  benefit  of  which  the  guarantor  can- 
not or  does  not  renounce.  If  the  promise  be  to  guarantee  the  pay- 
ment of  goods  sold  up  to  a  certain  amount,  and,  after  a  part  has 
been  delivered,  the  guaranty  is  revoked,  it  would  seem  that  the  revo- 
cation is  good,  unless  it  be  founded  upon  a  consideration  which  has 
been  paid  to  the  guarantor  for  the  whole  amount;  or  unless  the 
seller  has,  in  reliance  on  the  guaranty,  not  only  delivered  a  part  to 
the  buyer,  but  bound  himself  by  a  contract,  enforceable  at  law, 
to  deliver  the  residue."  Brocklebank  v.  Moore,  cor.  Abbott,  C.  J., 
Guildhall  Sittings  after  Trinity  Term,  1823,  referred  to  in  2  Stark. 
Evid.,  3d  edit.  510,  n.,  is  a  direct  authority  that  "a  continuing  guar- 
anty is  countermandable  by  parol."  And  the  same  principle  is 
clearly  deducible  from  Mason  v.  Pritchard,  12  East,  227. 
[Williams,  J.  That  would  have  been  applicable,  if  this  had  been 
a  guaranty  for  6001.,  with  no  mention  of  the  twelve  calendar  months.] 
The  mention  of  twelve  months  would  not  compel  the  plaintiff  to  go 
on  discounting  for  that  period.  In  Holland  ik  Teed,  7  Hare,  50, 
under  a  guaranty  given  to  a  banking-house  consisting  of  several 
partners,  for  the  payment  of  such  bills  drawn  upon  them  by  one  of 
their  customers  as  the  bank  might  honor,  and  any  advances  they 
might  make  to  the  same  customer,  within  a  certain  time,  it  was  held 
that  the  guaranty  ceased  upon  the  death  of  one  of  the  partners  in 
the  bank  before  the  expiration  of  the  time  to  which  the  guaranty 
was  expressed  to  extend;  that  bills  accepted  before  the  death  of  the 
partner,  and  payable  afterwards,  were  within  the  guaranty;  and 
that  th(!  amount  guaranteed  could  not  be  increased  by  any  act  of 
the  continuing  firm  and  the  customer  after  the  death  of  the  partner, 
although  such  amount  might  be  diminished  by  such  act.  [Byles,  J. 
The  case  of  a  change  in  the  firm  is  now  provided  for  by  the  Mer- 
cantile Law  Amendment  Act,  19  &  20  Vict.  c.  97,  §  4.  Erle,  C.  J. 
WliJit  meaning  do  you  attribute  to  the  words  "at  our  request"  in 
this  guaranty?]  As  and  when  we  request.  The  notice  operated 
a  retractation  of  the  request,  and  any  discount  which  took  place  after 
th.'it  notice  was  not  a  disconnt  at  the  request  of  tlie  defendants. 
Brandt,  in  reply.     The  Court  of  Exchequer  have  decided  in  this 


SECT.    l]  OFFORD    V.    DAVIES  93 

term,  in  a  case  of  Bradbury  v.  Morgan/  that  the  death  of  the  surety 
does  not  operate  a  revocation  of  a  continuing  guaranty.  If  that  be 
so,  it  is  plain  that  the  guaranty  is  not  a  mere  mandatum,  but  a 
contract.  In  Gordon  v.  Calvert,  2  Sim.  253,  4  Russ.  581,  the  execu- 
trix of  the  deceased  surety  gave  notice  to  Calvert  &  Co.,  the  obligees, 
that  she  would  no  longer  consider  herself  liable  on  the  bond ;  but  the 
Vice-Chancellor  (Sir  L.  Shadwell)  said,  that,  ''by  the  original  con- 
tract, the  liability  of  the  surety  was  to  continue  as  long  as  Calvert 
&  Co.  kept  Richard  Edwards,  or  he  chose  to  remain  in  their  service; 
chat  after  Calvert  &  Co.  had  received  the  plaintiff's  letter  they  never 
gave  her  any  intimation  that  they  did  not  consider  her  as  continuing 
liable  under  her  husband's  bond;  that  their  conduct  did  not  operate 
in  any  manner  upon  her;  and  that  therefore  the  injunction  ought 
to  be  dissolved."  That  shows  that,  in  the  opinion  of  that  learned 
Judge,  the  assent  of  the  three  persons  concerned  and  interested  in 
the  bargain  would  be  requisite  to  its  dissolution.  The  fourth  plea 
does  not  allege  that  notice  of  revocation  was  given  before  any  bills 
had  been  discounted  by  the  plaintiffs.  It  must  therefore  be  assumed 
that  some  discounts  had  taken  place.  [T.  Jones.  The  fact  un- 
doubtedly is  so.] 

Cur.  adv.  vult. 

Erle^  C.  J.,  now  delivered  the  judgment  of  the  Court. 

The  declaration  alleged  a  contract  by  the  defendants,  in  considera- 
tion that  the  plaintiff  would,  at  the  request  of  the  defendants,  dis- 
count bills  for  Davies  &  Co.,  not  exceeding  6001.,  the  defendants 
promised  to  guarantee  the  repayment  of  such  discounts  for  twelve 
months,  and  the  discount,  and  no  repayment.  The  plea  was  a  revo- 
cation of  the  promise  before  the  discount  in  question;  and  the  de- 
murrer raised  the  question  whether  the  defendants  had  a  right  to 
revoke  the  promise.  We  are  of  opinion  that  they  had,  and  that,  con- 
sequently, the  plea  is  good. 

This  promise  by  itself  creates  no  obligation.^  It  is  in  effect  con- 
ditioned to  be  binding  if  the  plaintiff  acts  upon  it,  either  to  the 

1  Since  reported,  31  Law  J.  Exch.  462;  [1  H.  &  C.  249].  There  the  guaranty  was 
in  the  following  terras:  "Messrs.  Bradbury  &  Co.,  —  I  request  you  will  give  credit 
in  the  usual  way  of  your  business  to  H.  L. ;  and,  in  consideration  of  your  doing  so,  I 
do  hereby  engage  to  guarantee  the  regular  payment  of  the  running  balance  of  his 
account  with  you,  until  I  give  you  notice  to  the  contrary,  to  the  extent  of  100/.;"  and  it 
was  held,  that  the  liability  was  not  determined  by  the  death  of  the  suretj%  but  that 
his  executors  were  liable  to  Bradbury  &  Co.  for  goods  sold  and  credit  given  to  H.  L. 
subsequently  to  the  surety's  death,  —  on  the  ground  (contrary  to  the  doctrine  laid 
down  in  Smith's  Mercantile  Law,  4th  edit.  425,  6th  edit.  477,  and  adopted  in  Williams 
on  Executors,  5th  edit.  1604)  that  the  guarantj'  was  a  contract  to  be  answerable  to  the 
extent  stipulated  for  credit  given  to  the  principal  debtor,  until  the  creditors  should 
receive  a  notice  to  put  an  end  to  it.  —  Rep. 

2  "A  great  number  of  cases  are  of  contracts  not  binding  on  both  sides  at  the  time 
when  made,  and  in  which  the  whole  duty  to  be  performed  rests  with  one  of  the  con- 
tracting parties.  A  guaranty  falls  under  that  class;  when  a  person  says,  'In  case 
you  choose  to  employ  this  man  as  your  agent  for  a  week,  I  will  be  responsible  for 
all  such  sums  as  he  shall  receive  during  that  time,  and  neglect  to  pay  over  to  you,' 
the  party  indemnified  is  not  therefore  bound  to  employ  the  person  designated  by  the 


94  BISHOP    V.    EATON  [CHAP,    I 

benefit  of  the  defendants  or  to  the  detriment  of  himself.  But,  until 
the  condition  has  been  at  least  in  part  fulfilled,  the  defendants  have 
the  power  of  revoking  it.  In  the  case  of  a  simple  guaranty  for  a 
proposed  loan,  the  right  of  revocation  before  the  proposal  has  been 
acted  on  did  not  appear  to  be  disputed.  Then  are  the  rights  of  the 
parties  affected  either  by  the  promise  being  expressed  to  be  for  twelve 
months,  or  by  the  fact  that  the  same  discounts  had  been  made  before 
that  now  in  question,  and  repaid?     We  think  not. 

The  promise  to  repay  for  twelve  months  creates  no  additional  lia- 
bility on  the  guarantor,  but,  on  the  contrary,  fixes  a  limit  in  time 
beyond  which  his  liability  cannot  extend.  And,  with  respect  to  other 
discounts,  which  had  been  repaid,  we  consider  each  discount  as  a 
separate  transaction,  creating  a  liability  on  the  defendant  till  it  is 
repaid,  and  after  repayment  leaving  the  promise  to  have  the  same 
operation  that  it  had  before  any  discount  was  made,  and  no  more. 

Judgment  for  the  defendants. 


CHARLES  A.  BISHOP  v.  FRANK  H.  EATON" 

SuPBEME  Judicial  Court  of  Massachusetts,  March  13- 
June  19,  1894 

[^Reported  in  161  Massachusetts,  496] 

Contract,  on  a  guaranty.  Writ  dated  Eebruary  2,  1892.  Trial 
in  the  Superior  Court  without  a  jury,  before  Braley,  J.,  who  found 
the  following  facts. 

The  plaintiff  in  1886  was  a  resident  of  Sycamore  in  the  State  of 
Illinois,  and  was  to  some  extent  connected  in  business  with  Harry 
H.  Eaton,  a  brother  of  the  defendant.  In  December,  1886,  the  de- 
fendant in  a  letter  to  the  plaintiff  said,  "If  Harry  needs  more  money, 
let  him  have  it,  or  assist  him  to  get  it,  and  I  will  see  that  it  is  paid." 

On  January  7,  1887,  Harry  Eaton  gave  his  promissory  note  for 
two  hundred  dollars  to  one  Stark,  payable  in  one  year.  The  plain- 
tiff signed  the  note  as  surety,  relying  on  the  letter  of  the  defendant, 
and  looked  to  the  defendant  solely  for  reimbursement,  if  called  upon 
to  pay  tbo  note.  Shortly  afterward  the  plaintiff  wrote  to  the  de- 
fendant a  letter  stating  that  the  note  had  been  given  and  its  amount, 
and  deposited  the  letter  in  the  mail  at  Sycamore,  postage  prepaid, 
and  properly  addressed  to  the  defendant  at  his  home  in  Nova  Scotia. 
The  letter,  according  to  the  testimony  of  the  defendant,  was  never 
received  by  him.     At  the  maturity  of  the  note  the  time  for  its  pay- 

giiaranty;  biit  if  ho  do  employ  him,  thm  fho  KU.'ir.'uity  jittaohos  and  boromos  liind- 
ing  on  tho  party  who  Ravo  it."  Parkn,  B.,  Konnoway  i>.  Trclcavan,  f)  M.  <fe  W.  408, 
501.  "Suppose  1  Hay,  if  you  will  furnish  Roods  to  a  third  porsf)n,  I  will  p:\inraiitoe 
tho  payment:  there  yo\i  are  not  boiuirl  to  furiii.sh  them;  yet  if  you  do  furnish  Ihem 
in  piirmianee  of  the  eontraet,  you  may  sue  mc  on  my  Ruaranty."  Pattcson,  ■!.,  Mor- 
ton V.  Burn,  7  Ad.  fc  El.  19.  23. 


SECT.    l]  BISHOP    V,    EATON  95 

ment  was  extended  for  a  year,  but  whether  with  the  knowledge  or 
consent  of  the  defendant  was  in  dispute.  In  August,  1889,  in  an 
interview  between  them,  the  plaintiff  asked  the  defendant  to  take  up 
the  note  still  outstanding,  and  pay  it,  to  which  the  defendant  re- 
plied: "Try  to  get  Harry  to  pay  it.  If  he  don't,  I  will.  It  shall 
not  cost  you  anything." 

On  October  1,  1891,  the  plaintiff  paid  the  note,  and  thereafter 
made  no  effort  to  collect  it  from  Harry  Eaton,  the  maker.  The  de- 
fendant testified  that  he  had  no  notice  of  the  payment  of  the  note 
by  the  plaintiff  until  December  22,  1891. 

The  judge  ruled,  as  matter  of  law  upon  the  findings  of  fact,  that 
the  plaintiff  was  entitled  to  recover,  and  ordered  judgment  for  him ; 
and  the  defendant  alleged  exceptions.^ 

F.  G.  Cool-,  for  the  defendant. 

R.  W.  Light,  for  the  plaintiff. 

Knowlton,  J.  The  first  question  in  this  case  is  whether  the  con- 
tract proved  by  the  plaintiff  is  an  original  and  independent  con- 
tract or  a  guaranty.  The  judge  found  that  the  plaintiff  signed  the 
note  relying  upon  the  letter,  "and  looked  to  the  defendant  solely  for 
reimbursement  if  called  upon  to  pay  the  note,"  The  promise  con- 
tained in  the  letter  was  in  these  words :  "If  Harry  needs  more  money, 
let  him  have  it,  or  assist  him  to  get  it,  and  I  will  see  that  it  is 
paid."  On  a  reasonable  interpretation  of  this  promise,  the  plaintiff 
was  authorized  to  adopt  the  first  alternative,  and  to  let  Harry  have 
the  money  in  such  a  way  that  a  liability  of  Harry  to  him  would  be 
created,  and  to  look  to  the  defendant  for  payment  if  Harry  failed 
to  pay  the  debt  at  maturity  or  he  might  adopt  the  second  alternative 
and  assist  him  to  get  money  from  some  one  else  in  such  a  way  as 
to  create  a  debt  from  Harry  to  the  person  furnishing  the  money, 
and,  if  Harry  failed  to  pay,  might  look  to  the  defendant  to  relieve 
him  from  the  liability.  The  words  fairly  imply  that  Harry  was  to 
be  primarily  liable  for  the  debt,  either  to  the  plaintiff  or  to  such 
other  persons  as  should  furnish  the  money,  and  that  the  defendant 
was  to  guarantee  the  payment  of  it.  We  are  therefore  of  opinion, 
that,  if  the  plaintiff  relied  solely  upon  the  defendant,  he  was  author- 
ized by  the  letter  to  rely  upon  him  only  as  a  guarantor. 

The  defendant  requested  many  rulings  in  regard  to  the  law  ap- 
plicable to  contracts  of  guaranty,  most  of  which  it  becomes  necessary 
to  consider.  The  language  relied  on  was  an  offer  to  guarantee,  which 
the  plaintiff  might  or  might  not  accept.  "Without  acceptance  of  it 
there  was  no  contract,  because  the  offer  was  conditional  and  there 
was  no  consideration  for  the  promise.  But  this  was  not  a  proposition 
which  was  to  become  a  contract  only  upon  the  giving  of  a  promise 
for  the  promise,  and  it  was  not  necessary  that  the  plaintiff  should 
accept  it  in  words,  or  promise  to  do  anything  before  acting  upon 
it.  It  was  an  offer  which  was  to  become  effective  as  a  contract  upon 
'  The  defendant's  requests  for  rulings  are  omitted. 


Q 


96  BISHOP    V.    EATON  [CHAP.    I 

the  doing  of  the  act  referred  to.  It  was  an  offer  to  be  bound  in  con- 
sideration of  an  act  to  be  done,  and  in  such  a  case  the  doing  of  the 
act  constitutes  the  acceptance  of  the  offer  and  furnishes  the  con- 
sideration. Ordinarily  there  is  no  occasion  to  notify  the  offerer  of 
the  acceptance  of  such  an  offer,  for  the  doing  of  the  act  is  a  suffi- 
cient acceptance,  and  the  promisor  knows  that  he  is  bound  when  ho 
sees  that  action  has  been  taken  on  the  faith  of  his  offer.  But  if  the 
act  is  of  such  a  kind  that  knowledge  of  it  will  not  quickly  come  to 
the  promisor,  the  promisee  is  bound  to  give  him  notice  of  his  accept- 
ance within  a  reasonable  time  after  doing  that  which  constitutes 
the  acceptance.  In  such  a  case  it  is  implied  in  the  offer  that,  to 
complete  the  contract,  notice  shall  be  given  with  due  diligence,  so  that 
the  promisor  may  know  that  a  contract  has  been  made.  But  where 
the  promise  is  in  consideration  of  an  act  to  be  done,  it  becomes  bind- 
ing upon  the  doing  of  the  act  so  far  that  the  promisee  cannot  be 
affected  by  a  subsequent  withdrawal  of  it,  if  within  a  reasonable 
time  afterward  he  notifies  the  promisor.  In  accordance  with  these 
principles,  it  has  been  held  in  cases  like  the  present,  where  the 
guarantor  would  not  know  of  himself,  from  the  nature  of  the  trans- 
action, whether  the  offer  has  been  accepted  or  not,  that  he  is  not 
bound  without  notice  of  the  acceptance,  seasonably  given  after  the 
performance  which  constitutes  the  consideration.  Babcock  v.  Bryant, 
12  Pick.  133  Whiting  v.  Stacy,  15  Gray,  270  Schlessinger  v.  Dickin- 
son, 5  Alen,  47. 

In  the  present  case  the  plaintiff  seasonably  mailed  a  letter  to  the 
defendant,  informing  him  of  what  he  had  done  in  compliance  with 
the  defendant's  request,  but  the  defendant  testified  that  he  never 
received  it,  and  there  is  no  finding  that  it  ever  reached  him.  The 
judge  ruled,  as  matter  of  law,  that  upon  the  facts  found,  the  plain- 
tiff was  entitled  to  recover,  and  the  question  is  thus  presented  whether 
the  defendant  was  bound  by  the  acceptance  when  the  letter  was 
properly  mailed,  although  he  never  received  it. 

When  an  offer  of  guaranty  of  this  kind  is  made,  the  implication 
is  that  notice  of  the  act  which  constitutes  an  acceptance  of  it  shall 
be  given  in  a  reasonable  way.  What  kind  of  a  notice  is  required 
depends  upon  the  nature  of  the  transaction,  the  situation  of  the 
parties,  and  the  inferences  fairly  to  be  drawn  from  their  previous 
dealings,  if  any,  in  regard  to  the  matter.  If  they  are  so  situated 
that  communication  by  letter  is  naturally  to  be  expected,  then  the 
deposit  of  a  letter  in  the  mail  is  all  that  is  necessary.  If  that  is  done 
which  is  fairly  to  be  contemplated  from  their  relations  to  the  sub- 
ject matter  and  from  their  course  of  dealing,  the  rights  of  the  parties 
arc- fixed,  and  a  failure  actually  to  receive  the  notice  will  not  affect 
the  obligation  of  tlio  guarantor. 

The  plaintiff  in  tbe  case  now  before  us  resided  in  Illinois,  and  the 
defendant  in  Nova  Scotia.  Tlic  offer  wns  made  by  letter,  and  the 
defendant  must  have  contemplated  that  information  in  regard  to  the 


SECT.    l]  DUNLOP    V.    HIGGINS  97 

plaintiff's  acceptance  or  rejection  of  it  would  be  by  letter.  It  would 
be  a  harsh  rule  which  would  subject  the  plaintiff  to  the  risk  of 
the  defendant's  failure  to  receive  the  letter  giving  notice  of  his  ac- 
tion on  the  faith  of  the  offer.  We  are  of  opinion  that  the  plaintiff, 
after  assisting  Harry  to  get  the  money,  did  all  that  he  was  required 
to  do  when  he  seasonably  sent  the  defendant  the  letter  by  mail  in- 
forming him  of  what  had  been  done. 

How  far  such  considerations  are  applicable  to  the  case  of  an  ordi-i  a.  ^ 
nary  contract  made  by  letter,  about  which  some  of  the  early  decisions  |  '  '^ ^ 
are  conflicting,  we  need  not  now  consider. 

The  plaintiff  was  not  called  upon  under  his  contract  to  attempt 
to  collect  the  money  from  the  maker  of  the  note,  and  it  is  no  de- 
fence that  he  did  not  promptly  notify  the  defendant  of  the  maker's 
default,  at  least  in  the  absence  of  evidence  that  the  defendant  was 
injured  by  the  delay.  This  rule  in  cases  like  the  present  was  estab- 
lished in  Massachusetts  in  Vinal  v.  Richardson,  13  Allen,  521,  after 
much  consideration,  and  it  is  well  founded  in  principle  and  strongly 
supported  by  authority. 

We  find  one  error  in  the  rulings  which  requires  us  to  grant  a  new 
trial.  It  appears  from  the  bill  of  exceptions  that  when  the  note 
became  due  the  time  for  the  payment  of  it  was  extended  without 
the  consent  of  the  defendant.  The  defendant  is  thereby  discharged 
from  his  liability,  unless  he  subsequently  assented  to  the  extension 
and  ratified  it.  Chace  v.  Brooks,  5  Cush.  43 ;  Carkin  v.  Savory,  14 
Gray,  528.  The  Court  should  therefore  have  ruled  substantially  in 
accordance  with  the  defendant's  eighth  request,  instead  of  finding 
for  the  plaintiff,  as  matter  of  law,  on  the  facts  reported.  Whether 
the  judge  would  have  found  a  ratification  on  the  evidence  if  he  had 
considered  it,  we  have  no  means  of  knowing. 

Exceptions  sustained.^ 


DUNLOP  v.  HIGGINS 

In  the  House  of  Lokds,  February  21,  22,  24,  1848 

DuNLOP  AND  Others,  Appellants 
Vincent  Higgins  and  Others,  Respondents 

{^Reported  in  1  House  of  Lords  Cases,  381] 

This  was  an  appeal  against  a  decree  of  the  Court  of  Session, 
made  under  the  following  circumstances :  Messrs.  Dunlop  &  Co.  were 
iron  masters  in  Glasgow,  and  Messrs.  Higgins  &  Co.  were  iron  mer- 
chants in  Liverpool.    Messrs.  Higgins  had  written  to  Messrs,  Dunlop 

^  The  authorities  upon  the  question  whether  notice  of  acceptance  is  necessary  to 
the  formation  of  a  contract  of  guaranty  are  collected  in  Ames's  Cases  on  Suretyship, 
225,  note  2;  1  Williston,  Contracts,  §§69,  69a.  The  different  reasons  given  in  the 
decisions,  holding  notice  necessary,  are  considered  in  Ames,  230,  231  and  notes  and  in 
Williston,  loc.  cit. 
4 


98  DUNLOP   V.   HIGGINS  [CHAP.   I 

respecting  the  price  of  iron,  and  received  the  following  answer: 
"Glasgow,  22d  January,  1845.  We  shall  be  glad  to  supply  you  with 
2000  tons,  pigs,  at  65  shillings  per  ton,  net,  delivered  here."  Messrs. 
Higgins  wrote  the  following  reply:  "Liverpool,  25th  January,  1845. 
You  say  65s.  net,  for  2000  tons  pigs.  Does  this  mean  for  our  usual 
four-months'  bill  ?  Please  give  us  this  information  in  course  of  post, 
as  we  have  to  decide  with  other  parties  on  Wednesday  next."  On 
the   28th   Messrs.   Dunlop   wrote,    "Our   quotation  meant    65s.    net, 

^  and  not  a  four-months'  bill."  This  letter  was  received  by  Messrs. 
Higgins  on  the  30th  of  January,  and  on  the  same  day,  and  by  post, 
but  not  by  the  first  post  of  that  day,  they  despatched  an  answer  in 

_«*^ese  terms:  "We  will  take  the  2000  tons  pigs  you  offer  us.  Your 
letter  crossed  ours  of  yesterday,  but  we  shall  be  glad  to  have  your 

'^  answer  respecting  the  additional  1000  tons.  In  your  first  letter  you 
omitted  to  state  any  terms  hence  the  delay."  This  letter  was  dated 
"31st  January."  It  was  not  delivered  in  Glasgow  until  2  o'clock 
P.M.  on  the  1st  of  February,  and,  on  the  same  day,  Messrs.  Dunlop 
sent  the  following  reply:  "Glasgow,  1st  February,  1845.  We  have 
your  letter  of  yesterday,  but  are  sorry  that  we  cannot  now  enter 
the  2000  tons  pig-iron,  our  offer  of  the  28th  not  having  been  ac- 
cepted in  course."  Messrs.  Higgins  wrote  on  the  2d  February  to 
say  that  they  had  erroneously  dated  their  letter  on  the  31st  January, 
that  it  was  really  written  and  posted  on  the  30th,  in  proof  of  which 
they  referred  to  the  post-mark.  They  did  not,  however,  explain  the 
delay  which  had  taken  place  in  its  delivery.  The  iron  was  not  fur- 
nished to  them,  and  iron  having  risen  very  rapidly  in  the  market, 
the  question  whether  there  had  been  a  complete  contract  between 
these  parties  was  brought  before  a  court  of  law.  Messrs.  Higgins 
instituted  a  suit  in  the  Court  of  Session  for  damages,  as  for  breach 
of  contract.  The  defence  of  Messrs.  Dunlop  Avas,  that  their  letter 
of  the  28th,  offering  the  contract,  not  having  been  answered  in  due 
time  there  had  been  no  such  acceptance  as  would  convert  that  offer 
into  a  lawful  and  binding  contract;  that  their  letter  having  been 
delivered  at  Liverpool  before  eight  o'clock  in  the  morning  of  the  30th 
of  January,  Messrs.  Higgins  ought,  according  to  the  usual  prac- 
tice of  merchants,  to  have  answered  it  by  the  first  post,  which  left 
Liverpool  at  three  o'clock  p.m.  on  that  day.  A  letter  so  despatched 
would  be  due  in  Glasgow  at  two  o'clock  p.m.  on  the  31st  of  January; 
another  post  left  Liverpool  for  Glasgow  every  day  at  one  o'clock 
A.M.,  and  letters  to  be  despatched  by  that  post  must  be  put  into  the 
office  during  the  preceding  evening,  and  if  any  letter  had  been  sent 
by  that  post  on  the  morning  of  the  31st,  it  must  have  been  delivered 
in  Glasgow  in  the  regular  course  of  post  at  eight  o'clock  in  the  morn- 
ing of  the  1st  of  February.  As  no  communication  from  Messrs. 
Higgins  arrived  by  either  of  these  posts,  Messrs.  Dunlop  contended 
that  thfy  wore  entitled  to  treat  their  offer  as  not  accepted,  and  that 
they  were  not  bound  to  wait  until  the  third  post  delivered  in  Glasgow 


SECT.    l]  DUNLOP   V.    HIGGINS  99 

at  two  o'clock  p.  M,  of  Saturday,  the  1st  of  February  (at  which  time 
Messrs.  Higgins'  letter  did  actually  arrive),  before  they  entered  into 
other  contracts,  the  taking  of  which  would  disable  them  from  per- 
forming the  contract  they  had  offered  to  Messrs.  Higgins.^ 

Mr.  Bethell  and  Mr.  Anderson,  for  the  appellants. 

Mr.  Stuart  Worthley  and  Mr.  Hugh  Hill,  for  the  respondents, 
were  not  called  on. 

The  Lord  Chancellor.^  The  case  certainly  appears  to  me  one 
which  requires  great  ingenuity  on  the  part  of  the  appellants,  be- 
cause I  do  not  think  that,  in  the  facts  of  the  case,  there  is  anything 
to  warrant  the  appeal.  The  contest  arises  from  an  order  sent  from 
Liverpool  to  Glasgow,  or  rather  a  proposition  sent  from  Glasgow 
to  Liverpool,  and  accepted  by  the  house  at  Liverpool.  It  is  unneces- 
sary to  go  earlier  into  the  history  of  the  case  than  the  letter  sent 
from  Liverpool  by  Higgins,  bearing  date  the  31st  of  January.  A 
proposition  had  been  made  by  the  Glasgow  house  of  Dunlop,  Wilson, 
&  Co.,  to  sell  2,000  tons  of  pig-iron.  The  answer  is  of  that  date 
of  the  31st  of  January:  "Gentlemen,  we  will  take  the  2,000  tons, 
pigs,  you  offer  us."  Another  part  of  the  letter  refers  to  other  ar- 
rangements; but  there  is  a  distinct  and  positive  offer  to  take  the 
2,000  tons  of  pigs.  To  that  letter  there  is  annexed  a  postscript  in 
which  they  say,  "We  have  accepted  your  offer  unconditionally;  but 
we  hope  you  will  accede  to  our  request  as  to  delivery  and  mode  of 
payment  by  two  months'  bill." 

That,  my  Lords,  therefore,  is  an  unconditional  acceptance,  by  the 
letter  dated  the  31st  of  January,  which  was  proved  to  have  been  put 
into  the  post-office  at  Liverpool  on  the  30th ;  but  it  was  not  delivered, 
owing  to  the  state  oT  severe  frost  at  that  time,  which  delayed  the 
mail  from  reaching  Glasgow  at  the  time  at  which,  in  the  ordinary 
course,  it  would  have  arrived  there.  The  letter  having  been  put  in 
on  the  30th  of  January,  it  ought  to  have  arrived  at  Glasgow  on  the 
following  day,  but  it  did  not  arrive  till  the  1st  of  February. 

The  first  question  raised  by  the  first  exception  applies  not  to  the 
summing  up  of  the  learned  Judge,  but  to  the  admission  of  evidence 
by  him. 

My  Lords,  the  exception  states,  "that  the  pursuers  having  admitted 
that  they  were  bound  to  answer  the  defenders'  offer  of  the  28th, 
by  letter  written  and  posted  on  the  30th,  and  the  only  answer  re- 
ceived by  the  defenders  being  admitted  to  be  dated  on  the  31st  of  Jan- 
uary, and  received  in  Glasgow  by  the  mail  which  in  due  course  ought 
to  bring  the  Liverpool  letters  of  the  31st,  but  not  Liverpool  letters 
of  the  30th,  it  is  not  competent  in  a  question  as  to  the  right  of  the 
defenders  to  withdraw  or  fall  from  the  offer,  to  prove  that  the  letter 
bearing  date  the  31st  of  January  was  written  and  despatched  from 
Liverpool  on  the   30th,   and   prevented  by  accident  from   reaching 

1  The  statement  of  the  proceedings  in  the  lower  courts  have  been  omitted. 
"^  Lord  Cottenham.     Portions  of  the  opinion  are  omitted. 


100  DUNLOP   V.   HIGGINS  [CHAP.   I 

Glasgow  in  due  course,  especially  as  it  is  not  alleged  that  the  de- 
fenders were  aware  (previous  to  the  3rd  of  February)  of  any  such 
accident  having  occurred." 

The  exception  is  that  the  learned  Judge  was  wrong  in  permitting 
the  pursuer  to  explain  his  mistake.  The  proposition  is,  that  if  a 
man  is  bound  to  answer  a  letter  on  a  particular  day,  and  by  mistake 
puts  a  date  in  advance,  he  is  to  be  bound  by  his  error,  whether  it 
produces  mischief  to  the  other  party  or  not.  It  is  unnecessary  to 
do  more  than  state  this  proposition  in  order  to  induce  you  to  assent 
to  the  view  I  take  of  the  objection,  and  to  come  to  the  conclusion 
that  the  learned  Judge  was  right  in  allowing  the  pursuer  to  go  into 
evidence  to  show  the  mistake. 

The  next  exception  to  be  considered  is  the  second,  and  that  raises 
a  more  important  question,  though  not  one  attended  with  much  diffi- 
culty. The  exception  is,  that  his  Lordship  did  direct  the  jury  in 
point  of  law,  that  if  the  pursuers  posted  their  acceptance  of  the 
offer  in  due  time,  according  to  the  usage  of  trade,  they  are  not  re- 
sponsible for  any  casualties  in  the  post-office  establishment. 

Now,  there  may  be  some  little  ambiguity  in  the  construction  of 
that  proposition.  It  proceeds  on  the  assumption  that,  by  the  usage 
of  trade,  an  answer  ought  to  have  been  returned  by  the  post,  and 
that  the  30th  was  the  right  day  on  which  that  answer  ought  to  have 
been  notified.  Then  comes  the  questioji,  whether  under  those  circum- 
stances, that  being  the  usage  of  trade,  the  fact  of  the  letter  being 
delayed,  not  by  the  act  of  the  party  sending  it,  but  by  an  accident 
connected  with  the  post,  the  party  so  putting  the  letter  in  on  the 
right  day  is  to  lose  the  benefit  which  Avould  have  belonged  to  him  if 
the  letter  had  arrived  in  due  course? 

I  cannot  conceive,  if  that  is  the  right  construction  of  the  direction 
of  the  learned  Judge,  how  any  doubt  can  exist  on  the  point.  If  a 
party  does  all  that  he  can  do,  that  is  all  that  is  called  for.  If  there 
is  a  usage  of  trade  to  accept  such  an  offer,  and  to  return  an  answer 
to  such  an  offer,  and  to  forward  it  by  means  of  the  post,  and  if  the 
party  accepting  the  offer  puts  his  letter  into  the  post  on  the  correct 
day,  has  he  not  done  every  thing  he  was  bound  to  do?  How  can  he 
be  responsible  for  that  over  which  he  has  no  control?  It  is  not  the 
same  as  if  the  date  of  the  party's  acceptance  of  the  offer  had  been 
the  subject  of  a  special  contract :  as  if  the  contract  had  been,  "I 
make  you  this  offer,  but  you  must  return  me  an  answer  on  the  30th, 
and  on  the  earliest  post  of  that  day."  The  usage  of  trade  would 
rer|nire  an  answer  on  the  day  on  which  the  offer  was  received,  and 
Messrs.  Hitrtriiis.  therefore^  did  on  tlie  30t]i,  in  proper  time,  return 
ar:  answer  by  the  right  conveyance  —  the  post-office. 

Jf  that  was  not  correct,  and  if  you  were  to  have  reference  now 
to  any  usage  constituting  the  contract  between  the  parties  a  specific 
contract,  it  is  quite  clear  to  me  that  the  rule  of  law  would  necessarily 
be  that  which  has  obtained  by  the  usage  of  trade.     It  has  been  so 


SECT.    l]  DUNLOP    V.    HIGGINS  101 

decided  in  cases  in  England,  and  none  has  been  cited  from  Scot- 
land which  controverts  that  proposition;  but  the  cases  in  England 
put  it  beyond  all  doubt.     It  is  not  disputed  —  it  is  a  very  frequent 
occurrence  —  that  a  party  having  a  bill  of  exchange,  which  he  tenders 
for  payment  to  the  acceptor,  and  payment  is  refused,  is  bound  to  give 
the  earliest  notice   to   the  drawer.     That  person  may  be  resident 
many  miles  distant  from  him;  if  he  puts  a  letter  into  the  post  at 
the  right  time,  it  has  been  held  quite  sufficient;  he  has  done  all  that 
he  is  expected  to  do  as  far  as  he  is  concerned;  he  has  put  the  letter  ^ 
into  the  post,  and  whether  that  letter  be  delivered  or  not,  is  a  matter  ^o<-*. 
quite  immaterial,  because  for  accidents  happening  at  the  post-office  "^^^-^ 
he  is  not  responsible. 

My  Lords,  the  case  of  Stocken  v.  Collin^  is  precisely  a  case  of  that 
nature,  where  the  letter  did  not  arrive  in  time.  In  that  case  Baron 
Parke  says,  "It  was  a  question  for  the  jury  whether  the  letter  was 
put  into  the  post-office  in  time  for  delivery  on  the  28th.  The  post- 
office  mark  certainly  raised  a  presumption  to  the  contrary,  but  it 
was  not  conclusive.  The  jurors  have  believed  the  testimony  of  the 
witness  who  posted  the  letter,  and  the  verdict  was  therefore  right. 
If  a  party  puts  a  notice  of  dishonor  into  the  post,  so  that  in  due 
course  of  delivery  it  would  arrive  in  time,  he  has  done  all  that  can 
be  required  of  him,  and  it  is  no  fault  of  his  if  delay  occurs  in  the 
delivery."  Baron  Alderson  says,  "The  party  who  sends  the  notice 
is  not  answerable  for  the  blunder  of  the  post-office.  I  remember  to 
have  held  so  in  a  case  on  the  Norfolk  Circuit,  where  a  notice  ad- 
dressed to  Norwich  had  been  sent  to  Warwick.  If  the  doctrine  that 
the  post-office  is  only  the  agent  for  the  delivery  of  the  notice  was 
correct,  no  one  could  safely  avail  himself  of  that  mode  of  trans- 
mission. The  real  question  is  whether  the  party  has  been  guilty 
of  laches." 

There  is  also  the  other  case  which  has  been  referred  to,  which  de- 
clares the  same  doctrine,  the  case  of  Adams  v.  Lindsell.  That  is 
a  case  where  the  letter  went,  by  the  error  of  the  party  sending  it, 
to  the  wrong  place,  but  the  party  receiving  it  answered  it,  so  far 
as  he  was  concerned,  in  proper  time.  The  party,  however,  who 
originally  sent  the  offer  not  receiving  the  answer  in  proper  time, 
thought  he  was  discharged,  and  entered  into  a  contract  and  sold  the 
goods  to  somebody  else.  The  question  was,  whether  the  party  mak- 
ing the  offer  had  a  right  to  withdraw  after  notice  of  acceptance.  He 
sold  the  goods  after  the  party  had  written  the  letter  of  acceptance, 
but  before  it  arrived  he  said,  "I  withdraw  my  offer."  Therefore  he 
said,  "before  I  received  your  acceptance  of  my  offer  I  had  withdrawn 
it."  And  that  raised  the  question  when  the  acceptance  took  place, 
and  what  constituted  the  acceptance.  It  was  argued,  that  "till  the 
plaintiff's  answer  was  actually  received,  there  could  be  no  binding 
contract  between  the  parties,  and  that  before  then  the  defendants  had 

1  7  Meeson  &  Welsby,  515. 


:^ 


'^^ 


102  DUNLOP   V.   HIGGINS  [CHAP.  I 

retracted  their  offer  by  selling  the  wool  to  other  persons."     But  the 

Court  said,  "If  that  were  so,  no  contract  could  ever  be  completed  by 

the  post,  for  if  the  defendants  were  not  bound  by  their  offer  when 

accepted  by  the  plaintiffs   till   the   answer   was   received,   then  the 

]a/^   I  plaintiffs  ought  not  to  be  bound  till  after  they  had  received  the  noti- 

jfication  that  the  defendants  had  received  their  answer  and  assented 

fc^A-y*-  to  it.     And  so  it  might  go  on  ad  infinitum.     The  defendants  must 

^_^,J***4be  considered  in  law  as  making,  during  every  instant  of  the  time 

— 7"     their  letter  was  travelling,  the  same  identical  offer  to  the  plaintiffs, 

and  then  the  contract  is  completed  by  the  acceptance  of  it  by  the 

latter." 

.^.^^t***^  Those  two  cases  leave  no  doubt  at  all  on  the  subject.  Common 
sense  tells  us  that  transactions  cannot  go  on  without  such  a  rule, 
and  these  cases  seem  to  be  the  leading  cases  on  the  subject,  and  we 
have  heard  no  authority  cited  which  in  the  least  degree  affects  the 
I  principle  on  which  they  proceed.  The  law  of  Scotland  appears  to 
be  the  same  as  the  law  of  England,  for  Mr.  Bell's  Commentary  lays 
.^1  down  the  same  rule  as  existing  in  Scotland,  and  nothing  has  been 
stated  to  us  in  contradiction  of  his  opinion. 

^.—^   It   was   ordered   that   the   interlocutor   complained   of  should   he 
^  '^'^         affirmed  with  costs} 

^^*^Qi  Adams  v.  Lindsell,  1  B.  &  Aid.  681;    Potter  v.  Sanders,  6  Hare,  1;    Dunlop  v. 

Ua*,^    Higgins,  1  H.  L.  C.  381;    Duncan  v.  Topham,  8  C.  B.  225;   Hebb's  Case,  L.  R.  4  Eq. 

^^^    9;   Harris's  Case,  L.  R.  7  Ch.  589;    Byrne  v.  Van  Tienhoven,  5  C.  P.  D.  344;   Grant 

(x.  v.  Household  Fire  Ins.  Co.  4  Ex.  D.  216;    Brogden  v.  Metropolitan  Ry.  Co.,  2  App. 

Cas.  666;  McGiverin  v.  James,  33  U.  C.  Q.  B.  203;  Tayloe  v.  Merchants'  F.  Ins.  Co., 
9  How.  390;  Patrick  v.  Bowman,  149  U.  S.  411;  Winterport,  &c.  Co.  v.  The  Jasper, 
1  Holmes,  99;  Re  Dodge,  9  Ben.  482;  Darlington  Iron  Co.  v.  Foote,  16  Fed.  Rep. 
646;  Sea  Ins.  Co.  v.  Johnston,  105  Fed.  Rep.  286,  291,  (C.  C.  A.) ;  Levisohn  v.  Waganer, 
76  Ala.  412;  Linn  v.  McLean,  80  Ala.  360;  Kempner  v.  Cohn,  47  Ark.  519;  Porter  v. 
Gossell  112  Ark.  380;  Mercer  Elec.  Mfg.  Co.  v.  Connecticut  Elec.  Mfg.  Co.  87  Conn. 
691;  Bryant  v.  Booze,  55  Ga.  4.38;  Haas  v.  Myers,  111  111.  421;  Chytraus  v.  Smith, 
141  111.  231,  2.57;  Kentucky  Mut.  Ins.  Co.  v.  Jenks,  5  Ind.  96;  Moore  v.  Pierson,  6 
la.  279;  Ferrier  v.  Storcr,  63  la.  484;  Gipps  Brewing  Co.  v.  De  France,  91  la.  108, 
112;  Chiles  v.  Nelson,  7  Dana,  281;  Shaw  v.  Ingram-Day  Lumber  Co.  152  Ky.  329; 
Bailey  v.  Hope  Ins.  Co.,  .56  Me.  474;  Emerson  Co.  v.  Proctor,  97  Me.  360;  Wheat  v. 
Cross,  31  Md.  99;  Lungstrass  v.  German  Ins.  Co.,  48  Mo.  201;  Lancaster  v.  Elliot 
42  Mo.  App.  503;  Egger  v.  Nesbitt,  122  Mo.  667,  674;  Horton  v.  New  York  Life 
Ins.  Co.,  151  Mo.  604;  Abbott  v.  Shepard,  48  N.  H.  14;  Davis  v.  ^tna  Mut.  F.  I. 
Co.,  67  N.  H.  218;  Hallock  v.  Commercial  Ins.  Co.,  26  N.  J.  L.  268;  Commercial  In. 
Co.  V.  Hallock,  27  N.  J.  L.  645;  Northampton,  &c.  Ins.  Co.  v.  Tuttle,  40  N.  J.  L. 
476;  Mactier  v.  Frith,  6  Wend.  103;  Vassar  v.  Camp.  11  N.  Y.  441;  Trevor  v.  Wood, 
36  N.  Y.  .307;  Watson  v.  Russell,  149  N.  Y.  388,  .391;  Wester  v.  Casein  Co.  200  N.  Y. 
606;  Hacheny  v.  Leary,  12  Ore.  40;  Hamilton  v.  Lycoming  M.  I.  Co.,  5  Pa.  St.  339; 
McClintock  V.  South  Penn.  Oil  Co.,  146  Pa.  144,  161;  Otis  v.  Payne,  86  Tenn.  663; 
Blake  V.  Hamburg  Bremen  F.  I.  Co.,  67  Tex.  160;  Haarstick  v.  Fox,  9  Utah,  110; 
Durkff!  V.  VrTmorit  Central  R.  R.  Co.,  29  Vt.  127;  Hartford  Ins.  Co.  v.  Lasher  Stock- 
ing Co.,  60  Vt.  439;  Malloy  v.  Drumheller,  68  Wash.  106;  Washlnirn  v.  Fletcher.  42 
Wis.  152,  ncc.  The  only  contrary  decision  not  overruled  secims  to  bo  McCuUoch  v. 
Eagle  In.s.  CVj.,  1  Pick.  278.  The  h^ttcir  must,  however,  be  properly  directed  and 
stamped.  Pots  v.  Whit<!head,  5  C.  E.  Green,  55;  Britton  v.  Phillips,  24  How.  Pr. 
Ill;   Blake  v.  Hamljurg  Bremen  F.  I.  Co.,  67  Tex.  160. 

The  ca.ie  of  ex  parli;  C;ote,  L.  R.  9  Ch.  27,  seems  to  indicate  that  the  English  doc- 
trine is  based  on  the  assuTiii)tioii  that  a  letter  when  mailed  is  no  longer  within  the 
control  of  th(t  Hcrruler,  and  that  wliere  as  in  France;  the  sender  may  reclaim  his  letter 
the  contract  should  not  be  regarded  as  completed  by  the  mailing  of  an  acceptance. 


SECT.   I] 


HENTHORN    V.    FRASEE 


103 


HENTHOEN  V.  FKASEE 

In  the  Chancery  Division^  Court  of  Appeal   March   3,  26,  1892 
[Reported  in  [1892]  2  Chancery,  27] 

In  1891  the  plaintiff  was  desirous  of  purchasing  from  the  Hus- 
kisson  Benefit  Building  Society  certain  houses  in  Flamank  Street, 
Birkenhead.  In  May  he,  at  the  office  of  the  society  in  Chapel  Street, 
Liverpool,  signed  a  memorandum  drawn  up  by  the  secretary,  offer- 
ing £600  for  the  property,  which  offer  was  declined  by  the  directors ; 
and  on  the  first  of  July  he  made  in  the  same  way  an  offer  of  £700, 
which  was  also  declined.  On  the  7th  of  July  he  again  called  at  the 
office,  and  the  secretary  verbally  offered  to  sell  to  him  for  £750. 
This  offer  was  reduced  into  writing,  and  was  as  follows :  — 

*'I  hereby  give  you  the  refusal  of  the  Flamank  Street  property  at 
£750  for  fourteen  days." 

The  secretary,  after  signing  this,  handed  it  to^  the  plaintiff,  who 
took  it  away  with  him  for  consideration. 

On  the  morning  of  the  8th  another  person  called  at  the  office  and 
offered  £760  for  the  property,  which  was  accepted,  and  a  contract 
for  purchase  signed,  subject  to  a  condition  for  avoiding  it  if  the 
society  found  that  they  could  not  withdraw  from  the  offer  to  the 
plaintiff. 

Between  12  and  1  o'clock  on  that  day  the  secretary  posted  to  the 
plaintiff,  who  resided  in  Birkenhead,  the  following  letter :  — 

"Please  take  notice  that  my  letter  to  you  of  the  7th  instant,  giving 
you  the  option  of  purchasing  the  property,  Flamank  Street,  Birken- 
head, for  £750,  in  fourteen  days,  is  withdrawn,  and  the  offer  can- 
celled." 


By  the  United  States  Postal  Laws,  §§  531,  533,  the  sender  of  a  letter  may  regain  it  by 
complying  with  required  formalities.  See  also  Crown  Point  Iron  Co.  v.  ^tna  Ins. 
Co.,  127  N.  Y.  608,  619.  But  in  McDonald  1).  Chemical  Nat.  Bank,  174  U.  S.  610, 
620,  the  Court  said;  "  Nor  can  it  be  conceded  that  except  on  some  extraordinary  occa- 
sion and  on  evidence  satisfactory  to  the  post-office  authorities,  a  letter  once  mailed 
can  be  withdrawn  by  the  party  who  mailed  it.  When  letters  are  placed  in  a  post-ofBce, 
they  are  within  the  legal  custody  of  the  officers  of  the  government,  and  it  is  the  duty 
of  postmasters  to  deliver  them  to  the  parties  to  whom  they  are  addressed.  United 
States  V.  Pond,  2  Curtis,  C.  C.  265;  Buell  v.  Chapin,  99  Mass.  594;  Morgan  v.  Rich- 
ardson, 13  Allen,  410;   Tayloe  v.  Merchants'  Fire  Ins.  Co.,  9  How.  390." 

If  the  use  of  the  telegraph  is  authorized  expressly  or  impliedly,  the  delivery  of  the 
acceptance  to  the  telegraph  office  is  held  to  complete  the  contract.  Stevenson  v.  Mc- 
Lean, 5  Q.  B.  D.  346;  Cowan  v.  O'Connor,  20  Q.  B.  D.  640;  Minnesota  Oil  Co.  v. 
Collier  Lead  Co.,  4  Dill.  431;  Garretson  v.  North  Atchison  Bank,  47  Fed.  Rep.  867 
Andrews  v.  Schreiber,  93  Fed.  Rep.  369;  Weld  v.  Victory  Co.  205  Fed.  Rep.  770 
Bank  of  Yolo.  v.  Sperry  Flour  Co.  141  Cal.  314;  Haas  v.  Myers,  111  111.  421,  427 
Cobb  V.  Foree,  38  111.  App.  255;  Trevor  v.  Wood,  36  N.  Y.  307;  Perry  v.  Mt.  Hope 
Iron  Co.,  15  R.  I.  380.  Contra  is  Beaubien  Produce  Co.  v.  Robertson  Rap  Jud 
Quebec,  18  C.  S.  429. 

The  question  when  a  contract  by  mail  or  telegraph  is  completed  has  been  much 
disputed  in  the  civil  law,  and  there  are  four  or  five  theories  each  of  which  has  adher- 
ents. See  Val^ry,  Contrats  par  Correspondance,  §  130  seq.;  Windscheid  Pandekten- 
recht,  II.   §306. 


104  HENTHORN    V.    FRASER  FCHAP.   I 

J^ 

-  This  letter,  it  appeared,  was  delivered  at_tbe  plaintiff's  address 

^Qy^^^^hetween  5  and  6  in  the  evening ;  Init,  as  Hewas  out,  did  not  reach  his 
hands  Till^aBout  b  o'clock."" 

On  the  same  8th  of  July  the  plaintiff's  solicitor,  by  the  plaintiff's 
direction,  wrote  to  the  secretary  as  follows :  — 

"I  am  instructed  by  Mr.  James  Henthorn  to  write  to  you,  and  ac- 
cept your  offer  to  sell  the  property,  1  to  17  Flamank  Street,  Birken- 
head, at  the  price  of  £750.    Kindly  have  contract  prepared  and  for- 
^^  .       warded  to  me." 

|J^  This  letter  was  addressed  to  the  society's  office,  and  was  posted  in 

^tf'^^^  Birkenhead  at  3.30  p.m.^  was  delivered  at  8.30  p.m.  after  the  closing 

of  the  office,  and  was  received  by  the  secretary  on  the  following 

morning.     The  secretary  replied,  stating  that  the  society's  offer  had 

been  withdrawn. 

The  plaintiff  brought  this  action  in  the  Court  of  the  County  Pala- 
tine for  specific  performance.  The  Vice-Chancellor  dismissed  the 
action,  and  the  plaintiff  appealed. 

Farwell,  Q.  C,  and  T.  R.  Hughes,  for  the  appeal. 

Neville,  Q.  C,  and  P.  0.  Lawrence,  for  the  defendant :  — 

We  insist  that  the  Vice-Chancellor  has  drawn  a  correct  inference, 
—  that  there  was  no  authority  to  accept  by  post ;  and  if  that  be 
so,  the  acceptance  will  not  date  from  the  posting.  Dunlop  v.  Higgins, 
1  H.  L.  C.  381,  went  on  the  ground  that  it  was  the  understanding  of 
both  parties  that  an  answer  should  be  sent  by  post.  In  Brogden  v. 
Metropolitan  Kailway  Company,  Lord  Blackburn  puts  it  on  the 
ground  "that  w^here  it  is  expressly  or  impliedly  stated  in  the  offer 
that  you  may  accept  the  offer  by  posting  a  letter,  the  moment  you 
post  the  letter  the  offer  is  accepted."  It  would  be  very  inconvenient 
to  hold  the  post  admissible  in  all  cases.  Here,  Liverpool  and  Birk- 
enhead are  at  such  a  short  distance  from  each  other  that  it  cannot 
be  considered  that  the  plaintiff  had  an  authority  to  reply  by  post. 
If  the  offer  had  been  sent  by  post  that  would,  no  doubt,  be  held  to 
give  an  authority  to  reply  by  post;  but  the  offer  was  delivered  by 
hand  to  the  plaintiff,  who  was  in  the  habit  of  calling  at  the  defend- 
ant's office,  and  lived  only  at  a  short  distance,  so  that  authority  to 
reply  by  post  cannot  be  inferred.  The  post  is  not  prohibited;  the 
acceptance  may  be  sent  in  any  way;  but,  unless  sending  it  by  post 
was  authorized,  it  is  inoperative  till  it  is  received.  Suppose,  im- 
C  mediately  after  posting  the  acceptance,  the  plaintiff  had  gone  to  the 
office  and  retraced  it,  surely  he  would  have  been  free. 

[Lord  Herscitell.  —  It  is  not  clear  that  he  would,  after  sending 
an  acceptance  in  such  a  way  that  ho  could  not  prevent  its  reaching 
/the  othfr  party.  Possibly  a  case  where  the  question  is  as  to  the 
date  from  which  an  acceptance  which  has  been  received  is  operative 
may  not  stand  on  precisely  the  same  footing  as  one  where  the  ques- 
tion is  whether  the  person  making  the  offer  is  bound,  though  the 
acceptance  has  never  been  received  at  all.     More  evidence  of  au- 


SECT.    l]  HENTHORN    V.    FRASER    'S'*^'^  •     '■^^*-        105  /rt±?~ 

thority  to  accept  by  post  may  be  required  in  the  latter  case  than  in  ^^*^  ^ 

the  former.]  A^^"^"""^-^ 

Dickinson  i;.  Dodds,  2  Ch.  D.  463,  shows  that  a  binding  contract  ^— -^^ 

to  sell  to  another  person  may  be  made  while  an  offer  is  pending,  and  *^^^'\  "' 

that  it  will  be  a  withdrawal  of  the  offer.  CoM-*-^ 

[Lord  Hebschell.  —  In  that  case  the  person  to  whom  the  offer  ^^'-<»-*    *" 

was  made  knew  of  the  sale  before  he  sent  his  acceptance.]  (£*-4>^A-«^<i 

Farwell,  in  reply. 

1892,  March  26.     Lord  Heeschell.^     If  the  acceptance  by  the  ^    "t" 
plaintiff  of  the  defendant's  offer  is  to  be  treated  as  complete  at  the  X*/*'-^^ 
time  the  letter  containing  it  was  posted,  I  can  entertain  no  doubt  ^jj^,^^^ 
that  the  society's  attempted  revocation  of  the  offer  was  wholly  in-  ^r^^*^ 
effectual.    I  think  that  a  person  who  has  made  an  offer  must  be  con-  '*-*^    '^ 
sidered  as  continuously  making  it  until  he  has  brought  to  the  knowl-  -'^w*'^-*^ 
edge  of  the  person  to  whom  it  was  made  that  it  is  withdrawn.     This  /3  L,t->^ 
seems  to  me  to  be  in  accordance  with  the  reasoning  of  the  Court  of '^^ 
King's  Bench  in  the  case  of  Adams  v.  Lindsell,  1  B,  &  Al.  681,  which 
was  approved  by  the  Lord  Chancellor  in  Dunlop  v.  Higgins,  1  H. 
L.  C.  381,  399,  and  also  with  the  opinion  of  Lord  Justice  Hellish 
in  Harris's  case.  Law  Kep.  7  Ch.  587.     The  very  point  was  decided 
in  the  case  of  Byrne  v\  Van  Tienhoven,  5  C.  P.  D.  344,  by  Lord 
Justice  Lindley,  and  his  decision  was  subsequently  followed  by  Mr.  j^"*"***  *1 
Justice  Lush.     The  grounds  upon  which  it  has  been  held  that  the  ^  ^^ 
acceptance  of  an  offer  is  complete  when  it  is  posted  have,  I  think,  f~       s 
no  application  to  the  revocation  or  modification  of  an  offer.     These 
can  be  no  more  eft'ectual  than  the  offer  itself,  unless  brought  to  the  '"^'^    ^ 
mmd  of  the  person  to  whom  the  offer  is  made!    But  it  is  contended  4-a^\.>..*. 
on  behalf  of  the  defendants  that  the  acceptance  was  complete  only  '^- 
when  received  by  them,  and  not  on  the  letter  being  posted.     It  can- 
not, of  course,  be  denied,  after  the  decision  in  Dunlop  v.  Higgins,  A-''^*A 
1  H.  L.  C.  381,  in  the  House  of  Lords,  that,  where  an  offer  has  been  /v«,tTi.^ 
made  through  the  medium  of  the  post,  the  contract  is  complete  as  ,v».v«  ^ 
soon  as  the  acceptance  of  the  offer  is  posted,  but  that  decision  is.  4.  *       * 
said  to  be  inapplicable  here,  inasmuch  as  the  letter  containing  the 
offer  was  not  sent  by  post  to  Birkenhead,  but  handed  to  the  plaintiff  '''**^ 
in  the  defendant's  office  at  Liverpool.     The  question  therefore  arises  to    *yo^ 
in  what  circumstances  the  acceptance  of  an  offer  is  to  be  regarded  .  . 
as  complete  as  soon  as  it  is  postej^.     In  the  case  of  the  Household  ■  j 
Fire  and  Carriage  Accident  Insurance  Company  v.  Grant,  4  Ex.  D. 
216,  Lord  Justice  Baggallay  said  (ibid.  227)  :  "I  think  that  the  prin-  ^IT^ 
ciple  established  in  Dunlop  v.  Higgins  is  limited  in  its  application  ^^^^^ 
to  cases  in  which  by  reason  of  general  usage,  or  of  the  relations  be-  "^  't"^ 
tween  the  parties  to  any  particular  transactions,  or  of  the  terms  in  «/  ^^^^.^.^ 
which  the  offer  is  made,  the  acceptance  of  such  offer  by  a  letter  '. 
through  the  post  is  expressly  or  impliedly  authorized."     And  in  the  ^^  '*^ 


'  Lord  Herschell's  restatement  of  the  case  is  omitted.    The  concurring  opinions  of 
Lindley,  L.  J.,  and  Kay,  L.  J.,  are  also  omitted. 


ZoJUa.   -UU^     i^  ^*^    ux-^-tJU)   »U.  /Uxv-tf-«.atM>^    d^    '-^^^  ^ 


106  HENTHORN    V.    ERASER  [CHAP.   I 

same  case  Lord  Justice  Thesiger  based  his  judgment,  4  Ex.  D.  218, 
on  the  defendant  having  made  an  application  for  shares  under  cir- 
cumstances "from  which  it  must  be  implied  that  he  authorized  the 
company,  in  the  event  of  their  allotting  to  him  the  shares  applied 
for,  to  send  the  notice  of  allotment  by  post."  The  facts  of  that  case 
were  that  the  defendant  had,  in  Swansea,  where  he  resided,  handed 
a  letter  of  application  to  an  agent  of  the  company,  their  place  of 
business  being  situate  in  London.  It  was  from  these  circumstances 
that  the  Lord  Justices  implied  an  authority  to  the  company  to  ac- 
cept the  defendant's  offer  to  take  shares  through  the  medium  of  the 
post.  Applying  the  law  thus  laid  down  by  the  Court  of  Appeal,  I 
think  in  the  present  case  an  authority  to  accept  by  post  must  be  im- 
plied. Although  the  plaintiff  received  the  offer  at  the  defendants' 
office  in  Liverpool,  he  resided  in  another  town,  and  it  must  have  been 
in  contemplation  that  he  would  take  the  offer,  which  by  its  terms 
was  to  remain  open  for  some  days,  with  him  to  his  place  of  residence, 
and  those  who  made  the  offer  must  have  known  that  it  would  be 
according  to  the  ordinary  usages  of  mankind  that  if  he  accepted  it 
he  should  communicate  his  acceptance  by  means  of  the  post.  I  am 
not  sure  that  I  should  myself  have  regarded  the  doctrine  that  an 
acceptance  is  complete  as  soon  as  the  letter  containing  it  is  posted 
as  resting  upon  an  implied  authority  by  the  person  making  the  offer 
to  the  person  receiving  it  to  accept  by  those  means.  It  strikes  me 
as  somewhat  artificial  to  speak  of  the  person  to  whom  the  offer  is 
made  as  having  the  implied  authority  of  the  other  party  to  send 
his  acceptance  by  post.  He  needs  no  authority  to  transmit  the  ac- 
ceptance through  any  particular  channel;  he  may  select  what  means 
he  pleases,  the  post-office  no  less  than  any  other.  The  only  effect  of 
the  supposed  authority  is  to  make  the  acceptance  complete  so  soon 
as  it  is  posted,  and  authority  will  obviously  be  implied  only  when 
the  tribunal  considers  that  it  is  a  case  in  which  this  result  ought  to 
be  reached.  I  should  prefer  to  state  the  rule  thus :  Where  the  cir- 
cumstances are  such  that  it  must  have  been  within  the  contemplation 
of  the  parties  that,  according  to  the  ordinary  usages  of  mankind, 
the  post  might  be  used  as  a  means  of  communicating  the  acceptance 
of  an  offer,  the  acceptance  is  complete  as  soon  as  it  is  posted.^  It 
matters  not  in  which  way  the  proposition  be  stated,  the  present  case 
is  in  either  view  within  it.  The  learned  yice-Chancellor  appears 
to  have  based  his  decision  to  some  extent  on  the  fact  that  before 
the  acceptance  was  posted  the  defendants  had  sold  the  property  to 
another  person.     The  case  of  Dickinson  v.  Dodds,   2  Ch.  D.  463, 

'  In  P(!rry  v.  Mt.  Hope  Iron  Co.,  15  R.  I.  380,  an  ofFor  made  in  Boston  in  conversa- 
tion was  to  "staiifl  until  tho  next  day."  The  plaintiff  toloRraphed  an  aocoptance  from 
Providoncfi.  It  wa,s  hfld  that  tho  contract  was  cr>mi)Icto(l  in  Rhode  Island.  "If  there 
bo  any  riucstion  that  tho  tolcgraph  is  a  natural  and  ordinary  mode  of  transmitting 
such  an  accoptanco,  that  is  :i  ((uc^stion  of  fact  for  th(>  jury;  hut  wo  are  of  opinion  that 
if  it  ho  shown  that  tho  acceptance  duly  reacherl  the  defendant,  the  question  of  the 
mode,  no  mode  having  Vieen  specified,  is  immaterial."  See  also  Wilcox  v.  Cline,  70 
Mich.  617. 


LONDON   AND    NORTHERN   BANK    i;.    JONES        -      ,  107     -  y 

was  relied  upon  iu  support  of  that  defence.     In  that  case,  however,  ^^', yc 

the  plaintiff  knew  of  the  subsequent  sale  before  he  accepted  the  offer,  ^,  ^j    ' 
which,  in  my  judgment,  distinguishes  it  entirely  from  the  present-^^  ' 

case.     For  the  reasons  I  have  given,  I  think  the  judgment  must    -^  <*-** 
be  reversed,  and  the  usual  decree  for  specific  performance  made.    The      '^7^*1 
respondents  must  pay  the  costs  of  the  appeal  and  of  the  action.  (^"^■A^^T^— 

^  ^  _^  T^ -c/-'^=^^;;^7^^  ^ 

In  re  LONDON  AND  NORTHERN  BANKEx  parte  JONES  /    ^^^^^ 

In  the  Chancery  Division,  November  15-17,  1899 
[Reported  in  [1900]  1  Chancery,  220] 

Cozens-Hardy,  J. :  On  October  15,  1898,  Dr.  Jones,  who  resides 
at  Sheffield,  applied  for  1000  ordinary  shares  of  lOZ.  each  in  the 
company,  upon  which  he  paid  a  deposit  of  500?.,  being  10s.  per 
share.  His  letter  of  application,  with  cheque  enclosed,  was  received 
in  due  course  by  the  company.  On  October  26  Dr.  Jones  wrote  from 
Sheffield  a  letter  withdrawing  his  application  and  asking  for  a  re- 
turn of  his  500L  This  letter  of  withdrawal  was  sent  as  a  registered 
letter.  It  was  delivered  at  the  office  of  the  company  at  about  8.30 
on  the  morning  of  October  27  before  the  arrival  of  the  secretary. 
On  the  afternoon  of  October  26  a  board  meeting  of  the  company  was 
held,  at  which  it  was  resolved  to  allot  1000  shares  to  Dr.  Jones.  An 
allotment  letter  addressed  to  Dr.  Jones,  dated  October  26,  was  de- 
livered in  Sheffield  at  about  7.30  in  the  evening  of  October  27.  Dr. 
Jones  now  applies  to  have  his  name  removed  from  the  register  in 
respect  of  the  1000  shares,  and  for  a  return  of  his  deposit,  on  the 
ground  that  his  application  was  withdrawn  before  notice  of  accept- 
ance. 

The  company  alleges  that,  although  the  notice  of  allotment  did 
not  reach  Dr.  Jones  until  the  evening  of  the  27th,  it  was  posted  at 
or  about  7.30  on  the  morning  of  the  26th,  and  therefore  before  the 
letter  of  withdrawal  arrived.  It  is  settled  law  that  an  offer  is  to 
be  deemed  accepted  when  the  letter  of  acceptance  is  posted,  the  reason  "L 
being  that  the  post-office  is  considered  the  common  agent  f^f  T^ntli  * 
parties"  Harris's  Case  (1872),  L.  R.  7  Ch.  587.  Hence,  no  delay 
on  the  part  of  the  post-office  in  delivering  the  letter  will  be  material. 
The  withdrawal,  in  order  to  be  effectual,  must  be  before  the  offer 
is  clinched  by  the  posting  of  the  letter  of  acceptance.  The  question 
I  have  to  decide  is  this :  Was  the  letter  of  allotment  posted  before 
the  letter  withdrawing  the  offer  was  received  by  the  company? 
jN"ow,  the  envelope  containing  the  letter  of  allotment  is  produced. 
It  bears  a  stamp  impressed  with  the  words  "11  a.m.,  27  Oct.,  '98," 
with  the  figures  "44"  below.  It  has  been  proved  that  this  stamp 
indicates  that  the  letter  was  not  posted  at  the  general  post-office  at 
all,  but  was  deposited  at  one  of  the  district  post-offices  in  London, 


108  LONDON   AND   NORTHERN    BANK    V.    JONES     [CHAP.   I 

from  which  letters  are  collected  and  taken  to  the  general  post-office. 
The  letters  thus  collected  are  placed  upon  a  separate  bench  or  table, 
and  this  particular  stamp  is  impressed  on  them.  No  work  is  done 
at  this  table  until  after  9.15.  Letters  posted  at  the  general  post- 
office  are  dealt  with  at  a  different  table  and  are  impressed  with  a 
different  stamp.  If  the  letter  had  been  posted  at  7.30  at  the  general 
post-office,  it  would  have  been  forwarded  by  the  10  o'clock  train  to 
Sheffield  and  have  been  delivered  before  7.30.  It  was  in  fact  sent 
down  in  the  ordinary  course  by  a  train  at  or  about  12  o'clock,  and 
was  delivered  in  due  course  at  7.30. 

This  evidence  raises  a  strong  presumption  in  favor  of  the  appli- 
cant. The  company  seeks  to  rebut  this  presumption,  and  the  result 
of  the  evidence  on  its  behalf  is  as  follows :  Mr.  Claxton,  who  was 
employed  by  the  promoters  with  a  staff  of  about  ten  clerks,  was  en- 
gaged from  shortly  after  the  end  of  the  board  meeting  on  the  after- 
noon of  the  26th  throughout  the  whole  night  in  preparing  from  the 
allotment  sheets  the  letters  of  allotment.  Their  task  ended  at  about 
7  in  the  morning,  when  Mr.  Claxton  and  one  of  his  clerks  took  the 
letters,  which  were  fastened  in  bundles  of  fifty,  in  a  cab  to  St.  Mar- 
tin's-le-Grand.  They  got  out  of  the  cab,  and,  seeing  a  porter  in  livery 
outside  the  building,  had  some  conversation  with  him,  in  the  course 
of  which  a  postman  came  by  and  offered  to  take  the  letters.  They 
gave  him  sixpence  or  a  shilling  for  his  trouble.  He  went  into  St. 
Martin's-le-Grand,  came  back,  and  said  it  was  "all  right."  Mr. 
Claxton  was  not,  in  some  respects,  a  satisfactory  witness,  but  for 
the  purposes  of  my  judgment  I  assume  that  the  letter  of  allotment 
to  Dr.  Jones  was  among  those  taken  to  St.  Martin's-le-Grand  and 
thus  dealt  with. 

It  was  contended  that  this  was  a  posting  of  the  letter  at  St.  Mar- 
tin's-le-Grand. It  seems  to  me,  however,  that  the  postman  was  not 
an  agent  of  the  post-office  to  receive  the  letters.  The  Postal  Guide, 
at  p.  47,  expressly  states  that  town  postmen  are  not  allowed  to  take 
charge  of  letters  for  the  post.  Mr.  Anderson,  the  witness  from  the 
post-office,  stated  that  any  man  would  be  reported  if  discovered  to 
have  done  any  such  thing.  I  cannot,  therefore,  regard  the  postman 
as  anything  better  than  a  boy  messenger  employed  by  Claxton  to 
post  the  letters,  and  the  mere  fact  of  handing  the  letter  to  the  post- 
man outside  St.  Martin's-le-Grand  was  not  a  posting  of  the  letter. 

It  is  further  urged  that  directly  the  postman  entered  St.  Martin's- 
le-Grand  the  letter  thereupon  came  into  the  lawful  custody  of  the 
post-office,  and  was  posted,  without  reference  to  what  the  postman 
did  with  it.  I  am,  however,  unable  to  follow  this  view.  It  is  not 
possible  for  me  to  ascertain  precisely  what  was  done  with  the  letters 
by  the  unknown  postman.  He  may  have  left  them  at  a  table  or  in 
a  bag  until  some  later  liour.  He  may  have  taken  them  to  a  branch 
office.  All  I  know  is  tli;it  it  was  not  until  a  much  later  hour  that 
they  were  found  on  the  table  appropriated  to  branch  office  letters. 


SECT.    l]      SCOTTISH   AMERICAN    MORTGAGE   CO.    V.    DAVIS  109 

However  that  may  be,  I  think  that  the  company  has  failed  to  prove 
that  the  letter,  which  did  not  leave  the  post-office  until  about  11 
o'clock,  was  posted  before  8.30,  or  before  9,30,  at  which  hour  the 
secretary  arrived  and  opened  the  letter  of  withdrawal. 

As  to  the  point  that  the  notice  of  withdrawal  did  not  reach  the 
company  when  it  was  opened  by  the  secretary,  I  think  there  is  no 
foundation  for  the  suggestion.  The  secretary  is  the  man  whose  duty 
it  was  to  receive  and  open  letters  of  that  nature.  The  result  is  that 
I  think  the  withdrawal  was  in  time,  and  I  must  therefore  make  an 
order  removing  the  name  of  Dr.  Jones  from  the  register  in  respect 
of  the  1000  shares;  and  I  must  order  the  return  of  the  deposit,  with 
interest  at  4  per  cent.     The  company  must  pay  the  costs  of  the  mo- 


SCOTTISH   AMEKICAN   MOETGAGfECOMPAI^,'"rTOr 

y  -        s    rT—      I  -^'-   W.    S.  DAVIS,    ET   AL. ^  ^  ^    ,       • 

^.l^    tUA^  ^ —  Usj^  ^^^^^^ojJT'    aL,JjL    k^cU    TCtU    /3  -*«*-/  ^-«-t- 
Texas  Supkeme'Ijoitrt,  May  11,  1903,^;^^^^^^    ^   "^  ^  -^ 

{Reported  m  96  Texas,  504]  ^   a^^-^t^^jt  Lj  /w.^^ 


Brown,  Associate  Justice.  —  W.  S.  Davis  sued  the  Scottish- 
American  Mortgage  Company,  Limited,  and  Brown  Brothers  to  re-  a*,*:/ 
cover  commissions  alleged  to  be  due  to  him  from  them  for  procuring  ^^^^ 
a  purchaser  for  certain  lands.  Brown  Brothers  were  the  agents  ^  ^^^ 
of  the  mortgage  company  and  repi-esented  it  in  the  transaction.    The  ' 

mortgage  company  and  Brown  Brothers  pleaded  over  against  J.  E.  ^ 
Couts,  the  alleged  purchaser,  but  he  was  dismissed  from  the  case  on  a  *'-^ 
plea  of  his  privilege  to  be  sued  in  Parker  County.    The  following  are  abtou 
the  findings  of  fact  by  the  Court  of  Civil  Appeals :  •  v- 

"The  evidence  discloses  that  Brown  Bros,  resided  in  Austin,  Texas. 
Davis  resided  in  Fort  Worth,  Texas,  and  the  communication  between 
them  was  through  the  mails.  Couts  resided  in  Weatherford  and 
Davis  first  got  in  communication  with  him  through  Hon.  I.  "W. 
Stephens,  who  stated  to  Davis  that  Couts  would  like  to  purchase  the 
land.  After  various  communications  between  the  parties,  Brown 
Bros,  submitted,  through  Davis,  to  Couts  a  proposition  to  sell.  This 
Couts  declined :  Davis  then  went  to  "Weatherford,  saw  Couts,  and  se- 
cured from  him  a  written  proposition  to  purchase.  This  was  sent  by 
Davis  to  Brown  Bros.,  and  on  January  23,  1900,  Brown  Bros,  re- 

^  "It  is  clear  that  when  the  plaintiff  in  pursuance  of  defendant's  request,  deposited 
the  duplicate  of  the  contract  signed  by  her,  with  her  address,  in  the  United  States 
street  mailing-box,  the  agreement  by  that  act  became  complete."  Watson  v.  Russell, 
149  N.  Y.  388,  391.  See  also  Wood  v.  Calnan,  61  Mich.  402,  411;  Greenwich  Bank  v. 
De  Groot,  7  Hun,  210,  ace.  In  Pearce  v.  Langfit,  101  Pa.  507,  511,  the  Court  said: 
"It  certainly  can  make  no  difference  whether  the  letter  is  handed  directly  to  the  car- 
rier, or  is  first  deposited  in  a  receiving  box  and  taken  from  thence  by  the  same  carrier. 
.  .  .  The  postal  regulations  of  the  United  States  require  that  carriers  while  on  their 
rounds  shall  receive  all  letters  prepaid  that  may  be  handed  them  for  mailing." 


110  SCOTTISH    AMERICAN    MORTGAGE    CO.    V.   DAVIS    [CHAP.    I 

turned  tlie  same  to  Davis  with  this  interlineation :  'Subject  to  letter 
from  Brown  Bros,  to  W.  S.  Davis  &  Co.,  dated  20th  of  January, 
1900.'  The  letter  of  January  20,  1900,  mentioned,  related  to  a  tax 
title  on  twelve  sections  of  said  land  and  stated,  'You  will  recollect 
that  there  is  an  old  absolutely  invalid  tax  title  on  twelve  sections. 
"We  could  clear  off  this  title  by  suit  easily,  but  prefer  that  the  pur- 
chaser do  it  and  would  pay  half  of  the  costs  of  the  suit.'  The 
proposition  so  interlined  by  Brown  Bros,  was  sent  to  Couts  by  Davis. 
After  receiving  same  (Jouts,  on  the  morning  of  January  26,  1900, 
met  Judge  Stephens  in  Weatherford  on  his  way  to  take  the  train 
for  Fort  Worth,  and  told  him  (Stephens)  that  he  could  tell  Davis 
that  he  (Couts)  had  decided  to  take  the  land.  Stephens  said  for  him 
to  confer  direct  with  Brown  Bros.,  which  he  assented  to.  When 
Judge  Stephens  reached  Fort  Worth  he  told  Davis  of  the  conversa- 
tion he  had  with  Couts.  Davis  on  the  same  day  wired  Brown  Bros., 
that  Couts  had  accepted  and  followed  same  with  a  letter.  On  that 
same  day  Couts  mailed  to  Brown  Bros,  the  following  letter,  to  wit: 

'"January  26,  1900. 
"'Messrs.  Brown  Bros.,  Austin,  Texas: 

"'Gentlemen.  —  You  are  hereby  notified  that  I  accept  the  interlineation  above 
the  last  line  of  first  page  of  preliminary  contract  and  will  take  the  land  as  indicated 
by  said  agreement. 

"'I  think,  however,  that  you  people  ought  to  pay  the  whole  cost  of  clearing  title, 
but  will  not  let  that  prevent  the  trade.  You  will  please  advise  me  what  you  think  ia 
best  plan  of  procedure  in  clearing  title.  Shall  we  sue  for  same  or  act  on  the  defense 
and  wait  for  adverse  claimant  to  institute  proceedings? 

"'The  abstract  received,  which  is  too  large  for  immediate  examination.  I  accept 
relying  on  your  statement  and  that  it  will  show  up  as  represented.     Yours  truly, 

"'J.  R.  Couts.' 

"This  letter  never  reached  Brown  Bros.,  it  being  intercepted  the 
next  day  by  a  telegram  sent  by  one  Holland  at  the  instance  of  _Couts 
to  the  postmaster  at  Austin,  who  returned  it  to  Couts,  and  on  that  ^y 
27th,  Couts  telegraphed  Brown  Bros,  that  he  objected  to  the  land 
on  account  of  its  shape  and  declared  the  trade  off.  In  the  letter  from 
Brown  Bros,  to  Davis  of  January  22d,  in  which  Couts'  proposal  was 
returned  interlined  by  Brown  Bros,,  they  said :  'Your  commission, 
of  course,  will  be  payable  only  in  the  event  of  the  sale  going  through 
according  to  the  contract.'  This  is  the  first  time  Brown  Bros,  said 
anything  to  Davis  as  to  when  the  commissions  were  payable." 

A  judgment  was  entered  in  favor  of  Davis  against  the  mortgage 
company  and  Brown  Bros,  for  $3382,  which  was  affirmed  against  the 
mortgage  company  and  reversed  and  rendered  in  favor  of  Brown 
Bros,  by  the  Court  of  Civil  Appeals. 

The  controlling  question  in  this  case  is,  was  there  at  any  time  a 
contract  between  the  mortgage  company  and  Couts  which  could  have 
been  enforced  by  either  party?  The  first  proposition  in  writing  that 
passed  bc^tAVfcn  the  parties  was  sent  by  Brown  Bros.,  as  agents  of  the 
mortgage  c-ompany,  to  Davis  to  be  submitted  to  Couts,  who  rejected  it 
and  returned  the  proposition  in  a  modified  form  to  Brown  Bros,  for 


SECT.    l]      SCOTTISH   AMERICAN    MORTGAGE    CO.    V.    DAVIS  111 

their  acceptance.  Brown  Bros,  did  not  accept  the  proposition  as 
modified  by  Gouts,  but  in  turn  added  other  terms,  and  returned  it  to 
Davis  to  be  again  submitted  to  Gouts,  who  took  the  matter  under  ad- 
visement, which  left  the  proposition  open  for  rejection  by  either 
party.  Up  to  this  time  their  minds  had  not  met  in  agreement.  Gouts, 
after  consideration  of  the  proposed  contract,  told  his  friend.  Judge 
Stephens,  that  he  would  accept  it,  and  authorized  Stephens  to  state 
that  fact  to  Davis  in  Fort  Worth,  but  upon  the  suggestion  of 
Stephens,  Gouts  concluded  to  communicate  through  the  mail  with 
Brown  Bros,  and  to  close  the  trade  with  them.  Judge  Stephens 
stated  the  conversation  between  himself  and  Gouts  to  Davis  at 
Port  Worth,  telling  him  that  Gouts  would  communicate  directly  with 
Brown  Bros,  and  "close  the  contract  with  them."  These  facts  did 
not  constitute  a  binding  obligation  on  Gouts;  he  might  withhold  his 
intended  acceptance.  When  Gouts  put  his  acceptance  of  the  proposi- 1 
tion  in  the  postoffice  to  be  delivered  to  Brown  Bros,  at  Austin  it 
was  still  subject  to  his  control,  and  might  be  recalled  at  any  time  be- 
fore actual  delivery,  unless  the  facts  bring  it  within  the  rule  of  law 
hereafter  stated. 

The  authorities  are  well-nigh  unanimous  in  asserting  that,  when  a 
party  submits  to  another  through  the  mail  a  proposition  of  purchase 
or  sale,  the  receiver  of  the  proposition  has  the  right  within  a  reason- 
able time  and  before  it  is  withdrawn  to  accept  by  a  writing  deposited 
in  the  postoiiice  duly  stamped,  ready  for  carriage  and  delivery,  and 
such  an  aceptance  binds  the  proposer  of  the  contract  from  the  time 
the  deposit  is  made  in  the  postoffice,  whether  it  be  delivered  or  not. 
Blake  v.  Insurance  Go.,  67  Texas,  163;  Bryant  v.  Booze,  55  Ga.,  445; 
Levy  V.  Gohen,  4  Ga.,  13;  Moore  v.  Pierson,  6  Iowa,  292;  Vassar  v. 
Gamp,  11  N".  Y.,  441 ;  Hunt  v.  Higman,  30  K  W.  Eep.,  769 ;  Hallock 
V.  Insurance  Go.,  2  Dutch.,  280;  Dunlop  v.  Higgins,  1  H.  L.  G.,  397. 
Any  number  of  authorities  to  the  same  effect  might  be  added. 

The  facts  of  this  case  do  not  bring  it  within  the  rule  above  laid 
down,  because  there  had  been  no  proposition  submitter!  by  Brown 
Bros,  on  behalf  of  the  mortgage  company  to  Gouts  through  the  mail. 
hence  there  was  no  implied  authority  for  Gouts  to  accept  by  inail  e-^ 
cept  by  actual  delivery  nf  hi<;  acceptance.  When  Gouts  deposited 
tis  letter  in  the  postoffice  it  was  subject  to  his  control  until  delivered 
to  the  party  addressed,  and  he  had  a  perfect  right  to  withdraw  his 
acceptance  and  abandon  the  contract,  because  it  did  not  bind  the 
mortgage  company  until  delivered  and  could  not  bind  Gouts  alone,  — 
it  must  be  mutual.  There  never  was  a  time  when  Gouts  was  legally 
bound  to  take  the  land.  Davis  never  did  present  Gouts  "able,  ready 
and  willing"  to  accept  a  deed  for  the  land  from  the  mortgage 
company,  nor  did  the  mortgage  company  ever  decline  to  carry  out 
the  proposed  contract;  on  the  contrary,  after  Brown  Bros,  received 
the  telegram  withdrawing  the  proposition  they  made  an  earnest  and 
persistent  effort  to  induce  Gouts  to  carry  out  the  trade  but  he  refused. 


112  LUCAS    V.    WESTERN   UNION   TELEGRAPH    CO.     [CHAP.   I 


^ 


.^. 


y 


.v; 


Neither  Bro'^ai  Bros.,  Davis,  nor  the  mortgage  company  ever  knew 
that  Couts  had  mailed  a  written  acceptance  until  after  he  had  re- 
peatedly rejected  all  propositions  from  Brown  Bros,  to  carry  it  out 
and  suit  had  been  commenced  by  Davis  to  recover  his  commissions.  . 

There  is  no  evidence  to  support  the  judgment  in  favor  of  Davis  \ 
against  the  mortgage  company,  and,  from  the  undisputed  facts,  it  is 
evident  that  no  right  of  action  can  be  established  upon  another  trial 
in  favor  of  Davis.  It  is  therefore  ordered  that  the  judgment  of  the  ''^ 
Court  of  Civil  Appeals  as  between  Davis  and  the  mortgage  company  ^ 
be  reversed,  and  that  judgment  be  here  entered  in  favor  of  the  >^ 
mortgage  company  that  Davis  take  nothing  by  his  suit  and  for  all  ^ 
costs.  The  judgment  of  the  Court  of  Civil  Appeals  as  to  all  the  ^ 
other  parties  is  affirmed.  Reversed  and  rendered. 


<^' 


'^^   S.  E.   LUCAS,  Appellant,   v.   WESTEEN  UNION  ^5 

^\       ^\y^   y  TELEGEAPH  COMPANY  \ 

>^\y^\}-      Iowa  Supreme  Court,  October  19,  1906 
^.^.  J^'  ,         [Reported  in  131  Iowa,  669] 

^ ^jo^  Ladd,  J.^  Plaintiif  sought  to  recover  profits  he  would  have  made 
^Mn  an  exchange  of  real  estate  but  for  the  negligence  of  defendant  in 
»Jt  failing  to  promptly  transmit  a  telegram.  Verdict  w^as  directed  for 
^r'  defendant  on  two  grounds:  (1)  There  was  no  proof  of  damages;  and 
\y\  (2)  the  delay  in  transmitting  the  message  did  not  occasion  the  loss. 
^,  Plaintiff  resided  at  Anthon,  Iowa,  and  was  engaged  in  the  business 
'  of  ''buying  and  selling  lands  and  exchanging  real  property."     He 

had  been  negotiating  for  some  time  to  exchange  property  at  Shelby, 
this  state,  with  William  Sas  of  Dexter,  Iowa,  and,  in  the  evening 
of  November  11,  1904,  received  a  letter,  written  and  mailed  b}^  Sas 
two  days  previous,  making  the  following  proposition :  "I  will  put 
in  my  store  property  here  with  the  extra  piece  of  ground  back  of  it 
just  as  I  showed  you  last  spring  and  $6500  in  cash,  any  encumbrance 
now  on  property  to  be  deducted  from  above  amt.  and  assumed  by 
me.  If  above  is  satisfactory  please  make  out  your  contract  and 
send  down.  I  will  make  a  $1500  deposit  until  the  papers  can  be 
made  out  and  abstract  brought  down,  if  I  get  the  building  I  expect 
I  can  make  a  better  deal  with  Jacobs.  My  man  here  takes  my  stock 
between  5th  and  10th  of  January.  I  will  have  to  know  at  once,  as 
I  have  another  deal  pending."  At  9.10  o'cl^fk  tho  n^vf;  jnorning  plaiii- 
tiff  liaiuhid  defendant's  agent  at  Anthon  tliis  telegram:  "November 
12,  Aritbon,  Iowa,  1904.  To  William  Sas,  Dexter,  Iowa.  Just  re- 
ceived letter.  Off(!r  accepted.  Send  contract  today.  S.  E.  Lucas." 
It  was  not  sent  until  4.41  o'clock,  p.m.  and  was  delivered  to  Sas  the 

'  A  r)ortion  of  the  opinion  is  omitted. 


L  '         t  *■<■■■■'  '  i .. 

I  I  -i.  ■] 

i  SECT.'Tl'^    LUCAS    V.    WESTERN   UNION   TELEGRAPH    CO.  113 

^  ^-  same  evening  at  three  minutes  after  6  o'clock.  The  latter  immedi- 
jL  <:>  ately  wrote  plaintiff  that  he  had  put  another  party  off  until  3.30 
C  ^  o'clock  P.M.  of  that  day,  and,  not  hearing  from  him,  had  negotiated 
^  ^n  exchange  with  another.  Evidence  was  offered  tending  to  support 
9  C'^the  statement. 

i  T^  The  proposition  of  an  exchange  w^as  made  to  plaintiff  by  letter. 
^(Vsoln  committing  it,  properly  addressed  to  the  mails  for  transmission,  the 
y^.-j  ^  post-office  became  the  agent  of  Sas  to  carry  the  offer,  he  taking  the 
j  3  ::  chances  of  delays  in  the  transmission.  Mactier's  Adm'rs.  v.  Frith, 
^  ^-6  Wend.  (N.  Y.)  103  (21  Am.  Dec.  262);  Adams  v.  Lindsell,  1  B. 
t  '^%k  Aid.  681;  Averill  v.  Hedge,  12  Conn.  424,  9  Cyc.  294.  Having 
y  '^Tsent  the  proposition  by  mail  he  impliedly  authorized  its  acceptance 
5^  ^^  through  the  same  agency.  Such  implication  arises  (1)  when  the 
^  Si  post  is  used  to  make  the  offer  and  no  other  mode  is  suggested,  and 
Xi"^      (2)  when  the  circumstances  are  such  that  it  must  have  been  within 

v\  the  contemplation  of  the  parties  that  the  post  would  be  used  in  C^f***""*^ 
**^  <|  making  the  answer.  Tuttle  v.  Iowa  State  Traveling  Men's  xisso-''''^.^  r^ 
jfj  ciation,  132  Iowa,*^.^The  contract  is  complete  in  such  a  case  when  ijjl^^"^ 
\  ^  the  letter  containing  the  acceptance  is  properly  addressed  and  de-/  -  ^^,^^4- 
\  "X.   posited  in  the  United   States  mails.     Trevor  v.   Wood,   36   N.   Y. 

307  (93  Am.  Dec.  511)  and  note;  Brewer  v.  Horst-Lachmund  Co., 

127   Cal.   643    (50  L.  K.   A.   240)    and  extended   note;   Dunlop   v. 

Higgins,  1  H.  L.  C.  381;  Household  Ins.  Co.  v.  Grant,  41  L.  T. 

JSr.  S.  298,  9  Cyc.  295.    This  is  on  the  ground  that  the  offerer  by  de- 

.^    positing  this  letter  in  the  post-office,  selects  a  common  agency  through 

^^^    which  to  conduct  the  negotiations,  and  the  delivery  of  the  letter  to 

'^^     it  is  in  effect  a  delivery  to  the  offerer.     Thereafter  the  acceptor  has 

no  right  to  the  letter  and  cannot  withdraw  it  from  the  mails.     Even  //  t^r**^ 


> 


fj    if  he  should  succeed  in  doing  so  the  withdrawal  will  not  invalidate  1 1  /»****** 

'^   V     the  contract  previously  entered  into.  tftfu^c  " 

^V         But  plaintiff  did  not  adopt  this  course.    On  the  contrary  he  chose 

*     X   to  indicate  his   acceptance   by   transmitting   a   telegram   to   Sas   by 

f  "^    the  defendant  company.     Sas  had  done  nothing  to  indicate  his  will- 

s  05    lingness  to  adopt  such  agency  and  the  defendant  in  undertaking  to 

-    transmit  the  message  was  acting  solely  as  the  agent  of  the  plaintiff. 

J  «^  The  latter  might  have  withdrawn  the  message  or  stopped  its  de- 

^     livery  at  any  time  before  it  actually  reached   Sas.     It  is  maifest 

;N     that  handing  the  message  to  his  own  agent  was  not  notice  to  the 

i  sendee  ot  tiie  telegram.     The  most  formal  declaration  of  an  inten-  -^ 

tion  of  acceptance  ot  an  offer  to  a  third  person  will  not  constitute 

a  contract.     A  written  letter  or  telegram,  like  an  oral  acceptance,     \C- 

must  be  communicate:d  to  the  party  who  has  made  the  offer  or  to 

some  one  expressly  or  impliedly  authorized  to  receive  iL  and  this 

rule  IS  not  complied  with  by  delivering  it  to  the  writer's  own  agent 

or  messenger  even  with  direction  to  deliver  to  the  offerer.     Hebbs' 

Case,  L.  E.  4  Eq.  9.     In  that  case  Hebbs  wrote  asking  that  certain 

shares  in  a  newly  formed  company  might  be  allotted  to  him.     The 

'    /       ":'  -  rr. 


114  LUCAS    V.    WESTERN   UNION   TELEGRAPH    CO.     [CHAP.   I 

directors  instructed  their  agent  through  the  mail  that  such  an  al- 
lotment should  be  made  and  the  shares  were  registered  as  Hebbs'. 
It  was  held  that  this  did  not  complete  the  contract  or  render  it  ob- 
ligatory on  him  to  take  and  pay  for  the  shares.  Lord  llomilly,  in 
the  course  of  the  opinion  said :  "If  A  writes  to  B  a  letter  offering 
to  buy  land  of  B  for  a  certain  sum  of  money,  and  B  accepts  the 
offer  and  sends  his  servant  with  a  letter  containing  his  acceptance, 
I  apprehend  that,  until  A  receives  the  letter,  A  may  withdraw  his 
offer,  and  B  may  stop  his  servant  on  the  road  and  alter  the  terms 
of  his  acceptance  or  withdraw  it  altogether;  he  is  not  bound  by 
communicating  the  acceptance  to  his  own  agent."  Dunlop  v.  Hig- 
^gins,  supra,  decides  that  the  posting  of  a  letter  accepting  an  offer 
constitutes  a  binding  contract,  but  the  reason  for  that  is  that  the 
post-office  is  the  common  agent  of  both  parties. 

The  party  miaking  the  offer  may  be  entirely  satisfied  to  trust  the 
mails,  and  not  be  willing  to  chance  the  use  of  the  telegraph.  The 
principle  is  lucidly  stated  so  as  to  make  the  company  his  agent  in 
the  somewhat  recent  work  of  Hare  on  Contracts,  363. 

It  is  very  evident  on  authority  and  principle  that,  in  the  absence 
of  any  suggestion,  one  transmitting  an  offer  by  mail  cannot  be  bound 
by  an  acceptance  returned  in  some  other  way  until  it  is  received  or 
he  has  notice  thereof. 

The  plaintiff,  then,  did  not  accept  the  offer  of  Sas  until  the  tele- 
gram was  received  by  the  latter,  a  few  minutes  after  6  o'clock  p.m. 
of  the  day  after  the  letter  had  been  received  and  the  question  arises 
whether  this  was  "at  once"  within  the  meaning  of  the  offer  which 
stated  that  another  deal  was  pending.  Like  "forthwith"  and  "im- 
mediately," "at  once"  does  not  mean  instantaneously  but  requires 
action  to  be  taken  within  a  reasonable  time,  or,  as  said  in  Warder, 
Bushnell  &  Glessner  Co.  v.  Home,  110  Iowa,  283,  it  is  synonymous 
with  the  words  mentioned  and  "as  soon  as  possible,"  and  is  "usually 
construed  to  mean  within  such  reasonable  time  as  shall  be  required 
under  all  the  circumstances  for  doing  the  particular  thing."  It  is 
doubtful  whether  the  same  vigilance  should  be  extracted  in  the  ac- 
ceptance of  an  offer  to  exchange  or  purchase  real  estate  as  in  trans- 
actions relating  to  the  transfer  of  chattel  property.  See  Kempner 
V.  Cohn,  47  Ark.  519  (1  S.  W.  869,  58  Am.  Eep.  775).  The  cir- 
cumstances of  each  case  necessarily  have  an  important  bearing. 
There  was  no  evidence  of  the  time  a  letter,  if  promptly  mailed, 
might  have  reached  Sas.  He  had  indicated  in  his  letter  that  he 
was  contemplating  another  deal,  and  we  think  ordinary  minds  fairly 
differ  as  to  whether,  in  these  circumstances,  an  acceptance  twenty- 
tliree  or  twenty-four  hours  after  the  hotter  had  been  received  was 
in  time  to  bii)d  the  party  making  the  offer,  and  the  issue  was  for 
tlic  jury  to  dctcrniino.  There  are  numerous  decisions  determining 
that  th(!  time  witliin  which  an  acceptance  has  been  made  is  reasonable 
or  unreasonable,  but  few  passing  upon  the  question  as  to  whether 


SECT.    l]        POSTAL   TELEGRAPH-CABLE    CO.    V.    WILLIS  115 

the  circumstances  were  such  as  to  carry  that  issue  to  the  jury.  Each 
case  necessarily  depends  upon  its  particular  facts,  and  for  this  reason 
authorities  are  of  slight  aid  in  determining  the  question. 

If,  because  of  unreasonable  delay  in  the  acceptance,  the  contract 
was  not  completed,  then  it  was  also  for  the  jury  to  say  whether  the 
defendant  was  negligent  in  transmitting  the  message,  and,  owing 
to  this,  plaintiff  lost  the  benefit  of  entering  into  the  contract.  It 
follows  that  the  court  erred  in  directing  a  verdict  for  the  defendant. 

Reversed. 


POSTAL  TELEGKAPH-CABLE  COMPANY  v.  FLOYD  WILLIS 

Mississippi  Supreme  Court,  October  1908 
[Reported  in  93  Mississippi  540] 

Mayes,  J.,  delivered  the  opinion  of  the  court. 

Floyd  Willis  was  engaged  in  buying  and  selling  cotton  in  the 
city  of  Jackson,  Miss.  On  the  5th  day  of  December,  1906,  he  sent 
a  telegram  to  Knight,  Yancey  &  Co.,  of  Mobile,  Ala.,  submitting 
to  them  an  offer  to  sell  certain  cotton  which  he  then  owned.  The 
message  was  duly  transmitted  by  the  telegraph  company  to  Mobile 
and  duly  delivered.  On  receipt  of  the  telegram  Knight,  Yancey 
&  Co.  wired  Willis,  accepting  the  offer.  This  message  of  acceptance 
by  them  was  duly  delivered  to  the  telegraph  company  at  Mobile,  and 
by  it  sent  to  Willis,  at  Jackson,  and  received  at  the  Jackson  office 
at  1.05  P.M.  At  2  o'clock  of  the  same  day  this  message  of  acceptance 
had  not  been  delivered  to  Willis  although  his  office  was  within  a 
short  distance  of  the  telegraph  office.  About  2  o'clock,  and  while 
this  message  lay  undelivered  in  the  Jackson  office.  Morrow,  agent 
and  manager  of  the  firm  of  Knight,  Yancey  &  Co.,  of  Mobile,  called 
Willis  over  the  phone,  and  according  to  Mr.  Willis's  own  statement 
asked  him  (Willis)  if  he  had  received  the  acceptance  of  his  offer; 
that  is,  the  acceptance  he  sent  by  telegraph,  Willis  replied  to  him 
over  the  phone  that  he  had  not.  Whereupon  Morrow  said  he  was 
very  glad  of  it,  and  would  then  withdraw  his  acceptance,  to  which^ 
-^Willis  assented.  Willis,  up  to  this  time,  had  not  received  the  tele- 
'  gram  of  acceptance  from  the  telegraph  office,  and  went  immediately 
to  the  telegraph  office,  called  for  the  telegram,  and  the  same  was 
delivered  to  him.  The  same  cotton  was  subsequently  sold  about 
10  o'clock  at  night  to  the  same  parties,  at  a  loss  of  some  $218  to 
Willis,  land  the  object  of  this  suit  is  to  hold  the  telegraph  company 
liable  for  the  loss  thus  sustained  by  Willis.  There  was  a  verdict 
in  the  court  below  in  favor  of  the  plaintiff,  from  a  judgment  on 
which  the  telegraph  company  appeals. 

It  is  settled  law  and  seems  to  be  conceded  on  both  sides,  that  under 
ordinary  circumstances  the  acceptance  of  Willis'  offer  was  complete 


116  POSTAL   TELEGRAPH-CABLE    CO.    V.    WILLIS       [CHAP.    I 

when  the  telegram  of  acceptance  of  the  proposition  made  was  de- 
livered by  Knight,  Yancey  &  Co.  to  the  telegraph  company  in  Mo- 
bile, and  that  the  agreement  then  and  there  became  a  binding 
contract  according  to  the  express  terms  contained  in  the  telegram 
from  "Willis.  The  main  contention  of  appellees  is  that,  while  this 
is  ordinarily  true,  yet  in  this  particular  instance  the  contract  was 
not  a  binding  contract,  for  the  reason  that,  according  to  the  custom 
prevailing  among  men  engaged  in  the  cotton  business,  the  accept- 
ance ot  the  otter  did  not  become  binding  until  the  actual  delivery 
of  the  telegram  by  the  telegraph  company  into  the  hands  of  Willis.^ 
it  IS  claimed  on  the  part  of  appellee  that  this  is  a  general  custom  or 
usage  prevailing  among  those  engaged  in  the  cotton  trade,  recognized 
and  acted  under  by  them,  and  for  this  reason  there  was  no  contract 
until  actual  delivery  to  Willis,  and,  because  there  was  no  contract, 
the  loss  to  the  plaintiff  was  occasioned  directly  by  the  negligence  of 
the  telegraph  company  in  failing  to  properly  deliver  the  message. 
On  the  other  hand,  it  is  claimed  by  the  telegraph  company  that  there 
was  a  binding  contract  at  the  time  when  this  telegram  was  delivered 
in  Mobile,  and  that  any  action  taken  by  Mr.  Willis  occasioning  loss 
to  him  was  caused  by  his  own  act  in  releasing  Knight,  Yancey  &  Co. 
from  a  valid  contract ;  that  they  cannot  be  held  responsible  for  it,  be- 
cause no  loss  occurred  by  reason  of  their  negligence.  According  to 
Willis'  own  testimony,  he  was  advised  of  the  fact  that  there  had  been 
a  telegram  of  acceptance  before  the  order  was  cancelled  over  the 
telephone. 

The  contract  made  by  the  parties  by  virtue  of  these  telegrams  is 
clear,  unambiguous,  and  valid,  unless  the  so-called  usage  or  custom 
can  be  invoked  to  relieve  the  parties  from  the  legal  effect  of  their 
acts.  There  is  no  such  uncertainty  about  this  contract  as  makes 
it  necessary,  because  of  indeterminate  terms,  to  resort  to  custom  or 
usage  in  order  to  understand  exactly  what  was  meant;  but  the  con- 
tract is  express  in  its  terms,  unambiguous,  and  became  binding  on 
the  parties  when  the  telegram  of  acceptance  was  delivered  to  the 
telegraph  company  in  Mobile.  It  would  be  in  the  highest  degree 
impolitic,  and  be  the  cause  of  introducing  interminable  confusion 
into  contracts,  if,  when  the  terms  of  a  contract  are  express,  clear, 
and  valid  under  the  law,  its  legal  cifect  could  be  controlled  by  some 
local  or  trade  custom.  Our  court  has  long  since  been  committed  to 
this  wise  doctrine.  Shackleford  /;.  N.  O.,  J.  &  Great  Northern  Ey., 
37  Miss.  202.  In  the  case  of  Hopper  v.  Sage,  112  N.  Y.  530,  20 
N".  E.  350,  8  Am.  Lt.  Rep.  771,  citing  many  authorities,  the  court 
says :  "Usage  and  custom  cannot  be  proved  to  contravene  a  rule  of  law, 
or  to  alter  or  contradict  the  express  or  implied  terms  of  a  contract 
free  from  ambiguity,  or  to  make  the  legal  rights  or  liabilities  of  the 
parties  to  a  contract  other  than  they  arc  by  the  terms  thereof.  When 
the  terms  of  a  contract  are  clear,  unambiguous,  and  valid,  they  must 
prevail,  and  no  evidence  of  custom  can  be  permitted  to  change  them." 


SECT.    l]  LEWIS    V.    BROWNING  117 

In  the  case  of  Shackleford  v.  jSTew  Orleans,  Jackson  &  Great 
ISTorthern  Railroad  Company,  37  Miss.  202,  the  court  has  said: 
"These  usages,  many  judges  are  of  the  opinion,  should  be  sparingly 
adopted  by  the  courts  as  rules  of  law,  as  they  are  often  founded 
on  mere  mistake,  or  on  the  want  of  enlarged  and  comprehensive 
views  of  the  full  bearings  of  principles.  Their  true  office  is  to  in- 
terpret the  otherwise  indeterminate  intentions  of  parties,  and  to  ascer- 
tain the  nature  and  extent  of  the  contracts^  arising,  not  frnm  express 
stipulations^  but  from  mere  implications  and  presumptions  and  ants 
of  a  doubtful  and  equivocal  character,  and  to  fix  and  explain  tbft 
meaning  of  words  and  expressions  of  doubtful  or  various  senses.  On 
this  principle  the  usage  or  habit  of  trade,  or  conduct  of  an  indi- 
vidual, which  is  known  to  the  person  who  deals  with  him,  may  be 
given  in  evidence  to  prove  what  was  the  contract  between  them." 
2  Greenleaf's  Ev.  §  251  and  note  5.  And  the  court  further  says 
that,  where  a  custom  or  usage  is  resorted  to,  such  customs  must  be 
certain,  uniform,  reasonable,  and  not  contrary  to  law.  To  the  same 
effect  is  2  Page  on  Contracts,  p.  928 :  "The  true  and  appropriate 
office  of  a  usage  or  custom  is  to  interpret  the  otherwise  indeterminate 
intention  of  parties,  and  to  ascertain  the  nature  and  extent  of  their 
contracts,  arising,  not  from  express  stipulations,  but  from  mere  im- 
plications, assumptions,  and  acts  of  a  doubtful  or  equivocal  char- 
acter." 

Where  the  contract  is  definite  and  certain,  the  obligations  of  a 
party,  by  reason  of  the  contract,  become  fixed  by  law  by  the  terms 
of  the  contract  which  they  have  entered  into,  and,  where  there  is 
nothing  uncertain  left  in  the  contract,  usage  or  custom  has  no  place. 
There  are  many  instances  in  which  a  contract  may  be  explained 
and  controlled  by  a  custom  prevailing  among  men  engaged  in  a 
certain  line  of  business,  but  this  is  not  one  of  them.  We  think  the 
court  below  erred  in  refusing  to  exclude  all  evidence  in  reference 
to  the  damages  arising  out  of  the  failure  of  appellant  to  deliver  the 
telegram. 

Tor  this  reason  the  case  is  reversed  and  remanded. 

Reversed. 


HELEN  C.  LEWIS  v.  MxiTTHEW  P.  BROWITING 

Supreme  Judicial  Court  of  Massachusetts,  l^ovember  11,  1880- 

January  6,  1881 

[Reported  in  130  Massachusetts,  173] 

Contract  for  breach  of  the  covenants  of  a  written  lease  of  a 
tenement  in  Boston.  Trial  in  the  Superior  Court,  without  a  jury, 
before  Rockwell,  J.,  who  allowed  a  bill  of  exceptions  in  substance  as 
follows : 


118  LEWIS    V.    BROWNING  [CHAP.   I 

The  defendant  admitted  that  there  had  been  a  breach  of  the  con- 
ditions of  the  lease,  and  agreed  that  judgment  might  be  entered  for 
the  plaintiff  in  the  sum  $2,168.22,  unless  the  facts  herein  stated  con- 
stituted a  defence  to  this  action. 

The  judge  found  that  the  defendant,  who  was  a  resident  of  New 
York  in  the  year  1868,  was,  during  the  summer  of  that  year,  tem- 
porarily residing  and  practising  his  profession  as  a  physician  at 
Gape  May,  in  the  State  of  jSTew  Jersey,  and  that  the  plaintiff  and  her 
husband,  Dr.  Dio  Lewis,  residents  of  Boston  at  that  time,  were 
temporarily  residing  at  Oakland,  in  the  state  of  California;  that, 
on  June  10,  1878,  Lewis,  who  was  and  still  is  the  authorized  agent 
of  his  wife,  the  plaintiff,  wrote  the  defendant  a  letter,  which  was 
received  by  him,  in  which  he  requested  the  defendant  to  make  him 
an  offer  for  a  new  lease  of  said  premises.  The  defendant  replied, 
making  such  offer,  by  letter  dated  June  22,  1878.  In  this  letter 
the  defendant  gave,  as  a  reason  for  desiring  to  make  the  new  con- 
tract, his  anxiety  to  be  released  from  all  claim  by  the  plaintiff. 

On  July  8,  1878,  Lewis  wrote  the  defendant  a  letter,  which  he 
received  on  July  17,  1878,  at  Cape  May,  in  which  Lewis  accepted 
the  defendant's  offer  with  slight  modifications,  and  w^hich  contained 
the  following:  ''If  you  agree  to  this  plan,  and  will  telegraph  me 
on  receipt  of  this,  I  will  forward  power  of  attorney  to  Mr.  Ware. 
Telegraph  me  'yes,'  or  'no.'  If  'no,'  I  will  go  on  at  once  to  Boston 
with  my  wife,  and  between  us  we  will  try  to  recover  our  lost  ground. 
If  I  do  not  hear  from  you  by  the  18th  or  20th,  I  shall  conclude  'no.'  " 

The  defendant,  on  said  July  17,  went  to  the  telegraph  office  of 
the  Western  Union  Telegraph  Company  in  Cape  May,  wrote  a  tele- 
graphic despatch  directed  to  Dio  Lewis,  Oakland,  Cal.,  delivered  it 
to  the  telegraphic  agent  and  operator  of  said  company,  and  paid 
the  full  price  for  its  transmission  to  Oakland,  and  gave  directions 
to  have  it  forwarded  at  once.  The  defendant  did  not  keep  a  copy 
of  the  telegram.  He  gave  notice  to  the  plaintiff  to  produce  the 
telegram,  and  testified  that  he  had  exhausted  all  the  means  in  his 
power  in  Boston,  New  York,  and  New  Jersey  in  his  endeavors  to 
produce  the  telegram;  that  he  had  been  to  the  Cape  May  office  of 
the  company,  and  had  learned  that  the  operator  to  whom  he  gave 
his  dispatch  was  not  in  charge  of  that  office;  that  he  had  made 
diligent  search  for  him  without  being  able  to  learn  his  whereabouts; 
and  that  in  this  search  he  had  had  the  aid  of  the  superintendent 
and  other  officers  of  the  company  in  Boston.  He  also  offered  to 
prove,  by  an  officer  of  the  company  in  Boston,  that  both  by  rule 
and  custom  of  the  company,  so  far  as  he  knew  the  custom,  the  de- 
spatches received  and  sent  from  all  the  offices  of  the  company  were 
destroyed  after  they  had  been  in  the  possession  of  the  company  six 
months.  If,  under  these  circumstances,  it  was  competent  to  prove 
the  contents  of  said  despatch  by  oral  testimony,  the  judge  found 
that  the  word  telegraphed  was  "yes." 


SECT.    l]  LEWIS    V.    BROWNING  119 

The  judge  also  found  that  Lewis  never  received  said  telegram; 
that  the  new  lease  to  be  made,  as  stipulated  in  the  letters  of  Lewis 
and  the  defendant,  was  to  be  like  the  former  lease  in  form,  with  the 
various  modifications  and  changes  contained  in  said  letters,  and  was 
to  be  delivered  in  Boston,  and  the  consideration  then  paid;  and  that 
the  Mr.  Ware  mentioned  in  Lewis's  letter  was  the  plaintiff's  at- 
torney, residing  in  Boston. 

The  defendant  contended  that  a  contract  was  completed  by  said 
letters  and  telegram  on  July  17,  under  the  law  of  the  State  of  New 
Jersey;  and  that  this  case  was  controlled  by  the  law  of  New  Jersey. 
The  judge  found  that  the  law  of  New  Jersey  is  as  stated  in  Hallock 
V.  Commercial  Ins.  Co.,  2  Dutcher,  268;  ruled,  as  matter  of  law, 
that  the  facts  as  above  set  forth  did  not  show  a  new  contract,  and 
constituted  no  defence  to  this  action;  and  found  for  the  plaintiff 
in  the  sum  agreed  upon.     The  defendant  alleged  exceptions. 

0.  T.  Gray,  for  the  defendant. 

D.  E.  Ware,  for  the  plaintiff,  was  not  called  upon. 

Gray,  C.  J.  In  M'Culloch  v.  Eagle  Ins  Co.,  1  Pick.  278,  this 
court  held  that  a  contract  made  by  mutual  letters  was  not  complete 
until  the  letter  accepting  the  offer  had  been  received  by  the  person 
making  the  offer;  and  the  correctness  of  that  decision  is  maintained, 
upon  an  able  and  elaborate  discussion  of  reasons  and  authorities, 
in  Langdell  on  Contracts  (2d  ed.),  989-996.  In  England,  New 
York,  and  New  Jersey,  and  in  the  Supreme  Court  of  the  United 
States,  the  opposite  view  has  prevailed,  and  the  contract  has  been 
deemed  to  be  completed  as  soon  as  the  letter  of  acceptance  has  been 
put  into  the  post-office  duly  addressed.  Adams  v.  Lindsell,  1  B.  & 
Aid.  681;  Dunlop  v.  Higgins,  1  H.  L.  Cas.  381,  398-400;  Newcomb 
V.  De  Eoos,  2  E.  &  E.  271;  Harris's  case,  L.  E.  7  Ch.  587;  Lord 
Blackburn  in  Brogden  v.  Metropolitan  Railway,  2  App.  Cas.  666, 
691,  692;  Household  Ins.  Co.  v.  Grant,  4  Ex.  D.  216;  Lindley,  J., 
in  Byrne  v.  Van  Tienhoven,  5  C.  P.  D.  344,  348;  2  Kent  Com. 
477,  note  c;  Mactier  v.  Frith,  6  Wend.  103;  Vassar  v.  Camp,  1 
Kernan,  441;  Trevor  v.  Wood,  36  N.  Y.  307;  Hallock  v.  Commer- 
cial Ins.  Co.,  2  Dutcher,  268,  and  3  Dutcher,  645;  Tayloe  v.  Mer- 
chants' Ins.  Co.,  9  How.  390. 

But  this  case  does  not  require  a  consideration  of  the  general  ques- 
tion; for,  in  any  view,  the  person  making  the  offer  may  always,  if 
he  chooses,  make  the  formation  of  the  contract  which  he  proposes 
dependent  upon  the  actual  communication  to  himself  of  the  accep- 
tance. Thesiger,  L.  J.,  in  Household  Ins.  Co.  v.  Grant,  4  Ex.  D. 
223;  Pollock  on  Cont.  (2d  ed.)  17;  Leake  on  Cont.  39,  note.  And 
in  the  case  at  bar,  the  letter  written  in  the  plaintiff's  behalf  by  her 
husband  as  her  agent  on  July  8,  1878,  in  California,  and  addressed 
to  the  defendant  at  Boston,  appears  to  us  clearly  to  manifest  such 
an  intention.  After  proposing  the  terms  of  an  agreement  for  a 
new  lease,  he  says :  "If  you  agree  to  this  plan,  and  will  telegraph 


120  TINN    V.    HOFFMAN   AND    COMPANY  [CHAP.   I 

me  on  receipt  of  this,  I  will  forward  power  of  attorney  to  Mr, 
Ware,"  the  plaintiff's  attorney  in  Boston.  "Telegraph  me  'yes'  or 
'no.'  If  'no/  I  will  go  at  once  to  Boston  with  my  wife,  and  between 
us  we  will  try  to  recover  our  lost  ground.  If  I  do  not  hear  from 
you  by  the  18th  or  20th,  I  shall  conclude  'no.'  "  Taking  the  whole 
letter  together,  the  offer  is  made  dependent  upon  an  actual  communi- 
cation to  the  plaintiff  of  the  defendant's  acceptance  on  or  before  the 
20th  of  July,  and  does  not  discharge  the  old  lease,  nor  bind  the  plain- 
tiff to  execute  a  new  one,  unless  the  acceptance  reaches  California 
within  that  time.  Assuming,  therefore,  that  the  defendant's  delivery 
of  a  despatch  at  the  telegraph  office  had  the  same  effect  as  the  mail- 
ing of  a  letter,  he  has  no  ground  of  exception. 

Exceptions  overruled.^ 


TINN  V.  HOFFMAN  AND  COMPANY 
In  the  Exchequer  Chamber,  May  14,  15,  1873 
[Reported  in  29  Law  Times  (New  Series),  271] 

This  was  an  action  brought  by  the  plaintiff  against  the  defendants 
to  recover  damages  in  respect  of  a  breach  of  contract  to  deliver  800 
tons  of  iron;  and  by  the  consent  of  the  parties,  and  by  order  of 
Martin,  B.,  dated  30th  May,  1872,  the  facts  were  stated  for  the 
opinion  of  the  Court  of  Exchequer  in  the  following 

Special  Case 

1.  The  plaintiff,  Mr.  Joseph  Tinn,  is  an  iron  manufacturer,  car- 
rying on  business  at  the  Ashton  Row  Rolling  Mills,  near  Bristol; 
and  the  defendant,  who  trades  under  the  name  and  style  of  Hoffman 
and  Co.,  is  an  iron  merchant,  carrying  on  business  at  Middlesbro'- 
on-Tees. 

2.  In  the  months  of  November  and  December,  1871,  the  following 
correspondence  passed  between  the  plaintiff  and  the  defendant  re- 
lating to  the  proposed  purchase  and  sale  of  certain  iron,  the  par- 
ticulars of  which  fully  appear  in  the  letters  hereinafter  set  forth. 

The  plaintiff  to  the  defendant :  — 

Nov.  22,  1871. 
Messrs.  Hoffman  and  Co.: 

Dear  Sirs,  —  Please  quote  your  lowest  price  for  800  tons  No.  4 
Cleveland,  or  other  equally  good  brand,  delivered  at  Portishead  at 
the  rate  of  200  tons  per  month,  March,  April,  May,  and  June,  1872. 
Payment  by  four  months'  acceptance. 

Yours  truly,  J.  Tinn. 

'  Household  Ins.  Co.  v.  Or.int,  4  Ex.  D.  210,  223,  238;  Pennsylvania  &c.  Ins.  Co. 
V.  Mc-yor,  120  Fed.  3r)2,  3.'')4;  Haas  v.  Myers,  111  111.  421,  423;  McCone  v.  Eccles,  42 
Nov.  451;   Vaasar  ».  Camp,  11  N.  Y.  441,  ace 


SECT.    l]  TINN    V.    HOFFMAN    AND    COMPANY  121 

3.  The  defendant's  reply :  — 

Koyal  Exchange  Buildings,  Middlesbro'-on-Tees, 

24th  Nov.  1871. 
Joseph  Tinn,  Esq.,  Bristol: 

Dear  Sir,  —  We  are  obliged  by  your  inquiry  of  the  22d  inst.,  and 
by  the  present  beg  to  offer  you  800  tons  No.  4  forge  Middlesbro' 
pig  iron  (brand  at  our  option,  Cleveland  if  possible)  at  69s.  per 
ton  delivered  at  Portishead,  delivery  200  tons  per  month,  March, 
April,  May,  and  June,  1872,  payment  by  your  four  months'  accept- 
ance from  date  of  arrival. 

We  shall  be  very  glad  if  this  low  offer  would  induce  you  to  favor 
us  with  your  order,  and  waiting  your  reply  by  return,  we  remain, 
dear  Sir, 

Yours  truly,  A.  Hoffman  and  Co. 

4.  The  plaintiff  to  the  defendant:  — 

Bristol,  27th  Nov.,  1871. 
Messrs.  Hoffman  and  Co.: 

Dear  Sirs,  —  The  price  you  ask  is  high.  If  I  made  the  quantity 
1,200  tons,  delivery  200  tons  per  month  for  the  first  six  months  of 
next  year  I  suppose  you  would  make  the  price  lower?  Your  reply 
per  return  will  oblige,  J.  Tinn. 

5.  The  defendant  to  the  plaintiff,  in  reply :  — 

Eoyal  Exchange  Buildings,  Middlesbro'-on-Tees, 

28th  Nov.,  1871. 
Joseph  Tinn,  Esq.,  Bristol: 

Dear  Sir,  —  In  reply  to  your  favor  of  yesterday,  we  beg  to  state 
that  we  are  willing  to  make  you  an  offer  of  further  400  tons  No.  4 
forge  Middlesbro'  pig  iron,  200  tons  in  Jan.,  200  tons  in  Feb.,  at 
the  same  price  we  quoted  you  by  ours  of  the  24th  inst.,  though  the 
rate  of  freight  at  the  above-named  time  will  doubtless  be  consider- 
ably higher  than  that  of  the  following  months. 

Our  to-day's  market  was  very  firm  again,  and  we  feel  assured 
we  shall  see  a  further  rise  ere  long. 

Kindly  let  us  have  your  reply  of  post  as  to  whether  you  accept 
our  offers  of  together  1,200  tons  and  oblige  yours  truly, 

A.  Hoffman  and  Co. 

6.  The  plaintiff  to  the  defendants :  — 

Bristol,  28th  Nov.,  1871. 
Messrs.  Hoffman  and  Co.: 

No.  4  Pig  iron. 
Dear  Sirs,  —  You  can  enter  me  800  tons  on  the  terms  and  con- 
ditions named  in  your  favor  of  the  24th  inst.,  but  I  trust  you  will 
enter  the  other  400,  making  in  all  1,200  tons,  referred  to  in  my 
last,  at  68s.  per  ton. 

Yours  faithfully,  Joseph  Tinn. 


122  TINN    V.    HOFFMAN   AND   COMPANY  [CHAP.    I 

7.  The  defendant's  reply :  — 

Eoyal  Exchange  Buildings,  Middlesbro'-on-Tees, 

29th  Nov.,  1871. 
Joseph  Tinn,  Esq.: 

Dear  Sir,  —  We  are  obliged  by  your  favor  of  yesterday,  in  reply 
to  which  we  are  sorry  to  state  that  we  are  not  able  to  book  your 
esteemed  order  for  1,200  tons  No.  4  forge  at  a  lower  price  than 
that  offered  to  you  by  us  of  yesterday,  viz.,  69s.,  and  even  that  offer 
we  can  only  leave  you  on  hand  for  reply  by  to-morrow  before  twelve 
o'clock.     Waiting  your  reply,  we  remain,  dear  sir,  yours  truly, 

A.  Hoffman  and  Co. 

8.  On  the  1st  Dec,  1871,  the  plaintiff  sent  a  telegram  to  the  de- 
fendants, of  which  the  following  is  a  copy  — 

From  Tinn,  Ashton. 

To  Hoffman  and  Co.,  Middleshro'-on-T ees. 
Book  other  400  tons  pig  iron  for  me,  same  terms  and  conditions 
as  before. 

[Other  immaterial  correspondence  followed.] 

14.  It  is  agreed  that  all  the  facts  and  circumstances  mentioned 
in  the  above  correspondence  are  true,  and  that  the  court  are  to  have 
power  to  draw  all  inferences  of  facts  in  the  same  way  as  a  jury 
might  do. 

15.  The  course  of  post  between  Bristol  and  Middlesbrough  is  one 
day. 

The  questions  for  the  opinion  of  the  court  are,  first,  whether, 
upon  the  facts  stated  and  documents  set  out  in  the  case,  there  is  any 
binding  contract  on  the  part  of  the  defendants  to  deliver  800  tons 
of  iron  to  the  plaintiff;  secondly,  whether,  upon  the  facts  and  docu- 
ments set  out  in  the  case,  there  is  any  binding  contract  on  the  part 
of  the  defendants  to  deliver  any  quantity  of  iron  to  the  plaintiff, 
and  if  yea,  what  quantity,  and  on  what  terms  and  conditions. 

In  the  Court  of  Exchequer,  Br  am  well,  Channell,  and  Pigott,  BB., 
held  the  defendant  entitled  to  judgment;  Kelly,  C.  B.,  dissented. 

Kinr/dom,  Q.  C,  and  Arthur  Charles,  for  the  plaintiff. 

A.  L.  Smith  and  H.  Lloyd,  A.  C,  for  the  defendants. 

BrtKTT.  J.  The  question  is,  whether  upon  a  true  construction  of 
this  corrf'sporulr-iifo  there  is  a  binding  contract  between  the  plaintiff 
and  the  dfffiulants  for  the  SCO  tons  of  iron  at  69,s,  It  is  argued 
on  the  one  side  that  such  a  contract  is  disclosed  because,  it  is  said, 
that  the  defendants'  letter  of  the  24th  November  is  an  offer  for  the 
sale  of  800  tons  of  iron,  and  this  letter  of  the  28th  November  leaves 
open  tbe  time  for  accfpting  that  offfr  of  the  24th  November,  and 
makf'H  a  new  offer  with  regard  to  another  400  tons;  and  that  the 
defendants'  offer  of  the  24th  November  being  thus  opened  by  their 
Ifttor  of  the  28tb,  the  plaintifTs'  letter  of  the  28th  is  an  acceptance 


SECT.    l]  TINN    V.    HOFFMAN   AND    COMPANY  123 

of  the  defendants'  offer  of  the  24th.  On  the  other  side  it  is  argued 
that  the  defendants'  letter  of  the  28th  IsTovember  is  not  an  opening 
of  their  offer  of  the  24th,  but  that  it  is  an  offer  with  regard  to  1,200 
tons;  and  that  even  if  it  were  a  separate  offer  with  regard  to  800 
tons  and  400  tons,  still  that  the  true  view  of  the  matter  is  not  that 
it  reopens  the  letter  of  the  24th,  but  that  it  makes  a  new  offer  with 
regard  to  the  800  tons,  and  another  separate  offer  with  regard  to 
400  tons;  and  that,  upon  such  a  view,  the  renewed  offer  with  regard 
to  800  tons  is  not  accepted,  because  the  letter  of  the  plaintiff  of  the 
28th  November  was  not  in  answer  to  that  offer,  but  was  a  letter 
crossing  it.  ]^ow,  with  regard  to  the  construction  of  the  defendants' 
letter  of  the  28th  ISTovember,  it  seems  to  me  that  we  must  consider 
that  the  defendant's  letter  of  the  24th  November  is  in  answer  to 
a  request  of  the  plaintiff's  of  the  22d  November  for  an  offer  with 
regard  to  800  tons,  and  is  therefore  an  offer  by  them  with  regard 
to  800  tons.  That  offer  left  open  to  the  plaintiff  to  accept  it  within 
a  period  which  is  to  be  computed  by  the  return  of  post.  I  agree 
that  the  words  "Your  reply  by  return  of  post"  fixes  the  time  for 
acceptance,  and  not  the  manner  of  accepting.^  But  that  time  elapsed; 
there  was  no  acceptance  within  the  limited  time.  So  far  from  there 
being  an  aceptance,  it  seems  to  me  that  the  plaintiff's  letter  of  the 
27th  November  rejects  that  offer;  it  rejects  it  on  the  ground  that 
the  price  is  higher  than  the  plaintiff  is  willing  to  give.  The  offer 
is,  therefore,  not  accepted  within  the  limited  time,  but  is  rejected, 
and  it  seems  to  me  is  at  once  dead.  The  letter  of  the  27th  then 
asks  for  an  offer  with  respect  to  1,200  tons,  and  the  letter  of  the 
28th  November  is  a  letter  written  "In  reply  to  your  favor  of  yester- 
day," —  that  is.  In  reply  to  your  request  for  an  offer  with  regard 
to  1,200  tons,  —  "I  now  make  you  this  offer."  That  seems  to  show 
that  the  letter  of  the  28th  November  of  the  defendants  is  an  offer 
with  regard  to  1,200  tons,  and  not  with  regard  to  800  tons  and 
400  tons  separately.  The  way  in  which  the  offer  with  regard  to  the 
1,200  tons  is  made  is  this:  "With  regard  to  the  first  800  of  them,  I 
make  you  a  new  offer  upon  the  same  terms  as  I  made  in  the  former 
offer  on  the  24th.  With  regard  to  the  remaining  400  tons,  I  offer 
you  to  deliver  them  at  the  same  price,  but  at  different  periods  of 
delivery."  I  think  that  the  defendants'  letter  of  the  28th  November, 
being  a  letter  in  answer  to  a  request  with  regard  to  1,200  tons,  is  an 
offer  with  regard  to  1,200  tons,  and  that  no  such  offer  was  ever 
accepted;  but  even  if  it  could  be  taken  that  it  was  a  separate  offer 
with  regard  to  800  tons  and  400  tons,  I  cannot  accede  to  the  view 
that  it  reopened  the  offer  of  the  24th  November.  That  offer  was 
dead,  and  was  no  longer  binding  upon  the  defendants  at  all;  and 
therefore  it  seems  to  me  to  be  a  wrong  phrase  to  say  that  it  reopened 
the  offer  of  the  24th  November.     The  only  legal  way  of  construing 

1  As  to  the  effect  of  these  words,  see  Ortman  v.  Weaver,  11  Fed.  Rep.  358,  362; 
Maclay  v.  Harvey,  90  111.  525;  Bernard  v.  Torrance,  5  G.  &  J.  383;  Taylor  v.  Rennie, 
35  Barb.  272;  Howells  v.  Stroock,  50  N.  Y.  App.  Div.  344. 


124  mactier's  administrators  v.  frith       [chap.  I 

it  is  to  say  that  it  is  a  new  offer  with  regard  to  800  tons.  If  it 
were  a  separate  offer,  which  I  should  think  it  was  not,  it  then  would 
be  a  new  offer  with  regard  to  800  tons,  and  a  separate  offer  with 
regard  to  400  tons;  but,  even  if  it  were  so,  I  should  think  that  the 
new  offer  with  regard  to  the  800  tons  had  never  been  accepted,  so 
as  to  make  a  binding  contract.  The  new  offer  would  not,  in  my 
opinion,  be  accepted  by  the  fact  of  the  plaintiff's  letter  of  the  28th 
November  crossing  it.  If  the  defendants'  letter  of  the  28th  JSTo- 
vember  is  a  new  offer  of  the  800  tons,  that  could  not  be  accepted  by 
"the  plaintilt  until  it  came  to  his  knowledtjg.  and  his  letter  of  the 
28th  November  could  only  be  considered  as  a  cross  offer.  Put  it 
thus:  If  I  write  to  a  person  and  say,  "If  you  can  give  me  £6,000 
for  my  house,  I  will  sell  it  you,"  and  on  the  same  day,  and  before 
that  letter  reaches  him,  he  writes  to  me,  saying,  "If  you  will  sell 
me  your  house  for  £6,000  I  will  buy  it,"  that  would  be  two  offers 
crossing  each  other,  and  cross  offers  are  not  an  acceptance  of  each 
other;  therefore  there  will  be  no  offer  of  either  party  accepted  by 
the  other.  That  is  the  case  where  the  contract  is  to  be  made  by 
the  letters,  and  by  the  letters  only.  I  think  it  would  be  different  if 
there  were  already  a  contract  in  fact  made  in  words,  and  then  the 
parties  were  to  write  letters  to  each  other,  which  crossed  in  the  post ; 
those  might  make  a  very  good  memorandum  of  the  contract  already 
made,  unless  the  Statute  of  Frauds  intervened.  But  where  the  con- 
tract is  to  be  made  by  the  letters  themselves,  you  cannot  make  it 
by  cross  offers,  and  say  that  the  contract  was  made  by  one  party 
accepting  the  offer  which  was  made  to  him.  It  seems  to  me,  there- 
fore, in  both  views,  that  the  judgment  of  the  court  below  was  right. 
Judgment  of  the  majority  of  the  court  below  affirmed.^ 

^MACTIER'S  ADMINISTEATOES,  Appellants,  AND  TEITH, 
L  Eespondent 

/^  ,r  J^       New  York  Court  of  Errors,  December,  1830 

xf^\y  [Reported  in  6  Wendell,  103] 

Appeal  from  Chancery.     At  New  York,  in  the  autumn  of  1822, 


^. 


n/> 


the  respondent  and  Henry  Mactier,  the  intestate,  agreed  to  embark 

^      in  a  commercial  adventure,  in  which  they  were  to  be  jointly  and 

equally  interested.    Frith  was  to  direct  a  shipment  of  200  pipes  of 

brandy  from  France  to  New  York,  to  be  consigned  to  Mactier,  who 

was  to  ship  to  the  respondent  at  Jacmel,  in  St.  Domingo,  provisions 

^     to  the  amount  of  the  invoice  cost  of  the  brandy,  and  the  respondent 

>-     was  to  place  the  shippers  of  the  brandy  in  funds  by  shipments  of 

^        '  Blackbtjiin,  AncHiBALD  and  Keating,  JJ.,  dolivored  concurrinp;,  and  Honyman 
W  and  C^UAiN,  JJ.,  dissontinK,  opinions.     The  statement  of  facts  and  of  the  decision  in 
th<;  lower  court  has  been  ahhrevialed. 

^^J^  y"  a*j^k\  >i.  ^  '^*^  ^^  ^-^-  ^  ^  c/'*'^**^ 


SECT.    l]  MACTIER's   ADMINISTRATORS    V.    FRITH  125 

coffee  to  France,  in  French  vessels,  and  the  parties  were  to  share 
equally  in  the  result  of  the  speculation  all  around. 

In  pursuance  of  this  arrangement,  Frith,  on  the  5th  September, 
1822,  wrote  Firebrace,  Davidson,  &  Co.,  a  mercantile  house  at  Havre, 
to  ship  200  pipes  of  brandy  to  New  York  to  the  consignment  of 
Mactier,  On  the  24th  of  December,  Frith,  who  had  returned  to 
Jacmel,  where  he  did  business  as  a  merchant,  wrote  a  letter  to  Mactier 
on  a  variety  of  subjects,  in  which  was  contained  a  paragraph  in 
these  words :  "I  also  have  the  pleasure  of  handing  you  copies  of 
Messrs,  Firebrace,  Davidson,  &  Co.'s  letters  regarding  the  brandy 
order.  By-the-bye,  as  your  brother,  before  I  left  N^ew  York,  de- 
clined taking  the  interest  I  offered  him  in  this  speculation,  and 
wishing  to  confine  myself  in  business  as  much  as  possible,  so  as 
to  bring  my  concerns  to  a  certain  focus,  /  would  propose  to  you  to 
take  the  adventure  solely  to  your  own  account,  holding  the  value 
to  cover  the  transaction  to  my  account  in  l^Tew  York."  On  the 
17th  January,  1823,  Mactier  wrote  to  Frith,  acknowledging  the  re- 
ceipt of  his  letter  of  the  24th  ult. ;  thanks  him  for  sending  the  copy 
of  Firebrace,  Davidson,  &  Co.'s  letter  on  the  subject  of  the  brandy 
order;  says  that  he  has  received  a  letter  from  them,  informing  that 
the  brandy  would  be  shipped  and  leave  Bordeaux  about  the  1st  of 
December  then  past;  and  adds,  "This  has  been  from  the  first  a 
favorite  speculation  with  me,  and  am  pleased  to  say  it  still  promises 
a  favorable  result;  but  to  render  it  complete,  I  am  desirous  the 
speculation  should  go  forward  in  the  way  first  proposed,  thereby 
making  it  a  treble  operation.  As  you  have,  however,  expressed  a 
wish  that  I  should  take  the  adventure  to  my  own  account,  /  shall 
delay  coming  to  any  determination  till  I  again  hear  from  you.  The 
prospect  of  war  between  France  and  Spain  may  defeat  the  object 
of  this  speculation,  as  far  as  relates  to  the  shipment  of  provisions 
hence  to  Hayti,  to  be  invested  in  coffee  for  France,  in  which  case  I 
will  at  once  decide  to  tahe  the  adventure  to  my  own  account.  Our 
London  accounts,  down  to  the  5th  of  December,  speak  confidently 
of  a  war  between  France  and  Spain,  —  a  measure  which,  if  carried 
into  effect,  would  operate  to  your  disadvantage."  Also,  ''The  next 
arrival  from  Europe  will  probably  decide  the  question  of  peace  or 
war,  and  I  will  lose  no  time  in  communicating  the  same  to  you;" 
and  also,  "Let  what  will  happen,  I  trust  you  will  in  no  way  be  a 
sufferer."  On  the  7th  March,  1823,  Frith  wrote  Mactier,^  making 
no  other  allusion  to  the  last  letter  of  Mactier  than  the  following: 
"I  have  received  your  esteemed  favors  of  the  17th  and  31st  January, 
and  note  their  respective  contents."  On  the  twelfth  day  of  March, 
1823,  the  ship  La  Claire  arrived  at  'New  York,  laden  with  the  brandy 
in  question,  and  was  at  the  wharf  on  the  morning  of  the  13th  of 
March.  A  clerk  of  Mactier  testified  that  he  had  a  conversation  with 
Mactier  about  the  time  the  brandy  arrived,  perhaps  the  morning 
^  This  letter  was  received  on  the  7th  of  April.     1  Paige,  434,  442. 


126  mactier's  administrators  v.  frith       [chap.  I 

after,  and  Mactier  then  said  he  should  take  it  to  himself.  A  mer- 
chant of  New  York  also  testified  that  Mactier  consulted  with  him 
on  the  subject  of  some  brandy  which  he  expected  to  arrive;  there 
was  some  offer  for  his  taking  it  on  his  own  account,  and  he  ap- 
peared inclined  to  take  it.  From  the  state  of  things,  he  advised 
Mactier  to  take  it,  and  there  was  a  letter  drafted  by  Mactier  upon 
the  subject,  in  which  the  merchant  made  some  alterations.  The 
letter  stated  that  he,  Mactier,  should  take  the  brandy  to  his  own 
account.  On  the  17th  of  March,  Mactier  entered  the  brandy  at  the 
custom-house  as  owner,  and  not  as  consignee,  took  the  usual  oath, 
and  gave  a  bond  for  the  duties.  On  the  twenty-second  day  of  March, 
he  sold  150  pipes  of  the  brandy  on  the  wharf  to  several  commercial 
houses,  and  took  their  notes  for  the  price  of  the  same.  The  re- 
maining 50  pipes  were  put  in  the  public  store,  and  remained  there 
in  bond,  the  liquidated  duties  not  having  been  secured  to  be  paid 
by  Mactier.  On  the  twenty-fifth  day  of  March,  Mactier  wrote  a 
letter  directed  to  Frith  at  Jacmel,  in  which  he~said:  "I  have  now 
to  advise  the  arrival  of  French  ship  La  Claire  with  the  200  pipes  of 
brandy,  and  that  in  consequence  of  the  probability  of  war  between 
France  and  Spain,  and  in  compliance  with  the  wish  expressed  in 
your  regarded  favor  of  the  24th  December,  and  my  answer  thereto 
of  the  17th  January  last,  I  have  decided  to  tahe  this  adventure  to 
my  ov:n  account.  I  therefore  credit  you  with  the  amount  of  the 
invoice,"  amounting  to  $14,254.57.  To  this  letter  was  attached 
a  postscript,  dated  the  31st  of  March.  On  the  twenty-eighth  day 
of  March,  ±ritti  wrote  a  letter  to  Mactier,  dated  at  Jacmel,  in  which, 
speaking  of  the  brandy  in  question,  he  says:  "With  regard  to  this 
adventure,  I  would  wish  to  confirm,  if  altogether  satisfactory  to 
you,  what  I  mentioned  to  you  some  time  ago,  and  which  I  omitted 
to  repeat  to  you  in  my  previous  letter,  in  reply  to  yours  of  the  17th 
of  January.  I  find  the  more  one  does  in  this  country,  in  the  present 
state  of  trade,  the  more  one's  affairs  get  shackled."  Previous  to 
the  arrival  of  these  two  last  letters  at  their  respective  places  of 
direction,  Mactier  was  dead,  he  having  departed  this  life  on  the  10th 
of  April,  1S23.  On  the  21st  of  April,  Frith  again  wrote  a  letter 
addressed  to  Mactier,  in  which  he  acknowledges  the  receipt  of  his 
letter  of  the  25th  of  March,  says  he  has  noted  its  contents,  and 
requests  Mactier  to  charter  on  his  account  a  stanch,  first-class  vessel, 
and  send  out  to  Jacmel  by  her  400  barrels  of  flour,  150  barrels  of 
pork,  150  barrels  of  beef,  100  barrels  of  mackerel,  &c.,  &c.,  In  the 
moan  time,  however,  Mactier  having  died,  administration  of  his 
goods,  &c.,  was  granted  to  A.  N".  Lawrence  and  another,  who,  in 
May,  1823,  gave  the  requisite  bonds  to  secure  the  duties  on  the  50 
pipes  of  brandy  which  had  not  been  bonded  for  by  Mactier  in  his 
life-time,  except  by  the  general  bond  on  entering  the  goods  at  the 
custom-housf,  and  look  the  50  pipes  from  the  public  store  and  sold 
them  at  public  auction. 


SECT.    l]  MACTIER's   ADMINISTRATORS    V.    FRITH  127 

The  respondent,  unwilling  to  come  in  as  a  general  creditor  of 
Mactier  and  receive  a  pro  rata  distribution,  on  the  1st  of  April, 
1824,  filed  his  bill  in  the  Court  of  Chancery,  alleging  that  the  brandy 
was  shipped  from  France  on  his  sole  account,  and  that  Mactier  was 
only  the  consignee  thereof. 

By  the  answer  it  was  admitted  that  the  defendants  had  found 
among  the  papers  of  Henry  Mactier  two  invoices  of  the  200  pipes 
of  brandy,  similar  in  all  respects,  except  that  one  states  the  shipment 
to  have  been  made  "to  the  address  and  for  the  account  of  Henry 
Mactier,"  and  the  other  states  it  to  have  been  made  "for  the  account 
of  the  complainant  to  the  address  of  Henry  Mactier."     The  first  of 
the  invoices  was  used  upon  entering  the  brandy  at  the  custom-house. 
It  also  aj)peared  in  evidence  that  on  the  first  day  of  March,  1823 
Mactier  effected  an  insurance  on  commissions  arising  on  a  consign- 
ment from  Bordeaux  to  New  York,  to  the  amount  of  $1500.     In 
a  petty  cash-book  of  Mactier's  there  is  the  following  entry:  "1823, 
March  17,  John  A.  Frith's  sales  of  brandy,  paid  entry  at  custom- 
house, eighty  cents."     The  clerk  of  Mactier,  who  made  this  entry, 
testified  that  the  name  of  Frith,  prefixed  to  the  entry  in  the  petty 
cash  book,  does  not  necessarily  prove  that  the  brandy  was  Frith's, 
but  it  shows  that  he  at  that  time  supposed  the  brandy  to  be  Frith's; 
if  it  had  then  belonged  to  Mactier,  or  if  Mactier  had  decided  to  take 
it,  and  any  entry  in  the  books  had  been  made  showing  that  fact,  he 
would  have  entered  it,  "Sales  of  brandy  Dr.  for  entering,"  &c.     At 
the  time  of  making  the  entry,  he  considered  the  fact  of  ownership 
contingent.     Mactier  afterwards  directed  the  account  to  be  opened 
in  the  books,  charging  the  brandy  to  himself,  the  account  to  be  "Sales 
of  brandy,"     An  entry  was  made  in  the  daybook,   of  the  twenty- 
eighth  day  of  March,  crediting  Frith  with  the  invoice  amount  of 
the  brandy.      Entries,   he   said,   are   sometimes   made   several   days 
after  the  transaction;  then  the  entry  refers  back  to  the  true  date  of 
the  transaction,  mentioning  the  time.     The  entry  was  made  by  the 
thirty-first  day  of  March.     He  also  testified  that  the  letter  of  the 
13th  of  March,  mentioned  in  the  complainant's  bill,  was  copied  on 
the  night  of  that  day,  but  he  had  no  recollection  when  it  left  the 
office;  it  possibly  might  not  have  gone  until  the  La,  Claire  arrived. 
Chancellor  Walworth  on  exceptions  to  a  master's  report  decreed 
that  the  master  should  report  the  amount  due  the  complainant,  on 
the  principle  that  he,  as  survivor,  is  entitled  to  the  net  proceeds  of 
the  adventure  of  brandy,  so  far  as  they  can  be  traced  and  identified, 
and  has  a  specific  lien  on  the  net  proceeds  of  the  50  pipes  of  brandy 
sold  by  the  administrators,  and  on  the  proceeds  of  the  notes  given 
for  the  150  pipes  which  remained  uncollected  or  not  passed  away 
at  the  time  of  Mactier's  death,  or  on  so  much  as  is  necessary  to 
satisfy    the   balance   due    complainant    for   payment    and    disburse- 
ments on  account  of  that  adventure,  after  deducting  from  those  pro- 
ceeds the  balance  of  the  amount  paid  for  duties  and  expenses,  if  any, 


128  mactier's  administrators  v.  frith        [chap.  I 

over  and  above  the  amount  of  proceeds  of  the  shipment  of  brandy 
which  were  received  by  Mactier  in  his  lifetime.  From  this  decree 
the  defendants  appealed.  For  the  reasons  of  the  Chancellor  for  the 
decree  pronounced  by  him,  see  1  Paige,  434.  The  cause  was  argued 
here  by 

S.  Boyd  and  S.  A.  Talcott,  for  the  appellants. 

S.  Stevens  and  G.  Griffin,  for  the  respondent. 

By  Mr.  Justice  Marcy  :  What  shall  constitute  an  acceptance 
will  depend  in  a  great  measure  upon  circumstances.  The  mere  de- 
termination of  the  mind,  unacted  on,  can  never  be  an  acceptance. 
Where  the  offer  is  by  letter,  the  usual  mode  of  acceptance  is  the 
sending  of  a  letter  announcing  a  consent  to  accept ;  where  it  is  made 
by  a  messenger,  a  determination  to  accept,  returned  through  him, 
or  sent  by  another,  would  seem  to  be  all  the  law  requires,  if  the 
contract  may  be  consummated  without  writing.  There  are  other 
modes  which  are  equally  conclusive  upon  the  parties :  keeping  silence, 
under  certain  circumstances,  is  an  assent  to  a  proposition;  any  thing 
that  shall  amount  ot  a  manifestation  of  a  formed  determination  to 
accept,  communicated  or  put  in  the  proper  way  to  be  communicated 
to  the  party  making  the  offer,  would  doubtless  complete  the  contract ; 
but  a  letter  written  would  not  be  an  acceptance,  so  long  as  it  re- 
mained in  the  possession  or  under  the  control  of  the  writer.  An 
acceptance  is  the  distinct  act  of  one  party  to  the  contract,  as  much 
as  the  offer  is  of  the  other;  the  knowledge,  by  the  party  making 
the  offer,  of  the  determination  of  the  party  receiving  it,  is  not  an 
ingredient  of  an  acceptance.  It  is  not  compounded  of  an  assent  by 
one  party  to  the  terms  offered,  and  a  knowledge  of  that  assent  by 
the  other. 

I  will  now  apply  this  law  to  the  facts  of  this  case.  Frith's  offer 
to  sell  his  interest  in  the  brandy  certainly  continued  till  his  letter 
of  the  24th  of  December  was  received  at  New  York,  and  Mactier 
had  a  fair  opportunity  to  answer  it.  If  the  answer  of  the  17th  of 
January  had  contained  an  unqualified  acceptance,  the  bargain  would 
have  been  closed  when  it  was  sent  away  for  Jacmel;  but  the  offer 
was  not  then  accepted.  There  was  a  promise  to  accept  upon  a  con- 
tingency; for  Mactier  says,  after  alluding  to  the  prospect  of  a  war 
between  France  and  Spain,  "in  which  case,"  that  is,  in  case  of  such 
a  war,  "I  will  at  once  decide  to  take  the  adventure  to  my  own  ac- 
count." This  concluded  nothing.  If  the  event  had  actually  hap- 
pened, and  Frith  had  insisted  on  enforcing  this  conditional  accep- 
tance, it  would  not  have  been  in  his  power  to  do  so.  The  most  that 
Mactier  said  was,  that  if  an  expected  event  happened,  he  would  do 
an  act  which  wonh]  complete  the  liargain.  The  happening  of  the 
event  could  not,  witliout  the  act,  complete  it.  The  Roman  law  re- 
garded the  tense  of  -the  verb  used  by  the  contracting  parties  to  de- 
termine whether  the  bargain  was  concluded:  Verhum  imperfecti 
temporis  rem  adhuc  imperfectum  significat.     There  is  a  wide  differ- 


SECT.    l]  MACTIER's    ADMINISTRATORS    V.    FRITH  129 

ence  between  a  promise  to  give  an  assent  to  a  proposition  for  a  con- 
tract on  the  happening  of  a  contingency,  and  the  annunciation  of 
a  present  assent  to  it.  If  the  expected  event  happens,  and  the  act 
promised  is  performed,  the  bargain  is  closed;  but  it  is  the  promised 
acceptance,  and  not  the  happening  of  the  event,  that  gives  validity 
to  the  contract.  If,  in  this  case,  the  oifer  of  Frith  had  been  to 
Mactier  to  take  the  brandy  on  the  happening  of  a  French  and  Span- 
ish war,  and  Mactier  had  promised  to  decide  to  take  it  in  such  an 
event,  the  simple  fact  of  his  taking  it  after  the  war  would  have 
enabled  Frith  to  treat  him  as  the  purchaser  of  it.  Such  an  act  would 
have  been  a  valid  acceptance;  but  a  conditional  acceptance  of  an 
unconditional  oifer,  followed  up  by  acts  of  the  acceptor,  after  the 
condition  was  fulfilled  on  which  the  acceptance  depended,  might  not 
be  considered  as  completing  the  bargain,  without  the  acquiescence 
of  the  party  making  the  offer  in  those  acts,  because  the  minds  of 
the  parties  would  not  have  met  on  the  precise  terms  of  the  contract. 

To  conclude  the  bargain,  Mactier  must  have  accepted  the  offer 
as  tendered  to  him  by  Frith,  and  that  acceptance  must  have  been 
while  the  offer,  in  contemplation  of  law,  was  still  held  out  to  him. 
That  there  was  an  acceptance,  or  rather  that  Mactier  did  all  that 
was  incumbent  on  him  to  do  to  effect  an  acceptance  was  not  denied; 
but  it  was  insisted,  on  the  part  of  the  respondent,  that  it  was  made 
after  the  offer  was  withdrawn.  It  will  be  necessary  to  consider  when 
this  acceptance  took  place,  as  preparatory  to  settling  the  fact  of  the 
continuance  of  the  offer  down  to  that  time.  There  is  not  the  slightest 
evidence  of  the  determination  on  the  part  of  Mactier  to  take  the 
brandy  before  the  seventeenth  day  of  March.  The  insurance  that 
he  effected  on  his  commissions  on  the  1st  of  March  disproves  the 
existence  of  such  a  determination  on  that  day;  but  if  the  situation 
of  the  parties  was  changed,  and  Frith  was  now  endeavoring  to  set 
up  the  contract,  I  am  at  a  loss  to  conceive  how  Mactier's  represen- 
tatives could  withstand  the  force  of  the  facts  which  took  place  on 
the  17th  of  March,  In  answer  to  the  offer,  Mactier  delayed  coming 
to  a~determination  thereon,  but  promised  to  accept  it  if  there  should 
be  a  war;  on  the  17th  of  March,  when  that  event  was  considered 
settled,  he  entered  the  brandy  as  his  own  property,  and  told  his  clerk 
that  he  had  determined  to  take  it.  But  if  there  should  be  anv  doubt 
as  to  the  effect^of  this  conduct,  there  can  be  none  as  to  his  subse- 
quent  acts.  By  a  letter  dated  the  25th,  with  a  postscript  of  the 
31st  of  March,  he  accepts  the  offer.  This  letter  was  immediately 
transmitted  to  Frith,  and  as  soon  as  the  28th  of  March  entries  were 
made  in  his  books,  showing  that  he  had  become  the  purchaser. 
Enough  was  done  by  the  31st  to  constitute  an  acceptance  of  Frith's 
offer  and  to  complete  the  bargain,  if  the  offer  can  be  considered  as 
standing  till  that  day. 

An  offer,  when  once  made,  continues,  as  I  have  heretofore  shown, 
to  the  satisfaction  of  my  own  mind  at  least,  until  it  is  expressly  re- 
5 


130  mactier's  administrators  v.  frith       [chap.  I 

voked,  or  until  circumstances  authorize  a  presumption  that  it  is 
revoked.  The  offer  itself  may  show  very  clearly  when  the  presump- 
tion of  revocation  attaches.  Where  it  is  made  to  be  replied  to  by 
return  mail,  the  party  to  whom  it  is  addressed  must  at  once  perceive 
that  it  is  not  to  stand  for  an  acceptance  to  be  transmitted  after  the 
mail.  If  an  offer  stands  until  it  is  expressly  withdrawn,  or  is  pre- 
sumed to  be  withdrawn,  whether  it  is  held  out  to  a  party  at  a  par- 
ticular period  or  not,  is  a  matter  of  fact.  Then  we  are  to  deter- 
mine, as  a  matter  of  fact,  whether  Frith's  offer  was  held  out  for 
Mactier's  acceptance  until  the  31st  of  March;  if  Frith  intended  it 
should  stand  so,  and  he  viewed  himself  as  tendering  it  to  Mactier 
down  to  that  time,  we  are  bound  to  regard  it  as  standing,  unless  his 
intention  was  the  result  of  the  fraudulent  conduct  of  Mactier.  The 
acts  of  Frith,  after  the  death  of  Mactier,  could  do  nothing  towards 
completing  an  unfinished  contract;  but  I  think  they  may  be  fairly 
adverted  to  for  the  purpose  of  ascertaining  his  intentions  in  relation 
to  the  continuance  of  his  offer.  On  the  7th  of  March  he  acknowl- 
edges Mactier's  letter  of  the  17th  of  January,  which  did  not  decline, 
as  it  has  been  construed  to  do,  the  offer,  but  apprised  him  that  it 
was  kept  under  advisement ;  and  by  using  the  expression,  "noting  the 
contents,"  Frith  is,  I  think,  to  be  understood  as  yielding  to  the  pro- 
posed delay.  If  a  doubt  as  to  this  construction  of  that  letter  could 
spring  up  in  the  mind,  it  would  be  at  once  removed  by  the  perusal 
of  the  letter  of  the  28th  of  the  same  month.  In  that  he  expresses 
a  wish  to  confirm  what  he  had  said  in  the  letter  making  the  offer 
to  sell,  and  declares  that  he  had  in  a  previous  letter,  which  must 
mean  that  of  the  7th,  omitted  to  communicate  the  same  thing.  In 
answering  Mactier's  letter  which  contained  the  acceptance  of  his 
offer  he  recognizes  the  bargain  as  closed,  and  gives  directions  as  to 
investing  the  proceeds  of  the  brandy.  All  the  subsequent  correspond- 
ence acquiesces  in  the  sale.  It  appears  to  me  to  be  impossible  to 
sav  after  reading  the  letters  of  Frith  written  subsequent  to  his  knowl- 
edge of  Mactier's  acceptance,  that  he  did  not  consider  the  offer  as 
held  out  to  Mactier  down  to  the  time  when  it  was  accepted,  and  the 
bargain  closed  by  that  acceptance;  and  I  think  we  must  adjudge 
it  to  have  been  closed,  unless  the  agreement  was  nugatory  by  reason 
that  the  thing  to  which  it  related  had  not  an  actual  or  potential 
existence  when  the  contract  was  consummated.^ .    .    . 

Whereupon,  on  the  question  being  put,  Sliall  the  decree  of  the 
Chancellor  appealed  from  be  reversed?  Chief  Justice  Savage  and 
Justices  ScTJiERLAND  and  Marcy,  and  eighteen  Senators,  voted  in 
the  affirmative;  and  three  Senators  voted  in  the  negative,  —  viz., 
ScMators  MoCauty,  Todd,  and  Wheeler. 

The  decree  of  the  Chancellor  was  accordingly  reversed  with  costs. 

*  Portions  of  the  statement  of  facts  and  of  the  opinion  are  omitted.  Concurring 
opinions  were  delivered  by  Senators  Benton,  Maynard,  Oliver,  and  Throop. 


"IA»       />■*-«  >.  .<1.'<LA-     ^V**-^  t^*^ 

SECT.   l]  WHEAT    f.    CROSS   <t«^*/<vt*4v^  ^      <*-      131   /O-^-*-- 

EDWARD  WHEAT  and  Others  v.  LEMUEL  CE^SS  nc 
Maryland  Court  of  Appeals,  April  Term,  1869   '^   •^ 
[Reported  in  31  Maryland,  99] 

Bartol,  C.  J.,  delivered  the  opinion  of  the  Court. 

This  suit  was  brought  by  the  appellee  to  recover  the  price  of  a 
horse  sold  to  the  appellants. 

The  plaintiff  resided  in  Frostburg,  and  the  defendants  were  en- 
gaged in  the  business  of  buying  and  selling  horses  in  Baltimore. 
The  contract  of  sale  was  made  by  correspondence  between  the  parties 
through  the  mails. 

The  facts  of  the  case,  so  far  as  it  is  material  to  state  them,  were 
as  follows:  On  the  23d  of  August,  1867,  the  defendants  received  the 
horse  in  their  possession,  to  be  sold  on  commission,  at  that  time 
apparently  sound  and  in  good  condition.  On  the  12th  of  September, 
1867,  they  addressed  a  letter  to  the  plaintiif,  stating  that  the  horse 
had  been  sick,  but  is  doing  well  at  this  time,  and  offering  $140  for 
him  clear  of  all  expenses,  and  saying,  "you  can  draw  on  us  at  sight 
for  $140."  This  letter  was  received  on  the  15th  or  16th  of  Sep- 
tember; on  the  16th  the  plaintiff  signified  his  acceptance  of  the  offer 
by  drawing  on  the  defendants  for  $140.  The  draft  was  sent  on  that 
day,  and  on  the  17th  the  defendants  refusing  to  pay  the  draft,  it 
was  protested. 

On  the  16th  of  September,  the  defendants  addressed  a  letter  to 
the  plaintiff  withdrawing  their  offer  of  the  12th,  stating  tliat  'Vhen 
they  wrote  they  did  not  think  the  horse  was  so  bad,  but  since  it 
has  turned  out  to  be  'farcy,'  they  would  not  buy  at  any  price,"  and 
directing  him  "not  draw  on  them  for  the  money,  that  they  will  not 
pay  the  draft  until  they  see  how  the  horse  gets."  This  letter  was 
not  received  by  the  plaintiff  till  after  he  had  accepted  the  offer  con- 
tained in  the  letter  of  the  12th,  by^  sending  the  dratj. 

In  the  argument  of  the  case  two  positions  have  been  taken  by  the 
defence  — 

1st.  That  there  was  not  such  mutual  assent  between  the  parties 
as  to  constitute  a  binding  contract. 

2d.  That  the  offer  by  the  defendants  was  made  through  mistake 
of  a  material  fact  as  to  the  condition  of  the  horse,  and  the  nature 
of  the  disease  under  which  it  was  suffering;  and  was  withdrawn  as 
soon  as  the  mistake  was  discovered,  and  the  acceptance  thereof  was 
not  binding  upon  them.^ 

1st.  On  the  first  question,  we  consider  the  law  well  settled  that 
where  parties  are  at  a  distance  from  each  other,  and  treat  by  corre- 
spondence through  the  post,  an  offer  made  by  one  is  a  continuing 
offer  until  it  is  received,  and  its  acceptance  then  completes  the  ag- 
gregatio  mentium  necessary  to  make  a  binding  bargain.     The  bar- 

*  Part  of  the  opinion,  holding  the  mistake  immaterial,  is  omitted. 


132  ELIASON    V.    HENSHAW  [CHAP.   I 

gain  is  complete  as  soon  as  the  letter  is  sent  containing  notice  of 
acceptance.  This  rule  applies  where  the  offer  and  acceptance  are 
unconditional. 

The  offer  may  be  withdrawn,  and  the  withdrawal  thereof  is  effec- 
tual so  soon  as  the  notice  thereof  reaches  the  other  party;  hut  if 
before  that  time  the  offer  is  accepted,  the  party  making  the  offer 
is  bound,  and  the  withdrawal  thereafter  is  too  late. 

In  this  case  it  appears  the  defendants'  letter  of  withdrawal  was 
sent  on  the  same  day  on  which  the  notice  of  the  plaintiff's  acceptance 
of  their  previous  offer  was  transmitted,  and  it  has  been  argued 
that  the  onus  is  on  the  plaintiff  to  show  that  the  sending  of  the  ac- 
ceptance preceded  the  sending  of  the  letter  of  withdrawal.  This 
position  is  not  correct;  it  is  quite  immaterial  to  inquire  whether  the 
defendants'  letter  of  the  16th,  or  the  draft  of  the  same  date,  was 
first  sent. 

Until  the  notice  of  the  withdrawal  of  the  offer  actually  reached 
the  plaintiff,  the  offer  was  continuing,  and  the  acceptance  thereof 
completed  the  contract. 

This  point  was  expressly  decided  in  Tayloe  v.  Merchants'  Fire 
Ins.  Co.,  9  Howard,  390.  That  was  a  case  arising  upon  an  insur- 
ance contract,  but  the  reasoning  of  the  Court  on  this  question,  and 
the  principles  decided,  are  applicable  alike  to  all  contracts  made  by 
correspondence  between  parties  at  a  distance  from  each  other.  There 
the  terms  upon  which  the  company  was  willing  to  insure  were  made 
known  by  letter,  and  it  was  held  "that  the  contract  was  complete 
when  the  insured  placed  a  letter  in  the  post-office  accepting  the 
terms." 


ELIASOISr  ET  AL.  V.  HENSHAW 

SuPEEME  Court  of  the  United  States,  Eeb.  17,  20,  1819 

[Reported  in  4  Wheaton,  225,  4  Curtis,  382] 

Error  to  the  Circuit  Court  for  the  District  of  Columbia. 

Jones  and  Keij,  for  the  plaintiff  in  error. 

Swann,  for  the  defendant  in  error. 

Washington,  J.,  delivered  the  opinion  of  the  Court. 

This  is  an  action,  brought  by  the  defendant  in  error,  to  recover 
damages  for  the  non-performance  of  an  agreement,  alleged  to  have 
been  entered  into  by  the  plaintiffs  in  error,  for  the  purchase  of  a 
quantity  of  flour  at  a  stipulated  price.  The  evidence  of  this  contract, 
givf-n  in  the  court  bellow,  is  stated  in  a  bill  of  exceptions,  and  is  to 
the  following  effect:  A  letter  from  tlie  plaintiffs  to  tlie  defendant, 
dated  the  10th  of  February,  1813,  in  which  they  say:  "Captain  Conn 
informs  us  that  you  have  a  quantity  of  flour  to  dispose  of.  We  are 
in  the  practice  of  purchasing  flour  at  all  times  in  Georgetown,  and 


SECT.    l]  ELIASON    V.    HENSHAW  133 

will  be  glad  to  serve  you,  either  in  receiving  your  flour  in  store  when 
the  markets  are  dull,  and  disposing  of  it  when  the  markets  will 
answer  to  advantage,  or  we  will  purchase  at  market  price  when  de- 
livered; if  you  are  disposed  to  engage  two  or  three  hundred  barrels 
at  present,  we  will  give  you  $9.50  per  barrel,  deliverable  the  first 
water  in  Georgetown,  or  any  service  we  can.  If  you  should  want 
an  advance,  please  write  us  by  mail,  and  will  send  you  part  of  the 
money  in  advance."  In  a  postscript  they  add :  ^^Please  write  bv 
return  of  wa^'on  whether  you  accept  our  ofPer."  This  letter  was 
sent  from  the  house  at  which  the  writer  then  was,  about  two  miles 
from  Harper's  Ferry,  to  the  defendant  at  his  mill,  at  Mill  Creek, 
distant  about  twenty  miles  from  Harper's  Ferry,  by  a  wajypner 
then  employed  by  the  defendant  to  haul  flour  from  his  mill  to 
Harper's  Ferry,  and  then  about  to  return  home  with  his  wagon. 
He  delivered  the  letter  to  the  defendant  on  the  14th  of  the  same 
month,  to  which  an  answer,  dated  the  succeeding  day,  was  written 
by  the  defendant,  addressed  to  the  plaintiffs  at  Georgetown,  and 
despatched  by  a  mail  which  left  Mill  Creek  on  the  19  th,  being  the 
first  regular  mail  from  that  place  to  Georgetown.  In  this  letter 
the  writer  says :  "Your  favor  of  the  10th  instant  was  handed  me 
by  Mr.  Chenoweth  last  evening.  I  take  the  earliest  opportunity  to 
answer  it  by  post.  Your  proposal  to  engage  300  barrels  of  flour, 
delivered  in  Georgetown  by  the  first  water,  at  $9.50  per  barrel,  I 
accept,  and  shall  send  on  the  flour  by  the  first  boats  that  pass  down 
from  where  my  flour  is  stored  on  the  river;  as  to  any  advance,  will 
be  unnecessary,  —  payment  on  delivery  is  all  that  is  required." 

On  the  25th  of  the  same  month,  the  plaintiffs  addressed  to  the 
defendant  an  answer  to  the  above,  dated  at  Georgetown,  in  which 
they  acknowledge  the  receipt  of  it,  and  add :  "Not  having  heard  from 
you  before,  had  quite  given  over  the  expectation  of  getting  your 
flour,  more  particularly  as  we  requested  an  answer  by  return  of 
wagon  the  next  day,  and  as  we  did  not  get  it,  had  bought  all  we 
wanted." 

The  wagoner,  by  whom  the  plaintiffs'  first  letter  was  sent,  in- 
formed them,  when  he  received  it,  that  he  should  not  probably  re- 
turn to  Harper's  Ferry,  and  he  did  not  in  fact  return  in  the  de- 
fendant's employ.  The  flour  was  sent  down  to  Georgetown  some 
time  in  March,  and  the  delivery  of  it  to  the  plaintiffs  was  regularly 
tendered  and  refused. 

Upon  this  evidence,  the  defendants  in  the  Court  below,  the  plain- 
tiffs in  error,  moved  that  Court  to  instruct  the  jury,  that,  if  they 
believed  the  said  evidence  to  be  true  as  stated,  the  plaintiff  in  this 
action  was  not  entitled  to  recover  the  amount  of  the  price  of  the 
300  barrels  of  flour,  at  the  rate  of  $9.50  per  barrel.  The  Court  being 
divided  in  opinion,  the  instruction  prayed  for  was  not  given. 

The  question  is,  whether  the  court  below  ought  to  have  given  the 
instruction  to  the  jury,  as  the  same  was  prayed  for.    If  they  ought, 


134  ELIASON    V.    HENSHAW  [CHAP.    I 

the  judgment,  which  was  in  favor  of  the  plaintiff  in  that  court,  must 
be  reversed. 

It  is  an  undeniable  principle  of  the  law  of  contracts,  that  an  offer 
of  a  bargain  by  one  person  to  another  imposes  no  obligation  upon 
the  former,  until  it  is  accepted  by  the  latter  according  to  the  terms 
in  which  the  offer  was  made.  Any  qualification  of  or  departure 
from  those  terms  invalidates  the  offer,  unless  the  same  be  agreed  to 
by  the  person  who  made  it.  Until  the  terms  of  the  agreement  have 
received  the  assent  of  both  parties,  the  negotiation  is  open,  and  im- 
poses no  obligation  upon  either. 

In  this  case,  the  plaintiffs  in  error  offered  to  purchase  from  the 
defendant  two  or  three  hundred  barrels  of  flour^  to  be  delivered  at 
Georgetown  by  the  first  water,  and  to  pay  for  the  same  $9.50  per 
barrel.  To  the  letter  containing  this  offer  they  required  an  answer 
by  the  return  of  the  wagon  by  which  the  letter  was  despatched. 
This  wagon  was  at  that  time  in  the  service  of  the  defendant,  and 
employed  by  him  in  hauling  flour  from  his  mill  to  Harper's  Ferry, 
near  to  which  place  the  plaintiffs  then  were.  The  meaning  of  the 
writers  was  obvious.  They  could  easily  calculate,  by  the  usual  length 
of  time  which  was  employed  by  this  wagon  in  travelling  from  Har- 
per's Ferry  to  Mill  Creek,  and  back  again  with  a  load  of  flour,  about 
what  time  they  should  receive  the  desired  answer;  and,  therefore, 
it  was  entirely  unimportant  whether  it  was  sent  by  that  or  another 
wagon,  or  in  any  other  manner,  provided  it  was  sent  to  Harper's 
Ferry,  and  was  not  delayed  beyond  the  time  which  was  ordinarily 
employed  by  wagons  engaged  in  hauling  flour  from  the  defendant's 
mill  to  Harper's  Ferry.  Whatever  uncertainty  there  might  have 
been  as  to  the  time  when  the  answer  would  be  received,  there  was 
none  as  to  the  place  to  which  it  was  to  be  sent;  this  was  distinctly 
indicated  by  the  mode  pointed  out  for  the  conveyance  of  the  answer. 
The  place,  therefore,  to  which  the  answer  was  to  be  sent  constituted 
an  essential  part  of  the  plaintiffs'  offer. 

It  appears,  however,  from  the  bill  of  exceptions,  that  no  answer 
to  this  letter  was  at  any  time  sent  to  the  plaintiffs  at  Harper's  Ferry. 
Their  offer,  it  is  true,  was  accepted  by  the  terms  of  a  letter  ad- 
dressed Georgetown,  and  received  by  the  plaintiffs  at  that  place;  but 
an  acceptance  communicated  at  a  place  different  from  that  pointed 
out  by  the  plaintiffs,  and  forming  a  part  of  their  proposal,  imposed 
no  obligation  binding  upon  them,  unless  they  had  acquiesced  in  it, 
which  they  declined  doing. 

It  is  no  argument  that  an  answer  was  received  at  Georgetown; 
the  plaintiffs  in  error  had  a  right  to  dictate  the  terms  upon  which 
they  would  purchase  the  flour;  and,  unless  they  were  complied  with, 
th(!y  were  not  bound  by  them.  All  their  arrangements  may  have 
been  made  with  a  vic^w  to  the  circumstance  of  place,  and  they  were 
the  only  judges  of  its  importance.  There  was,  therefore,  no  con- 
tract concluded  between  these  parties;  and  the  Court  ought,  there- 


SECT,    ij  WHITE    V.    CORLIES   AND   TIFT  135 

fore,  to  have  given  the  instruction  to  the  jury  which  was  asked  for. 
Judgment  reversed.     Cause  remanded,  with  directions  to  award  a 
venire  facias  de  novo. 


SAMUEL  P.  WHITE,  Eespondent,  v.  JOHN  W.  COKLIES  and 
JONATHAN  N.  TIFT,  Appellants 

New  York  Court  of  Appeals,  November  17-20,  1871 

[Reported  in  26  New  Yorh,  467] 

Appeal  from  judgment  of  the  General  Term  of  the  first  judicial 
district  affirming  a  judgment  entered  upon  a  verdict  for  .plaintiff. 

The  action  was  for  an  alleged  breach  of  contract. 

The  plaintiff  was  a  builder,  with  his  place  of  business  in  Fortieth 
Street,  New  York  City. 

The  defendants  were  merchants  at  32  Dey  Street. 

In  September,  1865,  the  defendants  furnished  the  plaintiff  with 
specifications  for  fitting  up  a  suite  of  offices  at  57  Broadway,  and 
requested  him  to  make  an  estimate  of  the  cost  of  doing  the  work. 

On  September  twenty-eighth  the  plaintiff  left  his  estimate  with  the 
defendants,  and  they  were  to  consider  upon  it,  and  inform  the  plain- 
tiff of  their  conclusions. 

On  the  same  day  the  defendants  made  a  change  in  their  specifi- 
cations and  sent  a  copy  of  the  same,  so  changed,  to  the  plaintiff  for 
his  assent  under  his  estimate,  which  he  assented  to  by  signing  the 
same  and  returning  it  to  the  defendants. 

On  the  day  following  the  defendants'  book-keeper  wrote  the  plain- 
tiff the  following  note :  — 

New  York,   September  29  th. 

Upon  an  agreement  to  finish  the  fitting  up  of  offices  57  Broadway 
in  two  weeks  from  date,  you  can  begin  at  once. 

The  writer  will  call  again,  probably  between  five  and  six  this  p.m. 

W.  H.  R., 
For  J.  W.   CoRLiEs  &  Co. 
32  Dey  Street, 

No  reply  to  this  note  was  ever  made  by  the  plaintiff;  and  on  the 
next  day  the  same  was  countermanded  by  a  second  note  from  the 
defendants. 

Immediately  on  receipt  of  the  note  of  September  twenty-ninth, 
and  before  the  countermand  was  forwarded,  the  plaintiff  commenced 
a  performance  by  the  purchase  of  lumber  and  beginning  work  thereon. 

And  after  receiving  the  countermand,  the  plaintiff  brought  this 
action  for  damages  for  a  breach  of  contract. 

The  court  charged  the  jury  as  follows:  "From  the  contents  of 
this  note  which  the  plaintiff  received,  was  it  his  duty  to  go  down 


136  WHITE    V.    CORLIES   AND   TIFT  [CHAP.    I 

to  Dey  Street  (meaning  to  give  notice  of  assent)  before  commencing 
4;he  work." 

"In  my  opinion  it  was  not.  He  had  a  right  to  act  upon  the  note 
and  commence  the  job,  and  that  was  a  binding  contract  between  the 
parties." 

To  this  defendants  excepted.  , 

L.  Henry,  for  the  appellants. 

Mr.  Field,  for  respondent. 

FoLGER,  J.  We  do  not  think  that  the  jury  found,  or  that  the 
testimony  shows,  that  there  was  any  agreement  between  the  parties, 
before  the  written  communication  of  the  defendants  of  September 
thirtieth  was  received  by  the  plaintiff.  This  note  did  not  make  an 
agreement.  It  was  a  proposition,  and  must  have  been  accepted  by 
the  plaintiff  before  either  party  was  bound,  in  contract,  to  the  other. 
The  only  overt  action  which  is  claimed  by  the  plaintiff  as  indicating 
on  his  part  an  acceptance  of  the  offer,  was  the  purchase  of  the  stuff 
necessary  for  the  work,  and  commencing  work  as  we  understand  the 
testimony,  upon  that  stuff. 

We  understand  the  rule  to  be,  that  where  an  offer  is  made  by  one 
party  to  another  when  they  are  not  together,  the  acceptance  of  it 
by  that  other  must  be  manifested  by  some  appropriate  act.  It  does 
not  need  that  the  acceptance  shall  come  to  the  knowledge  of  the  one 
making  the  offer  before  he  shall  be  bound.  But  though  the  mani- 
festation need  not  be  brought  to  his  knowledge  before  he  becomes 
bound,  he  is  not  bound  if  that  manifestation  is  not  put  in  a  proper 
way  to  be  in  the  usual  course  of  events  in  some  reasonable  time  com- 
municated to  him.  Thus  a  letter  received  by  mail  containing  a  pro- 
posal, may  be  answered  by  letter  by  mail  containing  the  acceptance. 
And  in  general,  as  soon  as  the  answering  letter  is  mailed  tlie  con- 
tract is  concluded.  Though  one  party  does  not  know  of  the  accep- 
tance, the  manifestation  thereof  is  put  in  the  proper  way  of  reaching 
him. 

In  the  case  in  hand,  the  plaintiff  determined  to  accept.  But  a 
mental  determination  not  indicated  by  speech,  or  put  in  course  of 
indication  by  act  to  the  other  party,  is  not  an  acceptance  which  will 
bind  the  other.  Nor  does  an  act  which,  in  itself  is  no  indication  of 
an  acceptance,  become  such,  because  accompanied  by  an  unevinced 
mental  determination.  Where  the  act,  uninterpreted  by  concurrent 
evidence  of  the  mental  purpose  accompanying  it,  is  as  well  referable 
to  one  state  of  facts  as  another,  it  is  no  indication  to  the  other  party 
of  an  acceptance,  and  does  not  operate  to  hold  him  to  his  offer. 

Conceding  that  the  testimony  shows  that  tlie  plaintiff  did  resolve 
to  accept  this  offer,  he  did  no  act  which  indicated  an  acceptance  of 
it  to  the  defendants.  He,  a  carpenter  and  builder,  purchased  stuff 
for  the  work.  But  it  was  stuff  as  fit  for  any  other  like  work.  He 
began  work  upon  the  stuff,  but  as  hv.  woulf]  liave  done  for  any  other 
like  work.    There  was  nothing  in  his  thought  formed  but  not  uttered, 


SECT.    l]      THE   GREAT    NORTHERN   R.    R.    CO.    V.    WITHAM  137 

or  in  his  acts,  that  indicated  or  set  in  motion  an  indication  to  the 
defendants  of  his  acceptance  of  their  offer,  or  which  could  neces- 
sarily result  therein. 

But  the  charge  of  the  learned  judge  was  fairly  to  be  understood 
by  the  jury  as  laying  down  the  rule  to  them,  that  the  plaintiff  need 
not  indicate  to  the  defendants  his  acceptance  of  their  offer,  and  that 
the  purchase  of  stuff  and  working  on  it  after  receiving  the  note, 
made  a  binding  contract  between  the  parties.  In  this  we  think 
the  learned  judge  fell  into  error. 

The  judgment  appealed  from  must  be  reversed,  and  a  new  trial 
ordered,  with  costs  to  abide  the  event  of  the  action. 

All  concur  but  Allen,  J.,  not  voting. 

Judgment  reversed  and  new  trial  ordered?- 


THE  GREAT  NORTHERI^  RAILWAY  COMPANY  v. 
WITHAM 

In  the  Common  Pleas,  ISTovember  6,   1783 

[Reported  in  Law  Reports,  9  Common  Pleas,  16] 

The  cause  was  tried  before  Brett,  J.,  at  the  sittings  at  West- 
minster after  the  last  term.  The  facts  were  as  follows:  In  October, 
1871,  the  plaintiffs  advertised  for  tenders  for  the  supply  of  goods 
(amongst  other  things  iron)  to  be  delivered  at  their  station  at  Don- 
caster,  according  to  a  certain  specification.  The  defendant  sent  in 
a  tender,  as  follows :  — 

I,  the  undersigned,  hereby  undertake  to  supply  the  Gveat  Northern 
Railway  Company,  for  twelve  months  from  the  1st  of  November, 
1871,  to  31st  of  October,  1872,  with  such  quantities  of  each  or  any 
of  the  several  articles  named  in  the  attached  specification  as  the 
company's  storekeeper  may  order  from  time  to  time,  at  the  price 
set  opposite  each  article  respectively,  and  agree  to  abide  by  the  con- 
ditions stated  on  the  other  side. 

(Signed)  Samuel  Witham 

^  There  are  many  cases  where  an  acceptance,  so  called,  did  not  complete  the  con- 
tract, because  it  imposed  a  new  condition  or  slightly  but  materially  varied  the  terms 
of  the  offer.  See 'Honeyman  v.  Marryat,  6  H.  L.  C.  112;  English,  &c.,  Credit  Co.  v. 
Arduin,  L.  R.  5  H.  L.  64;  Appleby  v.  Johnson,  L.  R.  9  C.  P.  158;  Stanley  v.  Dowdes- 
weU,  L.  R.  10  C.  P.  102;  Crossley  v.  Maycock,  E.  R.  18  Eq.  180;  Jones  v.  Daniel, 
[1894]  2  Ch.  332;  Lloyd  v.  Nowell,  [1895]  2  Ch.  744;  Ortman  v.  Weaver,  11  Fed. 
Rep.  358;  Martin  v.  Northwestern  Fuel  Co.,  22  Fed.  Rep.  596;  Coffin  v.  Portland,  43 
Fed.  Rep.  411;  James  v.  Darby,  100  Fed.  Rep.  224  (C.  C.  A.);  Robinson  v.  Weller, 
81  Ga.  704;  Corcoran  v.  White,  117  111.  118;  Middaugh  v.  Stough,  161  111.  312;  Stagg 
V.  Compton,  81  Ind.  171;  Siebold  v.  Davis,  67  la.  560;  Gilbert  v.  Baxter,  71  la.  327; 
Howard  v.  Industrial  School,  78  Me.  230;  Putnam  v.  Grace,  161  Mass.  237;  Falls 
Wire  Mfg.  Co.  v.  Broderick,  12  Mo.  App.  379;  Commercial  Telegram  Co.  v.  Smith 
47  Hun,  494;  Olds  v.  East  Tenn.  Stone  Co.  (Tenn.),  48  S.  W.  Rep.  333;  North  Texas 
Building  Co.  v.  Coleman  (Tex.  Civ.  App.),  58  S.  W.  Rep.  1044;  Virginia  Hot  Springs 
Co.  V.  Harrison,  93  Va.  569;  Baker  v.  Holt.  56  Wis.  100.  And  see  7  Am.  &  Eng.  Encyc. 
of  Law,  132.  Compare:  Hussey  v.  Home  Payne,  4  App.  Cas.  311;  Smith  v.  Webster, 
3  Ch.  D.  49;   North  v.  Percival,  [1898]  2  Ch.  128. 


138         THE   GREAT   NORTHERN   R.    R.    CO.    V.    WITHAM     [CHAP.   I 

The  company's  officer  wrote  in  reply  as  follows: — 
Mr.  S.  Witham: 

SiK,  —  I  am  instructed  to  inform  you  that  my  directors  have  ac- 
cepted your  tender,  dated,  &c.,  to  supply  this  company  at  Doncaster 
station  any  quantity  they  may  order  during  the  period  ending  31st 
of  October,  1872,  of  the  descriptions  of  iron  mentioned  on  the  in- 
closed list,  at  the  prices  specified  therein.  The  terms  of  the  eon- 
tract  must  be  strictly  adhered  to.  Requesting  an  acknowledgment 
of  the  receipt  of  this  letter, 

(Signed)  S.  Fitch,  Assistant  Secretary. 

To  this  the  defendant  replied :  — 

I  beg  to  own  receipt  of  your  favor  of  20th  instant,  accepting  my 
tender  for  bars,  for  which  I  am  obliged.  Your  specifications  shall 
receive  my  best  attention. 

S.  "Witham. 

Several  orders  for  iron  were  given  by  the  company,  which  were 
from  time  to  time  duly  executed  by  the  defendant;  but  ultimately 
the  defendant  refused  to  supply  any  more,  whereupon  this  action 
was  brought. 

A  verdict  having  been  found  for  the  plaintiffs,  — 

Dighy  Seymour,  Q.  C,  moved  to  enter  a  nonsuit,  on  the  ground 
that  the  contract  was  void  for  want  of  mutuality.  He  contended 
that,  as  the  company  did  not  bind  themselves  to  take  any  iron  what- 
ever from  the  defendant,  his  promise  to  supply  them  with  iron  was 
a  promise  without  consideration.  He  cited  Lees  v.  Whitcomb,  5 
Bing.  34;  Burton  v.  Great  Northern  Railway  Co.,  9  Ex.  507,  23 
L.  J.  (E.)  184;  Sykes  v.  Dixon,  9  Ad.  &  Ex.  693;  and  Bealey  v. 
Stuart,  7  H.  &  N.  753,  31  L.  J.  (Ex.)  281.  Cur.  adv.  vult. 

Brett,  J.  The  company  advertised  for  tenders  for  the  supply 
of  stores,  such  as  they  might  think  fit  to  order,  for  one  year.  The 
defendant  made  a  tender  offering  to  supply  them  for  that  period 
at  certain  fixed  prices;  and  the  company  accepted  his  tender.  If 
there  were  no  other  objection,  the  contract  between  the  parties  would 
be  found  in  the  tender  and  the  letter  accepting  it.  This  action  is 
brought  for  the  defendant's  refusal  to  deliver  goods  ordered  by  the 
company;  and  the  objection  to  the  plaintiff's  right  to  recover  is, 
that  the  contract  is  unilateral.  I  do  not,  however,  understand  what 
objection  that  is  to  a  contract.  Many  contracts  are  obnoxious  to  the 
same  complaint.  If  I  say  to  another,  "If  you  will  go  to  York,  I 
will  give  you  1001.,"  that  is  in  a  certain  sense  a  unilateral  contract. 
II(!  lias  not  proniisf'.d  to  go  to  York;  but  if  he  goes  it  cannot  be 
<lonbtf'd  tliat  ho  will  be  entitled  to  receive  the  lOO/.r/  His  going  to 
York  at  my  request  is  a  sufficient  consideration  f o  ■  my  promise. 
8o,  if  one  says  to  another,  "If  you  will  give  me  an   )rder  for  iron. 


SECT.    l]    CHICAGO   GREAT   EASTERN   R.   R.    CO.    V.    DANE  139 

or  other  goods,  I  will  supply  it  at  a  given  price;"  if  the  order  is 
given,  there  is  a  complete  contract  which  the  seller  is  bound  to  ptsr- 
form.  There  is  in  such  a  case  ample  consideration  for  the  promis^L' 
So,  here,  the  company  having  given  the  defendant  an  order  at  his 
request,  his  acceptance  of  the  order  would  bind  them.  If  any  au- 
thority could  have  been  found  to  sustain  Mr.  Seymour's  contention, 
I  should  have  considered  that  a  rule  ought  to  be  granted.  But  none 
has  been  cited.  Burton  v.  Great  Northern  Railway  Company,  9  Ex. 
507,  23  L.  J.  (Ex.)  184,  is  not  at  all  to  the  purpose.  This  ia 
matter  of  every  day's  practice;  and  I  think  it  would  be  wrong  to 
countenance  the  notion  that  a  man  who  tenders  for  the  supply  of 
goods  in  this  way  is  not  bound  to  deliver  them  when  an  order  is^. 
given.  I  agree  that  this  judgment  does  not  decide  the  question, 
whether  the  defendant  might  have  absolved  himself  from  the  further- 
performance  of  the  contract  by  giving  notice.^ 

Gkove,  J.     I  am  of  the  same  opinion,  and  have  nothing  to  add. 

Bule  refused.^ 


THE  CHICAGO  AND  GREAT  EASTERN  RAILWAY  COM- 
PANY, Appellant,  v.  FRANCIS  B.  DANE  and  Others,  Re- 
spondents 

New  York  Court  of  Appeals,  December  13-20,  1870 

[Reported  in  43  New  YorJc,  240] 

This  is  an  appeal  from  a  judgment  of  the  General  Term  of  the 
Supreme  Court  in  the  first  judicial  district,  affirming  a  judgment 
for  the  defendant  entered  upon  the  report  of  a  referee. 

This  action  was  brought  to  recover  damages  on  an  alleged  con- 
tract of  the  defendant  to  carry  and  transport  a  quantity  of  railroad 
iron  from  New  York  to  Chicago  for  the  plaintiffs.  The  only  evi- 
dence of  the  contract  were  the  letters  quoted  in  the  opinion  of  the 
court.  The  defendant  insisted  that  the  agreement  was  invalid  for 
want  of  the  proper  U.  S.  internal  revenue  stamp  affixed  at  the  time 
it  was  made.  But  the  referee  overruled  the  objection,  holding  that 
it  was  sufficient  under  section  173  of  the  Revenue  Act  of  June  30, 
1864,  to  stamp  the  instrument  on  its  production  in  court.  This  point 
was  not  passed  on  in  this  court. 

L"It  would  be  an  ordinary  case  of  a  unilateral  contract  growing  out  of  an  offer  of 
one  party  to  do  something  if  the  other  will  do  or  refrain  from  doing  something  else. 
If  the  party  to  whom  such  an  offer  is  made  acts  upon  it  in  the  manner  contemplated, 
either  to  the  advantage  of  the  offerer  or  to  his  own  disadvantage,  such  action  makes 
the  contract  complete,  and  notice  of  the  acceptance  of  the  offer  is  rmnecessary.  Lent 
V.  Padelford,  10  Mass.  230;  Train  v.  Gold,  5  Pick.  380;  Brogden  v.  Metropelitan  Rail- 
way, 2  App.  Gas.  666,  691;  Weaver  v.  Wood,  9  Pa.  220;  Patton  v.  Hassinger,  69  Pa. 
311."     Knowlton,  J.,  in  First  Nat.  Bank  v.  Watldns,  154  Mass.  385,  387. 

2  See  Queen  v.  Demers,  [1900]  A.  C.  103;  Ford  v.  Newth,  [1901]  1  K.  B.  683; 
Attorney-General  v.  Stewards,  18  T.  L.  R.  131. 

'  A  statement  of  the  pleadings  and  the  concurring  opinion  of  Keating,  J.,  are 
omitted.  .     . 

ZkjL     ^tW"    'l[     *^    ^yO^ati^^^u^      G^y^iAjL^etL.     CL^,y^^U-X\^J     ^  *-«^-»-l>- 


140  CHICAGO   GREAT   EASTERN   R.    R.    CO.    V.   DANE    [CHAP.    I 

Titus  and  Westervelt,  for  the  appellant. 

H.  W.  Johnson,  for  the  respondents, 

Gkovee,  J.  Whether  the  letter  of  the  defendants  to  plaintiff,  and 
the  answer  of  plaintiff  thereto  (leaving  the  question  of  revenue 
stamps  out  of  view),  proved  a  legal  contract  for  the  transportation 
of  iron  by  the  defendants  for  the  plaintiff  from  ISTew  York  to  Chi- 
cago upon  the  terms  therein  specified,  depends  upon  the  question 
whether  the  plaintiff  became  thereby  bound  to  furnish  any  iron  to 
the  defendants  for  such  transportation,  as  there  was  no  pretence 
of  any  consideration  for  the  promise  of  the  defendants  to  transport 
the  iron,  except  the  mutual  promise  of  the  plaintiff  to  furnish  it 
for  that  purpose,  and  to  pay  the  specified  j)rice  for  the  service.  Un- 
less, therefore,  there  was  a  valid  undertaking  by  the  plaintiff  so  to 
furnish  the  iron,  the  promise  of  the  defendants  was  a  mere  nude 
pact,  for  the  breach  of  which  no  action  can  be  maintained.  The 
material  part  of  the  defendants'  letter  affecting  this  question  is  as 
follows:  "We  hereby  agree  to  receive  in  this  port  (I!^ew  York), 
either  from  yard  or  vessel,  and  transport  to  Chicago,  by  canal  and 
rail  or  the  lakes,  for  and  on  account  of  the  Chicago  and  Great 
Eastern  Railway  Company,  not  exceeding  six  thousand  tons  gross 
(2,240  lbs.)  in  and  during  the  months  of  April,  May,  June,  July, 
and  August,  1864,  upon  the  terms  and  for  the  price  hereinafter 
specified."  This  letter  was  forwarded  by  the  defendants  to  the 
plaintiff  April  15,  1864.  On  the  16th  of  April,  the  plaintiff  answered 
this  letter,  the  material  part  of  which  was  as  follows :  "In  behalf  of 
this  company  I  assent  to  your  agreement,  and  will  be  bound  by  its 
terms."  We  have  seen  that  the  inquiry  is,  whether  this  bound  the 
plaintiff  to  furnish  any  iron  for  transportation.  It  is  manifest  that 
the  word  "agree"  in  the  letter  of  the  defendants  was  used  as  synony- 
mous with  the  word  "offer,"  and  that  the  letter  was  a  mere  propo- 
sition to  the  plaintiff  for  a  contract  to  transport  for  it  any  quantity 
of  iron  upon  the  terms  specified,  not  exceeding  6,000  tons,  and  that 
it  was  so  understood  by  the  plaintiff.  The  plaintiff  was  at  liberty 
to  accept  this  proposition  for  any  specified  quantity  not  beyond 
that  limited;  and  had  it  done  so,  a  contract  mutually  obligatory 
would  have  resulted  therefrom,  for  the  breach  of  which  by  either 
party  the  other  could  have  maintained  an  action  for  the  recovery 
of  the  damages  thereby  sustained.  This  mntnal  obligation  of  the 
parties  to  perform  the  contract  Avould  liave  constituted  a  considera- 
tion for  the  promise  of  each.  But  the  plaintiff  did  not  so  accept. 
TJpon  the  receipt  of  the  defendants'  offer  to  transport  not  to  exceed 
6,000  tons  upon  th(!  terms  specified,  it  merely  aceptcd  such  offer, 
and  agreed  to  be  bound  by  its  tf-rrns.  This  amounted  to  nothing 
more  than  the  acceptance  of  an  option  by  the  plaintiff  for  the  trans- 
jjortation  of  such  quantity  of  iron  by  the  defendants  ns  it  chose;  and 
liad  therr  ber'n  a  consideration  given  to  the  dc>feiidants  for  such 
option,  the  dcf(!iid!iiits  would  have  been  bound  to  transport  for  the 


SECT.    l]  WOOD    V.   DUFF-GORDON  141 

plaintiff  such  iron  as  it  required  within  the  time  and  quantity  speci- 
fied, the  plaintiff  having  its  election  not  to  require  the  transportation 
of  any.  But  there  was  no  consideration  received  by  the  defendants 
for  giving  any  such  option  to  the  plaintiff.  There  being  no  con- 
sideration for  the  promise  of  the  defendants,  except  this  acceptance 
by  the  plaintiff,  and  that  not  binding  it  to  furnish  any  iron  for  trans- 
portation unless  it  chose,  it  follows  that  there  was  no  cofisideration 
for  any  promise  of  the  defendants,  and  that  the  breach  of  such  prom- 
ises furnishes  no  foundation  for  an  action.  The  counsel  for  the 
plaintiff  insists  that  the  contract  may  be  upheld  for  the  reason  that 
at  the  time  the  letters  were  written  the  defendants  were  engaged 
in  transporting  iron  for  the  plaintiff.  But  this  had  no  connection 
with  the  letters  any  more  than  if  the  defendants  were  at  the  time 
employed  in  any  other  service  for  the  plaintiff.  ISTor  does  the  fact 
that  the  defendants,  after  the  letters  were  written,  transported 
iron  for  the  plaintiff  at  all  aid  in  upholding  the  con- 
tract. This  did  not  oblige  the  plaintiff  to  furnish  any  additional 
quantity,  and  consequently  constituted  no  consideration  for  a  prom- 
ise to  transport  any  such.  The  counsel  for  the  appellant  further 
insists  that  the  letter  of  defendant  was  a  continuing  offer,  and  that 
the  request  of  the  plaintiff,  in  August,  to  receive  and  transport  a 
specified  quantity  of  iron  was  an  acceptance  of  such  offer,  and  that 
the  promises  then  became  mutually  obligatory,  if  not  so  before.  This 
position  cannot  be  maintained.  Upon  receipt  of  the  defendants' 
letter,  the  plaintiff  was  bound  to  accept  in  a  reasonable  time  and 
give  notice  thereof,  or  the  defendant  was  no  longer  bound  by  the 
offer.     The  judgment  appealed  from  must  be  affirmed  with  costs. 

All  the  judges  concurring,  except  Allen,  J.,  who,  having  been  of 
counsel,  did  not  sit.  Judgment  affirmed.^ 


OTIS  F.  WOOD,  Appellant,  v.  LUCY,  LADY  DUFF  GOEDON", 

Respondent 

New  York  Court  of  Appeals,  November  14-December  4,  1917 

[Reported  in  222  New  Yorlc,  88] 

Caedozo,  J.  The  defendant  styles  herself  "a  creator  of  fashions." 
Her  favor  helps  a  sale.  Manufacturers  of  dresses,  millinery  and 
like  articles  are  glad  to  pay  for  a  certificate  of  her  approval.  The 
things  which  she  designs,  fabrics,  parasols  and  what  not,  have  a 
new  value  in  the  public  mind  when  issued  in  her  name.  She  em- 
ployed the  plaintiff  to  help  her  to  turn  this  vogue  into  money.  He 
was  to  have  the  exclusive  right,  subject  always  to  her  approval,  to 
place  her  indorsements  on  the  designs  of  others.  He  was  also  to 
have  the  exclusive  right  to  place  her  own  designs  on  sale,  or  to 
license  others  to  market  them.  In  return,  she  was  to  have  one-half 
1  See  Thayer  v.  Burchard,  99  Mass.  508. 


142  WOOD    V.    DUFF-GORDON  [CHAP.    I 

of  "all  the  profits  and  revenues"  derived  from  any  contracts  he  might 
make.  The  exclusive  right  was  to  last  at  least  one  year  from  April 
1,  1915,  and  thereafter  from  year  to  year  unless  terminated  by 
notice  of  ninety  days.  The  plaintiff  says  that  he  kept  the  contract 
on  his  part,  and  that  the  defendant  broke  it.  She  placed  her  in- 
dorsement on  fabrics,  dresses  and  millinery  without  his  knowledge, 
and  withheld  the  profits.  He  sues  her  for  the  damages,  and  the 
case  comes  here  on  demurrer. 

The  agreement  of  employment  is  signed  by  both  parties.  It  has 
a  wealth  of  recitals.  The  defendant  insists,  however,  that  it  lacks 
the  elements  of  a  contract.  She  says  that  the  plaintiff  does  not  bind 
himself  to  anything.  It  is  true  that  he  does  not  promise  in  so  many 
words  that  he  will  use  reasonable  efforts  to  place  the  defendant's 
indorsements  and  market  her  designs.  "We  think,  however,  that  such 
a  promise  is  fairly  to  be  implied.  The  law  has  outgrown  its  primi- 
tive stage  of  formalism  when  the  precise  word  was  the  sovereign 
talisman,  and  every  slip  was  fatal.  It  takes  a  broader  view  to- 
day. A  promise  may  be  lacking,  and  yet  the  whole  writing  may  be 
"instinct  with  an  obligation,"  imperfectly  expressed.  (Scott,  J.,  in 
McCall  Co.  V.  Wright,  133  App.  Div.  62;  Moran  v.  Standard  Oil 
Co.,  211  'N.  Y.  187,  198.)     If  that  is  so,  there  is  a  contract. 

The  implication  of  a  promise  here  finds  support  in  many  circum- 
stances. The  defendant  gave  an  exclusive  privilege.  She  was  to 
have  no  right  for  at  least  a  year  to  place  her  own  indorsements  or 
market  her  own  designs  except  through  the  agency  of  the  plaintiff. 
The  acceptance  of  the  exclusive  agency  was  an  assumption  of  its 
duties,  (Phoenix  Hermetic  Co.  v.  Filtrine  Mfg.  Co.,  164  App. 
Div.  424;  TV.  G.  Taylor  Co.  v.  Bannerman,  120  Wis.  189;  Mueller 
V.  Bethesda  Mineral  Spring  Co.,  88  Mich.  390.)  We  are  not  to 
suppose  that  one  party  was  to  be  placed  at  the  mercy  of  the  other 
(Hearn  v.  Stevens  &  Bro.,  11  App.  Div.  101,  106;  Kussell  v.  Aller- 
ton,  108  N.  Y.  288).  Many  other  terms  of  the  agreement  point  the 
same  way.  We  are  told  at  the  outset  by  way  of  recital  that  "the 
said  Otis  F.  Wood  possessed  a  business  organization  adapted  to 
the  placing  of  such  indorsements  as  the  said  Lucy,  Lady  Duff-Gordon 
has  approved."  The  implication  is  that  the  plaintiff's  business  or- 
ganization will  be  used  for  the  purpose  for  which  it  is  adapted. 
But  the  terms  of  the  defendant's  compensation  are  even  more  sig- 
nificant. Her  sole  compensation  for  tbo  grant  of  an  exclusive  agency 
is  to  be  one-half  of  all  the  profits  resulting  from  tlie  plaintiff's 
efforts.  Unless  he  gave  his  efforts,  she  could  never  get  anything. 
Without  an  implied  promise,  the  transaction  cannot  have  such  busi- 
ness "efficiency  as  both  parties  must  have  intended  that  at  all  events 
it  should  have"  (Bowkn,  L.  J.,  in  The  Moorcock,  14  P.  D.  64, 
68).  But  the  contract  does  not  stop  there.  The  plaintiff  goes  on 
to  promise  that  he  will  account  monthly  for  all  moneys  received 
by  him,  and  that  he  will  take  out  all  such  patents  and  copyrights  and 


SECT.    I]  JOYNSON    V.    HUNT   &    SON  143 

tradesmark  as  may  in  his  judgment  be  necessary  to  protect  the 
rights  and  articles  affected  by  the  agreement.  It  is  true,  of  course, 
as  the  Appellate  Division  has  said,  that  if  he  was  under  no  duty 
to  try  to  market  designs  or  to  place  certificates  of  indorsement,  his 
promise  to  account  for  profits  or  take  out  copyrights  would  be  value- 
less. But  in  determining  the  intention  of  the  parties,  the  promise 
has  a  value.  It  helps  to  enforce  the  conclusion  that  the  plaintiff 
had  some  duties.  His  promise  to  pay  the  defendant  one-half  of  the 
profits  and  revenues  resulting  from  the  exclusive  agency  and  to 
render  accounts  monthly,  was  a  promise  to  use  reasonable  efforts  to 
bring  profits  and  revenues  into  existence.  For  this  conclusion,  the 
authorities  are  ample.  (Wilson  v.  Mechanical  Orguinette  Co.,  170 
InT.  Y.  542;  Phoenix  Hermetic  Co.  v.  Filtrine  Mfg.  Co.,  supra;  Jac- 
quin  V.  Boutard,  89  Hun,  437;  157  N.  Y,  686;  Moran  v.  Standard 
Oil  Co.,  supra;  City  of  N".  Y.  v.  Paoli,  202  N".  Y.  18;  M'Intyre  v. 
Belcher,  14  C.  B.  (K".  S.)  654;  Devonald  v.  Rosser  &  Sons,  1906, 
2  K.  B.  728;  "W.  G.  Taylor  Co.  v.  Bannerman,  supra;  Mueller  v. 
Bethesda  Mineral  Spring  Co.,  supra;  Baker  Transfer  Co.  v.  Mer- 
chants' R.  &  I.  Mfg.  Co.,  1  App.  Div.  507.) 

The  judgment  of  the  Appellate  Division  should  be  reversed,  and 
the  order  of  the  Special  Term  afiirmed,  with  costs  in  the  Appellate 
Division  and  in  this  court. 

CuDDEBACK,  McLatjghlin  and  Andrews,  J  J.,  concur;  Hiscock, 
Ch.  J.,  Chase  and  Crane,  JJ.,  dissent. 

Judgment  reversed,  etc. 


jOYNSoJsr  V.  huj^t  &  soisr 

In  the  Court  of  Appeal,  July  26,  1905 
\_Reported  in  93  Law  Times  {^.  S.)  470] 

The  defendants  carried  on  business  in  the  glove  trade;  and  the 
plaintiff  was  a  commission  agent. 

On  the  18th  July  1902  the  defendants  wrote  the  following  letter 

to  the  plaintiff: 

In  reply  to  your  favour  I  beg  to  say  we  will  give  the  2\  per  cent,  commission  on  all 
business  you  do  for  us  in  London,  whether  you  send  the  buyers  to  buy  or  orders  come 
through  the  post,  or  you  take  them  and  send  them  direct.  You  let  us  know  to  whom 
you  show  our  samples,  and,  if  business  results  from  the  transaction,  we  will  forward 
your  commission  quarterly  as  you  suggest.     This  refers  to  orders  executed. 

The  defendants  gave  samples  to  the  plaintiff,  and  the  plaintiff 
obtained  orders  for  the  defendants. 

Subsequently  the  defendants  terminated  the  agency  of  the  plain- 
tiff without  giving  any  notice;  and  thereupon  the  plaintiff  brought 
this  action  to  recover  damages. 

At  the  trial  before  Lawrence,  J.  with  a  jury,  the  plaintiff  tendered 
the  evidence  of  witnesses  to  prove  that  there  was  a  custom  in  the 
glove  trade  that  six  months'  notice  must  be  given  to  terminate  the 


144  CAVANAUGH    V.   D.    W.   RANLET   COMPANY       [CHAP.    I 

agency  of  a  commission  agent.  The  learned  judge  held  that  the 
defendants  were  entitled  to  terminate  the  agency  without  notice, 
and  rejected  the  evidence  of  the  alleged  custom;  and  he  directed  a 
verdict  and  judgment  to  be  entered  for  the  defendants. 

The  plaintiff  appealed,  asking  for  judgment  or  for  a  new  trial. 

RoMEK,  L,  J. :  I  desire  to  make  it  clear  that  it  is  quite  possible 
that  a  good  custom  might  be  pleaded  and  proved  as  to  notice  being 
necessary  to  terminate  an  ordinary  contract  whei'e  the  principal 
employs  the  agent  to  sell  on  commission.  This  case,  however,  turns 
upon  the  special  terms  of  the  contract  between  these  parties.  In 
my  opinion  that  contract  does  not  show  any  employment  by  the 
defendants  of  the  plaintiff  at  all.  It  is  only  an  arrangement  that 
the  plaintiff  might  obtain  orders  for  the  defendants  if  he  thought 
fit  to  do  so,  and  that  if  he  did  obtain  orders  the  defendants  might 
accept  them  if  they  thought  fit  to  do  so,  and  that  if  business  re- 
sulted commission  would  be  paid  to  the  plaintiff.  In  my  opinion 
this  was  not  an  employment  by  a  principal  of  an  agent  at  all.  It 
was  simply  a  purely  voluntary  arrangement  on  the  part  of  principal 
and  agent,  neither  party  being  bound  to  do  anything.  From  the 
very  nature  of  the  arrangement  made  in  writing,  it  follows  that 
either  party  may  cause  it  to  cease  at  any  time.  To  import  into  it 
any  custom  as  to  notice  would  be  inconsistent  with  the  special  terms 
of  the  arrangement.     I  agree  that  the  appeal  fails.^ 


^  \X  MICHAEL  A.  CAVANAUGH,  and  Another,  v.  D.  W.  KAj^LET 
y  COMPANY 

SuPEEME  Judicial  Court  of  Massachusetts,  November  16- 
February  27,  1918 

[Reported  in  229  Massachusetts,  366] 

Action  for  breach  of  a  contract  to  deliver  a  carload  of  straight 
clipped  white  oats  guaranteed  to  be  "cool  and  sweet,"  or  for  the 
recovery  of  $537.93  paid  by  the  plaintiff  for  a  carload  of  inferior 
oats  which  he  had  no  opportunity  to  inspect. 

After  a  conversation  by  telephone,  the  defendant  sent  by  mail  to 
the  plaintiffs  a  paper  called  in  the  record  a  "confirmation"  of  the 
telephone  conversation,  which  stated  that  a  certain  shipment  of 
clipped  white  oats  had  been  sold  to  Cavanangh  Brothers,  "Arr.  cool 
and  sweet."  The  printed  form  on  which  this  so-called  confirmation 
was  made  out  contained  in  print  at  the  bottom  the  following: 

This  sale  subject  to  rules  of  T3oston  Chamber  of  Commerce  gov- 
erning trade  in  grain. 

Stiitfr  or  official  board  of  trade,  inspection  and  test  weights  shall 
be  fin.'il. 

'  CoLLiNB,  M.  Tl.  and  Mathews,  L.  J.  delivered  concurrinp;  opinions. 


SECT.    l]         CAVANAUGH    V.   D.    W.   RANLET   COMPANY  145 

'J'liis  is  a  contract  and  will  be  considered  mutually  binding;  unless 
we  are  advised  of  its  non-acceptance  by  wire. 

If  any  error  m  above  please  advise  by  return  mail. 
"We  thank  you  for  the  order. 

Yours  truly, 

The  D.  W.  Eanlet  Co., 
Per ....  Smith 

N"o  answer  was  sent  by  the  plaintiffs. 

The  plaintiff  paid  a  draft  for  the  price  on  tender  of  a  bill  of 
lading.  On  arrival  the  oats  were  found  not  cool  and  sweet,  but  the 
defendant  contended  that  notice  of  the  defect  was  not  given  within 
the  time  required  by  the  rules  of  the  Boston  Chamber  of  Commerce. 

At  the  close  of  the  evidence  the  Judge  ordered  a  verdict  for  the 
defendant  and  reported  the  case  for  determination  by  this  court; 
the  parties  stipulating  that  if  the  jury  would  have  been  warranted 
in  returning  a  verdict  for  the  plaintiff,  judgment  should  be  entered 
for  him  in  the  sum  of  $645.52. 

Braley,  J. :  If  the  paper  sent  by  defendant  to  the  plaintiffs  is 
examined,  the  word  "confirmation"  is  not  found.  It  purj)orts  to  be 
a  memorandum  of  a  sale  of  two  cars  "straight  clipped  white  oats," 
one  of  which  is  the  car  in  question,  with  a  statement  of  the  price, 
warranty  and  terms  of  shipment.  It  does  not  purport  to  confirm 
the  oral  contract.  It  is  of  itself  an  offer  to  sell  which  upon  accept- 
ance by  the  offerees  would  become  a  binding  sale.  The  words,  "This 
is  a  contract  and  will  be  considered  mutually  binding  unless  we 
are  advised  of  its  non-acceptance  by  wire.  If  any  error  in  above 
please  advise  by  return  mail,"  immediately  preceding  the  defendant's 
signature,  admit  of  no  other  satisfactory  construction.  It  could 
not  be  ruled  as  matter  of  law,  that,  if  the  "confirmation"  were 
treated  as  an  olter,  it  became  a  binding  agreement  from  the  failure 
of  the  plaintiffs  to  reply.  The  jury  under  all  the  circumstances  were 
to  say  whether  the  plaintiffs'  silence  amounted  to  an  assent.  Quin- 
tard  V.  Bacon,  99  Mass.  185.  Borrowscale  v.  Bosworth,  99  Mass, 
378.  Metropolitan  Coal  Co.  v.  Boutell  Transportation  &  Towing 
Co.  185  Mass.  391,  395.  If  the  jury  found  the  oral  contract  had 
not  been  established,  then,  if  accepted  by  the  plaintiffs,  the  "con- 
firmation" would  constitute  the  contract.  Metropolitan  Coal  Co.  v. 
Boutell  Transportation  &  Towing  Co.  ubi  supra.  But,  if  they  found 
the  oral  contract  had  been  proved,  the  further  question,  w^hether 
that  contract  had  been  mutually  modified,  rescinded  or  abandoned, 
was  a  question  of  fact  under  suitable  instructions.  Hanson  &  Parker, 
Ltd.  V.  Wittenberg,  205  Mass.  319,  326,  and  cases  cited. 

Judgment  for  the  plaintiff  in  the  agreed  sum.  ivas  ordered} 

^  The  statement  of  facts  is  abbreviated  and  a  portion  of  the  opinion  omitted. 


146  WHEELER    V.    KLAHOLT  [CHAP.    I 

JOHN  F.  WHEELER  and  Anothee  v.  A.  W.  KLAHOLT 

AND  Anothee 

SuPEEME  Judicial  Court  of  Massachusetts,  January  7- 
March  1,  1901 

[Re'ported  in  178  Massachusetts,  141] 

Holmes,  C.  J.  This  is  an  action  for  the  price  of  one  hundred 
and  seventy-four  pairs  of  shoes,  and  the  question  raised  by  the  de- 
fendants' exception  is  whether  there  was  any  evidence,  at  the  trial, 
of  a  purchase  by  the  defendants.^ 

The  evidence  of  the  sale  was  this.  The  shoes  had  been  sent  to  the 
defendants  on  the  understanding  that  a  bargain  had  been  made.  It 
turned  out  that  the  parties  disagreed,  and  if  any  contract  had  been 
made  it  was  repudiated  by  them  both.  Then,  on  September  11, 
1899,  the  plaintiffs  wrote  to  the  defendants  that  they  had  written 
to  their  agent.  Young,  to  inform  the  defendants  that  the  latter  might 
keep  the  goods  "at  the  price  you  offer  if  you  send  us  net  spot  cash 
at  once.  If  you  cannot  send  us  cash  draft  by  return  mail,  please  re- 
turn  the  goods  to  us  immediately  via  Wabash  &  Fitchbur^  Railroad, 
otEerwise'T^hey  will  go  through  New  York  City  and  it  would  take 
three  or  four  weeks  to  get  them."  On  September  15,  the  defendants 
enclosed  a  draft  for  the  price  less  four  per  cent,  which  they  said 
was  the  proposition  made  by  Young.  On  September  18  the  plain- 
tiffs replied,  returning  the  draft,  saying  that  there  was  no  deduction 
of  four  per  cent,  and  adding,  "if  not  satisfactory  please  return  the 
goods  at  once  by  freight  via  Wabash  &  Fitchburg  Railroad."  This 
letter  was  received  by  the  defendants  on  or  before  September  20, 
but  the  plaintiffs  heard  nothing  more  until  October  25,  when  they 
were  notified  by  the  railroad  company  that  the  goods  were  in  Boston. 

It  should  be  added  that  when  the  goods  were  sent  to  the  defendants 
they  were  in  good  condition,  new,  fresh,  and  well  packed,  and  that 
when  the  plaintiffs  opened  the  returned  cases  their  contents  were 
more  or  less  defaced  and  some  pairs  of  shoes  were  gone.  It  fairly 
might  be  inferred  that  the  cases  had  been  opened  and  the  contents 
tumbled  about  by  the  defendants,  although  whether  before  or  after 
the  plaintiffs'  final  offer  perhaps  would  be  little  more  than  a  guess. 

Both  parties  invoke  Hobbs  v.  Massasoit  Whip  Co.,  158  Mass.  194, 
the  defendants  for  the  suggestion  on  p.  197  that  a  stranger  by  send- 
ing goods  to  another  cannot  impose  a  duty  of  notification  upon  him 
at  the  risk  of  finding  himself  a  jmrchaser  against  his  own  will.  We 
are  of  opinion  that  this  proposition  gives  tbe  defendants  no  help. 
The  parties  were  not  strangers  to  each  other.  The  goods  had  not 
been  foisted  upon  the  defendants,  but  were  in  their  custody  pre- 
Buma})ly  by  tlicir  previous  assent,  at  all  events  by  their  assent  im- 
plied by  their  later  conduct.  The  relations  between  the  parties  were 
1  A  part  of  the  opinion  relating  to  a  question  of  practice  is  omitted. 


SECT.    l]  PRESCOTT    V.    JONES  147 

SO  far  similar  to  those  in  the  case  cited,  that  if  the  plaintiffs'  offer 
had  been  simply  to  let  the  defendants  have  the  shoes  at  the  price 
named,  with  an  alternative  request  to  send  them  back  at  once,  as 
in  their  letters,  the  decision  would  have  applied,  and  a  silent  re- 
tention of  the  shoes  for  an  unreasonable  time  would  have  been  an 
acceptance  of  the  plaintiffs'  terms,  or,  at  least  would  have  warranted 
a  finding  that  it  was.  See  also  Bohn  Manuf.  Co.  v.  Sawyer,  169 
Mass.  477. 

The  defendants  seek  to  escape  the  effect  of  the  foregoing  prin- 
ciple, if  held  applicable,  on  the  ground  of  the  terms  offered  by  the 
plaintiffs.  They  say  that  those  terms  made  it  impossible  to  accept 
the  plaintiffs'  offer,  or  to  give  the  plaintiffs  any  reasonable  ground 
for  understanding  that  their  offer  was  accepted,  otherwise  than  by 
promptly  forwarding  the  cash.  They  say  that  whatever  other  lia- 
bilities they  may  have  incurred  they  could  not  have  purported  to 
accept  an  offer  to  sell  for  cash  on  the  spot  by  simply  keeping  the 
goods.  But  this  argument  appears  to  us  to  take  one  half  of  the 
plaintiffs'  proposition  with  excessive  nicety,  and  to  ignore  the  al- 
ternative. Probably  the  offer  could  have  been  accepted  and  the  bar- 
gain have  been  made  complete  before  sending  on  the  cash.  At  all 
events  we  must  not  forget  the  alternative,  which  was  the  immediate 
return  of  the  goods. 

The  evidence  warranted  a  finding  that  the  defendants  did  not  re- 
turn the  goods  immediately  or  within  a  reasonable  time,  although 
subject  to  a  duty  in  regard  to  them.     The  case  does  not  stand  as 
a  simple  offer  to  sell  for  cash  received  in  silence,  but  as  an  alterna- 
tive offer  and  demand  to  and  upon  one  who  was  subject  to  a  duty    /J^e^t-^r- 
to  return  the  goods,  allowing  him  either  to  buy  for  cash  or  to  return 
the  shoes  at  once,  followed  by  a  failure  on  his  part  to  do  anything. 
Under  such  circumstances  a  jury  would  be  warranted  in  finding  that  -t^ 
a  neglect  of  the  duty  to  return  imported  an  acceptance  of  the  alter-  •  /    (.^ 
native  offer  to  sell,  although  coupled  with  a  failure  to  show  that  «^/y.  jj 
promptness  on  which  the  plaintiffs  had  a  right  to  insist  if  they  saw  y^..^^ 
fit,  but  which  they  also  were  at  liberty  to  waive.    «<>  t^  tf^^^-Xri^    V.  ^^\ 

Exceptions  overruled.  ^^«*^ 

PKESCOTT  V.  JONES,  et  al. 
!N^EW  Hampshire  Supreme  Court,  June,  1898 

[Reported  in  69  New  Hampshire,  305] 

Assumpsit.  The  declaration  alleged,  in  substance,  that  the  de- 
fendants, as  insurance  agents,  had  insured  the  plaintiff's  buildings 
in  the  Manchester  Fire  Insurance  Company  until  February  1,  1897; 
that  on  January  23,  1897,  they  notified  him  that  they  would  renew 
the  policy  and  insure  his  buildings  for  a  further  term  of  one  year 


148  PRESCOTT    V.    JONES  [CHAP.   I 

from  February  1,  1897,  in  the  sum  of  $500,  unless  notified  to  the 
contrary  by  him;  that  he,  relying  on  the  promise  to  insure  unless 
notified  to  the  contrary,  and  believing,  as  he  had  a  right  to  believe, 
that  the  buildings  would  be  insured  by  the  defendants  for  one  year 
from  February  1,  1897,  gave  no  notice  to  them  to  insure  or  not  to 
insure;  that  they  did  not  insure  the  buildings  as  they  had  agreed  and 
did  not  notify  him  of  their  intention  not  to  do  so ;  that  the  buildings 
were  destroyed  by  fire  March  1,  1897,  without  fault  on  the  plaintiff's 
part.     The  defendants  demurred. 

John  T.  Barthtt,  Burnham,  Brown  &  Warren,  and  Isaac  W. 
Smith,  for  the  plaintiff. 

Drury  &  Peaslee,  for  the  defendants. 

Blodgett,  J.  "While  an  offer  will  not  mature  into  a  complete 
and  effectual  contract  until  it  is  acceded  to  by  the  party  to  whom 
it  is  made  and  notice  thereof,  either  actual  or  constructive,  given  to 
the  maker  (Abbot  v.  Shepard,  48  N.  H.  14,  17;  Perry  v.  Insurance 
Co.,  67  ]^.  H.  291,  294,  295),  it  must  be  conceded  to  be  within  the 
power  of  the  maker  to  prescribe  a  particular  form  or  mode  of  accept- 
ance; and  the  defendants  having  designated  in  their  offer  what  they 
would  recognize  as  notice  of  its  acceptance,  namely,  failure  of  the 
plaintiff  to  notify  them  to  the  contrary,  they  may  properly  be  held 
'  to  have  waived  the  necessity  of  formally  communicating  to  them  the 
fact  of  its  acceptance  by  him. 

But  this  did  not  render  acceptance  on  his  part  any  less  necessary 
than  it  would  have  been  if  no  particular  form  of  acceptance  had 
been  prescribed,  for  it  is  well  settled  that  "a.  party  cannot,  by  the 
wording  of  his  offer,  turn  the  absence  of  communication  of  accept- 
ance into  an  acceptance,  and  compel  the  recipient  of  his  offer  to  re- 
fuse it  at  the  peril  of  being  held  to  have  accepted  it."  Clark  Cont. 
31,  32.  "A  person  is  under  no  obligation  to  do  or  say  anything  con- 
cerning a  proposition  which  he  does  not  choose  to  accept.  There 
must  be  actual  acceptance  or  there  is  no  contract."  More  v.  In- 
surance Co.,  130  ]Sr.  Y.  537,  547.  And  to  constitute  acceptance, 
"there  must  be  words,  written  or  spoken,  or  some  other  overt  act." 
Bish.  Cont.,  s.   329,  and  authorities  cited. 

If,  therefore,  the  defendants  might  and  did  make  their  offers  in 
such  a  way  as  to  dispense  Avith  the  conrrmmicntion  of  its  acceptance 
to  tlicm  in  a  formal  and  diroc-t  imiiinov,  tlioy  did  not  and  could  not 
80  frame  it  as  to  render  the  plaintiff  liable  as  having  accepted  it 
mendy  because  he  did  not  communicate  liis  intention  not  to  accept  it. 
And  if  the  plaintiff  was  not  bound  by  the  offer  until  he  accepted 
it,  the  defendants  could  not  be,  because  "it  takes  two  to  make  a 
bargain,"  and  as  contracts  rest  on  mutual  promises,  both  parties 
an;  bonnd,  or  neither  is  bound. 

The  inquiry  as  to  the  defendants'  liability  for  the  non-performance 
of  their  offer  thus  becomes  restricted  to  the  question.  Did  the  plain- 
tiff accept  the  offer,  so  that  it  became  by  his  action  clothed  with 


SECT.    l]  PRESCOTT    V.    JONES  149 

legal  consideration  and  perfected  with  the  requisite  condition  of 
mutuality  ?  As,  in  morals,  one  who  creates  an  expectation  in  another 
by  a  gratuitous  promise  is  doubtless  bound  to  make  the  expectation 
good,  it  is  perhaps  to  be  regretted  that,  upon  the  facts  before  us, 
we  are  constrained  to  answer  the  question  in  the  negative.  While 
a  gratuitous  undertaking  is  binding  in  honor,  it  does  not  create  a 
legal  responsibility.  Whether  wisely  and  equitably  or  not,  the  law 
requires  a  consideration  for  those  promises  which  it  will  enforce; 
and  as  the  plaintiff  paid  no  premium  for  the  policy  which  the  de- 
fendants proposed  to  issue,  nor  bound  himself  to  pay  any,  there  was 
no  legal  consideration  for  their  promise,  and  the  law  will  not  en- 
force it. 

Then,  again,  there  was  no  mutuality  between  the  parties.  All  the 
plaintiff  did  was  merely  to  determine  in  his  own  mind  that  he  would 
accept  the  offer  —  for  there  was  nothing  whatever  to  indicate  it 
by  way  of  speech  or  other,  appropriate  act.  Plainly,  this  did  not 
create  any  right  in  his  favor  as  against  the  defendants.  From  the 
very  nature  of  a  contract  this  must  be  so;  and  it  therefore  seems 
superfluous  to  add  that  the  universal  doctrine  is  that  an  uncom- 
municated  mental  determination  cannot  create  a  binding  contract. 

'Not  is  there  any  estoppel  against  the  defendants,  on  the  ground 
that  the  plaintiff  relied  upon  their  letter  and  believed  they  would 
insure  his  buildings  as  therein  stated. 

The  letter  was  a  representation  only  of  a  present  intention  or 
purpose  on  their  part.  "It  was  not  a  statement  of  a  fact  or  state 
of  things  actually  existing,  or  past  and  executed,  on  which  a  party 
might  reasonably  rely  as  fixed  and  certain,  and  by  which  he  might 
properly  be  guided  in  his  conduct.  .  .  .  The  intent  of  a  party,  how- 
ever positive  or  fixed,  concerning  his  future  action,  is  necessarily 
uncertain  as  to  its  fulfilment,  and  must  depend  on  contingencies 
and  be  subject  to  be  changed  and  modified  by  subsequent  events  and 
circumstances.  .  .  .  On  a  representation  concerning  such  a  matter 
no  person  would  have  a  right  to  rely,  or  to  regulate  his  action  in 
relation  to  any  subject  in  which  his  interest  was  involved  as  upon 
a  fixed,  certain,  and  definite  fact  or  state  of  things,  permanent  in 
its  nature  and  not  liable  to  change.  .  .  .  The  doctrine  of  estoppel 
...  on  the  ground  that  it  is  contrary  to  a  previous  statement  of 
a  party  does  not  apply  to  such  a  representation.  The  reason  on 
which  the  doctrine  rests  is,  that  it  w^ould  operate  as  a  fraud  if  a 
party  was  allowed  to  aver  and  prove  a  fact  to  be  contrary  to  that 
which  he  had  previously  stated  to  another  for  the  purpose  of  inducing 
him  to  act  and  to  alter  his  condition,  to  his  prejudice,  on  the  faith 
of  such  previous  statement.  But  the  reason  wholly  fails  when  the 
representation  relates  only  to  a  present  intention  or  purpose  of  a 
party,  because,  being  in  its  nature  uncertain  and  liable  to  change,  it 
could  not  properly  form  a  basis  or  inducement  upon  which  a  party 
could  reasonably  adopt  any  fixed  and  permanent  course  of  action." 


150  PHILLIPS     V.     MOOR  [CHAP.I 

Langdon  v.  Doud,  10  Allen,  433,  436,  437,  Jackson  v.  Allen,  120 
Mass.  64,  79;  Jorden  v.  Money,  5  H.  L.  Cas.  185, 

^'An  estoppel  cannot  arise  from  a  promise  as  to  future  action  with 
respect  to  a  right  to  be  acquired  upon  an  agreement  not  yet  made." 
Insurance  Co.  v.  Mowry,  96  U.  S.  544,  547.  "The  doctrine  has  no 
place  for  application  when  the  statement  relates  to  rights  depending 
upon  contracts  yet  to  be  made,  to  which  the  person  complaining  is 
to  be  a  party.  He  has  it  in  his  power  in  such  cases  to  guard  in 
advance  against  any  consequences  of  a  subsequent  change  of  intention 
by  the  person  with  whom  he  is  dealing."  lb.  548.  See,  in  addition : 
White  V.  Ashton,  51  N.  Y.  280;  Mason  v.  Bridge  Co.,  28  W.  Ya. 
639,  649;  Jones  v.  Parker,  67  Tex.  76,  81,  82;  Big.  Estop.  (5th  ed.) 
574. 

To  sum  it  up  in  a  few  words,  the  case  presented  is,  in  its  legal 
aspects,  one  of  a  party  seeking  to  reap  where  he  had  not  sown,  and 
to  gather  where  he  had  not  scattered.  Demurrer  sustained.^ 

Peaslee,  J.,  did  not  sit :  the  others  concurred. 


AUGUSTUS  L.  PHILLIPS,  by  his  Guardian,  v. 
GEORGE  L.  MODE 

Supreme  Judicial  Court  of  Maine,  March  8,  1880 

[Reported  in  71  Maine,  78] 

Barrows,  J.^  Negotiations  by  letter,  looking  to  the  purchase  by 
the  defendant  of  a  quantity  of  hay  in  the  plaintiff's  barn,  had  re- 
sulted in  the  pressing  of  the  hay  by  the  defendant's  men,  to  be  paid 
for  at  a  certain  rate  if  the  terms  of  sale  could  not  be  agreed  on; 
and  in  written  invitations  from  plaintiff's  guardian  to  defendant, 
to  make  an  offer  for  the  hay,  in  one  of  which  he  says :  "If  the  price 
is  satisfactory  I  will  write  you  on  receipt  of  it;"  and  in  the  other: 
"If  your  offer  is  satisfactory  I  shall  accept  it;  if  not,  I  will  send 
you  the  money  for  pressing."  Friday,  June  14th,  defendant  made 
an  examination  of  the  hay  after  it  had  been  pressed,  and  wrote  to 
plaintiff's  guardian,  same  day  .  .  .  "Will  give  $9.50  per  ton,  for 
all  but  three  tons,  and  for  that  I  will  give  $5.00."  Plaintiff's 
guardian  lived  in  Carmel,  fourteen  miles  from  Bangor,  where  de- 
fendant lived,  and  there  is  a  daily  mail  communication  each  way 
between  the  two  places.  The  card  containing  defendant's  offer  was 
mailed  at  Bangor,  June  15,  and  probably  received  by  plaintiff  in 
rf't^nlar  conrsc,  about  nine  o'clock  a.m.  that  day.  The  plaintiff  does 
not  fleiiy  tliis,  tliough  he  says  he  does  not  always  go  to  the  office,  and 
thf  mail   is  sometimes  carried  by.     deceiving  no  better  offer,  and 

•  Folthousf  V.  Hinflloy,  11  C.  B.  N.  h.  868,  arc. 

'  A  y)f)rtif)ri  of  thi-  opinion  is  omittnd  in  whir'li  it  was  held  that  on  the  COmpletiOEt 
of  the  eontruct,  title  to  the  hay  passed  to  the  buyer. 


SECT.    l]  PHILLIPS    V.    MOOR  151 

being  offered  less  by  another  dealer,  on  Thursday,  June  20th,  he 
went  to  Bangor,  and  there,  not  meeting  the  defendant,  sent  him 
through  the  post-office  a  card,  in  which  he  says  he  was  in  hopes  de- 
fendant would  have  paid  him  $10.00  for  the  best  quality:  "But  you 
can  take  the  hay  at  your  offer,  and  when  you  get  it  hauled  in,  if 
you  can  pay  the  $10.00  I  would  like  to  have  you  do  it,  if  the  hay 
proves  good  enough  for  the  price."  Defendant  received  this  card 
that  night  or  the  next  morning,  made  no  reply,  and  Sunday  morn- 
ing the  hay  was  burnt  in  the  barn.  Shortly  after,  when  the  parties 
met,  the  plaintiff  claimed  the  price  of  the  hay  and  defendant  denied 
his  liability,  and  asserted  a  claim  for  the  pressing.    Hence  this  suit. 

The  guardian's  acceptance  of  the  defendant's  offer  was  absolute 
and  unconditional.  It  is  not  in  any  legal  sense  qualified  by  the 
expression  of  his  hopes,  as  to  what  the  defendant  would  have  done, 
or  what  he  would  like  to  have  him  do,  if  the  hay  when  hauled  proved 
good  enough.  Aside  from  all  this,  the  defendant  was  told  that  he 
could  take  the  hay  at  his  own  offer.  It  seems  to  have  been  the  in- 
tention and  understanding  of  both  the  parties  that  the  property 
should  pass.  The  defendant  does  not  deny  what  the  guardian  testi- 
fies he  told  him  at  their  conference  after  the  hay  was  burned,  —  that 
he  had  agreed  with  a  man  to  haul  the  hay  for  sixty  cents  a  ton. 
The  guardian  does  not  seem  to  have  claimed  any  lien  for  the  price, 
or  to  have  expected  payment  until  the  hay  should  have  been  hauled 
by  the  defendant.  But  the  defendant  insists  that  the  guardian's  ac- 
ceptance of  his  offer  was  not  seasonable;  that  in  the  initiatory  cor- 
respondence the  guardian  had  in  substance  promised  an  immediate 
acceptance  or  rejection  of  such  offer  as  he  might  make,  and  that 
the  offer  was  not,  in  fact,  accepted  within  a  reasonable  time. 

If  it  be  conceded  that  for  want  of  a  more  prompt  acceptance  the 
defendant  had  the  right  to  retract  his  offer,  or  to  refuse  to  be  bound 
by  it  when  notified  of  its  acceptance,  still  the  defendant  did  not 
avail  himself  of  such  right.  Two  days  elapsed  before  the  fire  after 
the  defendant  had  actual  notice  that  his  offer  was  accepted,  and  he 
permitted  the  guardian  to  consider  it  sold,  and  made  a  bargain  with 
a  third  party  to  haul  it. 

It  is  true  that  an  offer,  to  be  binding  upon  the  party  making  it, 
must  be  accepted  within  a  reasonable  time.  Peru  v.  Turner,  10 
Maine,  185;  but  if  the  party  to  whom  it  is  made,  makes  known  his 
acceptance  of  it  to  the  party  making  it,  within  any  period  which 
he  could  fairly  have  supposed  to  be  reasonable,  good  faith  requires 
the  maker,  if  he  intends  to  retract  on  account  of  the  delay,  to  make 
known  that  intention  promptly.  If  he  does  not,  he  must  be  regarded 
as  waiving  any  objection  to  the  acceptance  as  being  too  late.^ 

1  "In  the  instruction  the  Court  ruled,  in  effect,  that  the  acceptance  became  binding 
upon  the  parties,  unless  the  plaintiff  immediately  notified  the  defendant  that  he  had 
withdrawn  his  offer.  The  rule  now  supported  by  the  great  preponderance  of  author- 
ity, and  almost,  if  not  quite,  universally  adhered  to,  is  that,  when  a  proposal  is  accepted 
by  letter,  the  contract  is  deemed  to  become  complete  when  the  letter  is  mailed,  pro- 


152  ANONYMOUS  [CHAP.   I 

SECTION^   II 
CONSIDERATION 


A.  —  Early  Development 


ANONYMOUS 

In  the  Common  Pleas,  Michaelmas  Term,   1504 

l^Reported  in  Keilwey,  77  placitum,  25] 

In  action  of  trespass  on  the  case  the  plaintiff  counted  that  he 
had  bought  of  the  defendant  twenty  quarters  of  malt  for  a  certain 
sum  of  money  paid  beforehand,  and  he  left  it  with  the  defendant 
to  safely  keep  to  the  use  of  the  plaintiff  until  a  certain  day  now 
passed,  and  to  do  this  the  defendant  super  se  assumpsit.  Before 
the  day  the  defendant  from  the  good  custody  of  the  defendant  him- 
self had  converted  the  said  malt  to  his  own  use,  to  the  injury  and 
damage  of  the  plaintiff,  &c.  More.  The  plaintiff  has  counted  that 
he  bought  twenty  quarters  of  malt  and  has  not  shown  that  it  was 
in  sacks,  so  by  the  purchase  no  property  was  passed,  for  the  plaintiff 
cannot  take  this  malt  from  the  storehouse  of  the  defendant  because 
of  such  a  purchase  of  uncertain  malt,  nor  can  he  have  action  of 

vided  the  offer  is  standing,  and  the  acceptance  is  made  within  a  reasonable  time.  .  .  . 
It  will  be  seen  that  the  rule  is  sharply  defined.  The  instruction  given  seems  to  us  to 
be  a  departure  from  it.  It  assumes  that  the  contract  in  the  case  at  bar  was  not  neces- 
sarily complete  when  the  letter  of  acceptance  was  mailed,  and  that  no  contract  would 
have  been  made,  if  the  plaintiff  immediately  upon  the  receipt  of  the  letter  had  notified 
the  defendant  that  the  offer  wag  withdrawn.  The  departure  from  the  recognized  rule 
must  have  been  deemed  called  for  upon  the  ground  that  the  letter  of  acceptance  was 
not  mailed  within  a  reasonable  time.  The  court,  doubtless,  assumed  the  rule  to  be, 
that  a  contract  by  the  correspondence  is  not  completed  by  the  mailing  of  the  letter  of 
acceptance,  where  that  is  not  done,  within  a  reasonable  time.  .  .  .  Taking  this  to  be 
the  rule,  we  have  to  inquire  whether  an  acceptance  after  the  time  limited,  or,  in  the 
absence  of  an  express  limitation,  after  the  lapse  of  a  reasonable  time,  imposes  upon 
the  jjorson  making  the  offer  any  obligation.  The  theory  of  the  court  below  seems  to 
have  been  that  it  does.  But  in  our  opinion  it  does  not.  The  offer,  unless  sooner  with- 
drawn, stands  during  the  time  limited,  or,  if  there  is  no  express  limitation,  during  a 
rcasonaljh;  time.  Until  the  end  of  that  time  the  offer  is  regarded  as  being  constantly 
repeated.  Chitty  on  Cont.  (11th  ed.),  17.  After  that  there  is  no  offer,  and,  properly 
con.sidered,  nothing  to  withdraw.  The  time  having  expired,  there  is  nothing  which 
the  acceptor  can  do  to  revive  the  offer,  or  produce  an  extension  of  time."  Ferrier  v. 
Storer,  G.3  la.  484,  4S7.     See  also  Maclay  v.  Harvey,  90  111.  525. 

fThe  offerer  when  he  has  received  an  acceptance  which  is  too  late]  "would  act 
nnifl'Titlv  and  fairly  if  he  infornied  his  corrcspoiHleiit  that  lie  had  given  up  the  trans- 
actif)ii  and  was  no  longer  disposed  to  bind  hiiriself  i)y  the  agreement  in  regard  to 
which  he  harl  at  first  taken  the  initiative.  Otherwise,  indeed,  his  silence  might  be 
foriHidercfl  as  imi)orting  tacit  assent  to  the  proposition  ex  novo  contained  in  the  late 
acceptance.  .  •  •  These  conHideration,s  have  such  force  that  they  have  led  to  some 
IcciHhitiori  imposiiig  on  every  one  who  luus  niad(;  an  offer  by  correspondence  the  duty 
to  inform  his  corrcHpoiKlfnt  that  the  acfv-ptance  has  arrivt-d  too  late.  German 
Commercial  Corle,  Art.  :{11>;  Swiss  Foderal  Code  of  Obligations,  Art.  5;"  Val6ry 
Contrats  par  f:orr.;.spondanee,    §  2[i\i. 


SECT.    I]  ANONYMOUS  153 

detinue,  nor,  for  the  same  reason,  action  on  the  case,  but  as  the  case 
is  here  he  is  put  to  his  action  of  debt  for  the  malt.  And  the  matter 
was  discussed  at  the  bar,  and  then  by  all  the  bench.  On  which 
Fkowike  said :  Truly  the  case  is  good,  and  many  good  cases  touching 
the  matter  have  been  put;  nevertheless  the  words  at  the  purchase 
are  the  whole  matter.  As,  if  a  man  sells  me  one  of  his  horses  in  his 
stable,  and  grants  further  that  he  will  deliver  the  horse  to  me  by 
a  certain  day,  I  shall  not  take  the  horse  without  his  delivery.  But 
if  he  sells  to  me  one  of  his  horses  within  his  stable  for  a  certain 
sum  of  money  paid  beforehand,  I  can  take  the  horse  —  that  is  such 
horse  as  pleases  me  —  without  any  delivery.  And  in  both  cases  if 
he  aliens  or  converts  all  his  horses  to  his  own  use  so  that  I  cannot 
have  my  bargain  carried  out,  I  shall  have  action  on  my  case  against 
him  because  of  the  payment  of  the  money.  And  so  if  I  sell  ten 
acres  of  land,  parcel  of  my  manor,  and  then  I  make  feoffment  of 
the  manor,  you  will  have  good  action  against  me  on  your  case  be- 
cause of  the  receipt  of  your  money,  and  in  this  case  you  have  no 
other  remedy  against  me.  And  so  if  I  sell  you  certain  land,  and 
I  covenant  further  to  enfeoff  you  by  a  certain  day  and  do  not,  you 
will  have  good  action  on  the  case,  and  that  is  adjudged.  And  so 
if  I  sell  you  twenty  oaks  from  my  wood  for  money  paid,  and  then 
I  alien  the  wood,  action  on  the  case  lies.  And  so  if  I  deliver  money 
to  his  own  use,  I  can  elect  to  have  action  of  account  against  him  or 
action  on  my  case;  but  the  stranger  has  no  other  remedy  except 
action  of  account.  And  so  if  I  bail  my  goods  to  a  man  to  safely 
keep,  and  he  takes  the  custody  upon  him,  and  my  goods  for  lack  of 
good  custody  are  lost  or  destroyed,  I  shall  have  action  of  detinue, 
or  on  my  case  at  my  pleasure,  and  shall  charge  him  by  this  word 
super  se  assumpsit.  And  if  I  make  use  of  my  action  of  detinue  and 
he  wages  his  law,  I  shall  be  barred  in  action  on  my  case,  because 
since  I  had  liberty  to  elect  action  of  detinue  it  was  at  my  peril, 
and  I  have  lost  the  advantage  of  the  action  on  my  case,  and  this 
is  adjudged.  As,  if  I  hold  an  acre  of  land  by  fealty,  twenty  shillings 
of  rent,  or  by  a  hawk  or  a  rose,  in  the  disjunctive,  in  this  case  before 
the  rent  day  I  have  liberty  to  pay  the  hawk,  rose,  or  otherwise  the 
twenty  shillings,  at  my  pleasure.  And  if  I  covenant  with  a  car- 
penter to  build  a  house  and  pay  him  twenty  pounds  for  the  house 
to  be  built  by  a  certain  day,  now.  I  shall  have  good  action  on  my 
case  because  of  payment  of  my  money,  and  still  it  sounds  only  in 
covenant,  and  without  payment  of  money  in  this  case  no  remedy; 
and  still  if  he  builds  it  and  misbuilds  it,  action  on  my  case  lies.  And 
also  for  nonfeasance,  if  the  money  is  paid  action  on  the  case  lies. 
And  hence  it  seems  to  me  in  the  case  at  bar  the  payment  of  the 
money  is  the  cause  of  the  action  on  the  case  without  any  passing  of 
any  property,  &c.,  et  adjournatur,  &c.^ 

1  The  stages  in  the  early  development  of  assumpsit  are  shown  in  Professor  Ames's 
articles  on  The  History  of  Assumpsit,  2  Harv.  L.  Rev.  1,  53. 


154  SMITH   AND   smith's    CASE  [CHAP.   I 

HUNT  V.  BATE 

Eastee  Tekm,  1568 
{Reported  in  Dyer,  272] 

The  servant  of  a  man  was  arrested,  and  imprisoned  in  the  Compter 
in  London  for  trespass;  and  he  was  let  to  mainprize  by  the  manu- 
caption of  two  citizens  of  London  (who  were  all  acquainted  with 
the  master),  in  consideration  that  the  business  of  the  master  should 
not  go  undone.  And  afterwards,  before  judgment  and  condemnation, 
the  master  upon  the  said  friendly  consideration  promised  and  un- 
dertook to  one  of  the  mainpernors  to  save  him  harmless  against  the 
party  plaintiff  from  all  damages  and  costs,  if  any  should  be  adjudged, 
as  happened  afterwards  in  reality;  whereupon  the  surety  was  com- 
pelled to  pay  the  condemnation,  sc.  31L,  &c.  And  thereupon  he 
brought  an  action  on  the  case,  and  the  undertaking  was  traversed 
by  the  master,  and  found  in  London  at  nisi  prius  against  him.  And 
now  in  arrest  of  judgment  it  was  moved  that  the  action  does  not  lie. 
And  by  the  opinion  of  the  Court  it  does  not  lie  in  this  matter,  be- 
cause there  is  no  consideration  whereupon  the  defendant  should  be 
charged  for  the  debt  of  his  servant,  unless  the  master  had  first  prom- 
ised to  discharge  the  plaintiff  before  the  enlargement  and  mainprize 
made  of  his  servant,  for  the  master  did  never  make  request  to  the 
plaintiff  for  his  servant  to  do  so  much,  but  he  did  it  of  his  own 
head.     Wherefore,  &c. 

But  in  another  like  action  on  the  case,  brought  upon  a  promise 
of  20/.  made  to  the  plaintiff  by  the  defendant,  in  consideration  that 
the  plaintiff,  at  the  special  instance  of  the  said  defendant,  had  taken 
to  wife  the  cousin  of  the  defendant,  that  was  good  cause,  although 
the  marriage  was  executed  and  past  before  the  undertaking  and 
promise,  because  the  marriage  ensued  the  request  of  the  defendant.^ 
And  land  may  be  also  given  in  frank-marriage  with  the  cousin  of 
the  donor  as  well  after  the  marriage  as  before,  because  the  marriage 
may  be  intended  the  cause,  &c.  And  therefore  the  opinion  of  the 
Court  in  this  case  this  Term  was,  that  the  plaintiff  should  recover 
upon  the  verdict,  &c.  And  so  note  the  diversity  between  the  afore- 
said cases. 


SMITH  AND  SMITH'S  CASE 

In  the  Qteen's  Bench,  Michaelmas  Term,  1583 

[Reported  in  3  Leonard,  88] 

Lambert  Smith,  executor  of  Tho.  Smith,  brought  an  action  upon 

the  case  against  John  Smith,  that  whereas  the  testator,  having  diAJ-ers 

'  TliKKH  V.  P.tillinKham,  Cro.  Eliz.  715;  BoHclon  v.  Thinno,  Yolv.  40;  Fiold  v.  Dalo, 
1  RoIIc'h  A1).  11,  plac.  8;  Townsend  v.  Hunt,  Cro.  Car.  418;  Oliverson  v.  Wood,  3 
Lev.  419,  ace. 


SECT.    II]  SIDENHAM   AND   WORLINGTON  155 

children  infants,  and  lying  sick  of  a  mortal  sickness,  being  careful 
to  provide  for  his  said  children  infants,  the  defendant,  in  considera- 
tion the  testator  would  commit  the  education  of  his  children,  and 
the  disposition  of  his  goods  after  his  death,  during  the  minority  of 
his  said  children,  for  the  education  of  the  said  children,  to  him 
promised  to  the  testator  to  procure  the  assurance  of  certain  custom- 
ary lands  to  one  of  the  children  of  the  said  testator;  and  declared 
further,  that  the  testator  thereupon  constituted  the  defendant  over- 
seer of  his  will,  and  ordained  and  appointed  by  his  will  that  his 
goods  should  be  in  the  disposition  of  the  defendant,  and  that  the 
testator  died,  and  that  by  reason  of  that  will,  the  goods  of  the  tes- 
tator to  such  a  value  came  to  the  defendant's  hands  to  his  great 
profit  and  advantage.  And  upon  non  assuvfipsit  pleaded,  it  was 
found  for  the  plaintiff.  And  upon  exception  to  the  declaration  in 
arrest  of  judgment  for  want  of  sufficient  consideration,  it  was  said  by 
Wkay,  C.  J.,  that  here  is  not  any  benefit  to  the  defendant  that  should 
be  a  consideration  in  law  to  induce  him  to  make  this  promise;  for 
the  consideration  is  no  other  but  to  have  the  disposition  of  the  goods 
of  the  testator  pro  educatione  liherorum.  For  all  the  disposition  is 
for  the  profit  of  the  children;  and  notwithstanding  that  such  over- 
seers commonly  make  gain  of  such  disposition,  yet  the  same  is  against 
the  intendment  of  the  law,  which  presumes  every  man  to  be  true 
and  faithful  if  the  contrary  be  not  showed;  and  therefore  the  law 
shall  intend  that  the  defendant  hath  not  made  any  private  gain  to 
himself,  but  that  he  hath  disposed  of  the  goods  of  the  testator  to  the 
use  and  benefit  of  his  children  according  to  the  trust  reposed  in 
him.  Which  Ayliffe,  J.,  granted;  Gawdy,  J.,  was  of  the  contrary 
opinion.  And  afterwards  by  award  of  the  Court  it  was  that  the 
plaintiff  nihil  capiat  per  hillam. 


SIDEN"HAM  AND  WORLINGTOJSr 

In  the  Common  Pleas,  Eastee  Term,  1585 

[^Reported  in  2  Leonard,  224] 

In  an  action  upon  the  case  upon  a  promise,  the  plaintiff  declared 
that  he,  at  the  request  of  the  defendant,  was  surety  and  bail  for 
J.  S.,  who  was  arrested  in  the  King's  Bench  upon  an  action  of  30Z., 
and  that  afterwards,  for  the  default  of  J.  S.,  he  was  constrained  to 
pay  the  30L;  after  which  the  defendant,  meeting  with  the  plaintiff, 
promised  him  for  the  same  consideration  that  he  would  repay  that 
30/.,  which  he  did  not  pay ;  upon  which  the  plaintiff  brought  the  ac- 
tion„  The  defendant  pleaded  non  assumpsit,  upon  which  issue  was 
joined,  which  was  found  for  the  plaintiff.  Walmesley,  Serjt.,  for 
the  defendant,  moved  the  Court  that  this  consideration  will  not 
maintain  the  action,  because  the  consideration  and  promise  did  not 
concur  and  go  together;  for  the  consideration  was  long  before  exe- 


156  SIDENHAM    AND   WORLINGTON  [CHAP.    I 

cuted,  so  as  now  it  caimot  be  intended  that  the  promise  was  for 
the  same  consideration :  as  if  one  giveth  me  a  horse,  and  a  month 
•after  I  promise  him  101.  for  the  said  horse,  he  shall  never  have 
debt  for  the  101.,  nor  assumpsit  upon  that  promise;  for  there  it  is 
neither  contract  nor  consideration,  because  the  same  is  executed. 
Anderson.  This  action  will  not  lie;  for  it  is  but  a  bare  agreement 
and  nudum  pactum,  because  the  contract  was  determined,  and  not 
in  esse  at  the  time  of  the  promise;  but  he  said  it  is  otherwise  upon 
a  consideration  of  marriage  of  one  of  his  cousins,  for  marriage  is 
always  a  present  consideration.  Windham  agreed  with  Anderson, 
and  he  put  the  case  in  3  H.  7.  If  one  selleth  a  horse  unto  another, 
and  at  another  day  he  will  warrant  him  to  be  sound  of  limb  and 
member,  it  is  a  void  warrant,  for  that  such  warranty  ought  to  have 
been  made  or  given  at  such  time  as  the  horse  was  sold.  Periam,  J,, 
conceived  that  the  action  did  well  lie;  and  he  said  that  this  case  is 
not  like  unto  the  cases  which  have  been  put  of  the  other  side:  for 
there  is  a  great  difference  betwixt  contracts  and  this  case;  for  in 
contracts  upon  sale,  the  consideration  and  the  promise  and  the  sale 
ought  to  meet  together;  for  a  contract  is  derived  from  con  and 
trahere,  which  is  a  drawing  together,  so  as  in  contracts  every  thing 
which  is  requisite  ought  to  concur  and  meet  together,  viz.,  the  con- 
sideration of  the  one  side,  and  the  sale  or  the  promise  on  the  other 
side.  But  to  maintain  an  action  upon  an  assumpsit,  the  same  is  not 
requisite,  for  it  is  sufficient  if  there  be  a  moving  cause  or  considera- 
tion precedent;  for  which  cause  or  consideration  the  promise  was 
made;  and  such  is  the  common  practice  at  this  day.  For  in  an 
action  upon  the  case  upon  a  promise,  the  declaration  is  laid  that 
the  defendant,  for  and  in  consideration  of  20L  to  him  paid  (postea 
sell.),  that  is  to  say,  at  a  day  after  super  se  assum,psit,  and  that  is 
good;  and  yet  there  the  consideration  is  laid  to  be  executed.  And 
he  said  that  the  case  in  Dyer,  10  Eliz.  272,  would  prove  the  case. 
For  there  the  case  was,  that  the  apprentice  of  one  Hunt  was  ar- 
rested when  his  master  Hunt  was  in  the  country,  and  one  Baker, 
one  of  the  neighbors  of  Hunt,  to  keep  the  said  apprentice  out  of 
prison,  became  his  bail,  and  paid  the  debt.  Afterwards  Hunt,  the 
master,  returning  out  of  the  country,  thanked  Baker  for  his  neigh- 
borly kindness  to  his  apprentice,  and  promised  him  that  he  would 
repay  him  the  sum  which  he  had  paid  for  his  servant  and  appren- 
tice: and  afterwards,  upon  that  promise,  Baker  brought  an  action 
upon  the  case  against  Hunt,  and  it  was  adjudged  in  that  case  that 
the  action  would  not  lie,  because  the  consideration  was  precedent 
to  the  promise,  because  it  was  executed  and  determined  long  before. 
But  in  that  case  it  was  holden  by  all  the  justices  that  if  Hunt  had 
TcqucHU'.d  Bak(;r  to  have  been  surety  or  bail,  and  afterwards  Hunt 
had  made  the  promise  for  the  same  consideration,  the  same  had  been 
good,  for  that  the  consideration  did  precede,  and  was  at  the  instance 
and   request  of  the  defendant.     Rhodes,  J.,  agreed  with  Periam; 


SECT.    Il]  STURLYN    V.   ALBANY  157 

and  he  said  that  if  one  serve  me  for  a  year,  and  hath  nothing  for 
his  service,  and  afterwards,  at  the  end  of  the  year,  I  promise  him 
201.  for  his  good  and  faithful  service  ended,  he  may  have  and  main- 
tain an  action  upon  the  case  upon  the  same  promise,  for  it  is  made 
upon  a  good  consideration;  but  if  a  servant  hath  wages  given  him, 
and  his  master  ex  abundanti  doth  promise  him  101.  more  after  his 
service  ended,  he  shall  not  maintain  an  action  for  that  10/.  upon 
the  said  promise;  for  there  is  not  any  new  cause  of  consideration 
preceding  the  promise;  which  difference  was  agreed  by  all  the  jus- 
tices; and  afterwards,  upon  good  and  long  advice,  and  consideration 
had  of  the  principal  case,  judgment  was  given  for  the  plaintiif ;  and 
they  much  relied  upon  the  case  of  Hunt  and  Baker,  10  Eliz.,  Dyer, 
272. 


CEIPPS  V.  GOLDIN'G 

In  the  Queen's  Bench,  Michaelmas  Teem,  1586 

{^Reported  in  1  Rolls' s  Abridgment,  30] 

If  a  man,  in  consideration  of  a  surrender  and  of  10/.  paid,  prom- 
ises to  do  such  a  thing,  although  the  surrender  cannot  be  made,  so 
that  that  consideration  is  void,  yet  the  action  is  maintainable  upon 
the  other  consideration.^ 


SIK  ANTHOI^Y  STURLYN  v.  ALBANY 

In  the  Queen's  Bench,  Michaelmas  Term,  1587 

{^Reported  in  Crohe  Elizabeth,  67] 

Assumpsit.  The  case  was,  the  plaintiff  had  made  a  lease  to  J.  S. 
of  land  for  life,  rendering  rent.  J.  S.  grants  all  his  estate  to  the 
defendant;  the  rent  was  behind  for  divers  years;  the  plaintiff  de- 
mands the  rent  of  the  defendant,  who  assumed  that  if  the  plaintiff 
could  show  to  him  a  deed  that  the  rent  was  due,  that  he  would  pay 
to  him  the  rent  and  the  arrearages;  the  plaintiff  allegeth  that  upon 
such  a  day  of,  &c.,  at  Warwick,  he  showed  unto  him  the  indenture 
of  lease  by  which  the  rent  was  due,  and  notwithstanding  he  had  not 
paid  him  the  rent  and  the  arrearages  due  for  four  years.  Upon 
non  assumpsit  pleaded,  it  was  found  for  the  plaintiff,  and  damages 
assessed  to  so  much  as  the  rent  and  arrearages  did  amount  unto. 
And  it  was  moved  in  arrest  of  judgment,  that  there  was  no  considera- 
tion to  ground  an  action ;  for  it  is  but  the  showing  of  the  deed,  which 
is  no  consideration.     2.     The   damages  ought  only  to  be  assessed 

^  In  1  Leon,  296,  s.  c.  nom.  Crisp  and  Go!  ding's  Case,  it  was  said  by  Coke,  arguendo: 
"Where  two  or  many  considerations  are  put  in  a  declaration,  although  some  be  void, 
yet  if  one  be  good,  the  action  well  lieth,  and  damages  shall  be  taxed  accordingly." 
Bradburne  v.  Bradburne,  Cro.  El.  149;  Colston  v.  Carre,  1  Rolle's  Ab.  30,  Cro.  El. 
847;    Crisp  v.  Gamel,  Cro.  Jac.  128;   Best  v.  Jolly,  1  Sid.  38,  ace. 


158  RICHES   AND   BRIGGS  [CHAP.   I 

for  the  time  tlie  rent  was  behind,  and  not  for  the  rent  and  the  arrear- 
ages; for  he  hath  other  remedy  for  the  rent;  and  a  recovery  in 
this  action  shall  be  no  bar  in  another  action.  But  it  was  adjudged 
for  the  plaintiff :  for  when  a  thing  is  to  be  done  by  the  plaintiff, 
be  it  never  so  small,  this  is  a  sufficient  consideration  to  ground  an 
action;  and  here  the  showing  of  the  deed  is  a  cause  to  avoid  suit; 
and  the  rent  and  arrearages  may  be  assessed  all  in  damages.  But 
they  took  order  that  the  plaintiff  should  release  to  the  defendant 
all  the  arrearages  of  rent  before  execution  should  be  awarded. 

Nota.  In  this  case  it  was  alleged  that  it  hath  been  adjudged, 
when  one  assumeth  to  another,  that  if  he  can  show  him  an  obligation 
in  which  he  was  bound  to  him,  that  he  would  pay  him,  and  he  did 
show  the  obligation,  &c.,  that  no  action  lieth  upon  this  assumpsit; 
which  was  affirmed  by  the  justices. 


STRANGBOKOUGH  AND  WARNER 

In  the  Queen's  Bench,  1588  ok  1589 

[Reported  in  4  Leonard,  3] 

Note.  That  a  promise  against  a  promise  will  maintain  an  action 
upon  the  case,  as  in  consideration  that  you  do  give  to  me  101.  on 
such  a  day,  I  promise  to  give  you  101.  such  a  day  after.^ 


JEREMY  V.  GOOCHMAN 

In  the  Common  Pleas,  Michaelmas  Term,   1595 

[Reported  in  Crohe  Elizabeth,  442] 

Assumpsit.  And  declares  that,  in  consideration  quod  deliherasset 
et  dedisset  to  the  defendant  twenty  sheep,  he  assumed  to  pay  unto 
him  five  pounds  at  the  time  of  his  marriage;  and  alleged  in  facto 
that  he  was  married,  &c.  The  issue  was  non  assumpsit,  and  found 
for  the  plaintiff;  and  now  moved  in  arrest  of  judgment,  because  it 
is  for  a  consideration  past;  for  it  is  in  the  preter  tense  deliherasset, 
and  therefore  no  cause  of  action.  And  of  that  opinion  was  the 
whole  court;  wherefore  judgment  was  stayed.^ 


RICHES  AND  BRIGGS 

In  the  Queen's  Bench,  Easter  Term,  1601 

[Reported  in  Yelverton,  4] 

In  an  action  on  the  case  the  plaintiff  declared  that,  in  considera- 
tion b(;  had  delivered  to  the  defendant  twenty  quarters  of  wheat,  the 

>  Son  also  Pfcko  v.  "Rfdman,  Dyer,  113  (1555). 

*  Barker  v.  Halifax,  Cro.  Eliz.,  741;    Docket  v.  Voyel,  Cro.  Eliz.,  411,  ace. 


SECT,  ii]  slade's  case  159 

defendant  promised  upon  request  to  deliver  the  same  wheat  again  to 
the  plaintiff.  And  adjudged  a  good  consideration;  for  by  Popham 
and  tot.  cur  the  very  possession  of  the  wheat  might  be  a  credit  and 
good  countenance  to  the  defendant  to  be  esteemed  a  rich  farmer  in 
the  country,  as  in  case  of  the  delivery  of  1,000/.  in  money  to  deliver 
again  upon  request;  for  by  having  so  much  money  in  his  possession 
he  may  happen  to  be  preferred  in  marriage.  Quoere,  for  it  seems 
an  hard  judgment;  for  the  defendant  has  not  any  manner  of  profit 
to  receive,  but  only  a  bare  possession.  Nota,  the  truth  of  the  case 
was  (which  doth  not  alter  the  reason  supra)  that  the  plaintiff  had 
delivered  to  the  defendant  the  said  twenty  quarters  of  wheat  to 
deliver  over  to  J.  S.  to  whom  the  plaintiff  v>^as  indebted  in  so  many 
quarters,  and  the  defendant  promised  to  deliver  the  same  quarters 
to  J.  S.  And  because  they  were  not  delivered,  the  plaintiff  brought 
his  action  ut  supra;  and  adjudged  ut  supra.  But  nota,  the  judg- 
ment was  reversed  in  the  Exchequer,  Mich.  44  &  45  Eliz.,  as  Hitcham 
told  Yelverton.^ 


MAYLAKD  v.  KESTEE 

In  the  King's  Bench,  Trinity  Term,  1601 

[Reported  in  Moore,  711] 

Maylard  brings  action  on  the  case  against  Kester  on  assumpsit, 
in  consideration  that  he  would  sell  and  deliver  to  Kester  woollen 
cloth  for  the  funeral  of  a  clerk,  Kester  assumed  to  pay  him  cum 
inde  requisitus.  And  alleges  that  he  sold  and  delivered  divers  cloth 
to  him  at  various  prices,  viz.,  thirty-one  black  striped  garments  for 
19Z.,  and  so  he  recites  other  lots  in  the  same  manner,  and  the  sum 
amounted  to  1601.,  which  he  requested  Kester  to  pay,  and  he  did 
not  pay  according  to  the  promise  and  assumption  aforesaid.  The 
defendant  pleaded  non  assumpsit,  and  verdict  was  for  the  plaintiff, 
and  judgment  given.  And  on  writ  of  error  brought,  the  judgment 
was  reversed  in  the  Exchequer  Chamber,  Michaelmas  Term,  41 
&  42  Elizabeth,  because  debt  properly  lies,  and  not  action  on  the 
case,  the  matter  proving  a  perfect  sale  and  contract. 


SLADE'S  CASE 

In  the  King's  Bench,  Trinity  Term,  1602 

[Reported  in  4  Cohe,  92^^] 

John  Slade  brought  an  action  on  the  case  in  the  King's  Bench 
against  Humphrey  Morley    (which  plea  began  Hil.   38  Eliz.   Rot. 

^  Howlet  V.  Osborne,  Cro.  El.,  380;    Game  v.  Harvie,  Yelv.  50;    Pickas  v.  Guile, 
Yelv.  128,  ace:   Wheatley  v.  Low.  Cro.  Jac.  668,  contra.    See  2  Harv.  L.  Rev.  5. 
2  Some  authorities  and  illustrations   are  omitted. 


160  blade's  case  [chap,  i 

305),  and  declared,  that  whereas  the  plaintiff,  10th  of  JSTovember, 
36  Eliz.  was  possessed  of  a  close  of  land  in  Halberton,  in  the  county 
of  Devon,  called  Eack  Park,  containing  by  estimation  eight  acres 
for  the  term  of  divers  years  then  and  yet  to  come,  and  being  so  pos- 
sessed, the  plaintiff  the  said  10th  day  of  November,  the  said  close 
had  sowed  with  wheat  and  rye,  which  wheat  and  rye,  8  Maii,  37 
Eliz.  were  grown  into  blades,  the  defendant,  in  consideration  that 
the  plaintiff,  at  the  special  instance  and  request  of  the  said  Humph- 
rey, had  bargained  and  sold  to  him  the  said  blades  of  wheat  and  rye 
growing  upon  the  said  close  (the  tithes  due  to  the  rector,  &c.  ex- 
cepted}, assumed  and  promised  the  plaintiff  to  pay  him  16?.  at 
the  feast  of  St.  John  the  Baptist  then  to  come :  and  for  non-pay- 
ment thereof  at  the  said  feast  of  St.  John  Baptist,  the  plaintiff 
brought  the  said  action :  the  defendant  pleaded  non  assumpsit 
modo  et  forma;  and  on  the  trial  of  this  issue  the  jurors  gave  a 
special  verdict,  sc,  that  the  defendant  bought  of  the  plaintiff  the 
wheat  and  rye  in  blades  growing  upon  the  said  close  as  is  aforesaid, 
prout  in  the  said  declaration  is  alleged,  and  further  found,  that 
between  the  plaintiff  and  the  defendant  there  was  no  other  promise 
or  assumption  but  only  the  said  bargain;  and  against  the  main- 
tenance of  this  action  divers  objections  were  made  by  John  Dod- 
deridge  of  counsel  with  the  defendant. 

1.  That  the  plaintiff  upon  this  bargain  might  have  ordinary 
remedy  by  action  of  debt,  which  is  an  action  formed  in  the  Register, 
and  therefore  he  should  not  have  an  action  on  the  case,  which  is 
an  extraordinary  action,  and  not  limited  within  any  certain  form 
in  the  Register;  for  uhi  remedium  ordinarium,  ibi  decurritur  ad 
extraordinarium,  et  nunquam  decurritur  ad  extraordinarium  ubi 
valet  ordinarium,  as  appears  by  all  our  books;  et  nullus  debet  agere 
actionem  de  dolo,  ubi  alia  actia  subest.  The  second  objection  was, 
that  the  maintenance  of  this  action  takes  away  the  defendant's  bene- 
fit of  wager  of  law,  and  so  bereaves  him  of  the  benefit  which  the 
law  gives  him,  which  is  his  birthright.  For  peradventure  the  de- 
fendant has  paid  or  satisfied  the  plaintiff  in  private  betwixt  them, 
of  which  payment  or  satisfaction  he  has  no  witness,  and  therefore 
it  would  be  mischievous  if  he  should  not  wage  his  law  in  such  case. 
And  that  was  the  reason  (as  it  was  said)  that  debts  by  simple  con- 
tract shall  not  be  forfeited  to  the  King  by  outlawry  or  attainder, 
because  then  by  the  King's  prerogative  the  subject  would  be  ousted 
of  his  wager  of  law,  which  is  his  birthrigbt,  as  it  is  held  in  40 
E.  3.  5  a.  50  Ass.  1.  16  E.  4.  4  b.  and  9  Eliz.  Dyer  262.  and  if 
the  King  shall  lose  the  forfeiture  and  the  debt  in  such  case,  and  the 
debtor  ])y  judgment  of  the  law  shall  bo  rather  discharged  of  his 
debt,  Ix'foro  be  shall  be  deprived  of  the  benefit  which  the  law  gives 
liini  Tor  bis  discharge,  although  in  truth  the  debt  was  due  and  pay- 
able; a  forh'ori  in  the  case  at  bar,  the  defendant  shall  not  be  charged 
in  an  action  in  which  he  shall  be  ousted  of  his  law,  when  he  may 


SECT.  II ]  blade's  case  161 

charge  him  in  an  action,  in  which  he  may  have  the  benefit  of  it; 
and  as  to  these  objections,  the  Courts  of  King's  Bench  and  Common 
Pleas  were  divided;  for  the  Justices  of  the  King's  Bench  held,  that 
the  action  (notwithstanding  such  objections)  was  maintainable,  and 
the  Court  of  Common  Pleas  held  the  contrary.  And  for  the  honor 
of  the  law,  and  for  the  quiet  of  the  subject  in  the  appeasing  of  such 
diversity  of  opinions  (quia  nil  in  lege  intolerahilius  est  eandem  rem 
diverso  jure  censeri)  the  case  was  openly  argued  before  all  the  Jus- 
tices of  England,  and  Barons  of  the  Exchequer,  sc.  Sir  John  Pop- 
ham,  Knt.  C.  J.  of  England,  Sir  Edm.  Anderson,  Knt.  C.  J.  of  the 
Common  Pleas,  Sir  "W.  Periam,  Chief  Baron  of  the  Exchequer, 
Clark,  Gawdy,  Walmesley,  Fenner,  Kingsmill,  Savil,  Warburton, 
and  Yelverton,  in  the  Exchequer  Chamber,  by  the  Queen's  Attorney- 
General  for  the  plaintiff,  and  by  John  Dodderidge  for  the  defendant, 
and  at  another  time  the  case  was  argued  at  Serjeants'  Inn,  before 
all  the  said  Justices  and  Barons,  by  the  Attorney-General  for  the 
plaintiff,  and  by  Francis  Bacon  for  the  defendant,  and  after  many 
conferences  between  the  Justices  and  Barons,  it  was  resolved,  that 
the  action  was  maintainable,  and  that  the  plaintiff  should  have  judg- 
ment. And  in  this  case  these  points  were  resolved :  —  1.  That  al- 
though an  action  of  debt  lies  upon  the  contract,  yet  the  bargainor 
may  have  an  action  on  the  case,  or  an  action  of  debt  at  his  elec- 
tion, and  that  for  three  reasons  or  causes:  1.  In  respect  of  infinite 
precedents  (which  George  Kemp,  Esq.,  Secondary  of  the  Prothono- 
taries  of  the  King's  Bench  showed  me),  as  well  in  the  Court  of 
Common  Pleas  as  in  the  Court  of  King's  Bench,  in  the  reigns  of 
King  H.  6.  E.  4.  H.  7.  and  H.  8.  by  which  it  appears,  that  the 
plaintiffs  declared  that  the  defendants,  in  consideration  of  a  sale 
to  them  of  certain  goods,  promised  to  pay  so  much  money,  &c.,  in 
which  cases  the  plaintiffs  had  judgment.  .  .  .  The  second  cause 
of  their  resolution  was  divers  judgments  and  cases  resolved  in  our 
books  where  such  action  on  the  case  on  Ass.  has  been  maintainable, 
when  the  party  might  have  had  an  action  of  debt,  21  H.  6.  55  b. 
12  E.  4.  13.  13  H.  7.  26.  20  H.  7.  4  b.  and  20  H.  7.  8  b.  which 
case  was  adjudged  as  Fitz  James  cites  it,  22  H.  8.  Dyer  22  b.  27 
H.  8.  24  &  25.  in  Tatam's  case,  ISTorwood  and  Read's  case  adjudged 
Plowd.  Com,  180.  3.  It  was  resolved,  that  every  contract  executory 
imports  in  itself  an  assumpsit,  for  when  one  agrees  to  pay  money, 
or  to  deliver  anything,  thereby  he  assumes  or  promises  to  pay,  or 
deliver  it,  and  therefore  when  one  sells  any  goods  to  another,  and 
agrees  to  deliver  them  at  a  day  to  come,  and  the  other  in  considera- 
tion thereof  agrees  to  pay  so  much  money  at  such  a  day,  in  that 
case  both  parties  may  have  an  action  of  debt,  or  an  action  on  the 
case  on  assumpsit,  for  the  mutual  executory  agreement  of  both 
parties  imports  in  itself  reciprocal  actions  upon  the  case,  as  well 
as  actions  of  debt,  and  therewith  agrees  the  judgment  in  Bead  and 
Norwood's  case,  PI.  Com,  128.    4.    It  was  resolved,  that  the  plain- 


162  slade's  case  [chap,  i 

tiff  in  this  action  on  the  case  on  assumpsit  should  not  recover  only 
damages  for  the  special  loss  (if  any  be)  which  he  had,  but  also 
for  the  whole  debt,  so  that  a  recovery  or  bar  in  this  action  would  be 
a  good  bar  in  an  action  of  debt  brought  upon  the  same  contract; 
so  vice  versa,  a  recovery  or  bar  in  an  action  of  debt,  is  a  good  bar 
in  an  action  on  the  case  on  assumpsit.  Vide  12  E.  4.  13  a.  2  R. 
3.  14.  (32)  33  H.  8.  Actio7i  sur  le  case.  Br.  105.  5.  In  some  cases 
it  would  be  mischievous  if  an  action  of  debt  should  be  only  brought, 
and  not  an  action  on  the  case,  as  in  the  case  inter  Redman  and  Peck, 
2  &  3  Ph.  and  Mar.  Dyer  113,  they  bargained  together,  that  for  a 
certain  consideration  Redman  should  deliver  to  Peck  twenty  quarters 
of  barley  yearly  during  his  life,  and  for  non-delivery  in  one  year, 
it  is  adjudged  that  an  action  well  lies,  for  otherwise  it  would  be 
mischievous  to  Peck,  for  if  he  should  be  driven  to  his  action  of  debt, 
then  he  himself  could  never  have  it,  but  his  executors  or  adminis- 
trators, for  debt  doth  not  lie  in  such  case,  till  all  the  days  are  in- 
curred, and  that  would  be  contrary  to  the  bargain  and  intent  of  the 
parties,  for  Peck  provides  it  yearly  for  his  necessary  use :  so  5  Mar. 
Br.  Action  sur  le  case  108,  that  if  a  sum  is  given  in  marriage  to 
be  paid  at  several  days,  an  action  upon  the  case  lies  for  non-pay- 
ment at  the  first  day,  but  no  action  of  debt  lies  in  such  case  till  all 
the  days  are  past.  Also  it  is  good  in  these  days  in  as  many  cases 
as  may  be  done  by  the  law,  to  oust  the  defendant  of  his  law,  and 
to  try  it  by  the  country,  for  otherwise  it  would  be  occasion  of  much 
perjury.  6.  It  was  said,  that  an  action  on  the  case  on  assumpsit 
is  as  well  a  formed  action,  and  contained  in  the  register,  as  an  action 
of  debt,  for  there  is  its  form :  also  it  appears  in  divers  other  cases 
in  the  register,  that  an  action  on  the  case  will  lie,  although  the  plain- 
tiff may  have  another  formed  action  in  the  Register.  ,  .  .  And 
therefore  it  was  concluded,  that  in  all  cases  when  the  Register  has 
two  writs  for  one  and  the  same  case,  it  is  in  the  party's  election 
to  take  either.  But  the  Register  has  two  several  actions,  sc.  action 
nnon  the  case  upon  assumpsit,  and  also  an  action  of  debt,  and  there- 
fore the  party  may  elect  either.  And  as  to  the  objection  which  has 
been  made,  that  it  would  be  mischievous  to  the  defendant  that  he 
should  not  wage  his  law,  forasmuch  as  he  might  pay  it  in  secret: 
to  that  it  was  answered,  that  it  should  be  accounted  his  folly  that 
he  did  not  toke  sufficient  witnesses  with  him  to  prove  the  payment 
he  made:  but  the  mischief  would  be  rather  on  the  other  party,  for 
now  experience  proves  that  men's  consciences  grow  so  large  that  the 
respect  of  their  private  advantage  rather  induces  men  (and  chiefly 
those  who  have  d'T-liiiing  estates)  to  perjury:  for  Jurare  in  propria 
causa  (b.h  one  saitli)  est  smpenumrrn  hoc  seculo  pro'cipitium,  diaholi 
ofJ  dt'lriidendas  miserorum  animas  ad,  infernum,:  and  th(M'(>fore  m 
debt  or  other  action  where  wager  of  law  is  admitted  by  the  law, 
tlif!  Judges  witliout  good  admonition  and  due  exiunination  of  the 
party  do  not  admit  him  to  it.     And  as  to  the  case  which  was  cited, 


SECT.    Il]  RANN    V.    HUGHES  163 

that  debts  or  duties  due  by  single  contract  where  the  party  may 
wage  his  law,  shall  not  be  forfeited  by  outlawry,  because  the  debtor 
will  be  thereby  ousted  of  his  law :  to  that  it  was  answered  by  the 
Attorney-General  that  in  such  case  by  the  law,  debts  or  duties  shall 
be  forfeited  to  the  King,  and  so  are  the  better  opinions  of  the  books. 


KAI^N  AND  Another,  Executors  of  Maky  Hughes,  v.  ISABELLA 
HUGHES,  Administratrix  of  J.  Hughes 

In  the  House  of  Lokds,  May  14,  1778 

[Reported  in  7  Term  Reports,  350,  note  (a)] 

The  declaration  stated  that  on  the  11th  of  June,  1764,  divers 
disputes  had  arisen  between  the  plaintiffs'  testator  and  the  defend- 
ant's intestate,  which  they  referred  to  arbitration;  that  the  arbi- 
trator awarded  that  the  defendants'  intestate  should  pay  to  the  plain- 
tiffs' testator  983/.;  that  the  defendant's  intestate  afterwards  died 
possessed  of  effects  sufficient  to  pay  that  sum;  that  administration 
was  granted  to  the  defendant;  that  Mary  Hughes  died,  having  ap- 
pointed the  plaintiffs  her  executors;  that  at  the  time  of  her  death 
the  said  sum  of  £983  was  unpaid :  by  reason  of  which  premises  the 
defendant,  as  administratrix,  became  liable  to  pay  to  the  plaintiffs, 
as  executors,  the  said  sum;  and  being  so  liable,  she,  in  consideration 
thereof,  undertook  and  promised  to  pay.  &c.  The  defendant  pleaded 
non  assumnsii.  plene  administravit,  and  plene  administravit  except 
as  to  certain  goods,  &c.,  which  were  not  sufficient  to  pay  an  out- 
standing bond-debt  of  the  intestate's  therein  set  forth,  &c.  The 
replication  took  issue  on  these  pleas.  Verdict  for  the  plaintiff  on 
the  first  issue,  and  for  the  defendant  on  the  two  last;  and  on  tlie 
first  a  general  judgment  was  entered  in  B.  R.  against  the  defend- 
ant de  bonis  propriis.  This  judgment  was  reversed  in  the  Exchequer 
Chamber;  and  a  writ  of  error  was  afterwards  brought  in  the  House 
of  Lords,  where,  after  argument,  the  folloAving  question  was  pro- 
posed to  the  judges  by  the  Lord  Chancellor;  Whether  sufficient 
matter  appeared  upon  the  declaration  to  warrant  after  verdict  the 
judgment  against  the  defendant  in  error  in  her  personal  capacity; 
upon  whicii  the  L,ord  Chief  Baron  Skynner  delivered  the  opinion  of 
the  judges  to  this  effect :  It  is  undoubtedly  true  that  every  man  is, 
by  the  law  of  nature,  bound  to  fulfil  his  engagements.  It  is  equally 
true  that  the  law  of  this  country  supplies  no  means,  nor  affords  any 
\  remedy,  to  compel  the  performance  of  an  agreement  made  without 
^  sufficient  consideration.  Such  agreement  is  nudem  pactum,  ex  quo 
non  oritur  actio:  and  whatsoever  may  be  the  sense  of  this  maxim 
in  the  civil  law,  it  is  in  the  last-mentioned  sense  only  that  it  is  to 
be  understood  in  our  law.  The  declaration  states  that  the  defendant, 
being  indebted  as  administratrix,  pron^ised  to  pay  when  requested; 


164  RANN    V.   HUGHES  [CHAP.   I 

and  the  judgment  is  against  the  defendant  generally.     The  being 
indebted  is  of  itself  a  sufficient  consideration  to  ground  a  promise; 
but  the  promise  must  be  coextensive  with  the  consideration,  unless 
some  particular  consideration  of  fact  can  be  found  here  to  warrant 
the  extension  of  it  against  the  defendant  in  her  own  capacity.     If 
a  person  indebted  in  one  right,  in  consideration  of  forbearance  for 
a  particular  time,  promise  to  pay  in  another  right,  this  convenience 
will  be  sufficient  consideration  to  warrant  an  action  against  him  or 
her  in  the  latter  right;  but  here  no  sufficient  consideration  occurs 
to  support  this  demand  against  her  in  her  personal  capacity,  for 
she   derives   no   advantage   or   convenience   from   the   promise   here 
made.     For  if  I  promise  generally  to  pay  upon  request  what  I  was 
liable  to  pay  upon  request  in  another  right,  I  derive  no  advantage 
or  convenience  from  this  promise,  and  therefore  there  is  not  suffi- 
cient consideration  for  it.     But  it  is  said  that  if  this  promise  is  in 
writing,  that  takes  away  the  necessity  of  a  consideration^  and  06- 
viates  tiie  objection  of'  nudum  pactum,  for  that  cannot   be  where 
the  promise  is  put  in  writing;  and  that,  if  it  were  necessary  to  sup- 
port the  promise  that  it  should  be  in  writing,  it  will,  after  verdict, 
be  presumed  that  it  was  in  writing;  and  this  last  is  certainly  true; 
but  that  there  cannot  be  nudum  pactum  in  writing,  whatever  may 
be  the  rule  of  the  civil  law,  there  is  certainly  none  such  in  the  law 
of  England.     His  Lordship  observed,  upon  the  doctrine  of  nudum 
pactum  delivered  by  Mr.  J.  Wilmot  in  the  case  of  Pillans  v.  Yan 
Mierop  and  Hopkins,  3  Burr.  1663,  that  he  contradicted  himself, 
and  was  also  contradicted  by  Vinnius  in  his  comment  on  Justinian. 
All  contracts  are  by  the  laws  of  England  distinguished  into  agree- 
ments by  specialty,  and  agreements  by  parol;  nor  is  there  any  such 
third  class,  as  some  of  the  counsel  have  endeavored  to  maintain,  as 
contracts  in  writing.     If  they  be  merely  written  and  not  specialties, 
they  are  parol,  and  a  consideration  must  be  proved.     But  it  is  said 
that  the  Statute  of  Erauds  has  taken  away  the  necessity  of  any  con- 
sideration in  this  case:  the  Statute  of  Erauds  was  made  for  the  re- 
lief of  personal  representatives  and  others,   and  did  not  intend  to 
charge  them  further  than  by  common   law   they  were  chargeable. 
His  Lordship  here  read  those  sections  of  that  statute  which  relate 
to  the  present   subject.     He   observed   that   the  words  were  merely 
negative,  and  that  executors  and  adminstrators  should  not  be  liable 
out  of  their  own  estates,  unless  the  agreement  upon  which  the  action 
was  brought,  or  some  memorandum  thereof,  was  in  writing  and  signed 
by  the  party.     But  this  does  not  prove  that  the  agreement  was  still 
not  liable  to  be  tried  and  judged  of  as  all  other  agreements  merely 
in  writing  are  by  the  common  law,  and  does  not  prove  the  converse 
of  tlie  T>roposition,  that  when  in  writing  the  party  must  bo  at  all 
events   linblf.     JTc  liere  observed   upoTi    the   cnse  of  Pillans   v.   Van 
Microti,  ill  Burr.,  niid  the  case  of  Losb  v.  Williamson,  Mich.  16  G. 
3,  in  B.  11.;  and  so  far  as  these  cases  went  on  the  doctrine  of  nudum 


SECT.    Il]  HAIGH    V.    BROOKS  165 

pactum,  he  seemed  to  intimate  that  they  were  erroneous.  He  said 
that  all  his  brothers  concurred  with  him  that  in  this  case  there  was 
not  a  sufficient  consideration  to  support  this  demand  as  a  personal 
demand  against  the  defendant,  and  that  its  being  now  supposed  to 
have  been  in  writing  makes  no  difference.  The  consequence  of  which 
is  that  the  question  put  to  us  must  be  answered  in  the  negative. 
And  the  judgment  in  the  Exchequer  Chamber  was  affirmed.^ 


B. — General  Principles 


HAIGH  AND  Another  v.  BKOOKS 

In  the  Queen's  Bench,  June  6,  1839 

BEOOKS  V.  HAIGH  and  Another 

In  the  Exchequer  Chamber,  June  29,  1840 

[Reported  in  10  Adolphus  &  Ellis,  309,  323] 

Assumpsit.  The  first  count  of  the  declaration  stated  that  hereto- 
fore, to  wit,  on  &c.,  in  consideration  that  the  said  plaintiffs,  at  the 
special  instance  and  request  of  the  said  defendant, .  would  give  up 
to  him  a  certain  guaranty  of  10,000L,  on  behalf  of  Messrs.  John 
Lees  &  Sons,  Manchester,  then  held  by  the  said  plaintiffs,  he  the 
said  defendant  undertook,  and  then  faithfully  promised  the  said 
plaintiffs,  to  see  certain  bills,  accepted  by  the  said  Messrs.  John 
Lees  &  Sons,  paid  at  maturity;  that  is  to  say,  a  certain  bill  of  ex- 
change, bearing  date,  &c.,  drawn  by  plaintiffs  upon  and  accepted  by 
the  said  Lees  &  Sons,  payable  three  months  after  date,  for  3466L 
13s.  Id.,  and  made  payable  at,  &c. ;  and  also  a  certain  other  bill, 
&c.,  describing  two  other  bills  for  3000Z.  and  3200Z.;,  drawn  by  plain- 
tiffs upon  and  accepted  by  Lees  &  Sons,  and  made  payable  at,  &c. 
Averment:  that  plaintiffs,  relying  on  defendant's  said  promise,  did 
then,  to  wit,  on,  &c.,  give  up  to  the  said  defendant  the  said  guaranty 
of  10,000/.  Breach,  non-payment  of  the  bills,  when  they  afterwards 
came  to  maturity,  by  Lees  &  Sons,  or  the  parties  at  whose  houses 
the  bills  respectively  were  made  payable,  or  by  defendant,  or  any 
other  person,  &c. 

Third  plea  to  the  first  count:  "That  the  said  supposed  guaranty 
of  10,000/.,  in  consideration  of  the  giving  up  whereof  the  defendant 
made  such  supposed  promise  and  undertaking  as  therein  mentioned, 
and  which  guaranty  was  so  given  up  to  the  said  defendant  as  therein 
mentioned,  was  a  special  promise  to  answer  the  said  plaintiffs  for 
the  debt  and  default  of  other  persons,  to  wit,  the  said  Messrs.  John 
Lees  &  Sons  in  the  said  first  count  mentioned;  and  that  no  agree- 
ment in  respect  of,  or  relating  to,  the  said  supposed  guaranty  or 

*  In  7  Brown's  Parliament  Cases,  550  (vol.  4  of  Tomlin's  ed.,  p.  27)  the  arguments 
of  counsel  are  given. 


'jt   to    -*oi.  ,    «3  ^.^UA.  /x,^    ><»*^  '^/^fi-tr-o   X—    3  o  t^*j^. 

166  iimSh  v.  brooks  ^    [chap,  i 

special  promise,  or  any  memorandum  or  note  thereof,  wherein  any 
sufficient  consideration  for  the  said  guaranty  or  special  promise  was 
stated  or  shown,  was  in  writing  and  signed  by  the  said  defendant, 
or  any  other  person  by  him  thereunto  lawfully  authorized.  And 
the  said  defendant  further  saith  that  the  said  supposed  guaranty 
was  and  is  in  the  words  and  figures  and  to  the  effect  following,  that 
is  to  say :  — 

Manchester,  4th  February,  1837. 
Messrs.  Haigh  &  Franceys. 

Gent.,  —  In  consideration  of  your  being  in  advance  to  Messrs.  John  Lees  &  Sons 
in  the  sum  of  lO.OOOL  for  the  purchase  of  cotton,  I  do  hereby  give  you  my  guaranty 
for  that  amount  (say  lO.OOOZ.)  on  their  behalf. 

John  Brooks. 

And  that  there  was  no  other  agreement  or  memorandum  or  note 
thereof,  in  respect  of,  or  relating  to,  the  said  last-mentioned  sup- 
posed guaranty  or  special  promise;  wherefore  the  said  defendant 
says  that  the  supposed  guaranty,  in  consideration  whereof  the  said 
defendant  made  the  said  supposed  promise  and  undertaking  in  the 
said  first  count  mentioned,  was  and  is  void  and  of  no  effect;  and, 
therefore,  that  the  said  supposed  promise  and  undertaking  in  the 
said  first  count  mentioned  was  and  is  void  and  of  no  effect."  Veri- 
fication. 

Demurrer :  assigning  for  cause,  "that  it  is  admitted  by  the  plea 
that  the  memorandum,  the  giving  up  of  which  was  the  consideration 
of  the  guaranty  in  the  said  declaration  mentioned,  was  actually 
given  up  to  the  said  defendant  by  the  said  plaintiffs,  and  the  con- 
sideration was,  therefore,  executed  by  the  said  plaintiffs;  and  that, 
even  if  the  original  memorandum  was  not  binding  in  point  of  law, 
the  giving  up  was  a  sufficient  consideration  for  the  promise  m  the 
declaration  mentioned/'  Joinder.  The  demurrer  was  argued  in  last 
liilary  Term. 

Sir  W.  W.  Follett  for  the  plaintiffs. 

Sir  J.  Campbell,  Attorney-General,  contra. 

LoKD  Denman,  C.  J.,  in  this  Term  (June  6th)  delivered  the  judg- 
ment of  the  court. 

It  was  argued  for  the  defendant  that  this  guaranty  is  of  no  force, 
because  the  fact  of  the  plaintiffs  being  already  in  advance  to  Lees 
could  form  no  consideration  for  the  defendant's  promise  to  guar- 
antee to  the  plaintiffs  the  payment  of  Lees's  acceptances.  In  the 
first  place,  this  is  by  no  means  clear.  That  "being  in  advance" 
must  necessarily  mean  to  assert  that  he  was  in  advance  at  the  time 
of  giving  the  guaranty,  is  an  assertion  open  to  argument.  It  may 
possibly  ^"''ivf  ^'•^^-f  intended  as  prospective.  If  the  phrase  had  been 
"in  consideration  of  your  hecoming  in  advance,"  or  "on  condition 
of  your  being  in  advance,"  such  would  have  been  the  clear  import.^ 

>  Rf!f  the  fliHOUHHion  on  the  words  "for  giving  his  vote,"  in  Lord  Huntingtower  v. 
Gardiner,  1  B.  &  ('■  297. 


SECT.   Il]  HAIGH    V.   BROOKS  167 

As  it  is,  nobody  can  doubt  that  the  defendant  took  a  great  interest 
in  the  affairs  of  Messrs.  Lees,  or  believe  that  the  plaintiffs  had  not 
come  under  the  advance  mentioned  at  the  defendant's  request.  Here 
is  then  sufficient  doubt  to  make  it  worth  the  defendant's  while  to 
possess  himself  of  the  guaranty ;  and,  if  that  be  so,  we  have  no  con-  >^ 
cern  with  the  adequacy  or  inadequacy  of  the  price  paid  or  promised 
for  i^. 

Bni  we  are  by  no  means  prepared  to  say  that  any  circumstances 
short  of  the  imputation  of  fraud  in  fact  could  entitle  us  to  hold 
that  a  party  was  not  bound  by  a  promise  made  upon  any  considera- 
tion which  could  be  valuable;  while  of  its  being  so,  the  promise  by 
which  it  was  obtained  from  the  holder  of  it  must  always  afford 
some  proof. 

Here,  whether  or  not  the  guaranty  could  have  been  available  within 
the  doctrine  of  "Wain  v.  Walters,^  the  plaintiffs  were  induced  by 
the  defendant's  promise  to  part  with  something  which  they  mi^ht 
have  kept,  and  the  defendant  obtained  what  he  desired  by  means 
of  that  promise.  Both  being  free  and  able  to  judge  for  themselves, 
how  can  the  defendant  be  justified  in  breaking  this  promise,  by  dis- 
covering afterwards  that  the  thing  in  consideration  of  which  he 
gave  it  did  not  possess  that  value  which  he  supposed  to  belong  to 
it?  It  cannot  be  ascertained  that  that  value  was  what  he  most  re- 
garded: he  may  have  had  other  objects  and  motives,  and  of  their 
weight  he  was  the  only  judge.  We  therefore  think  the  plea  bad; 
and  the  demurrer  must  prevail.  Judgment  for  the  plaintiffs. 

The  plaintiffs  having  signed  judgment,  error  was  brought  in  the 
Exchequer  Chamber. 

The  writ  of  error  set  out  the  pleadings,  of  which  the  material 
part  is  stated  in  the  preceding  report.  The  errors  assigned  were, 
that  the  declaration  is  insufficient,  and  that  the  judgment  was  for 
the  plaintiffs  below,  whereas  it  ought  to  have  been  for  the  defendant. 
The  writ  of  error  was  argued  in  Trinity  Vacation,  June  22d,  1840, 
before  Lokd  Abinger,  C.  B.,  Bosanquet,  Coltman,  and  Maule, 
J  J.,  and  Alderson  and  Rolfe,  BB. 

Sir  /.  Campbell,  Attorney-General,  for  the  plaintiff  in  error.    .    .    . 

Sir  W.  W.  Follett,  contra. 

Lord  Abinger,  C.  B.,  in  the  same  Vacation  (June  29th)  delivered 
the  judgment  of  the  Court. 

In  the  case  of  Brooks  v.  Haigh  the  judgment  of  the  Court  is  to 
affirm  the  judgment  of  the  Court  of  Queen's  Bench. 

It  is  the  opinion  of  all  the  Court  that  there  was  in  the  guaranty 
an  ambiguity  that  might  be  explained  by  evidence,  so  as  to  make 
it  a  valid  contract;  and  therefore  this  was  a  sufficient  consideration 
for  the  promise  declared  upon. 

It  is  also  the  opinion  of  all  the  Court,  with  the  exception  of  my 

*  5  East,  10. 


168  SCHNELL    V.    NELL  [CHAP.    I 

brother  Maule,  who  entertained  some  doubt  on  the  question,  that 
the  words  both  of  the  declaration  and  the  plea  import  that  the  paper 
on  which  the  guaranty  was  written  was  given  up ;  and  that  the  actual 
surrender  of  the  possession  of  the  paper  to  the  defendant  was  a 
sufficient  consideration  without  reference  to  its  contents. 

Judgment  ajfirmed} 


SCHNELL  V.  NELL 

Indiana  Supreme  Court,  November  Term,  1861 
[^Reported  in  17  Indiana,  29] 

Perkins,  J.  Action  by  J.  B.  Nell  against  Zacharias  Schnell, 
upon  the  following  instrument :  — 

"This  agreement,  entered  into  this  13th  day  of  Eebruary,  1856, 
between  Zach.  Schnell,  of  Indianapolis,  Marion  County,  State  of 
Indiana,  as  party  of  the  first  part,  and  J.  B.  Nell,  of  the  same  place, 
Wendelin  Lorenz,  of  Stilesville,  Hendricks  County,  State  of  Indi- 
ana, and  Donata  Lorenz,  of  Frickinger,  Grand  Duchy  of  Baden, 
Germany,  as  parties  of  the  second  part,  witnesseth :  The  said  Zach- 
arias Schnell  agrees  as  follows :  whereas  his  wife,  Theresa  Schnell, 
now  deceased,  has  made  a  last  will  and  testament,  in  which,  among 
other  provisions,  it  was  ordained  that  every  one  of  the  above  named 
second  parties  should  receive  the  sum  of  $200;  and  whereas  the  said 
provisions  of  the  will  must  remain  a  nullity,  for  the  reason  that  no 
property,  real  or  personal,  was  in  the  possession  of  the  said  Theresa 
Schnell,  deceased,  in  her  own  name,  at  the  time  of  her  death,  and 
all  property  held  by  Zacharias  and  Theresa  Schnell  jointly,  therefore 
reverts  to  her  husband ;  and  whereas  the  said  Theresa  Schnell  has  also 
been  a  dutiful  and  loving  wife  to  the  said  Zach.  Schnell,  and  has  ma- 
terially aided  him  in  the  acquisition  of  all  property,  real  and  personal, 
now  possessed  by  him;  for,  and  in  consideration  of  all  this,  and 
the  love  and  respect  he  bears  to  his  wife;  and,  furthermore,  in  con- 
si  fleration  of  one  cent,  received  by  him  of  the  second  parties,  he, 
the  said  Zach.  Schnell,  agrees  to  pay  the  above  named  suras  of  money 
to  the  parties  of  the  second  part,  to  wit:  $200  to  the  said  J.  B.  Nell; 
$200  to  the  said  Wendelin  Lorenz;  and  $200  to  the  said  Donata 
Lorenz,  in  tbe  following  instalments,  $200  in  one  year  from  the  date 

'  A  portion  of  tho  case  is  omitted. 

"Tho  adnquucy  of  tho  considoration  is  for  the  parties  to  consider  at  the  time  of 
making  the  aKrf;enient,  not  for  th(!  court  when  it  is  sought  to  be  enforced."  Black- 
bum,  J.,  in  Bolton  x.  Madden,  L.  R.  9  Q.  B.  55.  See  also  Wolford  v.  Powers,  85  Ind. 
294;  Colt  V.  McConnell.  116  Ind.  249;  Mullen  v.  Hawkins,  141  Ind.  3f)3;  Train  v. 
Gold,  5  Pink.  .'iSO,  .•{H4;  Wilton  v.  Eaton,  127  Mass.  174;  Whitney  v.  Clary,  145  Mass. 
150;  Daily  v.  Minniek,  91  N.  W.  Hep.  9i;i  (Iowa);  Willaims  v.  .Jensen,  75  Mo.  681; 
Perkins  v.  Clay,  .54  N.  II.  518;  Traphagen's  Ex.  v.  Voorhees,  44  N.  J.  Eq.  21;  Worth 
».  Case,  42  N.  Y.  362;  Earl  i;.  Peck,  64  N.  Y.  5G9;  Cowee  v.  Cornell,  75  N.  Y.  91; 
Judy  V.  Loudcrman,  48  Ohio  St.  562;  Cumming's  Appeal,  67  Pa.  404;  Giddings  v. 
Giddings'B  Adm.,  51  Vt.  227. 


SECT.   Il]  SCHNELL   V.    NELL  16^ 

of  these  presents;  $200  in  two  years,  and  $200  in  three  years;  to 
be  divided  between  the  parties  in  equal  portions  of  $66f  each  year, 
or  as  they  may  agree,  till  each  one  has  received  his  full  sum  of  $200. 
"And  the  said  parties  of  the  second  part,  for,  and  in  consideration 
of  this,  agree  to  pay  the  above  named  sum  of  money  [one  cent], 
and  to  deliver  up  to  said  Schnell,  and  abstain  from  collecting  any 
real  or  supposed  claims  upon  him  or  his  estate,  arising  from  the 
said  last  will  and  testament  of  the  said  Theresa  Schnell,  deceased. 
"In  witness  whereof,  the  said  parties  have,  on  this  13th  day  of 
Pebruary,  1856,  set  hereunto  their  hands  and  seals. 

"Zachabias    Schnell,   [seal.] 
"J.  B.  Nell,  [seal.] 

"Wen.  Lobenz."  [seal.] 

The  complaint  contained  no  averment  of  a  consideration  for  the 
instrument,  outside  of  those  expressed  in  it;  and  did  not  aver  that 
the  one  cent  agreed  to  be  paid  had  been  paid  or  tendered. 

A  demurrer  to  the  complaint  was  overruled. 

The  defendant  answered,  that  the  instrument  sued  on  was  given 
for  no  consideration  whatever. 

He  further  answered,  that  it  was  given  for  no  consideration,  be- 
cause his  said  wife,  Theresa,  at  the  time  she  made  the  will  men- 
tioned, and  at  the  time  of  her  death,  owned,  neither  separately,  nor 
jointly  with  her  husband,  or  any  one  else  (except  so  far  as  the  law 
gave  her  an  interest  in  her  husband's  property),  any  property,  real 
or  personal,  &c. 

The  will  is  copied  into  the  record,  but  need  not  be  into  this  opinion. 

The  Court  sustained  a  demurrer  to  these  answers,  evidently  on  the 
ground  that  they  were  regarded  as  contradicting  the  instrument  sued 
on,  which  particularly  set  out  the  considerations  upon  which  it  was 
executed.  But  the  instrument  is  latently  ambiguous  on  this  point. 
See  Ind.  Dig.,  p.  110. 

The  case  turned  below,  and  must  turn  here,  upon  the  question 
whether  the  instument  sued  on  does  not  express  a  consideration  suffi- 
cient to  give  it  legal  obligation,  as  against  Zacharias  Schnell.  It 
specifies  three  distinct  considerations  for  his  promise  to  pay  $600 : 

1.  A  promise,  on  the  part  of  the  plaintiffs,  to  pay  him  one  cent. 

2.  The  love  and  affection  he  bore  his  deceased  wife,  and  the  fact 
that  she  had  done  her  part,  as  his  wife,  in  the  acquisition  of  prop- 
erty. 

3.  The  fact  that  she  had  expressed  her  desire,  in  the  form  of  an 
inoperative  will,  that  the  persons  named  therein  should  have  the 
sums  of  money  specified. 

The  consideration  of  one  cent  will  not  support  the  promise  of 
Schnell.  It  is  true,  that  as  a  general  proposition,  inadequacy  of 
consideration  will  not  vitiate  an  agreement.  Baker  v.  Eoberts,  14 
Ind.  552.    But  this  doctrine  does  not  apply  to  a  mere  exchange  of 


170  SCHNELL    V.    NELL  [CHAP.    I 

sums  of  money,  of  coin,  whose  value  is  exactly  fixed,^  but  to  the  ex- 
change of  something  of,  in  itself,  indeterminate  value,  for  money, 
or  perhaps,  for  some  other  thing  of  indeterminate  value.     In  this 
case,  had  the  one  cent  mentioned  been  some  particular  one  cent,  a 
family  piece,  or  ancient,  remarkable  coin,  possessing  an  indetermi- 
nate value,  extrinsic  from  its  simple  money  value,  a  different  view 
might  be  taken.     As  it  is,  the  mere  promise  to   pay  six  hundred 
dollars  for  one  cent,  even  had  the  portion  of  that  cent  due  from 
the  plaintiff  been  tendered,  is  an  unconscionable  contract,  void,  at 
first  blush,  upon  its  face,  if  it  be  regarded  as  an  earnest  one.     Har- 
desty  V.  Smith,  3  Ind.  39.    The  consideration  of  one  cent  is,  plainly, 
in  this  case,  merely  nominal,  and  intended  to  be  so.     As  the  will 
and  testament  of  Schnell's  wife  imposed  no  legal  obligation  upon 
him  to  discharge  her  bequests  out  of  his  property,  and  as  she  had 
none  of  her  own,  his  promise  to  discharge  them  was  not  legally 
binding  upon  him,  on  that  ground.     A  moral  consideration,  only, 
will  not  support  a  promise.     Ind.  Dig.,  p.  13.     And  for  the  same 
reason,  a  valid  consideration  for  his  promise  cannot  be  found  in  the 
fact  of  a  compromise  of  a  disputed  claim;  for  where  such  claim  is 
legally  groundless,  a  promise  upon  a  compromise  of  it,  or  of  a  suit 
upon  it,  is  not  legally  binding.     Spahr  v.  Hollingshead,  8  Blackf. 
415.    There  was  no  mistake  of  law  or  fact  in  this  case,  as  the  agree- 
ment admits  the  will  inoperative  and  void.    The  promise  was  simply 
one  to  make  a  gift.     The  past  services  of  his  wife,  and  the  love  and 
affection  he  had  borne  her,  are  objectionable  as  legal  considerations 
for  Schnell's  promise,  on  two  grounds:  1.     They  are  past  considera- 
tions.    Ind.  Dig.,  p.  13.     2.     The  fact  that  Schnell  loved  his  wife, 
and  that  she  had  been  industrious,  constituted  no  consideration  for 
his  promise  to  pay  J.  B.  ISTell,  and  the  Lorenzes,  a  sum  of  money. 
"Whether,   if  his  wife,   in  her  lifetime,   had  made   a  bargain  with 
Schnell,  that,  in  consideration  of  his  promising  to  pay,   after  her 
death,  to  the  persons  named,  a  sum  of  money,  she  would  be  indus- 
trious, and  worthy  of  his  affection,  such  a  promise  would  have  been 
valid  and  consistent  with  public  policy,  we  need  not  decide.     Nor 
is  the  fact  that  Schnell  now  venerates  the  memory  of  his  deceased 
wife  a  legal  consideration  for  a  promise  to  pay  any  third  person 
money. 

The  instrument  sued  on,  interpreted  in  the  light  of  the  facts  al- 
leged in  the  second  paragraph  of  the  answer,  will  not  support  an 
action.  The  demnrr(!r  to  the  answer  should  have  been  overruled. 
See  Stevenson  v.  Druley,  4  Ind.   519. 

1  Wolford  V.  Powers,  85  Ind.  294,  301;  Shepard  v.  Rhodes,  7  R.  I.  470,  ace. 


SECT.   II]  HARRISON    V.   CAGE  171 

HAREISON  V.  CAGE  and  his  Wife 

In  the  King's  Bench,  Michaelmas  Tebm,  1698 

[Reported  in  5  Modern,  411] 

This  is  an  action  on  the  case,  wherein  the  plaintiff  declares  that, 
in  consideration  the  plaintiff  would  marry  the  defendant,  the  de- 
fendant promised  to  marry  him,  and  that  he  had  offered  himself  to 
her,  but  that  she  refused  him,  and  had  married  the  other  defendant. 

First.  This  action  does  not  lie.  Indeed  it  might  be  otherwise  in 
the  case  of  a  woman ;  for  a  marriage  is  an  advancement  to  a  woman, 
but  not  to  a  man,  as  appears  in  Anne  Davis's  Case,^  and  in  the  case 
of  a  feoffment  causa  matrimonii  proetocuti,  which  shows  that  there 
is  a  great  difference  between  the  two  cases  of  a  man  and  a  woman; 
for  it  is  a  breach  of  a  woman's  modesty  to  promise  a  man  to  marry 
him,  but  it  is  not  for  a  man  to  promise  a  woman  to  marry  her. 

Secondly.  Here  is  no  time  laid  when  this  marriage  was  to  be; 
and  it  may  be  still. 

.Thirdly.  The  consideration  is  ill;  it  is  no  more  than  "I  will  be 
your  husband  if  you  will  be  my  wife;"  it  is  no  more  than  this,  "I 
will  be  your  master,  and  you  shall  be  my  servant." 

Fourthly.  It  is  not  reasonable  that  a  young  woman  should  be 
caught  into  a  promise. 

E  contra.  The  action  very  well  lies;  and  certainly  marriage  is 
as  much  advancement  to  a  man  as  it  is  to  a  woman.  And  I  am 
sorry  that  the  counsel  on  the  other  side  has  so  mean  an  opinion  of 
a  good  woman  as  to  think  that  she  is  no  advancement  to  a  man. 
We  say  that  we  have  offered  ourselves,  and  that  she  did  refuse  us; 
and  though  we  do  not  mention  the  portion,  it  is  well  enough. 

Holt,  C.  J.  Why  should  not  a  woman  be  bound  by  her  promise 
as  well  as  a  man  is  bound  by  his?  Either  all  is  a  nudum  pactum, 
or  else  the  one  promise  is  as  good  as  the  other.  You  agree  a  woman 
shall  have  an  action;  now  what  is  the  consideration  of  a  man's 
promise?  Why,  it  is  the  woman's.  Then  why  should  not  his  prom- 
ise be  a  good  consideration  for  her  promise,  as  well  as  her  promise 
is  a  good  consideration  for  his?  There  is  the  same  parity  of  reason 
in  the  one  case  as  there  is  in  the  other,  and  the  consideration  is 
mutual.  As  for  the  case  of  the  m,atrimonii  proelocuti,  that  goes 
upon  another  reason,  there  being  a  feoffment  of  lands  and  a  condition 
annexed  to  it ;  but  this  here  is  upon  a  contract.  In  the  ecclesiastical 
court  he  might  have  compelled  a  performance  of  this  promise;  but 
here,  indeed,  she  has  disabled  herself,  for  she  has  married  another. 
Then  you  might  have  given  in  evidence  any  lawful  impediment  upon 
this  action;  as  that  the  parties  were  within  the  Levitical  degrees, 
,&c.,  for  this  makes  the  promise  void;  but  it  is  otherwise  of  a  pre- 
contract. 

»  4Reu.  i66 


172  HOLT    V.    CLARENCIEUX  [CHAP.    I 

TuETON,  J.  There  is  as  much  reason  for  the  one  as  for  the  other; 
and  Halcomb's  Case  in  Vaughan  is  plain. 

EoKEBY,  J.  If  a  man  be  scandalized  by  words  per  quod  matri- 
monium  amisit,  a  good  action  lies;  and  why  not  in  this  case? 

TuKTON,  J.     This  action  is  grounded  on  mutual  promises. 

Holt,  C.  J.  The  man  is  bound  in  respect  of  the  woman's  prom- 
ise; if  she  make  none,  he  is  not  bound  by  his  promise,  and  then  it 
is  a  nudum  pactum;  so  that  her  promise  must  be  good  to  make  his 
signify  anything  to  her;  and  then,  if  her  promise  be  good,  why 
should  not  a  good  action  lie  upon  it  ?      Judgm,ent  for  the  plaintijf. 


>4^ 


HOLT  V.  WARD  CLARENCIEUX 
In  the  King's  Bench,  Tkinity  Term,  1732 

[Reported  in  2  Strange,  937] 

The  plaintiff  declared  that  it  was  mutually  agreed  between  the 
plaintiff  and  defendant  that  they  should  marry  at  a  future  day  which 
is  past,  and  that,  in  consideration  of  each  other's  promise,  each  en- 
gaged to  the  other;  notwithstanding  which  the  defendant  did  not 
marry  the  plaintiff,  but  had  married  another,  which  she  lays  to  her 
damage  of  4,000Z. 

The  defendant,  with  leave  of  the  Court,  pleaded  double;  viz.,  non 
assumpsit,  and  that  the  plaintiff,  at  the  time  of  the  promise,  was 
an  infant  of  fifteen  years  of  age. 

The  plaintiff  joins  issue  on  the  non  assumpsit,  and  a  verdict  is 
found  for  her,  with  2,000Z.  damages.  And,  as  to  the  plea  of  infancy, 
demurred. 

This  cause  was  several  times  argued  at  the  bar :  1.  By  Mr.  Strange 
for  the  plaintiff,  and  Serjeant  Chappie  for  the  defendant;  when 
the  Court  inclined  strongly  with  the  plaintiff,  because,  though  the 
defendant  would  not  have  the  same  remedy  against  her  by  action 
for  damages,  yet  they  thought  he  might  have  some  remedy,  viz.,  by 
suit  in  the  ecclesiastical  court  to  compel  a  performance,  the  plain- 
tiff being  of  the  age  of  consent;  and  that  would  be  a  sufficient  con- 
sideration. And  therefore  appointed  an  argument  by  civilians,  to 
see  what  their  law  would  determine  in  such  a  case. 

Upon  the  arguments  of  the  civilians,  no  instance  could  be  shown 
•wherein  they  liad  compelled  the  performance  of  a  minor's  contract. 
And  tbey  who  argued  for  the  defendant  strongly  insisted  that,  in 
the  case  of  a  contract  per  verba  dr.  futuro  (as  this  was),  there  was 
no  remedy,  even  against  a  person  of  full  age,  in  the  spiritual  court; 
but  only  an  admonition.  And  the  only  reason  why  they  bold  juris- 
diction in  tbr'  r'aae  of  a  contract  per  verba  de  pro'senti  is  because 
that  is  look(!d  upon  amongst  them  to  be  ipsum  matrimonium,  and 


SECT.    Il]  HOLT   V.    CLARENCIEUX  173 

they  only  decree  the  formality  of  a  solemnization  in  the  face  of 
the  church. 

After  their  arguments  it  was  spoken  to  a  fourth  time  by  Mr. 
Reeve  and  Serjeant  Eyre.  And  now  this  Term  the  Chief  Justice 
delivered  the  resolution  of  the  Court. 

The  objection  in  this  case  is,  that,  the  plaintiif  not  being  bound 
equally  with  the  defendant,  this  is  nudum  •pactum,  and  the  defendant 
cannot  be  charged  in  this  action.  Formerly  it  was  made  a  doubt  by 
my  Lord  Vaughan  whether  any  action  could  be  maintained  on  mu- 
tual promises  to  marry;  but  that  is  now  a  point  not  to  be  disputed. 
And  as  to  the  present  case,  we  should  have  had  no  difficulty  in  giving 
judgment  for  the  plaintiif,  if  we  could  have  been  satisfied  by  the 
arguments  of  the  civilians  that,  as  the  plaintiff  was  of  the  age  of 
consent,  any  remedy,  though  not  by  way  of  action  for  damages, 
could  be  had  against  her.  But  since  they  seem  to  have  had  no  prece- 
dent in  the  case,  we  must  consider  it  upon  the  foot  of  the  common 
law.  And  upon  that  the  single  question  is,  whether  this  contract, 
as  against  the  plaintiff,  was  absolutely  void.  And  we  are  all  of 
opinion  that  this  contract  is  not  void,  but  only  voidable  at  the  elec- 
tion of  the  infant;  and  as  to  the  person  of  full  age  it  absolutely 
binds. 

The  contract  of  an  infant  is  considered  in  law  as  different  from 
the  contracts  of  all  other  persons.  In  some  cases  his  contract  shall 
bind  him;  such  is  the  contract  of  an  infant  for  necessaries,  and  the 
law  allows  him  to  make  this  contract  as  necessary  for  his  preserva- 
tion; and  therefore  in  such  case  a  single  bill  shall  bind  him,  though 
a  bond  with  a  penalty  shall  not.     1  Lev.  87. 

Where  the  contract  may  be  for  the  benefit  of  the  infant,  or  to  his 
prejudice,  the  law  so  far  protects  him  as  to  give  him  an  opportunity 
to  consider  it  when  he  comes  of  age;  and  it  is  good  or  voidable  at 
his  election.  Cro.  Car.  502;  2  Eol.  24,  427;  Hob.  69;  1  BrownL 
11;  1  Sid.  41;  1  Vent.  21;  1  Mod.  25;  Sir  W.  Jones,  164.  But 
though  the  infant  has  this  privilege,  yet  the  party  with  whom  he 
contracts  has  not :  he  is  bound  in  all  events.  And  as  marriage  is 
now  looked  upon  to  be  an  advantageous  contract,  and  no  distinction 
holds  whether  the  party  suing  be  man  or  woman,  but  the  true  dis- 
tinction is  whether  it  may  be  for  the  benefit  of  the  infant,  we  think, 
that  though  no  express  case  upon  a  marriage  contract  can  be  cited, 
yet  it  falls  within  the  general  reason  of  the  law  with  regard  to 
infants'  contracts.  And  no  dangerous  consequence  can  follow  from 
this  determination,  because  our  opinion  protects  the  infant  even 
more  than  if  we  rule  the  cpntract  to  be  absolutely  void.  And  as  to 
persons  of  full  age,  it  leaves  them  where  the  law  leaves  them,  which 
grants  them  no  such  protection  against  being  drawn  into  incon- 
venient contracts. 

For  these  reasons  we  are  all  of  opinion  that  the  plaintiff  ought 
to  have  her  judgment  upon  the  demurrer. 


174  ATWELL    V.    JENKINS  [CHAP.    I 

WILLIAM  J.  ATWELL  v.  EDWARD  J.  JENKINS 

Supreme  Judicial  Court  of  Massachusetts,  January  24- 
April  2,  1895 

[Reported  in  163  Massachusetts,  362] 

Holmes,  J.  This  is  an  action  to  recover  four  hundred  dollars, 
put  into  the  defendant's  hands  by  the  plaintiff  through  the  Western 
Union  Telegraph  Company,  under  the  following  circumstances.  One 
Hoes,  an  inhabitant  of  Chicago,  committed  an  offence  here  and  was 
arrested.  It  seems  to  have  been  for  his  interest  to  keep  the  matter 
private.  He  retained  the  defendant,  who,  on  receipt  of  the  above 
mentioned  money,  recognized  as  surety  for  him  and  obtained  his 
release  from  arrest.  Afterwards  a  nolle  prosequi  was  entered  by 
reason  of  the  insanity  of  Hoes.  When  arrested  Hoes  telegraphed 
to  the  plaintiff,  "Telegraph  at  once  four  hundred  dollars  to  Hon. 
Edward  J.  Jenkins,  my  attorney.  .  .  .  Am  in  trouble.  Don't  fail." 
The  plaintiff  thereupon  sent  the  money. 

It  hardly  needs  to  be  said  that  this  transaction  made  no  contract 
between  the  plaintiff  and  the  defendant.  The  plaintiff's  advance 
was  to  Hoes.  When  the  money  was  received  by  Jenkins,  it  was  re- 
ceived by  Hoes  as  between  them  and  the  plaintiff,  and  if  the  defend- 
ant kept  it,  that  was  by  some  arrangement  between  him  and  Hoes 
with  which  the  plaintiff  had  nothing  to  do. 

But  there  was  evidence  that  Hoes  was  insane  at  the  time,  and 
the  plaintiff  claims  a  right  to  recover  on  that  ground.  This  must 
mean  that  he  had  a  right  to  avoid  his  contract  on  the  ground  of 
the  other  party's  insanity,  and  to  demand  his  money  wherever  he 
could  find  it,  unless  the  defendant,  to  whose  hands  it  was  traced, 
stood  as  a  purchaser  for  value,  or  had  changed  his  position,  which 
fact  the  plaintiff  had  a  right  to  deny,  and  did  controvert  in  this  case, 
except  as  to  fifty  or  sixty  dollars.  We  presume  that  the  argument 
is,  that  if  Hoes  had  become  sane  and  had  affirmed  his  dealings  with 
the  defendant,  the  plaintiff  still  would  have  had  the  right  to  prove 
that  the  defendant  had  no  contract  with  Hoes,  and  was  not  a  pur- 
chaser for  value,  and  that,  on  the  other  hand,  if  Hoes  had  avoided 
his  contract,  his  right  to  the  money  would  be  subject  to  the  plain- 
tiff's paramount  right  to  the  same  fund,  always  supposing  that  the 
plaintiff  had  the  right  to  avoid  his  contract  also.  Buller  v.  Harri- 
son, Cowp.  565,  568;  Cox  v.  Prentice,  3  M.  &  S.  344. 

But  the  question  is  whether  the  plaintiff  had  the  right  supposed. 
In  Holt  v.  Ward  Clarencieux,  Strange,  937,  it  was  held,  on  great 
consideration,  that  a  person  of  full  age  contracting  with  an  infant 
was  bound  absolutely,  although  the  infant  had  a  right  to  avoid  her 
contract.  The  decision  was  on  demurrer  to  a  plea  of  the  plaintiff's 
infancy,  not  alleging  that  the  defendant  was  ignorant  of  the  fact 
when  iie  made  the  contract,  but  seems  to  have  been  made  without 


SECT.    II]  THOMAS    V.    THOMAS  175 

regard  to  whether  the  defendant  knew  or  not.  This  case  is  accepted 
without  dispute  as  the  law.  Thompson  v.  Hamilton,  12  Pick.  425, 
429 ;  Warwick  v.  Bruce,  2  M.  &  S.  205 ;  Bruce  v.  Warwick,  6  Taunt. 
118;  Monaghan  v.  Agricultural  Ins.  Co.,  53  Mich.  238,  243;  Hunt 
V.  Peake,  5  Cowen,  475 ;  Cannon  v.  Alsbury,  1  A.  K.  Marsh.  76 ; 
Johnson  v.  Rockwell,  12  Ind,  76,  81;  Field  v.  Herrick,  101  HI.  110; 
2  Kent,  Com.  78,  236;  Leake,  Con.  (3d  ed.)  476.  The  analogy  be- 
tween insane  persons  and  infants  is  not  perfect,  but  has  prevailed 
in  this  matter.  Allen  v.  Berryhill,  27  Iowa,  534;  Harmon  v.  Har- 
mon, 51  Fed.  Rep.  113;  Bish.  Con.  §  973;  Clark,  Con.  268.  An 
insane  person  like  Hoes,  if  he  was  insane,  not  a  raving  madman  or 
an  idiot,  is  capable  of  an  act,  even  if  his  act  be  voidable.  The 
promise  of  an  insane  man  is  not  absolutely  void.  Carrier  v.  Sears, 
4  Allen,  336,  337;  Bullard  v.  Moor,  158  Mass.  418,  424.  So  that  it 
cannot  be  argued  that  the  contract  was  formally  defective  and  void 
because  only  one  party  had  done  the  necessary  overt  act.  A  void- 
able promise  is  a  sufficient  consideration.  Plympton  v.  Dunn,  148 
Mass.  523,  527.  If  a  person  unwittingly  dealing  with  an  insane 
man  were  given  the  right  to  avoid  his  contract  when  he  found  out 
the  fact,  it  would  be  on  groundi^  of  policy  and  fairness,  and  of  course 
it  would  be  possible  to  read  in  a  condition  or  personal  exception  to 
that  effect.  But  there  seems  to  be  no  more  reason  to  do  it  in  this 
case  than  when  a  man  has  contracted  with  an  infant.  The  general 
rule  is  that  a  man  takes  the  risk  of  facts  which  he  deems  material, 
unless  he  expressly  stipulates  for  them  in  his  contract,  or  unless  he 
is  misled  by  a  fraudulent  misrepresentation.  See  Ring  v.  Phoenix 
Assurance  Co.,  145  Mass.  426,  429.  The  right  to  avoid  is  for  the 
personal  protection  of  the  insane,  and  those  who  deal  with  them 
have  been  held  to  have  no  corresponding  rights  in  all  the  cases  which 
we  have  seen.  Upon  these  considerations,  and  in  view  of  the  de- 
cisions cited,  we  are  of  opinion  that  the  plaintiff  cannot  repudiate 
his  contract  with  Hoes.  So  long  as  that  contract  stands,  at  least, 
he  cannot  maintain  an  action  against  the  defendant.  Other  de- 
fences need  not  be  considered.  We  express  no  opinion  as  to  the  law 
in  case  of  a  bilateral  contract  wholly  unexecuted  on  both  sides. 

Exceptions   overruled. 


ELEANOR  THOMAS  v.  BENJAMIN  THOMAS 

In  the  Queen's  Bench,  February  5,  1842 

[Reported  in  2  Queens  Bench  Reports,  851] 

Assumpsit.  The  declaration  stated  an  agreement  between  plain- 
tiff and  defendant  that  the  defendant  should,  when  thereto  required 
by  the  plaintiff,  by  all  necessary  deeds,  conveyances,  assignments, 
or  other  assurances,  grants,  &c.,  or  otherwise,  assure  a  certain  dwell- 
ing-house and  premises,  in  the  county  of  Glamorgan,  unto  plaintiff 


176  THOMAS    V.   THOMAS  [CHAP.   I 

for  her  life,  or  so  long  as  she  should  continue  a  widow  and  un- 
married; and  that  plaintiff  should,  at  all  times  during  which  she 
should  have  possession  of  the  said  dwelling-house  and  premises,  pay- 
to  defendant  and  one  Samuel  Thomas  (since  deceased),  their  execu- 
tors, administrators,  or  assigns,  the  sum  of  11.  yearly  towards  the 
ground-rent  payable  in  respect  of  the  said  dwelling-house  and  other 
premises  thereto  adjoining,  and  keep  the  said  dwelling-house  and 
premises  in  good  and  tenantable  repair.  That  the  said  agreement 
being  made,  in  consideration  thereof  and  of  plaintiff's  promise  to 
perform  the  agreement,  Samuel  Thomas  and  the  defendant  prom- 
ised to  perform  the  same;  and  that  although  plaintiff  afterwards 
and  before  the  commencement  of  the  suit,  to  wit,  &c.,  required  of 
defendant  to  grant,  &c.,  by  a  necessary  and  sufficient  deed,  &c.,  the 
said  dwelling-house,  &c.,  to  plaintiff  for  her  life,  or  whilst  she  con- 
tinued a  widow;  and  though  she  had  then  continued,  &c.,  and  still 
was,  a  widow  and  unmarried,  and  although  she  did,  to  wit,  on,  &c., 
tender  to  the  defendant  for  his  execution  a  certain  necessary  and 
sufficient  deed,  &c.,  proper  and  sufficient  for  the  conveyance,  &e., 
and  although,  &c.  (general  readiness  of  plaintiff  to  perform),  yet 
defendant  did  not  nor  would  then  or  at  any  other  time  convey,  &c. 

Pleas :  1.  Non  assumpsit.  2.  That  there  was  not  the  consideration 
alleged  in  the  declaration  for  the  defendant's  promise.  3.  Fraud 
and  covin.     Issues  thereon. 

At  the  trial  before  Coltman,  J.,  at  the  Glamorganshire  Lent 
Assizes,  1841,  it  appeared  that  John  Thomas,  the  deceased  husband 
of  the  plaintiff,  at  the  time  of  his  death,  in  1837,  was  possessed  of 
a  row  of  seven  dwelling-houses  in  Methyr  Tidvil,  in  one  of  which, 
being  the  dwelling-house  in  question,  he  was  himself  residing;  and 
that  by  his  will  he  appointed  his  brother  Samuel  Thomas  (since  de- 
ceased) and  the  defendant  executors  thereof,  to  take  possession  of 
al  his  houses,  &c.,  subject  to  certain  payments  in  the  will  mentioned, 
among  which  were  certain  charges  in  money  for  the  benefit  of  the 
plaintiff.  In  the  evening  before  the  day  of  his  death  he  expressed 
orally  a  wish  to  make  some  further  provision  for  his  wife;  and  on 
the  following  morning  he  declared  orally,  in  the  presence  of  two 
witnesses,  that  it  was  his  will  that  his  wife  should  have  either  the 
house  in  which  he  lived  and  all  that  it  contained,  or  an  additional 
sum  of  lOOL  instead  thereof. 

Tliis  declaration  being  shortly  afterwards  brought  to  the  knowl- 
edge of  Samuel  Thomas  and  the  defendant,  the  executors  and  re- 
siduary legatees,  they  consented  to  carry  the  intentions  of  the  tes- 
tator 80  expressed  into  effect;  and  after  the  lapse  of  a  few  days  they 
and  th(!  j)luintiff  executed  the  agreement  declared  upon,  which,  after 
stating  tlu!  parties  and  briefly  reciting  tlie  Avill,  proceeded  as 
follows :  — 

"And  wliereas  the  said  testator,  shortly  before  his  death,  declared, 


SECT.    II  ]  THOMAS    V.   THOMAS  177 

in  the  presence  of  several  witnesses,  that  he  was  desirous  his  said 
wife  should  have  and  enjoy  during  her  life,  or  so  long  as  she  should 
continue  his  widow,  all  and  singular  the  dwelling-house,"  &c.,  "or 
100/.  out  of  his  personal  estate,"  in  addition  to  the  respective  leg- 
acies and  bequests  given  her  in  and  by  his  said  will;  "but  such 
declaration  and  desire  was  not  reduced  to  writing  in  the  life-time 
of  the  said  John  Thomas  and  read  over  to  him;  but  the  said  Samuel 
Thomas  and  Benjamin  Thomas  are  fully  convinced  and  satisfied 
that  such  was  the  desire  of  the  said  testator,  and  are  willing  and  de- 
sirous that  such  intention  should  be  carried  into  full  effect:  Now 
these  presents  witness,  and  it  is  hereby  agreed  and  declared  by  and 
between  the  parties,  that,  in  consideration  of  such  desire  and  of  the 
premises,"  the  executors  would  convey  the  dwelling-house,  &c.,  to 
the  plaintiff  and  her  assigns  during  her  life,  or  for  so  long  a  time 
as  she  should  continue  a  widow  and  unmarried :  "provided  neverthe- 
less, and  it  is  hereby  further  agreed  and  declared,  that  the  said 
Eleanor  Thomas  or  her  assigns  shall  and  will,  at  all  times  during 
which  she  shall  have  possession  of  the  said  dwelling-house,  &c.,  pay 
to  the  said  Samuel  Thomas  and  Benjamin  Thomas,  their  executors, 
&c.,  the  sum  of  11.  yearly  towards  the  ground-rent  payable  in  respect 
of  the  said  dwelling-house  and  other  premises  thereto  adjoining, 
and  shall  and  will  keep  the  said  dwelling-house  and  premises  in  good 
and  tenantable  repair:"  with  other  provisions  not  affecting  the  ques- 
tions in  this  case. 

The  plaintiff  was  left  in  possession  of  the  dwelling-house  and 
premises  for  some  time;  but  the  defendant,  after  the  death  of  his 
co-executor,  refused  to  execute  a  conveyance  tendered  to  him  for 
execution  pursuant  to  the  agreement,  and  shortly  before  the  trial 
brought  an  ejectment,  under  which  he  turned  the  plaintiff  out  of 
possession.  It  was  objected  for  the  defendant  that,  a  part  of  the 
consideration  proved  being  omitted  in  the  declaration,  there  was  a 
fatal  variance.  The  learned  judge  overruled  the  objection,  reserving 
leave  to  move  to  enter  a  nonsuit.  Ultimately  a  verdict  was  found 
for  the  plaintiff  on  all  the  issues;  and  m  Easter  Term  last  a  rule 
nisi  was  obtained  pursuant  to  the  leave  reserved. 
Chilton  and  T7.  M.  James  now  showed  cause. 
E.  V.  Williams,  contra. 

Lord  Denman,  C.  J.  There  is  nothing  in  this  case  but  a  great 
deal  of  ingenuity,  and  a  little  wilful  blindness  to  the  actual  terms 
of  the  instrument  itself.  There  is  nothing  whatever  toshow  that 
the  ground-rent  was  payable  to  a  superior  landlord;  and  the  stipu- 
lation for  the  payment  of  it  is  not  a  mere  proviso,  but  an  express 
agreement.  (His  Lordship  here  read  the  proviso.)  This  is  in  terms 
an  express  agreement,  and  shows  a  sufficient  legal  consideration 
quite  independent  of  the  moral  feeling  which  disposed  the  executors 
to  enter  into  such  a  contract.  Mr.  Williams's  definition  of  consider- 
ation is  too  large:  the  word  causa  in  the  passage  referred  to  means 


178  THOMAS    V.    THOMAS  [CHAP.    I 

one  which  confers  what  the  law  considers  a  benefit  on  the  party. 
Then  the  obligation  to  repair  is  one  which  might  impose  charges 
heavier  than  the  value  of  the  life  estate. 

Patteson,  J.  It  would  be  giving  to  causa  too  large  a  construc- 
tion if  we  were  to  adopt  the  view  urged  for  the  defendant :  it  would 
be  confounding  consideration  with  motive.  Motive  is  not  the  same 
thing  with  consideration.  Consideration  means  something  which  is 
of  some  value  in  the  eye  of  the  law,  moving  from  the  plaintiff:  it 
may  be  some  detriment  to  the  plaintiff,  orsome  benefit  to  the  de^ 
tenciant;  bm  aTTir'evemrjr'must  Se  moving  from  the  plaintiff. 
N'ow^  that'which  is  suggesfeJ  as  the  consideration  here  —  a  pious 
respect  for  the  wishes  of  the  testator  —  does  not  in  any  way  move 
from  the  plaintiff:  it  moves  from  the  testator;  therefore,  legally 
speaking,  it  forms  no  part  of  the  consideration.  Then  it  is  said 
that,  if  that  be  so,  there  is  no  consideration  at  all,  it  is  a  mere  volun- 
tary gift :  but  when  we  look  at  the  agreement  we  find  that  this  is 
not  a  mere  proviso  that  the  donee  shall  take  the  gift  with  the 
burthens;  but  it  is  an  express  agreement  to  pay  what  seems  to  be 
a  fresh  aploortionmeut  of  a  ground-rent,  and  which  is  made  pay;- 
"aM^Tnot  to  a  superior  landlord  but  to  the  executors.  So  that  this 
"rent  is  clearly  not  something  incident  to  the  assignment  of  the  house ; 
for  in  that  case,  instead  of  being  payable  to  the  executors,  it  would 
have  been  payable  to  the  landlord.  Then  as  to  the  repairs:  these 
houses  may  very  possibly  be  held  under  a  lease  containing  covenants 
to  repair ;  but  we  know  nothing  about  it :  for  any  thing  that  appears, 
the  liability  to  repair  is  first  created  by  this  instrument.  The  pro- 
viso certainly  struck  me  at  first  as  Mr.  "Williams  put  it,  that  the 
rent  and  repairs  were  merely  attached  to  the  gift  by  the  donors; 
and,  had  the  instrument  been  executed  by  the  donors  only,  there 
might  have  been  some  ground  for  that  construction;  but  the  fact  is 
not  so.  Then  it  is  suggested  that  this  would  be  held  to  be  a  mere 
voluntary  conveyance  as  against  a  subsequent  purchaser  for  value: 
possibly  that  might  be  so:  but  suppose  it  would:  the  plaintiff  con- 
tracts to  take  it,  and  does  take  it,  whatever  it  is,  for  better  for  worse : 
perhaps  a  hona  fde  purchase  for  a  valuable  consideration  might 
override  it;  but  that  cannot  be  helped.       , 

Coleridge,  J.  The  concessions  made  in  the  course  of  the  argu- 
ment have  in  fact  disposed  of  the  case.  It  is  conceded  that  mere 
motive  need  not  be  stated;  and  we  are  not  obliged  to  look  for  the 
legal  consideration  in  any  particular  part  of  the  instrument,  merely 
because  the  consideration  is  usually  stated  in  some  particular  part: 
ut  res  magis  valeat,  we  may  look  to  any  part.  In  this  instrument, 
in  the  part  where  it  is  usual  to  state  the  consideration,  nothing  cer- 
tainly is  expresserl  but  a  wish  to  fulfil  the  intentions  of  the  testator; 
but  in  another  part  we  find  an  express  agreement  to  pay  an  annual 
sum  for  a  particular  purpose,  and  also  a  distinct  agreement  to  re- 
pair.    If  these  had  occurred  in  the  first  part  of  the  instrument,  it 


SECT.    Il]  MCmULLAN    f.    DICKINSON    COMPANY  179    <3^u^ 

could  hardly  have  been  argued  that  the  declaration  was  not  well 
drawn,  and  supported  by  the  evidence.  As  to  the  suggestion  of  this 
being  a  voluntary  conveyance,  my  impression  is  that  this  payment 
of  11.  annually  is  more  than  a  good  consideration:  it  is  a  valuable 
consideration :  it  is  clearly  a  thing  newly  created,  and  not  part  of 
the  old  ground-rent.  Rule  discharged.^ 


WILLIAM  McMULLAN  v.  DICKINSON"  COMPANY 

Minnesota  Supreme  Court,  January  14,  1896 
[Reported  in  63  Minnesota,  405] 

Collins,  J.^  From  the  resolution  which  was  incorporated  bodily 
into  the  instrument  executed  by  both  parties  as  their  contract  it 
appears  that  it  was  resolved  to  employ  plaintiff  as  an  assistant 
manager  of  the  corporate  business  at  a  fixed  salary  per  year,  pay- 
able in  monthly  instalments.  The  term  of  employoment  was  de- 
termined upon  as  the  period  of  time  during  which  the  corporate 
business  might  be  carried  on;  not  to  exceed,  of  course,  the  life  of 
the  corporation  as  fixed  by  law.  Two  provisos  were  appended  to 
the  paragraph  relating  to  the  term  of  employment,  —  one  that  plain- 
tiff should  properly  and  efficiently  discharge  his  duties  as  such  as- 
sistant; the  other,  that  his  term  of  employment  should  continue 
only  so  long  as  he  owned  and  held,  in  his  own  name,  fifty  shares,  fully 
paid  up,  of  the  defendant's  capital  stock.  A  recital  that  plaintiff 
had  accepted  the  employment  followed,  and  then  the  agreement  where- 
by defendant  employed  plaintiff  and  the  latter  entered  into  the  em- 
ployment, each  party  being  subject  to  the  terms  and  conditions 
mentioned  and  prescribed  by  the  resolution. 

Counsel  for  defendant  urges  several  objections  to  the  validity  of 
the  contract,  but  they  are  all  disposed  of  by  considering  the  claim 
that  it  is  and  was  void  for  lack  of  mutuality  of  consideration,  the 
point  being  that,  while  the  character  of  the  services  to  be  rendered 
and  the  compensation  were  fixed,  no  definite  period  of  time  was 
agreed  upon  during  which  the  plaintiff  should  work  or  defendant 
employ  and  pay.  The  language  used,  independent  of  the  provisos, 
was :  "Said  employment  is  to  continue  during  the  time  the  business 
of  said  corporation  shall  be  continued,  not  exceeding  the  term  and 
existence  of  the  corporation."  The  only  conditions  mentioned  and 
imposed  being  that,  while  in  defendant's  employ,  the  plaintiff  should 
render  proper  and  efficient  service,  and  should  own  and  hold  in  his 
own  name  certain  shares  of  corporate  stock. 

As  we  construe  the  expressions  used,  the  duration  of  the  term  of 

^  Montpelier  Seminary  v.  Smith's  Estate,  69  Vt.  382,  contra. 
*  Part  of  the  case  is  omitted. 


180  MCMULLAN    V.    DICKINSON    COMPANY  CHAP.   I 

employment  was  sufficiently  defined,  for  the  law  does  not  require 
that  the  precise  number  of  days  or  months  or  years  shall  be  stated; 
and  there  was  mutuality  of  consideration.  The  term  fixed,  depend- 
ent only  upon  the  condition  as  to  plaintiff's  ownership  of  the  stock 
shares,  was  for  such  period  of  time  as  defendant  corporation  might 
continue  to  transact  business.  It  might  cease  to  do  business  volun- 
tarily, or  there  might  be  an  involuntary  termination  of  its  business 
transactions;  for  instance  by  proceedings  in  insolvency  instituted  by 
its  creditors,  or  the  business  might  terminate  by  operation  of  law  at 
the  end  of  not  to  exceed  thirty  years  from  the  date  of  its  organiza- 
tion, —  that  being  the  life  term  of  corporations  of  this  character 
under  the  statutes.  The  defendant  agreed  to  keep  plaintiff  in  its 
employ  so  long  as  he  retained  as  the  owner,  and  held  in  his  own 
name,  the  shares,  and  it  continued  in  business;  and  plaintiff,  in 
consideration  of  defendant's  agreement,  stipulated  that,  so  long  as 
he  remained  in  such  employment,  he  would  own  and  hold  the  stock, 
and  would  perform  proper  and  efficient  service.  The  requirement 
that  plaintiff  should  own  and  continue  to  hold  the  stock  as  a  con- 
dition to  his  retention  by  defendant  was,  presumptively,  for  the  bene- 
fit of  the  latter,  and  a  detriment  to  the  former.  It  was  in  defendant's 
interest  to  have  its  stock  shares  permanently  held  by  its  employes, 
for  such  holding  would  serve  to  stimulate  them  in  the  performance 
of  their  duties.  It  was  an  injury  to  plaintiff  to  hold  the  stock  as 
a  condition  for  his  employment,  especially  when  we  consider  that 
the  business  of  the  concern  could  be  closed  out  at  any  time,  leaving 
him  out  of  employment,  with  the  stock  upon  his  hands.  Had  the 
plaintiff  disposed  of  his  shares,  the  defendant  would  have  suffered 
a  loss;  and,  had  the  latter  ceased  business,  the  former  would  have 
been  injured.  Had  the  relation  of  employer  and  employe  terminated 
between  these  parties  through  the  happening  of  either  of  these  two 
contingencies,  neither  party  would  have  been  in  staiu  quo.  The  con- 
sideration for  the  agreement  was  ample  and  mutual,  although  the 
term  of  service  might  be  terminated  by  defendant's  cessation  of 
business  or  plaintiff's  selling  his  stock  in  the  corporation.  See  Bolles 
V.  Sachs,  37  Minn.  315,  33  N.  W.  862.  The  expressions  of  a  con- 
tingency whereby  the  contract  might  be  terminated  by  the  act  of 
either  party  expressly  excluded  the  idea  that  each  was  at  liberty 
to  terminate  it  at  any  time  without  regard  to  the  happening  of 
either  contingency.^ 

'  "When  a  man  actfl  in  conRidcration  of  a  conditional  promise,  if  he  gets  the  prom- 
ise he  ({"ts  .'ill  that  he  is  entitled  to  by  his  act,  ant!  if  as  events  turn  out,  the  condition 
is  not  satiHficfl,  and  the  promise  calls  for  nf>  performance,  there  is  no  failure  of  con- 
BideratioQ."     Holmes,  J.,  in  Gutlon  v.  Marcus,  1G5  Mass.  335,  336. 


SECT.   IlJ  WELLS    V.   ALEXANDRE  181 


MAEGAKET  WELLS,  Appellant,  v.  FRANCIS  ALEXANDRE, 
ET  AL.,  Respondent 

New  Yoek  Court  of  Appeals,  October  13-December  1,  1891 

[Reported  in  130  New  York,  642] 

Parker,  J.^  December  31,  1887,  the  plaintiff  addressed  the  fol- 
lowing communication  to  the  defendants :  — 

"Messrs.  F.  Alexandre  &  Sons,  New  York: 

"Gents,  —  We  propose  to  furnish  your  steamers,  'City  of  Alexandria,'  'City  of 
Washington'  and  'Manhattan,'  with  strictly  free  burning  pea,  delivered  alongside 
Pier  3,  North  River,  for  the  year  1888,  commencing  Jan.  1st  to  Dec.  31st,  for  the 
sum  of  three  dollars  and  five  cents  per  ton.  We  also  agree  to  furnish  any  other  steamers 
of  your  line  with  same  coal  and  at  same  price  at  any  time  you  wish.  If,  through  any 
cause,  we  are  unable  to  deliver  pea  coal,  we  will  deUver  you  other  sizes  at  an  equi- 
table adjustment  of  price. 

"Yours,  very  respectfully, 

"Jos.  K.  Wells,  Agt." 

To  which  the  defendants  on  January  4,  1888,  replied  as  follows:  — 

"Mr.  Jos.  K.  Wells: 

"Dear  Sir,  —  We  beg  to  accept  your  offer  of  31st  ult.,  to  furnish  our  steamers, 
'City  of  Alexandria'  'City  of  Washington'  and  'Manhattan,'  with  strictly  free  burn- 
ing pea  coal,  delivered  along  side  Pier  3,  North  River,  for  the  year  1888,  commencing 
January  1st,  for  the  sum  of  $3.05  per  ton  of  2,240  lbs.;  also  to  furnish  any  other 
steamer  of  our  line  with  same  coal  at  same  price,  if  we  wish  it.  If,  through  any  cause, 
you  are  unable  to  deliver  pea  coal,  you  will  deliver  us  other  sizes  at  an  equitable 
adjustment  of  price. 

"Yours  truly, 

"F.  Alexandre  &  Sons." 

Thereafter,  and  until  the  twenty-fifth  day  of  June  following,  the 
plaintiff  furnished  to  the  defendants  such  quantities  of  coal  as  were 
required  for  the  use  of  the  steamships  named.  On  that  day  the 
defendants  sold  to  the  New  York  and  Cuba  Steamship  Company 
all  their  steamship  property,  charters,  and  business,  including  the 
steamers  mentioned  in  the  correspondence,  and  ceased  to  operate 
them.  The  steamers  under  the  control  and  management  of  the  pur- 
chaser of  June  twenty-fifth  continued  to  make  regular  trips  at  stated 
intervals  between  the  same  ports  as  before,  and  during  the  remain- 
ing portion  of  the  year  required  and  used  large  quantities  of  coal. 
The  plaintiff  insists  that  the  correspondence  created  a  valid  contract 
by  which  she  became  bound  to  deliver,  and  the  defendants  to  receive, 
at  the  price  named,  all  coal  which  would  be  required  for  the  opera- 
tion of  the  steamers  during  1888,  and  as  the  coal  required  for  their 
use  was  not  received  by  the  defendants  after  June  twenty-fifth,  that 
she  is  entitled  to  recover  the  damages  sustained  because  of  the  de- 
fault of  the  defendants. 

The  defendants,  on  the  other  hand,  contend  that  the  correspond- 
ence did  not  created  a  contract;  that  if  it  did,  it  was  a  contract 
for  successive  deliveries  of  coal,  to  be  made  only  when  the  defendants 

*  A  small  portion  of  the  opinion  is  omitted. 


182  WELLS    V.   ALEXANDRE  [CHAP.    I 

should  give  the  plaintiff  notice  that  a  delivery  was  required,  and  as 
notice  had  not  been  given,  the  defendants  are  not  in  default. 

If  in  plaintiff's  offer  the  words  "one  thousand  tons"  had  been 
employed  instead  of  "your  steamers  'City  of  Alexandria,'  'City  of 
Washington'  and  'Manhattan,'  "  it  would  not  be  questioned  that  the 
written  acceptance  of  the  defendants  created  a  valid  contract.  The 
offer  and  acceptance  were  unqualified;  the  price  fixed;  the  duration 
of  the  contract  limited  to  a  period  commencing  January  first,  and 
ending  December  thirty-first  of  the  same  year;  and  the  quantity 
would  have  been  certain. 

As  it  was  not  possible  to  determine  the  precise  amount  of  coal 
that  would  be  required  to  operate  the  steamers  during  the  year,  the 
plaintiff  seems  to  have  made  his  proposition  as  to  amount  as  definite 
and  certain  as  the  situation  permitted.  Three  of  defendants' 
steamers  made  regular  trips  at  stated  intervals  between  certain  ports 
and  necessarily  required  and  used  in  so  doing  large  quantities  of 
coal,  and  in  view  of  that  condition  the  plaintiff  offered  to  "furnish 
your  steamers  'City  of  Alexandria,'  'City  of  Washington'  and  'Man- 
hattan,' "  with  coal  for  a  period  of  about  a  year.  It  is  very  clear 
that  the  language  employed  by  plaintiff  in  the  light  of  surrounding 
circumstances  was  intended  to  make  as  definite  as  possible  the  quan- 
tity of  coal  which  the  defendants  would  be  required  to  take.  The 
quantity  to  be  measured  by  the  requirements  of  the  three  steamers 
for  the  year  ensuing  in  an  employment  about  which  they  had  been 
long  engaged.  So,  while  at  the  date  of  the  agreement  the  quantity 
was  indefinite,  it  was,  nevertheless,  determinable  by  its  terms  and, 
therefore,  certain,  within  the  maxim,  cerium  est  quod  certum  reddi- 
■potest. 

Defendants  urged  that  if  it  be  conceded  that  the  proposition  ac- 
cepted was  to  furnish  the  steamers  with  coal  for  the  year,  at  three 
dollars  and  five  cents  per  ton,  still  the  undertaking  was  to  furnish 
coal  from  time  to  time  when  defendants  should  notify  her  that  de- 
liveries were  required,  and  as  no  such  notice  has  been  given  since 
the  last  delivery  for  which  payment  has  been  made,  the  defendants 
are  not  in  default  and  no  recovery  can  be  had. 

The  argument  made  in  support  of  this  proposition  briefly  stated 
is,  that  it  is  apparent  that  it  could  not  have  been  in  the  contempla- 
tion of  the  parties  that  the  coal  should  be  furnished  in  one  lot,  but 
rather  at  different  times  as  the  steamers  required  it  for  their  several 
voyages;  nor  could  the  plaintiff  know  the  amount  which  each  steamer 
woulfl  rfqnire  at  the  successive  loadings.  Tlierefore,  the  defendants 
were  to  determine  the  time  and  quantity  for  eacli  delivery,  and  as 
the  contract  contained  no  promise  to  give  the  plaintiff  notice,  the 
dffendanta  were  bound  to  take  only  such  coal  as  they  notified  the 
plaintiff  to  furnish. 

It  may  be  rloubtod  whether  there  is  any  thing  in  the  record  to 
warrant  a  determination  that  the  plaintiff  would  not  know  the  several 


TU. 


SECT.    iQ  BALFOUR    V.    BALFOUR  183 

amounts  and  times  when  coal  would  be  needed,  but  if  it  were  other- 
*wise,  we  do  not  deem  it  controlling.  As  we  have  already  said,  the 
evident  intention  of  the  parties  was  that  the  plaintiff  should  furnish 
'to  the  defendants  all  the  coal  which  the  steamers  named  should 
require  in  the  work  in  which  they  were  employed  for  the  year  en- 
suing, and  that  the  parties  should  perform  all  needful  acts  to  give 
effect  to  the  agreement;  therefore,  if  a  notice  was  requisite  to  its 
proper  execution,  a  covenant  to  give  such  notice  will  be  inferred,  for 
any  other  construction  would  make  the  contract  unreasonable  and 
place  one  of  the  parties  entirely  at  the  mercy  of  the  other.  Jugla 
V.  Trouttet,  120  N.  Y.  21-28;  New  Eng.  Iron  Co.  v.  Gilbert  E. 
E.  E.  Co.,  91  id.  153;  Booth  v.  C.  E.  M.  Co.,  74  id.  15. 

The  fact  that  the  defendants  deemed  it  best  to  sell  the  steamers, 
cannot  be  permitted  to  operate  to  relieve  them  from  the  obligation 
to  take  the  coal  which  the  ordinary  and  accustomed  use  of  the 
steamers  required,  for  the  provisions  of  the  agreement  do  not  admit 
of  a  construction  that  it  was  to  terminate  in  the  event  of  a  sale  or 
other  disposition  of  them  by  the  defendants. 

The  judgment  should  he  reversed. 

BALFOUE  V.  BALFOUE 

In  the  Court  of  Appeal  —  July  24,  25,  1919 

[Reported  in   [1919]    2  King's  Bench,  571]    V^^-^-*-^    h^ 

The  plaintiff  sued  the  defendant  (her  husband)  for  money  which 
she  claimed  to  be  due  in  respect  of  an  agreed  allowance  of  30/.  a 
month.  The  alleged  agreement  was  entered  into  under  the  following 
circumstances.  The  parties  were  married  in  August,  1900.  The 
husband,  a  civil  engineer,  had  a  post  under  the  Government  of  Cey- 
lon as  Director  of  Irrigation,  and  after  the  marriage  he  and  his 
wife  went  to  Ceylon,  and  lived  there  together  until  the  year  1915, 
except  that  in  1906  they  paid  a  short  visit  to  this  country,  and  in 
1908  the  wife  came  to  England  in  order  to  undergo  an  operation, 
after  which  she  returned  to  Ceylon.  In  November,  1915,  she  came 
to  this  country  with  her  husband,  who  was  on  leave.  They  remained 
in  England  until  August,  1916,  when  the  husband's  leave  was  up 
and  he  had  to  return.  The  wife,  however,  on  the  doctor's  advice  re- 
mained in  England.  On  August  8,  1916,  the  husband  being  about  to 
sail,  the  alleged  parol  agreement  sued  upon  was  made.  The  plain- 
tiff, as  appeared  from  the  judge's  note,  gave  the  following  evidence 
of  what  took  place:  "In  August,  1916,  defendant's  leave  was  up. 
I  was  suffering  from  rheumatic  arthritis.  The  doctor  advised  my 
staying  in  England  for  some  months,  not  to  go  out  till  November 
4.  On  August  8  my  husband  sailed.  He  gave  me  a  cheque  from 
8th  to  31st  for  24L,  and  promised  to  give  me  30Z.  per  month  till 


184  BALFOUK    V.   BALFOUR  [CHAP.    I 

I  returned."  Later  on  she  said:  "My  husband  and  I  wrote  the  fig- 
ures together  on  August  8;  34L  shown.  Afterwards  he  said  30/." 
In  cross-examination  she  said  that  they  had  not  agreed  to  live  apart 
until  subsequent  differences  arose  between  them,  and  that  the  agree- 
ment of  August,  1916,  was  one  which  might  be  made  by  a  couple 
in  amity.  Her  husband  in  consultation  with  her  assessed  her  needs, 
and  said  he  would  send  30/.  per  month  for  her  maintenance.  She 
further  said  that  she  then  understood  that  the  defendant  would  be 
returning  to  England  in  a  few  months,  but  that  he  afterwards  wrote 
to  her  suggesting  that  they  had  better  remain  apart.  In  March, 
1918,  she  commenced  proceedings  for  restitution  of  conjugal  rights, 
and  on  July  30  she  obtained  a  decree  nisi.  On  December  16,  1918, 
she  obtained  an  order  for  alimony. 

Saegant,  J.,  held  that  the  husband  was  under  an  obligation  to 
support  his  wife,  and  the  parties  had  contracted  that  the  extent  of 
that  obligation  should  be  defined  in  terms  of  so  much  a  month.  The 
consent  of  the  wife  to  that  arrangement  was  a  sufficient  consideration 
to  constitute  a  contract  which  could  be  sued  upon. 

He  accordingly  gave  judgment  for  the  plaintiff. 

The  husband  appealed. 

Warrington,  L.  J.  (after  stating  the  facts).  Those  being  the 
facts  we  have  to  say  whether  there  is  a  legal  contract  between  the 
parties,  in  other  words,  whether  what  took  place  between  them  was 
in  the  domain  of  a  contract  or  whether  it  was  merely  a  domestic 
arrangement  such  as  may  be  made  every  day  between  a  husband 
and  wife  who  are  living  together  in  friendly  intercourse.  It  may 
be,  and  I  do  not  for  a  moment  say  that  it  is  not,  possible  for  such 
a  contract  as  is  alleged  in  the  present  case  to  be  made  between  hus- 
band and  wife.  The  question  is  whether  such  a  contract  was  made. 
That  can  only  be  determined  either  by  proving  that  it  was  made 
in  express  terms,  or  that  there  is  a  necessary  implication  from  the 
circumstances  of  the  parties,  and  the  transaction  generally,  that 
such  a  contract  was  made.  It  is  quite  plain  that  no  such  contract 
was  made  in  express  terms,  and  there  was  no  bargain  on  the  part 
of  the  wife  at  all.  All  that  took  place  was  this:  The  husband  and 
wife  met  in  a  friendly  way  and  discussed  what  would  be  necessary 
for  her  support  while  she  was  detained  in  England,  the  husband 
being  in  Ceylon,  and  they  came  to  the  conclusion  that  30Z.  a  month 
woiilr]  be  about  right,  but  there  is  no  evidence  of  any  express  bar- 
gain by  tbo  wife  that  s!ie  wonhl  in  all  the  circumstances  treat  that 
as  in  satisfflftion  of  the  obligation  of  the  husband  to  maintain  her. 
Can  we  tind  a  contract  from  the  position  of  the  parties?  It  seems 
to  me  it  is  quite  impossible.  If  we  were  to  imply  such  a  contract 
in  this  case  we  should  be  Implying  on  the  part  of  the  wife  that 
whatever  happened  and  whatever  might  be  the  change  of  circum- 
stances while  the  hiisljfuul  was  away  she  should  be  content  with  this 
30/.  a  month,  and  bind  herself  by  an  obligation  in  law  not  to  re- 


SECT.    Il]  DEVECMON    V.    SHAW   AND   DEVRIES  185 

quire  him  to  pay  anything  more;  and  on  the  other  hand  we  should 
be  implying  on  the  part  of  the  husband  a  bargain  to  pay  30Z.  a 
month  for  some  indefinite  period  whatever  might  be  his  circum- 
stances. Then  again  it  seems  to  me  that  it  would  be  impossible  to 
make  any  such  implication.  The  matter  really  reduces  itself  to 
an  absurdity  when  one  considers  it,  because  if  we  were  to  hold  that 
there  was  a  contract  in  this  case  we  should  have  to  hold  that  with 
regard  to  all  the  more  or  less  trivial  concerns  of  life  where  a  wife, 
at  the  request  of  her  husband,  makes  a  promise  to  him,  that  is  a 
promise  which  can  be  enforced  in  law.  All  I  can  say  is  that  there 
is  no  such  contract  here.  These  two  people  never  intended  to  make 
a  bargain  which  could  be  enforced  in  law.  The  husband  expressed 
kis  intention  to  make  this  payment,  and  Hie  promised  to  make  it, 
and  was  bound  in  honour  to  continue  it  so  long  as  he  was  in  a  po- 
sition to  do  so.  The  wife,  on  the  other  hand,  so  far  as  I  can  see, 
made  no  bargain  at  all.  That  is  in  my  opinion  sufficient  to  dispose 
■of  the  case. 

It  is  unnecessary  to  consider  whether  if  the  husband  failed  to 
make  the  payments  the  wife  could  pledge  his  credit  or  whether  if 
he  failed  to  make  the  payments  she  could  have  made  some  other 
arrangements.  The  only  question  we  have  to  consider  is  whether 
the  wife  has  made  out  a  contract  which  she  has  set  out  to  do.  In 
my  opinion  she  has  not. 

I  think  the  judgment  of  Sargant  J.  cannot  stand,  the  appeal  ought 
to  be  allowed  and  judgment  ought  to  be  entered  for  the  defendant.^ 


JOKN  SEMMES  DEVECMON^  v.  ALEXAm)ER  SHAW  and 
CHEISTIAN  DEVKIES,  Executors  of  John   S.  Combs 

Maryland  Court  of  Appeals,  April  Term,   1888 

[Reported  in  69  Maryland,  199] 

Bryan,  J.,  delivered  the  opinion  of  the  court :  — 
John  Semmes  Devecmon  brought  suit  against  the  executors  of 
John  S.  Combs,  deceased.  He  declared  in  the  common  counts,  and 
also  filed  a  bill  of  particulars.  After  judgment  by  default,  a  jury 
was  sworn  to  assess  the  damages  sustained  by  the  plaintiff.  The 
evidence  consisted  of  certain  accounts  taken  from  the  books  of  the 
deceased,  and  testimony  that  the  plaintiff  was  a  nephew  of  the  de- 
ceased, and  lived  for  several  years  in  his  family,  and  was  in  his 
service  as  clerk  for  several  years.  The  plaintiff  then  made  an  offer 
of  testimony,  which  is  thus  stated  in  the  bill  of  exceptions :  "that 
the  plaintiff  took  a  trip  to  Europe  in  1878,  and  that  said  trip  was 
taken  by  said  plaintiff,  and  the  money  spent  on  said  trip  was  spent 
by  the  said   plaintiff  at  the  instance  and  request   of  said   Combs, 

*  Duke,  L.  J.  and  Atkin,  L.  J.  delivered  concurring  opinions. 


186  DEVECMON    V.    SHAW   AND   DEVRIES  [CHAP.    I 

and  upon  a  promise  from  him  tliat  he  would  reimburse  and  repay 
to  the  plaintiif  all  money  expended  by  him  in  said  trip;  and  that 
the  trip  was  so  taken  and  the  money  so  expended  by  the  said  plain- 
tiff, but  that  the  said  trip  had  no  connection  with  the  business  of 
said  Combs ;  and  that  said  Combs  spoke  to  the  witness  of  his  conduct 
in  being  thus  willing  to  pay  his  nephew's  expenses  as  liberal  and 
generous  on  his  part."  On  objection,  the  court  refused  to  permit 
the  evidence  to  be  given,  and  the  plaintiff  excepted. 

It  might  very  well  be,  and  probably  was  the  case,  that  the  plain- 
tiff would  not  have  taken  a  trip  to  Europe  at  his  own  expense.  But 
whether  this  be  so  or  not,  the  testimony  would  have  tended  to  show 
that  the  plaintiff  incurred  expense  at  the  instance  and  request  of 
the  deceased,  and  upon  an  express  promise  by  him  th"at  h^  would 
repay  the  money  spent.  It  was  a  burden  incurred  at  the  request 
of  the  otner  party,  and  was  certainly  a  sufficient  consideration  for 
a  promise  to  pay.  Great  injury  might  be  done  by  inducing  persons 
to  make  expenditures  beyond  their  means,  on  express  promise  of 
repayment,  if  the  law  were  otherwise.  It  is  an  entirely  different 
case  from  a  promise  to  make  another  a  present;  or  render  him  a 
gratuitous  servace.  It  is  nothing  to  the  purpose  that  the  plaintiff 
was  benefited  by  the  expenditure  of  his  own  money.  He  was  in- 
duced by  this  promise  to  spend  it  in  this  way,  instead  of  some  other 
mode.  If  it  is  not  fulfilled,  the  expenditure  will  have  been  procured 
by  a  false  pretence. 

As  the  plaintiff,  on  the  theory  of  this  evidence,  had  fulfilled  his 
part  of  the  contract,  and  nothing  remained  to  be  done  but  the  pay- 
ment of  the  money  by  the  defendant,  there  could  be  a  recovery  in 
indebitatus  assumpsit ;  and  it  was  not  necessary  to  declare  on  the 
special  contract.  The  fifth  count  in  the  declaration  is  for  "money 
paid  by  the  plaintiff  for  the  defendants'  testator  in  his  lifetime,  at 
his  request."  In  the  bill  of  particulars,  we  find  this  item:  "To  cash 
contributed  by  me,  J.  Semmes  Devecmon,  out  of  my  own  money, 
to  defray  my  expenses  to  Europe  and  return,  the  said  John  S.  Combs, 
now  deceased,  having  promised  me  in  1878  'that  if  I  would  con- 
tribute part  of  my  own  money  towards  the  trip,  he  would  give  me 
a  part  of  his,  and  would  make  up  to  me  my  part,'  and  the  amount 
below  named  is  my  contribution,  as  follows,"  etc.  It  seems  to  us  that 
this  statement  is  a  sufficient  description  of  a  cause  of  action  covered 
by  the  general  terms  of  the  fifth  count.  The  evidence  ought  to  have 
been  admitted. 

Tbe  defendants  offered  the  following  prayer,  which  the  court 
graiitf-d  : 

"Tlif.  flcfendants,  by  their  attorneys,  pray  the  court  to  instruct 
the  jury  tbat  there  is  no  sufficient  evidence  in  this  case  to  entitle 
the  yd.'iintiff  to  recover  tlie  interest  claimed  in  the  bill  of  particulars, 
markfd,  'Kxbibit  No.   1,  Bill  of  Particulars.'" 

The  only  evidence  bearing. on  this  question  is  the  account  taken 


SECT.     II]  KIRKSEY    V.    KIRKSEY  187 

from  the  books  of  the  deceased,  which  was  offered  in  evidence  by 
the  plaintiff.  This  account  showed  on  its  face  a  final  settlement  of 
all  matters  embraced  in  it.  In  the  absence  of  proof  showing  errors 
of  some  kind,  the  parties  must  be  concluded  by  it  in  all  respects. 
We  think  the  prayer  was  properly  granted. 

Judgment  reversed,  and  new  trial  ordered. 


KIRKSEY  V.  KIRKSEY 

Alabama  Supreme  Court,  January  Term,  1845 

{^Reported  in  8  Alabama,  131] 

Error  to  the  Circuit  Court  of  Talladega. 

Assumpsit  by  the  defendant,  against  the  plaintiff  in  error.  The 
question  is  presented  in  this  Court,  upon  a  case  agreed,  which  shows 
the  following  facts :  — 

The  plaintiff  was  the  wife  of  defendant's  brother,  but  had  for 
some  time  been  a  widow,  and  had  several  children.  In  1840,  the 
plaintiff  resided  on  public  land,  under  a  contract  of  lease,  she  had 
held  over,  and  was  comfortably  settled,  and  would  have  attempted 
to  secure  the  land  she  lived  on.  The  defendant  resided  in  Talladega 
County,  some  sixty  or  seventy  miles  off.  On  the  10th  October,  1840, 
he  wrote  to  her  the  following  letter :  — 

"Dear  Sister  Antillico,  —  Much  to  my  mortification,  I  heard  that  brother 
Henry  was  dead,  and  one  of  his  children.  I  know  that  your  situation  is  one  of  grief 
and  difficulty.  You  had  a  bad  chance  before,  but  a  great  deal  worse  now.  I  should 
like  to  come  and  see  you,  but  cannot  with  convenience  at  present.  ...  I  do  not  know 
whether  you  have  a  preference  on  the  place  you  live  on  or  not.  If  you  had,  I  would 
advise  you  to  obtain  your  preference,  and  sell  the  land  and  quit  the  country,  as  1 
understand  it  is  very  unhealthy,  and  I  know  society  is  very  bad.  If  you  will  come 
down  and  see  me,  I  will  let  you  have  a  place  to  raise  your  family,  and  i  nave  more 
open  land  than  1  can  tend;  and  on  the  account  of  your  situation,  and  that  of  your 
family,  I  feel  like  I  want  you  and  the  children  to  do  well." 

Within  a  month  or  two  after  the  receipt  of  this  letter,  the  plaintiff 
abandoned  her  possession,  without  disposing  of  it,  and  removed  with 
her  family,  to  the  residence  of  the  defendant,  who  put  her  in  com- 
fortable houses,  and  gave  her  land  to  cultivate  for  two  years,  at  the 
end  of  which  time  he  notified  her  to  remove,  and  put  her  in  a  house, 
not  comfortable,  in  the  woods,  which  he  afterwards  required  her  to 
leave. 

A  verdict  being  found  for  the  plaintiff,  for  two  hundred  dollars, 
the  above  facts  were  agreed,  and  if  they  will  sustain  the  action,  the 
judgment  is  to  be  affirmed,  otherwise  it  is  to  be  reversed. 

Ormond,  J.  The  inclination  of  my  mind  is,  that  the  loss  and 
inconvenience,  which  the  plaintiff  sustained  in  breaking  up,  and 
moving  to  the  defendant's,  a  distance  of  sixty  miles,  is  a  sufficient 
consideration  to  support  the  promise,  to  furnish  her  with  a  house, 
and  land  to  cultivate,  until  she  could  raise  her  family.    My  brothers, 


188        PRESBYTERIAN    CHURCH    OF   ALBANY    V.    COOPER    [CHAP.   I 

however,  think  that  the  promise  on  the  part  of  the  defendant  was 
a  mere  gratuity,  and  that  an  action  will  not  lie  for  its  breach.  The 
judgment  of  the  Court  below  must  therefore  be  reversed,  pursuant 
to  the  agreement  of  the  parties.^ 


PEESBYTEEIAN"  CHURCH  OF  ALBANY,  Appellant,  v. 
THOMAS  C.  COOPER  et  al,  as  Administkatoes,  etc..  Re- 
spondents 

New  Yoke  Court  of  Appeals,  January  25-March  5,  1889 

{^Reported  in  112  New  York,  517] 

Appeal  from  order  of  the  General  Term  of  the  Supreme  Court 
in  the  third  judicial  department,  made  the  first  Tuesday  of  May, 
1887,  which  reversed  a  judgment  in  favor  of  plaintiff,  entered  upon 
the  report  of  a  referee,  and  ordered  a  new  trial.  (Reported  below,, 
45  Hun,  453.) 

This  was  a  reference  under  the  statute  of  a  disputed  claim  against 
the  estate  of  Thomas  P.  Crook,  defendants'  intestate.  The  claim 
arose  under  a  subscription  paper,  of  which  the  following  is  a  copy :  — 

"We,  the  undersigned,  hereby  severally  promise  and  agree  to  and 
with  the  trustees  of  the  First  Presbyterian  Church  in  this  city  of 
Albany,  in  consideration  of  one  dollar  to  each  of  us  in  hand  paid 
and  the  agreements  of  each  other  in  this  contract  contained,  to  pay 
on  or  before  three  years  from  the  date  hereof  to  said  trustees  the 
sum  set  opposite  to  our  respective  names,  but  upon  the  express  con- 
dition, and  not  otherwise,  that  the  sum  of  $45,000  in  the  aggregate 
shall  be  subscribed  and  paid  in  for  the  purpose  hereinafter  stated; 
and  if  within  one  year  from  this  date  said  sum  shall  not  be  sub- 
scribed or  paid  in  for  such  purpose,  then  this  agreement  to  be  null 
and  of  no  effect.  The  purpose  of  this  subscription  is  to  pay  off 
the  mortgage  debt  of  $45,000,  now  a  lien  upon  the  church  edifice 
of  said  church,  and  the  subscription  or  contribution  for  that  purpose 

1  The  decision  was  followed  in  Forward  v.  Armstead,  12  Ala.  124;  Bibb.  v.  Freeman, 
59  Ala.  G12.  In  the  latter  case  the  Court  said:  "It  is  often  a  matter  of  great  diffi- 
culty to  discern  the  line  which  separates  promises  creating  legal  obligations  from 
mere  gratuitous  agreements.  Each  case  depends  so  much  on  its  own  peculiar  facts 
and  circumstances  that  it  affords  but  little  aid  in  determining  other  cases  of  differing 
facts.  The  promise  or  agnjement,  the  relation  of  the  parties,  the  circumstances  sur- 
rounding thc;m,  anrl  their  intent,  as  it  may  be  deduced  from  these,  must  determine  the 
inquiry.  If  the  purpose  is  to  confer  on  the  j>romisee  a  benefit  from  affection  and 
generosity,  the  agreement  is  gratuitous.  If  the  purpose  is  to  obtain  a  quid  pro  quo  — 
if  there  is  something  to  be  received,  in  exrbniige  for  which  the  promise  is  given,  the 
promise  is  not  grat\iitous,  but  of  legal  ol)ligatif)n." 

See  also  in  accord,  Br)ord  v.  Boord,  Pelham  (So.  Au.st.),  .58.  But  see  contra,  Shirley 
V.  Ifarris,  ."^  McLean,  ^.'iO;  Berry  v.  CJraddy,  1  Met.  (Ky.)  5.53;  Bigelow  v.  Bigelow,  95 
Me.  17;  Steele  v.  Stefle,  75  Md.  477;  Adams  v.  Honness,  62  Barb.  326;  Richardson 
V.  Goaser,  20  Pa.  .335. 

In  regarrl  to  the  enforcement  of  promises  relating  to  land,  unenforceable  at  law,  by 
courts  fff  eriuity  in  orrUr  to  prevent  a  fraud,  see  Pomeroy  on  Eq.  Jur.  §  1294;  Ames, 
Gas.  on  Eq.  Jur.  300-.309. 


SECT.   Il]   PRESBYTERIAN    CHURCH    OF   ALBANY    V.    COOPER         189 

must  equal  that  sum  in  the  aggregate  to  make  this  agreement  binding. 

"Dated  May  18,  1884." 

The  defendants'  intestate  made  two  subscriptions  to  this  paper,  — 
one  of  $5,000  and  another  of  $500.  He  paid  upon  the  subscription 
$2,000.     The  claim  was  for  the  balance. 

Matthew  Hale,  for  appellant. 

Walter  E.  Ward,  for  respondent. 

Andrews,  J.  It  is,  we  think,  an  inseparable  objection  to  the 
maintenance  of  this  action  that  there  was  no  valid  consideration  to 
uphold  the  subscription  of  the  defendants'  intestate.  It  is,  of  course, 
unquestionable  that  no  action  can  be  maintained  to  enforce  a  gratui- 
tous promise,  however  worthy  the  object  intended  to  be  promoted. 
The  performance  of  such  a  promise  rests  wholly  on  the  will  of  the 
person  making  it.  He  can  refuse  to  perform,  and  his  legal  right 
to  do  so  cannot  be  disputed,  although  his  refusal  may  disappoint 
reasonable  expectations  or  may  not  be  justified  in  the  forum  of  con- 
science. By  the  terms  of  the  subscription  paper  the  subscribers 
promise  and  agree  to  and  with  the  trustees  of  the  First  Presbyterian 
Church  of  Albany,  to  pay  to  said  trustees,  within  three  years  from 
its  date,  the  sums  severally  subscribed  by  them,  for  the  purpose  of 
paying  off  "the  mortgage-debt  of  $45,000  on  the  church  edifice," 
upon  the  condition  that  the  whole  sum  shall  be  subscribed  or  paid 
in  within  one  year.  It  recites  a  consideration,  viz,  "in  considera- 
tion of  one  dollar  to  each  of  us  (subscribers)  in  hand  paid  and  the 
agreement  of  each  other  in  this  contract  contained."  It  was  shown 
that  the  one  dollar  recited  to  have  been  paid  was  not  in  fact  paid, 
and  the  fact  that  the  promise  of  each  subscriber  was  made  by  rea- 
son of  and  in  reliance  upon  similar  promises  by  the  others  constitutes 
no  consideration  as  between  the  corporation  for  whose  benefit  the 
promise  was  made  and  tbp  prnTr^isnrs^  The  recital  of  a  consideration 
paid  does  not  preclude  the  promisor  from  disputing  the  fact  in  a 
case  like  this,  nor  does  the  statement  of  a  particular  consideration 
which,  on  its  face,  is  insufficient  to  support  a  promise,  give  it  any 
validity,  although  the  fact  recited  may  be  true. 

It  has  sometimes  been  supposed  that  when  several  persons  promise 
to  contribute  to  a  common  object,  desired  by  all,  the  promise  of 
each  may  be  a  good  consideration  for  the  promise  of  others,  and 
this  although  the  object  in  view  is  one  in  which  the  promisors  have 
no  pecuniary  or  legal  interest,  and  the  performance  of  the  promise 
by  one  of  the  promisors  would  not  in  a  legal  sense  be  beneficial  to 
the  others.  This  seems  to  have  been  the  view  of  the  Chancellor  as 
expressed  in  Hamilton  College  v.  Stewart  when  it  was  before  the 
Court  of  Errors  (2  Den.  417),  and  dicta  of  judges  will  be  found 
to  the  same  effect  in  other  cases.  Trustees,  etc.,  v.  Stetson,  5  Pick. 
508 ;  "Watkins  v.  Eames,  9  Cush.  537.  But  the  doctrine  of  the  Chan- 
cellor, as  we  understand,  was  overruled  when  the  Hamilton  College 
case  came  before  this  court,  1  N.  Y.  581,  as  have  been  also  the 


190        PRESBYTERIAN    CHURCH    OF   ALBANY    V.    COOPER    [CHAP.    I 

dicta  in  the  Massachusetts  cases,  bj  the  court  in  that  State,  in  the 
recent  case  of  Cottage  Street  Methodist  Episcopal  Church  v.  Ken- 
dall, 121  Mass.  528.  The  doctrine  seems  to  us  unsound  in  principle. 
It  proceeds  on  the  assumption  that  a  stranger  both  to  the  considera- 
tion and  the  promise,  and  whose  only  relation  to  the  transaction  is 
that  of  donee  of  an  executory  gift,  may  sue  to  enforce  the  payment 
of  the  gratuity  for  the  reason  that  there  has  been  a  breach  of  con- 
tract between  the  several  promisors  and  a  failure  to  carry  out  as 
between  themselves  their  mutual  engagement.  It  is  in  no  proper 
sense  a  case  of  mutual  promises,  as  between  the  plaintiff  and  de- 
fendant. 

In  the  disposition  of  this  case  we  must,  therefore,  reject  the  con- 
sideration recited  in  the  subscription  paper  as  ground  for  supporting 
the  promise  of  the  defendants'  intestate,  the  money  consideration, 
because  it  had  no  basis  in  fact,  and  the  mutual  promise  between  the 
subscribers,  because  there  is  no  privity  of  contract  between  the  plain- 
tiff and  the  promisors.  Some  consideration  must,  therefore,  be  found 
other  than  that  expressly  stated  in  the  subscription  paper  in  order 
to  sustain  the  action.  It  is  urged  that  a  consideration  may  be  found 
in  the  efforts  of  the  trustees  of  the  plaintiff  during  the  year,  and 
the  time  and  labor  expended  by  them  during  that  time,  to  secure 
subscriptions  in  order  to  fulfil  the  condition  upon  which  the  liability 
of  the  subscribers  depended.  There  is  no  doubt  that  labor  and  serv- 
ices, rendered  by  one  party  at  the  request  of  another,  constitute  a 
good  consideration  for  a  promise  made  by  the  latter  to  the  former, 
based  on  the  rendition  of  the  service.  But  the  plaintiff  encounters 
the  difficulty  that  there  is  no  evidence,  express  or  implied,  on  the 
face  of  the  subscription  paper,  nor  any  evidence  outside  of  it,  that 
the  corporation  or  its  trustees,  did,  or  undertook  to  do,  anything  upon 
the  invitation  or  request  of  the  subscribers.  Nor  is  there  any  evi- 
dence that  the  trustees  of  the  plaintiff,  as  representatives  of  the  cor- 
poration, in  fact  did  anything  in  their  corporate  capacity,  or  other- 
wise than  as  individuals  interested  in  promoting  the  general  object 
in  view. 

Leaving  out  of  the  subscription  paper  the  affirmative  statement 
of  the  consideration  (which,  for  reasons  stated,  may  be  rejected), 
it  stands  as  a  naked  promise  of  the  subscribers  to  pay  the  several 
amounts  subscribed  by  them  for  the  purpose  of  paying  the  mortgage 
on  the  church  property,  upon  a  condition  precedent  limiting  their 
liability.  Neither  the  church  nor  the  trustees  promise  to  do  any- 
thiiit?,  nor  are  they  requested  to  do  anything,  nor  can  such  a  request 
be  implied.  It  was  held  in  Hamilton  College  v.  Stewart,  1  N.  Y. 
581,  tli.'it  no  such  request  could  l)e  implied  from  the  terms  of  the 
8ub.scrii)tioii  in  tliat  case,  in  which  the  ground  for  such  an  implica- 
tion was,  to  say  the  least,  as  strong  as  in  this  case.  It  may  bo  as- 
sumed from  the  fact  that  the  subscriptions  were  to  be  paid  to  the 
trustees  of  the  church  for  the  purpose  of  paying  the  mortgage,  that 


SECT.    II]    PRESBYTERIAN    CHURCH   OF   ALBANY    V.    COOPER         191 

it  was  uuderstood  that  the  trustees  were  to  make  the  payment  out 
of  the  moneys  received.  But  the  duty  to  make  such  payment,  in 
case  they  accepted  the  money,  would  arise  out  of  their  duty  as  trus- 
tees. This  duty  would  arise  upon  the  receipt  of  the  money,  although 
they  had  no  antecedent  knowledge  of  the  subscription.  They  did 
not  assume  even  this  obligation  by  the  terms  of  the  subscription, 
and  the  fact  that  the  trustees  applied  money,  paid  on  subscriptions, 
upon  the  mortgage;  debt,  did  not  constitute  a  consideration  for  the 
promise  of  defendants'  intestate.  We  are  unable  to  distinguish  this 
case  m  principle  from  Hamilton  College  v.  Stewart,  1  IST.  Y.  581. 
There  is  nothing  that  can  be  urged  to  sustain  this  subscription  that 
could  not,  with  equal  force,  have  been  urged  to  sustain  the  subscrip- 
tion in  that  case.  In  both  the  promise  was  to  the  trustees  of  the 
respective  corporations.  In  each  case  the  defendant  had  paid  part 
of  his  subscription  and  resisted  the  balance.  In  both,  part  of  the 
subscription  had  been  collected  and  applied  by  the  trustees  to  the 
purpose  specified.  In  the  Hamilton  College  case  (which  in  that 
respect  is  unlike  the  present  one)  it  appeared  that  the  trustees  had 
incurred  expense  in  employing  agents  to  procure  subscriptions  to 
make  up  the  required  amount,  and  it  was  shown,  also,  that  professors 
had  been  employed  upon  the  strength  of  the  fund  subscribed.  That 
case  has  not  been  overruled,  but  has  been  frequently  cited  with  ap- 
proval in  the  courts  of  this  and  other  States.  The  cases  of  Barnes 
V.  Ferine,  12  K  Y.  18,  and  Eoberts  v.  Cobb,  103  id.  600,  are  not 
in  conflict  with  that  decision.  There  is,  we  suppose,  no  doubt  that 
a  subscription  invalid  at  the  time  for  want  of  consideration,  may 
be  made  valid  and  binding  by  a  consideration  arising  subsequently 
between  the  subscribers  and  the  church  or  corporation  for  whose 
benefit  it  is  made.  Both  of  the  cases  cited,  as  we  understand  them, 
were  supported  on  this  principle.  There  was,  as  held  by  the  court 
in  each  of  these  cases,  a  subsequent  request  by  the  subscriber  to 
the  promisee  to  go  and  render  service  or  incur  liabilities  on  the 
faith  of  the  subscription,  which  request  was  complied  with,  and 
services  were  rendered  or  liabilities  incurred  pursuant  thereto.  It 
was  as  if  the  request  was  made  at  the  very  time  of  the  subscription, 
followed  by  performance  of  the  request  by  the  promisee.  Judge 
Allen,  in  his  opinion  in  Barnes  v.  Ferine,  said:  "The  request  and 
promise  were,  to  every  legal  effect,  simultaneous,"  and  he  expressly 
disclaims  any  intention  to  interfere  with  the  decision  in  the  Hamilton 
College  case.  In  the  present  case  it  was  shown  that  individual  trus- 
tees were  active  in  procuring  subscriptions.  But,  as  has  been  said, 
they  acted  as  individuals,  and  not  in  their  official  capacity.  They 
were  deeply  interested,  as  was  Mr.  Crook,  in  the  success  of  the  effort 
to  pay  the  debt  on  the  church,  and  they  acted  in  unison.  But  what 
the  trustees  did  was  not  prompted  by  any  request  from  Mr.  Crook. 
They  were  co-laborers  in  promoting  a  common  object.  "We  can  but 
regret  that  the  intention  of  the  intestate  in  respect  to  a  matter  in 


192  MARTIN    V.    MELES  [CHAP.    I 

which  he  was  deeply  interested,  and  whose  interest  was  manifested 
lip  to  the  very  time  of  his  death,  is  thwarted  by  the  conclusion  we 
have  reached.  But  we  think  there  is  no  alternative,  and  that  the 
order  should  be  affirmed. 

All  concur.  Order  /iffirmed  and  judgment  accordingly.^ 


AUGUSTUS  B.  MARTIN  and  Others  v.  WILLIAM  MELES 

AND  Others 

Supreme  Judicial  Court  of  Massachusetts,  March  20- 
May  23,  1901 

[Reported  in  179  Massachusetts,  114] 

Holmes,  C.  J.  This  is  an  action  to  recover  the  contribution  prom- 
ised by  the  following  paper,  which  was  signed  by  the  defendants 
and  others:  "January  21,  1896,  We,  the  undersigned,  manufacturers 
of  leather,  promise  to  contribute  the  sum  of  five  hundred  (500) 
dollars  each,  and  such  additional  sums  as  a  committee  appointed  by 
the  Massachusetts  Morocco  Manufacturers  Association  may  require; 
in  no  case  shall  the  committee  demand  from  any  manufacturer  or 
firm  a  total  of  subscriptions  to  exceed  the  sum  of  two  thousand 
(2,000)  dollars,  such  sum  to  be  employed  for  legal  and  other  ex- 
penses under  the  direction  of  the  committee,  in  defending  and  pro- 
tecting our  interests  against  any  demands  or  suits  growing  out  of 
Letters  Patent  for  Chrome  Tanning,  and  in  case  of  suit  against 
any  of  us  the  committee  shall  take  charge  thereof  and  apply  as  much 
of  the  fund  as  may  be  needed  to  the  expense  of  the  same." 

*  Charitable  subscriptions  have  been  held  supported  by  sufficient  consideration  on 
various  grounds:  — 

1.  If  the  work  for  which  the  subscription  was  made  has  been  done,  or  liability  in- 
curred in  regard  to  such  work,  on  the  faith  of  the  subscription,  consideration  is  found 
in  that  fact.  Young  Men's  Christian  Assoc,  v.  Estill,  140  Ga.  291 ;  Trustees  v.  Garvey, 
53  111.  401;  Des  Moines  Univ.  v.  Livingston,  57  la.  307,  65  la.  202;  First  Church  v. 
Donnell.  110  la.  5;  Brokaw  v.  McElroy  162  la.  288:  Gittings  v.  Mayhcw,  6  Md.  113; 
Cottage  St.  Church  v.  Kendall,  121  Mass.  528;  Robinson  v.  Nutt,  185  Mass.  345; 
Albert  Lea  College  v.  Brown,  88  Minn.  524;  Pitt  v.  Gentle,  49  Mo.  74;  Irwin  v.  Lom- 
bard University,  56  Ohio  St.  9.  (Compare  Johnson  v.  Otterbein  University,  41  Ohio 
St.  527);  in  re  Converse's  Est.  240  Pa.  458;  Hodges  v.  Nalty,  104  Wis.  464.  See  also 
Lasar  v.  Johnson,  125  Cal.  549;   Gait's  Ex.  v.  Swain,  9  Gratt,  633. 

In  Bcatty  v.  Western  College,  177  111.  280,  the  Court  oiiforrod  the  promise,  because 
liabilities  had  been  incurred,  but  said  (p.  292),  "The  gift  will  be  enforced  upon  the 
ground  of  estoppel,  and  not  by  reason  of  any  valid  consideration  in  the  original 
undertaking. 

By  th(!  reasoning  of  these  cases  a  subscription  is  treated  as  an  offer.  Therefore 
until  work  has  bf!C'n  done  or  liability  incurred  the  subscription  may  be  revoked. by 
death,  insanity,  or  otherwise.  Grand  Lodge  v.  Farnham,  70  Cal.  158;  Pratt  v.  Baptist 
Soc,  93  111.  475;  Beach  v.  First  f Church,  96  111.  177;  Hclfonatein's  Est.,  77  Pa.  328; 
First  Church  v.  Gillis,  17  Pa.  Co.  Ct.  614.  See  also  /Jeimensnyder  v.  Cans,  110  Pa.  17. 
y'  2.  It  is  held  in  other  jurisdictions  that  the  promise  of  each  subscriber  is  supported 
by  the  promises  of  the  others.  Christian  College  v.  Hendley,  49  Cal.  347;  Hig(>rt  v. 
Trustees,  53  Ind.  326;    Petty  v.  Trustees,  95  Ind.  278;    Allen  v.  Duffie,  43  Mich.  1; 


SECT.    Il]  MARTIN    V.    MELES  193 

The  plaintiffs  are  the  committee  referred  to  in  the  agreement, 
and  subscribers  to  it.  They  were  appointed  and  did  some  work  be- 
fore the  date  of  the  agreement,  and  then  prepared  the  agreement 
which  was  signed  by  nine  members  of  the  association  mentioned, 
and  by  the  defendants,  who  were  not  members.  They  went  on  with 
their  work,  undertook  the  defence  of  suits,  and  levied  assessments 
which  were  paid,  the  defendants  having  paid  $750.  In  November, 
1896,  the  defendants'  firm  was  dissolved,  and  two  members  of  it, 
Meles  and  Auerbach,  ceased  tanning  leather.  The  defendants  noti- 
fied the  plaintiffs  of  the  dissolution,  and  on  June  23,  1897,  upon 
demand  for  the  rest  of  their  subscription,  refused  to  pay  the  same. 
The  main  questions  insisted  upon,  raised  by  demurrer  and  by  various 
exceptions,  are  whether  the  defendants'  promise  is  to  be  regarded 
as  entire  and  as  supported  by  a  sufficient  consideration. 

It  will  be  observed  that  this  is  not  a  subscription  to  a  charity. 
It  is  a  business  agreement  for  purposes  in  which  the  parties  had 
a  common  interest,  and  in  which  the  defendants  still  had  an  in- 
terest after  going  out  of  business,  as  they  still  were  liable  to  be  sued. 
It  contemplates  the  undertaking  of  active  and  more  or  less  arduous 
duties  by  the  committee,  and  the  making  of  expenditures  and  incur- 
ring of  liabilities  on  the  faith  of  it.  The  committee  by  signing_the_ 
agreement  promised  by  implication  not  only  to  accept  the  sub- 
scribers' mon"ey  but  16  perform  those  duties.  It  is  a  mistaken  con- 
struction to  say  that  their  promise,  or  indeed  their  obligation,  arose 
only  as  the  promise  of  the  subscribers  was  performed  by  payments 
of  money. 

If  then  the  committee's  promise  should  be  regarded  as  the  con- 
sideration, as  in  Ladies'  Collegiate  Institute  v.  French,  16  Gray, 
196,  201    (see  Maine  Central  Institute  v.  Haskell,  75  Maine,  140, 


Congregational  Soc.  v.  Perry,  6  N.  H.  164;    Edinboro  Academy  v.  Robinson,  37  Pa. 
210.     See  also  First  Church  v.  Pungs,  126  Mich.  670;    Homan  v.  Steele,  18  Neb.  652. 

3.  It  has  been  held  that  the  acceptance  of  the  subscription  by  the  beneficiary  or 
its  representatives  imports  a  promise  to  apply  the  funds  properly,  and  this  promise 
supports  the  subscribers'  promises.  Barnett  v.  Franklin  College,  10  Ind.  App.  103; 
CoUier  v.  Baptist  Soc,  8  B.  Mon.  68;  Trustees  v.  Fleming,  10  Bush,  234;  Trustees  v. 
Haskell,  73  Me.  140;  Helfenstein's  Est.,  77  Pa.  328,  331;  Trustees  v.  Nelson  24  Vt. 
189. 

4.  The  fact  that  other  subscriptions  have  been  induced  has  been  held  in  some 
cases  a  good  consideration.  Hanson  Trustees  v.  Stetson  5  Pick.  506;  Watkins  v. 
Eames,  9  Cuch.  537;  Ives  v.  Sterling,  6  Met.  310  (but  this  theory  was  discredited  in 
Cottage  St.  Church  v.  Kendall,  121  Mass.  528);  Comstock  v.  Howd,  15  Mich.  237 
(but  see  Northern,  &c.  R.  R.  v.  Eslow,  40  Mich.  222);  Irwin  v.  Lombard  University, 
66  Ohio  St.  9. 

In  England  a  charitable  subscription  is  not  binding.  Re  Hudson,  54  L.  J.  Ch.  811. 
See  also  Culver  v.  Banning,  19  Minn.  303;  Twenty-third  St.  Church  v.  Cornell,  117 
N.  Y.  601  (compare  Keuka  College  v.  Ray,  167  N.  Y.  96) ;  Montpelier  Seminary  v. 
Smith's  Estate,  69  Vt.  382  (compare  Grand  Isle  v.  Kinney,  70  Vt.  381). 

In  in  re  Hudson,  Pearson,  J.,  said:  "  If  A.  says,  '  I  will  give  you,  B.,  lOOOL,'  and  B., 
in  reliance  on  that  promise,  spends  1000/.  in  buying  a  house,  B.  cannot  recover  the 
lOOOL  from  A." 

In  a  few  cases  of  charitable  subscriptions  the  special  facts  show  that  the  promise 
was  made  for  clearly  good  consideration.     Rogers  v.  Galloway  College,  64  Ark.  627; 
Lasar  v.  Johnson,  125  Cal.  549;   La  Fayette  Corporation  v.  Ryiand,  80  Wis.  29. 
7 


1. 


194  MARTIN    V.    MELES  [GHAP.   I 

144),  its  sufficiency  hardly  would  be  open  to  the  objection  which  has 
been  urged  against  the  doctrine  of  that  case,  that  the  promise  of 
trustees  to  apply  the  funds  received  for  a  mere  benevolence  to  the 
purposes  of  the  trust  imposes  no  new  burden  upon  them.  Johnson 
V.  Otterbein  University,  41  Ohio  St.  527,  531.  See  Presbyterian 
Church  of  Albany  v.  Cooper,  112  N.  Y.  517.  Neither  would  it  raise 
the  question  whether  the  promise  to  receive  a  gift  was  a  consideration 
for  a  promise  to  make  one.  The  most  serious  doubt  is  whether  the 
promise  of  the  committee  purports  to  be  the  consideration  for  the 
subscriptions  by  a  true  interpretation  of  the  contract. 

In  the  later  Massachusetts  cases  more  weight  has  been  laid  on 
the  incurring  of  other  liabilities  and  making  expenditures  on  the 
faith  of  the  defendant's  promise  than  on  the  counter-promise  of  the 
plaintiff.  Cottage  Street  Church  v.  Kendall,  121  Mass.  528;  Sher- 
win  V.  Fletcher,  168  Mass.  413.     Of  course  the  mere  fact  that  a 

)  promise! relies   upon   a   promise  made   without   other   consideration 
does  not  impart  validity  to  what  befoi'e  was  void.    Bragg  v.  Daniel- 
son,  141  Mass.  195,  196.     There  must  be  some  ground  for  saying 
I  that  the  acts  done  in  reliance  upon  the  promise  were  contemplated 
Ijby  the  form  of  the  transaction  either  impliedly  or  in  terms  as  the 
1 1  conventional  inducement,  motive,  and  equivalent   for  the  promise. 
But  courts  have  gone  very  great  lengths  in  discovering  the  implica- 
tion of  such  an  equivalence,  sometimes  perhaps  even  having  found 
it  in  matters  which  would  seem  to  be  no  more  than  conditions  or 
natural  consequences  of  the  promise.     There  is  the  strongest  reason 
for  interpreting  a  business  agreement  in  the  sense  which  will  give 
it  a  legal  support,  and  such  agreements  have  been  so  interpreted. 
Sherwin  v.  Fletcher,  uhi  supra. 

What  we  have  said  justifies,  in  our  opinion,  the  finding  of  a  con- 
sideration either  in  the  promise  or  in  the  subsequent  acts  of  the 
committee,  and  it  may  be  questioned  whether  a  nicer  interpretation 
of  the  contract  for  the  purpose  of  deciding  which  of  the  two  was 
the  true  one  is  necessary.  It  is  true  that  it  is  urged  that  the  acts 
of  the  committee  would  have  been  done  whether  the  defendants  had 
promised  or  not,  and  therefore  lose  their  competence  as  consideration 
because  they  cannot  be  said  to  have  been  done  in  reliance  upon  the 
promise.  But  that  is  a  speculation  upon  which  courts  do  not  enter. 
When  an  act  has  been  done,  to  the  knowledge  of  another  party, 
wbinh  purports  expressly  to  invite  certain  conduct  on  his  part,  and 
that  conduct  on  his  part  follows,  it  is  only  under  exceptional  and 
peculiar  circumstances  that  it  will  be  inquired  how  far  the  act  in 
truth  was  the  motive  for  the  conduct,  whether  in  case  of  considera- 
tion fWilliams  v.  Carwardine,  4  B.  &  Ad.  621;  see  Maine  Central 
Institute;  v.  Haskell,  75  Maine,  140,  145),  or  of  fraud.  Windram 
V.  French,  151  Mass.  547,  553.  In  Cottage  Street  Church  v.  Ken- 
dall, 121  Mass.  528,  the  form  of  the  finding  in  terms  excluded  sub- 
sequent acts  as  consideration,  and  therefore  it  did  not  appear  whether 


SECT,    II]  MARTIN    V.    MELES  195 

the  facts  were  such  that  reliance  upon  the  promise  would  be  pre- 
sumed. In  Bridgewater  Academy  v.  Gilbert,  2  Pick,  579,  the  point 
was  that  merely  signing  a  subscription  paper  without  more  did  not 
invite  expenditure  on  the  faith  of  it.  See  Amherst  Academy  v. 
Cowls,  6  Pick,  427,  438;  Ives  v.  Sterling,  6  Met,  310,  316,  In  this 
case  the  paper  indisputably  invited  the  committee  to  proceed. 

A  more  serious  difficulty  if  the  acts  are  the  consideration  is  that 
it  seems  to  lead  to  the  dilemma  that  either  all  acts  to  be  done  by 
the  committee  must  be  accomplished  before  the  consideration  is  fur- 
nished, or  else  that  the  defendant's  promise  is  to  be  taken  distribu- 
tively  and  divided  up  into  distinct  promises  to  pay  successive  sums 
as  successive  steps  of  the  committee  may  make  further  payments  nec- 
essary and  may  furnish  consideration  for  requiring  them.  The  last 
view  is  artificial  and  may  be  laid  on  one  side.  In  the  most  notice- 
able cases  where  a  man  has  been  held  entitled  to  stop  before  he  has 
finished  his  payments,  the  ground  has  not  been  the  divisibility  of 
his  undertaking  but  the  absence  of  consideration,  which  required 
the  Court  to  leave  things  where  it  found  them.  In  re  Hudson,  54 
L.  J.  Ch.  811;  Presbyterian  Church  of  Albany  v.  Cooper,  112  N. 
Y.  517,  As  against  the  former  view,  if  necessary,  we  should  assume 
that  the  first  substantial  act  done  by  the  committee  was  all  that 
was  required  in  the  way  of  acts  to  found  the  defendants'  obligation. 
See  Amherst  Academy  v.  Cowls,  6  Pick,  427,  438,  But  if  that  were 
true,  it  would  follow  that  as  to  the  future  conduct  of  the  committee 
their  promise,  not  their  performance,  was  the  consideration,  and 
when  we  have  got  as  far  as  that,  it  may  be  doubted  whether  it  is 
not  simpler  and  more  reasonable  to  set  the  defendants'  promise 
against  the  plaintiffs'  promise  alone.  We  are  inclined  to  this  view, 
but  do  not  deem  a  more  definitive  decision  necessary,  as  we  are 
clearly  of  opinion  that,  one  way  or  the  other,  the  defendants  must  pay. 

What  has  been  said  pretty  nearly  disposes  of  a  subordinate  point 
raised  by  the  defendants.  It  is  argued  that,  by  notice  pending  per- 
formance that  they  would  not  go  on  with  the  contract,  the  defend- 
ants, even  if  they  incurred  a  liability  to  damages,  put  an  end  to  the 
right  of  the  plaintiffs  to  go  on  and  to  recover  further  assessments, 
as  in  the  case  where  an  order  for  work  is  countermanded  at  the 
moment  when  performance  is  about  to  begin  under  the  contract 
(Davis  V.  Bronson,  2  ISTo.  Dak.  300),  or  when  at  a  later  moment  the 
plaintiff  was  directed  to  stop  (Clark  v.  Marsiglia,  1  Den.  317), 
followed  by  many  later  cases  in  this  country.  See  Collins  v.  Dela- 
porte,  115  Mass.  159,  162.  We  assume  that  these  decisions  are  right 
in  cases  where  the  continuance  of  work  by  the  plaintiff  would  be 
merely  a  useless  enhancement  of  damages.  But  we  are  of  opinion 
that  they  do  not  apply.  In  the  first  place  it  does  not  appear  that 
such  a  notice  was  given.  The  first  definite  notice  and  the  first  breach 
was  a  refusal  to  pay  on  demand.  At  that  time  the  liability  was 
fixed,  and  the  damages  were  the  sum  demanded. 


196  WARREN    V.    HODGE  [CHAP.   I 

In  the  next  place,  if  a  definite  notice  had  been  given  by  the  de- 
fendants in  advance  that  they  would  not  pay,  whatever  rights  it 
might  have  given  the  plaintiffs  at  their  election  (Ballou  v.  Billings, 
136  Mass.  307),  it  would  not  have  been  a  breach  of  the  contract 
(Daniels  v.  Newton,  114  Mass.  530),  and  it  would  not  have  ended 
the  right  of  the  plaintiffs  to  go  on  under  the  contract  in  a  case 
like  the  present,  where  there  was  a  common  interest  in  the  perform- 
ance, and  where  what  had  been  done  and  what  remained  to  do  prob- 
ably were  to  a  large  extent  interdependent.  Davis  v.  Campbell,  93 
Ta.  524;  Gibbons  v.  Bente,  51  Minn.  499;  Cravens  v.  Eagle  Cotton 
Mills  Co.,  120  Ind.  6.  See  Frost  v.  Knight,  L.  E.  7  Ex.  Ill,  112 ; 
Johnstone  v.  Milling,  16  Q.  B.  D.  460,  470,  473;  Dalrymple  v. 
Scott,  19  Ont.  App.  477;  John  A.  Eoebling's  Sons'  Co.  v.  Lock 
Stitch  Fence  Co.,  130  111.  660,  666',  Davis  v.  Bronson,  2  No.  Dak. 
300,  303. 

Before  leaving  the  case  it  is  interesting  to  remark  that  the  notion 
rightly  exploded  in  Cottage  Street  Church  v.  Kendall,  121  Mass. 
528,  530,  531,  that  the  subscription  of  others  than  the  plaintiff  may 
be  a  consideration,  seems  to  have  remained  unquestioned  with  re- 
gard to  agreements  of  creditors  to  accept  a  composition.  Compare 
the  remarks  of  Wells,  J.,  in  Perkins  v:  Lockwood,  100  Mass.  249, 
250  (Farrington  v.  Hodgdon,  119  Mass.  453,  457;  Trecy  v.  Jefts, 
149  Mass,  211,  212;  Emerson  v.  Gerber,  178  Mass,  130),  with  what 
he  says  in  Athol  Music  Hall  Co.  v.  Corey,  116  Mass.  471,  474. 

It  is  not  argued  that  whatever  contract  was  made  was  not  made 
with  the  plaintiffs.     Sherwin  v.  Fletcher,  168  Mass.  413. 


Demurrer  overruled;  exceptions  overruled} 


^     HORACE  S.  WARREN  v.  AMASA  S.  HODGE 
SuPBEME  Judicial  Court  of  Massachusetts,  October  4,  1876 
[^Reported  in  121  Massachusetts,  106] 

CoNTKACT  to  recover  $184  for  work  and  labor.  Writ  dated  April 
12,  1875. 

At  the  trial  in  the  Superior  Court,  before  Putnam,  J.,  the  de- 
fendant contended  that  the  action  was  prematurely  brought,  and 
introduced  evidence  that,  on  or  about  March  17,  1875,  being  about 
two  months  after  the  plaintiff  had  left  his  employ,  and  after  the 

'  InstancfiH  of  HnbHcriptionH  for  businoH.s  purpoaos  arc  Richcliou  Hotel  Co.  ».  Inter-, 
national  Co.,  I'm  Til.  24S;  Fort  Wayne  Co.  v.  Miller,  LSI  Ind.  400;  Bryant'.s  Pond  Co 
V.  Felt,  H7  Me.  234;  TTtulson  Co.  v.  Tower,  150  Mass.  82.  101  Mas.s.  10;  Bohn  Mfp;.- 
Co  V.  LfwiM,  45  Minn.  104:  GibbonH  ».  Rente,  51  Minn.  500;  Homan  r).  Steele,  18  Neb 
652;  Ixieke'c.  Taylor.  101  N.  Y.  App.  D.  44;  Aubnrn  Work.s  v.  Phiiltz,  143  Pa.  256; 
C.erard  v.  Seattlf.  73  Wash.  510;  C.ibbons  v.  C.rinsel,  70  Wis.  305;  Superior  Land  Co. 
V.  Bickford,  93  Win.  220;  Badger  Paper  Co.  v.  Rose,  05  Wis.  145. 


SECT.    II J  SHANLEY    V.    KOEHLER  197 

time  when  the  amount  was  due,  the  plaintiff  called  at  his  office  and 
demanded  the  amount  due  him^  and  said  that,  if  the  defendant  would 
give  him  $25  on  account,  he  would  wait  until  May  1  for  the  bal- 
ance, and  he  thereupon  paid  him  $25  on  account,  and  the  plaintiff 
then  agreed  to  wait  until  May  1,  1875,  for  the  balance  due  him. 

The  plaintiff  asked  the  judge  to  rule  that  an  agreement  on  his 
part  to  wait  until  some  future  day  for  his  pay  (the  same  being  due 
and  payable)  would  be  null  and  void  unless  there  was  some  consid- 
eration for  the  promise;  and  that  a  payment  of  $25  by  the  defendant 
to  him  on  account  (the  whole  amount  being  then  due)  would  not 
constitute  a  consideration  for  such  an  agreement,  and  that,  notwith- 
standing such  an  agreement,  he  could  maintain  his  action  brought 
before  the  future  day.  But  the  judge  declined  so  to  rule,  and  in- 
structed the  jury  as  follows:  "If  the  jury  find  that  the  agreement 
was  that,  if  the  defendant  would  pay  him  $25  on  the  spot,  he  would 
wait  for  the  balance  of  his  pay  till  a  day  after  the  date  of  the  writ, 
and  the  defendant  made  such  payment  and  relied  upon  that  agree- 
ment and  neglected  to  pay  the  plaintiff  in  consequence,  that,  whether 
there  was  a  consideration  therefor  or  not,  the  action  had  been  pre- 
maturely brought,  and  the  plaintiff  cannot  recover."  The  jury  re- 
turned a  verdict  for  the  defendant;  and  the  plaintiff  alleged  ex- 
ceptions. 

By  the  Court.  It  is  too  well  settled  to  require  discussion  or 
reference  to  authorities,  that  an  agreement  to  forbear  to  sue  upon 
a  debt  already  due  and  payable,  for  no  other  consideration  than  the 
payment  of  part  of  the  debt,  is  without  legal  consideration,  and 
cannot  be  availed  of  by  the  debtor,  either  by  way  of  contract  or  of 
estoppel. 

Of  the  cases  cited  for  the  defendant,  Harris  v.  Brooks,  21  Pick. 
195,  was  a  case  of  a  surety,  and  Fleming  v.  Gilbert,  3  Johns.  528, 
a  case  of  modification  by  agreement  of  the  way  of  performing  an 
obligation  to  discharge  a  mortgage.  Exceptions  sustained. 

^^ 

JOHN  SHAITLEY,  Appellant,  v,  DAVID  M.  KOEHLJ 

Respondent 


ISTew  Yoek  Supreme  Court,  Appellate  Division, 

March   Term,   1903  ^ 

[Reported  in  80  New  YorJc  Appellate  Division,  566] 


Ingraham,  J. :  On  May  15,  1896,  the  defendant  recovered  judgment  ^    V 
against  the  plaintiff  for  $226.29.    In  July  1896,  as  an  agreed  settle-    ^If 
ment  of  this  judgment  the  plaintiff  paid  the  defendant  $50,   and  kA*"^ 
gave  his  indorsed  note  for  $50,  with  interest  at  six  per  cent.  A  receipt  ^  /^ 
was  given  by  the  defendanfs  agent  as  part  of  the  transaction  which  \^ 

^^■'^ 


198  SHANLEY    V.    KOEHLER  [CHAP.    I 

provided  tliat  if  the  note  was  paid  at  maturity  the  judgment  should 
thereby  be  satisfied.  The  note  was  duly  paid  and  a  receipt  was 
then  given  by  the  defendant  stating  that  he  had  received  full  settle- 
ment of  his  account.  Nothing  further  was  done  until  September 
1902,  when  the  plaintiff,  having  become  the  owner  of  real  estate 
upon  which  this  judgment  was  a  lien,  asked  the  defendant  to  enter 
of  record  the  satisfaction  of  the  judgment.  The  defendant  declined 
to  do  so;  whereupon  the  plaintiff  brought  this  proceeding  to  cancel 
the  judgment.     The  court  below  dismissed  the  complaint. 

This  precise  question  was  presented  in  the  case  of  Moss  v.  Shannon 
(1  Hilt.  175),  where  it  was  decided  by  the  Court  of  Common  Pleas 
that  ''the  payment  of  part  of  a  debt,  and  giving  the  debtor's  note  for 
part  of  the  balance,  can  never  discharge  the  whole  indebtedness  with- 
out a  release.  The  debtor's  note  amounted  to  nothing.  He  only 
agreed  by  it  to  pay  at  a  future  time  what  he  was  bound  to  pay  at 
the  present  moment,  and  afforded  no  new  consideration  for  any  con- 
tract at  the  time."  This  case  was  founded  upon  several  cases  in  the 
Supreme  Court,  which  are  all  discussed  by  Judge  Cowen  in  Waydell 
V.  Luer  (5  Hill,  448).  That  case  was  subsequently  reversed  by  the 
Court  of  Errors  in  3  Denio,  412.  The  question  presented  in  this 
case  was  not,  however,  presented  there,  and  the  reversal  does  not 
appear  to  have  doubted  the  correctness  of  the  rule  that  the  giving 
by  a  debtor  to  a  creditor  of  his  own  promissory  note  was  not  a 
consideration  for  an  agreement  that  it  should  be  received  in  full 
satisfaction  of  the  debt,  or,  on  payment  of  the  note,  an  accord  and 
satisfaction.  (See  opinion  of  Davis^  P.  J.,  in  Parrot  v.  Colby, 
6  Hun.  55.)  In  Ludington  v.  Bell  (77  'N.  Y.  138)  the  question 
presented  was  whether  the  giving  of  his  individual  note  by  one  of 
the  members  of  a  partnership  after  its  dissolution  for  a  copartner- 
ship  debt  was  a  good  consideration  for.  an  agreement  on  the  part 
of  the  creditor  to  release  and  discharge  the  maker  from  liability 
for  the  debt;  and  it  was  held  that  giving  and  accepting  such  a  note 
under  such  an  agreement  was  an  accord  and  satisfaction  of  the 
copartnership  debt  and  released  the  other  members  of  the  co- 
partnership. The  court,  in  that  case,  holds  that  the  opinion  of 
LoTT,  Senator,  in  Waydell  v.  Luer  (3  Denio,  410)  was  accepted  by 
the  court;  that  the  acceptance  of  the  individual  note  of  one  partner 
may  be  preferable  and  a  better  security  than  a  demand  against  the 
firm.  In  Bliss  v.  Shwarts  (65  ^.  Y.  444),  the  defendant 
claimed  that  the  case  was  taken  out  of  the  general  rule 
"because  the  acceptance  by  Kopper  (acting  for  the  plaintiff)  of 
the  draft  of  Butler  &  Co.  on  Duncan  &  Sherman  was  sufficient 
evidence  of  a  new  consideration  to  uphold  the  transaction,  even 
though  the  plaintiffs  did  not  participate  in  the  general  plan  of 
compromise."  In  relation  to  this  point  the  court  said  :  "The  evi- 
dericf"  is  entirely  clear  that  the  payment  to  be  made  to  the  plain- 
tiffs was  to  be  in   cash.     It  was   then   shown   in  evidence  that   to 


SECT.    Il]  SHANLEY    V.    KOEHLER  199 

'carry  out  this  settlement'  Mr.  Butler  gave  his  draft  on  Duncan  & 
Sherman  to  Kopper,  acting  for  the  plaintiffs.  .  .  .  The  draft 
must  be  regarded  merely  as  a  mode  of  paying  the  cash."  I  cannot 
find  that  these  cases,  or  the  principle  established  in  them  have  ever 
been  questioned.  It  is  true  that  the  principle  that  the  payment  of 
a  lesser  sum  in  satisfaction  of  a  greater  is  no  consideration  for  an 
agreement  to  discharge  the  balance  of  the  indebtedness  has  been 
criticised,  but  it  has  been  universally  recognized  to  be  the  rule 
and  uniformly  enforced.  The  courts  have  been  inclined  to  limit 
the  application  of  this  rule  and  to  seize  hold  of  any  benefit,  how- 
ever slight,  to  the  creditor  or  any  disadvantage  to  the  debtor, 
and  accept  it  as  a  consideration  upon  which  an  accord  and  satis- 
faction could  be  based.  Judge  Andrews  in  Allison  v.  Abendroth 
says  (108  N.  Y.  470)  :  ''But  it  is  held  that  where  there  is  an 
independent  consideration,  or  the  creditor  receives  any  benefit  or  is 
put  in  a  better  position,  or  one  from  which  there  may  be  legal 
possibility  of  benefit  to  which  he  was  not  entitled  except  for  the 
agreement,  then  the  agreement  is  not  nudum  pactum,  and  the  doc- 
trine of  the  common  law  to  which  we  have  adverted  has  no  appli- 
cation." So  in  Jaffrey  v.  Davis  (124  N".  Y.  164)  it  was  held  that 
where  one  indebted  on  an  open  book  account  gave  to  his  creditor  his  ^^-*-^ 
promissory  notes  for  one-half  of  his  debt,  secured  by  a  chattel  mort-  j^ 
gage  under  an  agreement  with  the  creditor  that  he  would  accept  the 
same  in  full  satisfaction  and  discharge  of  the  debt,  and  the  debtor 
paid  the  notes  as  they  became  due  and  the  creditor  satisfied  the 
mortgage,  the  new  agreement  was  valid  and  supported  by  a 
sufficient  consideration.  It  may  be  that  giving  a  creditor  a 
promissory  note  for  a  portion  of  an  amount  resting  in  an  open 
account,  placing  the  creditor  in  a  position  which  would  enable 
him  to  more  speedily  obtain  payment  of  the  amount  represented 
by  the  note,  would  be  an  advantage  to  the  creditor,  or  disadvan- 
tage to  the  debtor,  which  would  be  a  sufficient  consideration  to 
support  the  agreement  to  accept  a  lesser  sum  than  claimed  by 
the  creditor,  but  in  this  case  the  defendant  had  obtained  a  judg- 
ment for  his  demand,  and  the  amount  due  was  then  actually 
liquidated  and  determined.  A  receipt  by  him  of  the  whole  $100 
in  cash  would  clearly  not  have  been  a  sufficient  consideration  for 
an  agreement  to  discharge  the  remainder  of  the  judgment,  and 
the  receipt  of  the  judgment  debtor's  own  promissory  note  for  $50  fto 
would  put  the  judgment  creditor  in  no  better  position  than  he  was  (r<^^ 
in  at  the  time  the  note  was  accepted.  ISTo  possible  advantage  could  j-  /, 
accrue  to  him  upon  the  receipt  of  this  note  which  he  did  not  have  .  ' 
at  the  time  the  note  was  given.  He  had  a  judgment  which  he  '*''*-*^ 
could  enforce  by  execution.  If  the  note  was  not  paid  he 
could  enforce  it  in  no  other  way  than  by  a  new  action  against 
the  plaintiff  which  would  result  in  a  new  judgment  which  would 
be  no  better  security  for  the  defendant  than  the  judgment  he  had 


200  TANNER    V.    MERRILL  [CHAP.   I 

already  obtained.     Nor  was  the  giving  of  this  note  in  any  sense  an 

*<-""  injury  to  the  plaintiff.     Whether  or  not  there  is  a  consideration 

to    must  appear  from  the  facts  of  each  particular  case,  and  in  this  case 

AX-  it    is    quite    evident    that    there    was    no    consideration    for    the 

agreement. 

It  follows  that  judgment  appealed  from  must  be  affirmed,  with 
costs.^ 

Van   Brunt,    P.   J.,   O'Bkien,    McLaughlin    and    Hatch,    JJ., 
concurred. 

Judgment  ajfirmed,  with  costs. 


ta:n'N"er  v.  meerill 

Michigan  Supeeme  Court,  November  22-December  30,  1895 
[Reported  in  108  Michigan,  58] 

Hooker,  J.  The  defendants  appeal  from  a  judgment  recovered 
against  them  at  circuit.  They  are  lumbermen,  and  the  plaintiff 
worked  for  them  at  Georgian  Bay,  his  transportation  from  Saginaw 
to  that  place  having  been  paid  by  them.  When  he  quit  work,  a 
question  arose  as  to  who  should  pay  this,  under  the  contract  of  em- 
ployment, and  defendants'  superintendent  declined  to  pay  any  trans- 
portation. The  plaintiff  needed  the  money  due  him  to  get  home, 
and  showed  a  telegram  announcing  the  illness  or  death  of  his  mother, 
and  said  that  he  must  go  home,  to  which  the  superintendent  replied 
that  "he  did  not  pay  any  man's  fare";  whereupon  a  receipt  in  full 
was  signed,  and  the  money  due,  after  deducting  transportation,  was 
paid.  The  plaintiff  testified  that  they  had  no  dispute,  only  he 
claimed  the  fare  and  the  superintendent  refused  to  allow  it. 

The  most  important  question  arises  over  a  request  to  charge  upon 
the  part  of  the  defendants,  which  reads  as  follows : 

"The  testimony  of  the  plaintiff  is  that,  at  the  time  the  receipt 
put  in  evidence  in  this  case  was  signed  by  him,  he  claimed  that  his 
railroad  fare  should  not  be  deducted  from  his  wages;  that  this  was 
denied  by  the  agents  and  superintendent  of  defendants,  and  it  was 
taken  out  of  his  wages;  that  he  then  signed  the  receipt  with  full 
knowledge  of  its  contents,  and  of  the  fact  that  his  railroad  fare  had 
been  taken  out  of  his  wages.  This  being  so,  the  receipt  in  this  case, 
upon  the  plaintiff's  own  testimony,  cannot  be  contradicted.  While 
a  receipt  may  be  contradicted  in  certain  cases,  it  must  be  in  a  case 
of  mistake,  ignorance  of  fact,  fraud,  or  when  some  unconscionable 
advantage  has  been  taken  of  one  by  the  other  party.  Therefore, 
the  receipt,  in  this  case,  shows  a  full  settlement  of  all  claims  plaintiff 
had  against  fh(;  flefcndants." 

The  only  theory  u[)oii  which  it  can  be  contended  that  this  request 
^  The  opinion  has  been  ubbroviatcd. 


SECT.    Il]  TANNER    V.    MERRILL  201 

should  have  been  given  is  that  the  plaintiff  accepted  less  than  he 
claimed,  but  no  more  than  defendants'  admitted,  to  be  due,  and 
gave  a  receipt  in  full  when  the  defendants'  superintendent  refused 
to  pay  more.  We  do  not  discover  any  testimony  tending  to  show 
an  agreement  to  accept  as  payment,  either  in  full  or  by  way  of 
compromise,  except  the  receipt,  and  the  question  resolves  itself  into 
this:  Whether  a  receipt  in  full  is  conclusive  of  the  question  of  de- 
fendant's liability,  when  it  is  given  upon  payment  of  a  portion  of 
a  claim  admittedly  due,  accompanied  by  a  refusal  to  pay  more,  in 
the  absence  of  mistake,  fraud,  duress,  or  undue  influence. 

It  is  urged  upon  behalf  of  the  plaintiff  that  receipts  are  always 
open  to  explanation,  and  that  there  is  no  consideration  to  support 
the  acceptance  of  a  portion  of  a  valid  claim  as  full  payment.  The 
cases  which  counsel  cite  do  not  support  the  broad  contention  of 
plaintiff's  counsel,  which  would  seriously  derange  business  affairs  if 
it  should  be  sustained.  The  doctrine  that  the  receipt  of  part  pay- 
ment must  rest  upon  a  valid  consideration  to  be  effective  in  discharge 
of  the  entire  debt  is  carefully  limited  to  cases  where  the  debt  is 
liquidated,  by  agreement  of  the  parties  or  otherwise,  which  was 
not  the  case  here.  It  was  in  dispute.  In  the  case  of  St.  Louis,  etc., 
R.  Co.  V.  Davis,  35  Kan.  464,  the  opinion  says  that  "it  is  a  well- 
settled  principle  of  law  that  the  payment  of  a  part  of  an  ascertained, 
overdue,  and  undisputed  debt,  although  accepted  as  full  satisfaction, 
and  a  receipt  in  full  is  given,  does  not  estop  the  creditor  from  re- 
covering the  balance.  In  such  a  case  the  agreement  to  accept  a 
smaller  sum  is  regarded  to  be  without  consideration."  The  case  of 
Day  V.  Gardner,  42  IST.  J.  Eq.  199,  was  one  where  the  agreement 
was  to  forgive  a  debt,  implying  its  existence.  In  Hasted  v.  Dodge 
(Iowa),  35  N".  W.  462,  the  opinion  of  Mr.  Justice  Rothrock  shows 
the  debt  not  to  have  been  in  dispute.  Moreover,  the  doctrine  was 
not  applicable  to  the  case  for  reasons  shown.  See  also  American 
Bridge  Co.  v.  Murphy,  13  Kan.  35.  In  Bailey  v.  Day,  26  Me.  88, 
the  claim  was  liquidated  by  judgment.  In  Hayes  v.  Insurance  Co., 
125  111.  639,  the  court  apply  the  doctrine  relied  upon,  but  expressly 
state  that  "this  rule  has  no  application  where  property  other  than 
money  is  taken  in  satisfaction,  or  where  there  is  an  honest  com- 
promise of  unliquidated  or  disputed  demands."  See  also  Bish.  Cont. 
§  50;  2  Pars.  Cont.  618.  In  Marion  v.  Heimbach,  62  Minn.  215, 
the  Court  say :  "But  where  the  claim  is  unliquidated,  it  would  seem 
to  be  true  that  if  the  creditor  is  tendered  a  sum  less  than  his  claim, 
upon  the  condition  that,  if  it  is  acepted,  it  must  be  in  full  satisfac- 
tion of  his  whole  claim,  his  acceptance  is  an  accord  and  satisfaction." 
See  also  Fuller  v.  Kemp,  138  IST.  Y.  231,  where  the  same  doctrine 
is  held;  Fire  Ins.  Ass'n  v.  Wickham,  141  U.  S.  577.  The  important 
fact  to  ascertain  is  whether  the  plaintiff's  claim  was  a  liquidated 
claim  or  not.  If  it  was,  there  was  no  consideration  for  the  discharge. 
If  not,  the  authorities  are  in  substantial  accord  that  part  payment  of 


202  TANNER   V.    MERRILL  [CHAP.   I 

the  claim  may  discharge  the  debt,  if  it  is  so  received.  Upon  the 
undisputed  facts,  the  claim  of  the  plaintiff,  as  made,  was  not  liqui- 
dated. It  was  not  even  admitted,  but,  on  the  contrary,  was  denied, 
because  the  defendants  claimed  that  it  had  been  partially  paid  by 
a  valid  offset.  While  the  controversy  was  over  the  offset,  it  is  plain 
that  the  amount  due  the  plaintiff"  was  in  dispute.  If  so,  it  is  difficult 
to  understand  how  it  could  be  treated  as  a  liquidated  claim,  unless 
it  is  to  be  said  that  a  claim  may  be  liquidated  piecemeal,  and  that, 
so  far  as  the  items  are  agreed  upon,  it  is  liquidated,  and  to  that 
extent  is  not  subject  to  adjustment  on  a  basis  of  part  payment.  Cases 
are  not  numerous  in  which  just  this  phase  of  the  question  appears. 
This  would  seem  remarkable,  unless  we  are  to  assume  that,  in  calling 
a  claim  unliquidated,  the  courts  have  alluded  to  the  whole  claim, 
and  have  considered  that,  where  the  amount  is  not  agreed  upon,  the 
claim  as  a  whole  is  unliquidated,  and  therefore  subject  to  adjustment. 
If  this  is  not  true,  no  man  can  pay  an  amount  that  he  admits  to 
be  due  without  being  subject  to  action  whenever  and  so  often  as  his 
creditor  may  choose  to  claim  that  he  was  not  fully  paid,  no  matter 
how  solemn  may  have  been  his  acknowledgment  of  satisfaction,  so 
long  as  it  is  not  a  release  under  seal. 

The  general  rule  is  a  technical  one,  and  there  are  many  exceptions. 
It  has  been  said  that  it  "often  fosters  bad  faith,"  and  that  "the 
history  of  judicial  decisions  upon  the  subject  has  shown  a  constant 
effort  to  escape  from  its  absurdity  and  injustice."  Harper  v.  Graham, 
20  Ohio,  105;  Kellogg  v.  Kichards,  14  Wend.  116;  Brooks  v.  White, 
2  Mete.  (Mass.)  283  (37  Am.  Dec.  95).  Again,  it  is  said  to  be 
"rigid  and  unreasonable,"  and  "a  rule  that  defeats  the  expressed 
intentions  of  the  parties,  and,  therefore,  should  not  be  extended  to 
embrace  cases  not  within  the  letter  of  it."  Wescott  v.  Waller,  47 
Ala.  492;  Johnston  v.  Brannan,  5  Johns.  268;  Simmons  v  Almy, 
103  Mass.  35.  See  Milliken  v.  Brown,  1  Rawle,  391,  where  the  rule 
is  vigorously  denounced.  It  has  no  application  in  cases  of  claims 
against  the  government.  If  one  accepts  the  amount  allowed,  it  is 
a  discharge  of  the  whole  claim.  TJ.  S.  v.  Adams,  7  Wall.  463;  U.  S. 
r.  Child,  12  Wall.  232.  See  also  Wapello  Co.  v.  Sinnaman,  1  G. 
Greene,  413;  Brick  v.  County  of  Plymouth,  63  Iowa,  462;  Perry  v. 
Cheboygen,  55  Mich.  250;  Calkins  v.  State,  13  Wis.  389.  Again, 
it  has  been  repeatedly  held  that  part  payment  is  a  bar  to  a  claim  for 
intc-rfst.     Another  exception  is  found  in  composition  with  creditors. 

It  is  believed  that  we  may  safely  treat  this  claim  as  one  claim, 
not  as  two,  and  as  unliquidated,  inasmuch  as  it  was  not  admitted. 
In  McGlynn  v.  Billings,  16  Vt.  329,  the  defendant,  after  an  examina- 
tion of  acfounts,  claimed  that  he  owed  the  plaintiff  $82,  and  drew 
a  check  for  tbat  sum,  and  tendered  it  as  payment  in  full.  It  was 
refused,  and  it  was  delivered  to  a  third  person,  with  directions  to 
deliver  it  whenever  tbe  plaintiff  wouhl  receive  it  as  payment  in  full. 
This  was  done,  and  it  was  held  to  discharge  the  debt.     In  Hills  v. 


SECT.     Il]  TANNER    V.    MERRILL  203 

Sommer,  53  Hun,  392,  the  plaintiffs  shipped  lemons  to  dealers  in 
St.  Joseph,  Mo.,  and  were  notified  that  some  were  defective,  with 
a  claim  of  a  specific  rebate,  which  plaintiffs  refused  to  allow.  A 
draft  was  subsequently  sent  for  the  amount  which  the  defendants 
had  previously  expressed  their  willingness  to  allow,  with  a  letter 
stating  that  it  was  in  payment  of  the  invoice.  The  draft  was  cashed, 
and  action  brought  for  the  remainder  of  the  claim.  Verdict  was 
directed  for  the  defendants.  Pierce  v.  Pierce,  25  Barb.  243,  seems 
to  be  a  similar  case.  In  Potter  v.  Douglass,  44  Conn.  541,  plaintiff 
refused  $45,  which  was  tendered  in  full  payment  of  a  claim.  He 
took  it,  however,  on  account,  as  he  said,  and  wrote  a  receipt  to  that 
effect,  which  defendant  refused,  for  the  reason  that  it  stated  that 
the  money  was  received  on  account.  The  plaintiff,  however,  kept 
the  money.  It  does  not  appear  that  this  amount  of  $45  was  disputed. 
Apparently,  it  was  not.  Yet  the  court  called  the  claim  an  unliqui- 
dated demand,  and  held  it  to  have  been  discharged.  In  Perkins  v. 
Headley,  49  Mo.  App.  562,  it  is  said :  "But  if  there  is  a  controversy 
between  him  [the  creditor]  and  his  debtor  as  to  the  amount  which 
is  due,  and  if  the  debtor  tenders  the  amount  which  he  claims  to  be 
due,  but  tenders  it  on  the  condition  that  the  creditor  accept  it  in 
discharge  of  his  whole  demand,  and  the  creditor  does  accept  it,  that 
will  be  an  accord  and  satisfaction  as  a  conclusion  of  law." 

While  no  Michigan  case  decisive  of  this  question  is  cited,  and 
we  recall  none,  it  was  held  in  Houghton  v.  Poss,  54  Mich.  335, 
that :  — 

"A  receipt  which  states  its  purpose  to  be  for  a  complete  settle- 
ment, and  which  covers  the  whole  period  of  dealing,  is  equivalent 
to  an  account  stated;  and  though  it  is  open  to  explanation  as  to 
errors  or  omissions,  it  cannot  be  treated  as  if  it  had  not  been  meant 
to  cover  everything." 

And  in  Pratt  v.  Castle,  91  Mich.  84,  it  was  said  that :  — 

"1.  Settlements  are  favored  by  the  law,  and  will  not  be  set  aside, 
except  for  fraud,  mistake,  or  duress. 

"2.  A  settlement  evidenced  by  the  execution  of  mutual  receipts 
of  'one  dollar,  in  full  for  all  debts,  dues,  and  demands  to  this  date,'  " 
except  as  to  certain  specified  items,  is  conclusive,  in  the  absence  of 
fraud  or  mistake,  as  to  all  prior  dealings  between  the  parties  not 
covered  by  the  excepted  items." 

See  also  Dowling  v.  Eggemann,  47  Mich.  171. 

It  therefore  appears  that  such  settlements  should  have  weight, 
and  it  seems  reasonable  to  hold  that  the  rule  contended  for  does  not 
apply,  for  the  reason  that  this  was  an  unliquidated  demand,  although 
a  certain  portion  of  it  was  not  questioned.  Clearly,  the  claim  was 
disputed,  and,  so  far  as  this  record  shows,  the  defendants'  superin- 
tendent was  given  to  understand  that  the  money  paid  was  accepted 
in  full  satisfaction,  as  plaintiff's  own  evidence  shows  that  he  gave 
the  receipt  without  protest,  and  without  stating  to  the  defendants' 


204  BENSON    V.    PHIPPS  [CHAP.    I 

superintendent  what  he  said,  aside,  to  his  fellow  laborers,  that  it 
would  make  no  difference  if  they  did  give  the  receipts.  To  hold  other- 
wise would  be  a  recognition  of  the  ''mental  reservation"  more  effec- 
tive than  just.  Upon  the  plaintiff's  own  testimony,  he  accepted  the 
money,  with  the  knowledge  that  the  defendants  claimed  that  the 
amount  paid  was  all  that  was  his  due,  and  gave  a  receipt  in  full. 
There  is  nothing  in  the  case  to  negative  the  inference  naturally  to 
be  drawn  from  this  testimony,  that  there  was  an  accord  and  satis- 
faction of  an  unliquidated  demand. 

The  judgment  must  he  reversed.  No  new  trial  should  he  ordered} 


H.  L.  BENSOl^  V.  L.  PHIPPS 

Texas  Supreme  Couet,  March  4,  1895 
IRe^ported  in  87  Texas,  578] 

Gaines,  Chief  Justice.  The  plaintiff  was  a  surety  for  one  Hosack, 
the  principal  maker  upon  a  promissory  note  payable  to  the  defend- 
ant in  error.  Some  days  after  the  note  fell  due,  Hosack  wrote  de- 
fendant in  error  requesting  an  extension,  to  which  request  defendant 
replied  by  letter  as  follows :  "I  will  extend  the  time  of  payment 
one  year,  and  look  with  confidence  for  the  accrued  interest  within 
sixty  days,  hoping  it  will  not  inconvenience  you.  After  that,  if  it 
is  your  pleasure  to  make  the  interest  on  the  extension  payable  semi- 
annually, it  will  help  me." 

The  defendant  in  error  testified  to  having  received  the  letter  from 
Hosack  requesting  an  extension,  and  that  the  foregoing  was  his 
reply,  but  the  contents  of  Hosack's  communication  were  not  other- 
wise shown.  He  also  testified,  that  he  was  paid  nothing  for  the 
extension,  and  that  Hosack  never  paid  the  accrued  interest. 

Suit  having  been  brought  on  the  note  by  the  payee  against  all 
the  makers,  the  plaintiff  in  error  pleaded  his  suretyship;  and  the 
facts  as  stated  above  having  been  proved,  the  trial  court  gave  judg- 
ment for  the  plaintiff  in  that  court.  That  judgment  upon  appeal 
was  affirmed  by  the  Court  of  Civil  Appeals. 

It  is  the  right  of  the  surety  at  any  time  after  the  maturity  of  the 
debt  to  pay  it  and  to  proceed  against  the  principal  for  indemnity. 
Tliis  rigbt  is  impaired  if  the  creditor  enter  into  a  valid  contract 
with  the  principal  for  an  extension  of  the  time  of  payment.  The 
obligation  of  the  surety  is  strictly  limited  to  the  terms  of  his  con- 
tract, and  any  valid  agreement  between  the  creditor  and  the  prin- 
fij);il  by  which  his  position  is  changed  for  tlie  worse,  discharges  his 
liability.     For  this  reason  it  is  universally  held,  that  a  contract  be- 

»  ChioiiKo,  <^r,  Ry.  Co.  v.  Clark,  17S  U.  S.  Sf^ri,  307;  Ostrander  ».  iScott.  IGl  III, 
339,  nr.c.  Soo.  hIho  NaHsoiy  ?;.  Tomiirison,  148  N.  Y.  3'2G;  Jordan  v.  Great  Northern 
Ry.  Co.  80  Minn.  405.     Millor  v.  Coates,  66  N.  Y.  609,  contra. 


SECT.    Il]  BENSON    V.    PHIPPS  205 

tween  the  two,  which  is  binding  in  law,  by  which  the  principal  se- 
cures an  extension  of  time,  releases  the  surety,  provided  the  surety 
has  not  become  privy  to  the  transaction  by  consenting  thereto.     If 
the  creditor  is  not  bound  by  his  promise  to  extend,  it  is  clear  there 
is  no  release.     In  order  to  hold  him  bound  by  his  promise,  there 
must  be  a  consideration.     Whether  a  mere  agreement  for  an  exten- 
sion by  the  debtor  is  sufficient  to  support  a  promise  to  extend  by 
the  creditor,  is  a  question  upon  which  the  authorities  are  not  in 
accord.     We  are  of  opinion,  however,  that  the  question  should  be 
resolved  in  the  affirmative,  at  least  in  cases  in  which  it  is  contemp- 
lated by  the  contract  that  the  debt  should  bear  interest  during  the 
time  for  which  it  is  extended.     If  the  new  agreement  was  that  the 
debtor  should  pay  at  the  end  of  the  period  agreed  upon  for  the  ex- 
tension precisely  the  same  sum  which  was  due  at  the  time  the  agree- 
ment was  entered  into,  the  case  might  be  different.     But  a  promise 
to  do  what  one  is  not  bound  to  do,  or  to  forbear  what  one  is  not 
bound  to_Jorbear,  is  a  good  consideration  for  a  contract.     In  case 
oT  a  debtwhich  l)ears  interest  either  by  convention  or  by  operation 
of  law,  when  an  extension  for  a  definite  period  is  agreed  upon  by 
the  parties  thereto,  the  contract  is,  that  the  creditor  will  forbear 
suit  during  the  time  of  the  extension,  and  the  debtor  forgoes  his 
right  to  pay  the  debt  before  the  end  of  that  time.     The  latter  se- 
cures the  benefit  of  the  forbearance;  the  former  secures  an  interest- 
bearing  investment  for  a  definite  period  of  time.     One  gives  up  his 
right  to  sue  for  a  period  in  consideration  of  a  promise  to  pay  in- 
terest during  the  whole  of  the  time;  the  other  relinquishes  his  right 
to  pay  during  the  same  period,  in  consideration  of  the  promise  of 
forbearance.     To  the  question,  why  this  is  not  a  contract,  we  think 
no  satisfactory  answer  can  be  given.     It  seems  to  us  it  would  be  j^ 
a  binding  contract,  even  if  the  agreement  was  that  the  debt  should 
be  extended  at  a  reduced  rate  of  interest.     That  an  agreement  by 
the  debtor  and  creditor  for  an  extension  for  a  definite  time,  the  debt 
to  bear  interest  at  the  same  rate  or  at  an  increased  but  not  usurious 
rate,  is  binding  upon  both,  is  held  in  many  cases,  some  of  which 
we  here  cite:  Wood  v.  Newkirk,  15  Ohio  St.  295;  Fowler  v.  Erooks, 
33  K  H.  240;  Davis  v.  Lane,  10  N".  H.  156;  Stallings  v.  Johnson, 
27  Ga.  564;  Robinson  v.  Miller,  2  Bush   (Ky.),  179;  Reynolds  v. 
Barnard,  36  111.  App.  218;  Chute  v.  Pattee,  37  Me.  102;  Rees  v. 
Barrington,   2  Ves.   540;   see  also  Grossman  v.  Wohlleben,   90   111. 
537;  McComb  v.  Kittredge,  14  Ohio,  348.^ 

In  many  cases  which   seemingly  support   the  contrary   doctrine, 

^  Royal  V.  Lindsay,  15  Kan.  591;  Shepherd  n.  Thompson,  2  Bush,  176;  Alley  v. 
Hopkins,  98  Ky.  668;  Simpson  v.  Evans,  44  Minn.  419;  Moore  v.  Redding,  69  Miss. 
841;  Fawcett  v.  Freshwater,  31  Ohio  St.  637,  occ:  Abel  v.  Alexander,  451  Ind.  523; 
Hume  V.  Mazelin,  84  Ind.  574;  Holmes  v.  Boyd,  90  Ind.  332;  Da\'is  v.  Stout,  126  Ind. 
12;  Wilson  v.  Powers,  130  Mass.  127;  Hale  v.  Forbes,  3  Mont.  395;  Grover  v.  Hop- 
pock,  2  Dutch.  191;  Kellogg  v.  Olmsted,  25  N.  Y.  189;  Parmelee  ?'.  Thompson,  45 
N.  Y.  58;  Olmstead  v.  Latimer,  158  N.  Y.  313,  contra.  See  also  Toplitz  v.  Bauer,  161 
N.  Y.  325. 


206      AUSTIN   REAL   ESTATE    &   ABSTRACT   CO.    V.    BAHN    [CHAP.    I 

there  was  a  mere  promise  by  the  creditor  to  forbear,  without  any 
corresponding  promise  on  part  of  the  debtor  not  to  pay  during  the 
time  of  the  promised  forbearance.  In  such  cases,  it  is  clear  that 
there  is  no  consideration  for  the  promise.  In  others,  where  there 
was  a  mutual  agreement  for  the  extension,  it  may  be  that  interest 
during  the  period  of  extension  was  not  allowed  by  law,  and  the 
agreement  did  not  provide  for  the  payment  of  interest.  The  case 
of  McLemore  v.  Powell,  12  Wheaton,  554,  may  have  been  of  that 
character. 

In  this  case,  as  we  construe  the  correspondence  between  Hosack 
and  the  defendant  in  error,  there  was  a  request  for  an  extension  of 
the  debt  for  twelve  months  on  part  of  the  former,  and  an  uncon- 
ditional acceptance  on  the  part  of  the  latter.  We  infer,  that  Hosack 
must  have  written  something  about  the  payment  of  accrued  interest 
—  properly  that  he  hoped  to  be  able  to  pay  it  in  sixty  days.  The 
presumption  is,  that  the  letter  was  in  the  possession  of  the  defend- 
ant in  error  at  the  time  of  the  trial.  He  did  not  produce  it.  In 
any  event,  he  should  have  known  its  contents,  and  if  Hosack  made 
his  request  for  an  extension  conditional  upon  his  payment  of  the 
accrued  interest,  he  should  have  testified  to  the  fact.  We  conclude, 
therefore,  that  there  was  a  binding  promise  for  an  extension,  and 
that  the  plaintiff  in  error  was  therefore  released.^ 

There  is  error  in  the  judgment,  for  which  it  must  be  reversed; 
and  since  it  may  be  shown  upon  another  trial  that  Hosack's  offer 
contained  a  condition  that  he  would  pay  the  interest  in  sixty  days, 
the  cause  is  remanded.  Reversed  and  remanded.' 


THE  AUSTIN  REAL  ESTATE  AND  ABSTRACT 
COMPANY  V.  G.  A.  BAHN 

Texas  Supreme  Court^  March  11,   1895 

[Reported  in  87  Texas,  582] 

On  motion  for  rehearing. 

Gaines,  Chief  Justice.  This  is  a  motion  for  a  rehearing  of  an 
application,  based  upon  the  ground  that  our  ruling  in  this  case  is 
in  conflict  with  that  made  in  the  case  of  Benson  v.  Phipps,  recently 
dr"'-idcd    in    this   court. 

When  the  application  now  before  us  was  filed,  it  was  considered 
that  it  probably  involved  the  same  question  which  was  raised  in 
Benson  V.  Phipps,  and  upon  which  a  writ  of  error  had  been  granted. 

>  An  c-xamirmtion  by  thf  court  of  scvrrjvl  Texas  decisions  is  omitted. 

»  Compnrr:  Hopkins  v.  Logan,  5  M.  &  W.  241;  Voroyckcn  v.  Vandonbrooks,  102 
Mich.  110;  Htrykfr  v.  Vanriorbilt,  3  Dutch.  68;  McNish  v.  Reynolds,  05  Pa.  48.3;  Gib- 
son V.  Daniol.  17  Tex.  17.3;  Mclntyre  v.  Ajax  MininR  ('o.,  20  Utah,  323,  .3.36;  P'Janders 
V.  Fay,  40  Vt.  316;   Stickler  v.  Giles,  9  Wash.  147;    Price  v.  Mitchell,  23  Wash.  742. 


SECT.    II]  LATTIMORE    V.    HARSEN  207 

Action  upon  the  application  was  accordingly  suspended  until  that 
case  was  decided;  and  then  it  was  discovered,  that  although  the 
question  of  the  validity  of  a  promise  for  an  extension  of  a  contract 
of  indebtedness  was  involved  in  each  case,  the  two  were  clearly  dis- 
tinguishable. In  this  case,  with  reference  to  this  question,  the  trial 
court  found  the  facts  as  follows :  "That  a  few  days  after  the  note 
sued  on  became  due,  and  just  before  it  was  assigned  to  the  plaintiff, 
JSr.  E.  Fain  presented  same  to  the  defendant  for  payment,  when  said 
Stacy,  as  president  of  defendant  company,  requested  that  an  exten- 
sion of  one  week  from  that  date  be  given  on  said  note,  and  that 
the  same  be  not  placed  in  the  hands  of  attorney  for  collection  until 
one  week;  and  agreed,  if  this  was  done,  that  he  would  pay  the  note 
within  that  time^  etc.  Here  the  creditor  agrees  to  extend  for  one 
week,  and  the  debtor  agrees  to  pay  within  the  week.  He  does  not 
agree  that  he  will  not  pay  until  the  end  of  the  week,  or  that  in  case 
he  does  pay,  he  will  pay  interest  for  the  entire  period  of  the  exten- 
sion. Hence  there  was  no  consideration  for  the  promise  of  the  cred- 
itor. In  Benson  v.  Phipps,  the  principal  maker  of  the  note  and 
the  payee  agree  upon  an  extension  for  twelve  months;  from  which 
the  promise  was  implied  on  part  of  the  former  not  to  sue,  and  upon 
the  latter  not  to  pay  within  the  stipulated  time.  The  promise  of 
the  debtor  to  forego  his  right  to  pay  at  any  time  after  the  note 
was  originally  due,  secured  to  the  creditor  the  absolute  right  to  re- 
ceive the  interest  for  the  entire  time  of  the  extension,  and  constituted 
the  consideration  for  the  creditor's  promise. 

In  the  case  before  us,  it  was  the  right  of  the  company  to  pay  at 
any  time,  notwithstanding  Fain's  promise,  and  hence  there  was  no 
consideration  to  support  that  promise. 

The  motion  for  a  rehearing  is  overruled.  Motion  overruled.^ 


LATTIMOEE  and  Others  v.  HAKSEN" 

New  York   Supreme   Court,  August,   1817 

[Reported  in  14  Johnson,  330] 

This  was  a  motion  to  set  aside  the  report  of  referees.  It  ap- 
peared from  the  affidavits  which  were  read,  that  the  plaintiffs  en- 
tered into  an  agreement  under  seal,  dated  the  14th  of  November, 
1815,  with  Jacob  Harsen,  and  the  defendant,  Cornelius  Harsen, 
by  which  the  former,  in  consideration  of  the  sum  of  nine  hundred 
dollars,  agreed  to  open  a  cartway  in  Seventieth  Street,  in  the  city 
of  New  York,  the  dimensions  and  manner  of  which  were  stated  in 
the  agreement,  and  bound  themselves  under  the  penalty  of  two 
hundred  and  fifty  dollars  to  a  performance  on  their  part.     Some 

1  McManus  v.  Bark,  L.  R.  5  Ex.  65  ace. 


208  MUNROE    V.    PERKINS  [CHAP.    I 

time  after  the  plaintiffs  entered  upon  the  performance,  they  became 
dissatisfied  with  their  agreement,  and  determined  to  leave  off  the 
work,  when  the  defendant,  by  parol,  released  them  from  their  cove- 
nant, and  promised  them  that  if  they  would  go  on  and  complete 
the  work,  and  find  materials,  he  would  pay  them  for  their  labor  by 
the  day.  The  plaintiffs  had  received  more  than  the  sum  stipulated 
to  be  paid  to  them  by  the  original  agreement.  The  action  was 
brought  for  the  work  and  labor,  and  materials  found  by  the  plain- 
tiffs, under  the  subsequent  arrangement,  and  the  referees  reported 
the  sum  of  four  hundred  dollars  and  five  cents  in  favor  of  the  plain- 
tiffs. 

The  case  was  submitted  to  the  court  without  argument. 

Peb  Curiam.  The  only  question  that  can  arise  in  the  case  is, 
whether  there  was  evidence  of  a  contract  between  the  plaintiff  and 
the  present  defendant  to  perform  the  services  for  which  this  suit 
is  brought.  From  the  evidence,  it  appears  that  a  written  contract 
had  been  entered  into  between  the  plaintiff  and  the  defendant,  to- 
gether with  his  father  Jacob  Harsen,  for  the  performance  of  the 
same  work;  and  that,  after  some  part  of  it  was  done,  the  plaintiffs 
became  dissatisfied  with  their  contract,  and  determined  to  abandon 
it.  The  defendant  then  agreed,  if  they  would  go  on  and  complete 
the  work,  he  would  pay  them  by  the  day  for  such  service,  and  the 
materials  found,  without  reference  to  the  written  contract. 

This  is  the  allegation  on  the  part  of  the  plaintiffs,  and  which  the 
evidence  will  very  fairly  support.  If  the  contract  is  made  out,  there 
can  be  no  reason  why  it  should  not  be  considered  binding  on  the 
defendant.  By  the  former  contract,  the  plaintiffs  subjected  them- 
selves to  a  certain  penalty  for  the  non-fulfilment,  and  if  they  chose 
to  incur  this  penalty  they  had  a  right  to  do  so,  and  notice  of  such 
intention  was  given  to  the  defendant,  upon  which  he  entered  into 
the  new  arrangement.  Here  was  a  sufficient  consideration  for  this 
promise;  all  payments  ma^e  on  the  former  contract  have  been  al- 
lowed, and  perfect  justice  appears  to  have  been  done  by  the  referees, 
and  no  rules  or  principles  of  law  have  been  infringed.  The  motion 
to  set  aside  the  report,  therefore,  ought  to  be  denied. 

Motion  denied. 


GEORGE  MUNROE  v.  THOMAS  H.   PERKINS 

SuPHEME  Judicial  Couet  of  Massachusetts,  March  Term,  1830 

\Reported  in  9  Pickering,  298] 

Indebitatus  assumpsit  for  work  done,  materials  found,  money 
paid,  (S:f.,  l)rong]it  iigainst  tli((  defendant  jointly  with  William  Payne, 
who  (lied  aftfT  \\u'.  action  was  commenced. 

At  th(!  trial  before  the  Chief  Justice  it  appeared   that  in    1821 


SECT.    Il]  MUNROE    V.    PERKINS  209 

the  plaintiff  was  employed  by  Perkins  and  Payne  to  build  a  hotel 
at  I^ahant,  which  was  begun  in  that  year  and  finished  in  1823. 

The  general  defence  was,  that  there  was  a  special  contract,  and 
that  the  work  had  been  paid  for  according  to  the  terms  of  that  con- 
tract. 

For  the  purposes  of  this  case  it  was  admitted  that  the  amount 
of  expenditures  made  and  incurred  by  the  plaintiff  in  and  about 
the  work,  exceeded  the  amount  of  the  payment  made  to  him. 

It  appeared  that  in  1821  a  number  of  persons  associated  them- 
selves for  the  purpose  of  erecting  a  hotel  at  ISTahant,  and  subscribed 
certain  sums  of  money  therefor;  that  Perkins  and  Payne  were  sub- 
scribers, and  were  the  agents  of  the  association,  which  was  to  be 
incorporated  as  soon  as  possible,  and  which  was  incorporated  ac- 
cordingly in  February,  1822. 

The  defendant  offered  in  evidence  an  agreement  under  seal,  dated 
October  24,  1821,  wherein  the  plaintiff  engages  to  build  the  hotel 
according  to  a  certain  drawing  and  description,  and  the  defendant 
and  Payne,  in  behalf  of  their  associates,  agree  to  pay  the  plaintiff 
therefor  $14,500  as  the  work  advances. 

T.  W.  Sumner,  a  witness  called  by  the  defendant,  testified  that 
the  work  was  executed  upon  the  basis  of  the  drawing  and  description 
referred  to  in  the  sealed  contract;  that  there  were  some  deviations, 
consisting  of  additional  work;  that  this  was  considered  as  extra 
work,  not  included  in  the  contract,  and  was  paid  for  separately  ac- 
cording to  its  full  cost  and  value. 

To  prove  a  waiver  of  the  special  contract,  the  plaintiff  introduced 
several  witnesses.  J.  Alley  testified  that  in  1825  he  said  to  the  de- 
fendant, it  was  a  pity  Munroe  had  undertaken  to  build  the  hotel; 
to  which  the  defendant  replied,  that  Munroe  would  not  lose  any- 
thing by  it,  and  that  they  had  agreed  to  pay  him  for  every  minute's 
work  and  for  all  he  had  purchased.  J.  Mudge  testified  that  in  the 
spring  of  1823  the  plaintiff  was  indebted  to  the  Lynn  bank  on  a 
note  for  $1,100  which  he  wished  to  have  renewed,  but  that  the  di- 
rectors were  not  satisfied  of  his  solvency;  that  in  April  of  that  year 
the  plaintiff  came  to  the  bank  with  Payne,  who  said  he  was  the 
agent  who  attended  to  the  business  of  the  Nahant  hotel  in  the  ab- 
sence of  Perkins,  who  had  gone  to  Europe;  that  he  wanted  to  get 
from  the  bank  some  indulgence  towards  the  plaintiff;  that  the  cor- 
poration would  leave  the  plaintiff  as  good  as  they  found  him;  they 
would  pay  Munroe  for  all  he  should  lay  out;  that  Munroe  should 
not  stop  for  want  of  funds;  that  he  (Payne)  knew  Perkins's  mind 
upon  the  subject;  that  the  bills  would  be  paid,  and  the  plaintiff 
should  not  suffer.  W.  Johnson  testified  that  on  the  strength  of  this 
representation  of  Payne,  the  bank  renewed  the  plaintiff's  paper. 
W.  Babb  testified  that  in  May,  1822,  the  defendant  asked  the  plain- 
tiff how  he  got  on;  that  the  plaintiff  said,  poorly  enough;  that  the 
defendant  told  him  he  must  persevere;  the  plaintiff  said  he  could 


210  MUNROE    V.    PERKINS  [CHAP.    I 

not  without  means;  and  the  defendant  repeated,  "You  must  perse- 
vere," and  added,  "You  shall  not  suffer,  we  shall  leave  you  as  we 
found  you." 

The  defendant  objected  to  this  evidence  that  it  was  insuiiicient 
in  law  to  set  aside  the  special  contract;  that  it  did  not  amount  to 
a  waiver  of  the  original  contract,  but  so  far  as  it  proved  anything, 
it  was  evidence  of  a  new  express  promise,  which  was  without  con- 
sideration and  from  which  no  implied  assumpsit  could  be  raised. 
Also,  that  the  conversation  with  Perkins  at  one  time  and  with  Payne 
at  another  were  not  joint  promises  and  created  no  joint  cause  of  ac- 
tion, but  that  the  liability,  if  there  was  any,  was  several. 

A  verdict  was  taken  by  consent,  subject  to  the  opinion  of  the 
court. 

S.  Hubbard  and  F.  Dexter,  for  the  defendant. 

Ward,  contra. 

Per  Curiam.  The  verdict  of  the  jury  has  established  the  fact, 
if  the  evidence  was  legally  sufficient,  that  the  defendant  together 
with  Payne,  made  the  promise  declared  on.  The  defence  set  up 
was  that  the  work  was  done  and  the  materials  were  furnished  on 
a  special  contract  under  seal,  made  by  the  defendant  and  Payne  on 
behalf  of  themselves  and  other  subscribers  to  the  hotel;  and  such  a 
contract  was  produced  in  evidence.  The  main  question  is,  whether, 
there  being  this  contract  under  seal  for  a  stipulated  sum,  an  action 
lies  on  a  general  assumpsit  for  the  amount  which  the  building  actu- 
ally cost;  which  is  more  than  the  sum  specified  in  the  contract.  It 
is  said  on  the  part  of  the  plaintiff  that,  having  made  a  losing  bar- 
gain and  being  unwilling  and  unable  to  go  on  with  the  work,  Per- 
kins and  Payne  assured  him  that  he  should  not  suffer;  and  that  the 
work  was  carried  on  and  finished  upon  their  engagement  and  prom- 
ise that  he  should  have  a  reasonable  compensation,  without  regard 
to  the  special  contract.  This  engagement  is  to  be  considered  as 
proved,  if  by  law  it  was  admissible  to  show  a  waiver  of  a  special 
contract. 

It  is  objected  that,  as  the  evidence  was  parol,  it  is  insufficient  in 
law  to  defeat  or  avoid  the  special  contract;  and  many  authorities 
have  been  cited  to  show  that  a  sealed  contract  cannot  be  avoided  or 
waived  but  by  an  instrument  of  a  like  nature;  or  generally,  that 
a  contract  under  seal  cannot  be  avoided  or  altered  or  explained  by 
parol  evidence.  That  this  is  the  general  doctrine  of  the  law  cannot 
ho  disputed.  It  seems  to  have  emanated  from  the  common  maxim, 
Umimfjuodr/ue  dissolvitur  eo  lif/amine  quo  ligatur.  But,  like  other 
maxims,  this  has  received  qualifications,  and  indeed  was  never  true 
to  the  letter,  for  at  all  times  a  bond,  covenant,  or  other  sealed  in- 
strument might  be  defeated  by  parol  evidence  of  payment,  accord 
and  satisfaction,  &c. 

It  is  a  general  principle  that  where  there  is  an  agreement  in  writ- 
ing, it  merges  all  previous  conversations  and  parol  agreements;  but 


SECT.    II]  MUNROE    V.    PERKINS  211 

there  are  many  cases  in  which  a  new  parol  contract  has  been  admitted 
to  be  proved.  And  though  when  the  suit  is  upon  the  written  con- 
tract itself  it  has  been  held  that  parol  evidence  should  not  be  re- 
ceived, yet  when  the  suit  has  been  brought  on  the  ground  of  a  new 
subsequent  agreement  not  in  writing,  parol  evidence  has  been  ad- 
mitted. 

In  Katcliff  v.  Pemberton,  1  Esp.  R.  35,  Lord  Kenyon  decided  that, 
to  an  action  of  covenant  on  a  charter-party  for  the  demurrage  which 
was  stipulated  in  it,  the  defendant  might  plead  that  the  covenantee, 
who  was  the  master  and  owner  of  the  ship,  verbally  permitted  the 
delay,  and  agreed  not  to  exact  any  demurrage,  but  waived  all  claim 
to  it.  He  laid  down  a  similar  rule  in  Thresh  v.  Rake,  ibid.  53 ; 
where,  however,  the  contract  does  not  appear  to  have  been  under 
seal. 

In  2  T.  R.  483,  there  were  articles  of  partnership,  containing  a 
covenant  to  account  at  certain  times;  and  upon  a  balance  being 
struck,  the  defendant  promised  to  pay  the  amount  of  the  balance; 
and  it  was  held  that  assumpsit  would  lie  upon  this  promise. 

The  case  of  Latimore  et  al.  v.  Harsen,  14  Johns.  R.  330,  comes 
nearer  the  case  at  bar.  There  the  plaintiffs  had  agreed  to  perform 
certain  work  for  a  stipulated  sum  of  money,  under  a  penalty.  After 
they  had  entered  upon  the  performance  of  it,  they  determined  to 
leave  off,  and  the  defendant,  by  parol,  released  them  from  their 
covenant,  and  promised  them,  if  they  would  complete  the  work, 
that  he  would  pay  them  by  the  day.  The  court  held  that  if  the 
plaintiffs  chose  to  incur  the  penalty,  they  had  a  right  to  do  so,  and 
that  the  new  contract  was  binding  on  the  defendant. 

In  Dearborn  v.  Cross,  7  Cowen,  48,  it  is  held  that  a  bond  or  other 
specialty  may  be  discharged  or  released  by  a  parol  agreement  be- 
tween the  parties,  especially  where  the  parol  agreement  is  executed; 
and  the  case  of  Lattimore  v.  Harsen  is  there  cited  and  relied  on. 

There  are  other  decisions  of  like  nature  in  the  same  court;  as 
Fleming  fv.  Gilbert,  3  Johns.  R.  528;  Keating  v.  Price,  1  Johns. 
Cas.  22;  Edwin  v.  Saunders,  1  Cowen,  250.  In  Ballard  v.  "Walker, 
8  Johns.  Cas.  64,  it  w^as  held  that  the  lapse  of  time  between  the 
making  of  the  contract  and  the  attempt  to  enforce  it  was  a  waiver; 
which  is  going  further  than  is  necessary  in  the  case  before  us,  for 
here  there  is  an  express  waiver. 

In  Le  Fevre  v.  Le  Fevre,  4  Serg.  &  R.  241,  parol  evidence  was 
admitted  to  prove  an  alteration  of  the  course  of  an  aqueduct  estab- 
lished by  deed.  In  regard  to  the  objection  that  this  evidence  was 
in  direct  contradiction  to  the  deed,  Duncan,  J.  remarks  that  "the 
evidence  was  not  offered  for  that  purpose,  but  to  show  a  substitu- 
tion of  another  spot.  If  this  had  not  been  carried  into  effect  the 
evidence  would  not  have  been  admissible;  but  where  the  situation 
of  the  parties  is  altered  by  acting  upon  the  new  agreement,  the  evi- 
dence is  proper;  for  a  party  may  be  admitted  to  prove  by  parol 


212         LINGENFELDER    V.    WAINWRIGHT   BREWING    CO.     [CHAP.   1 

evidence,  that  after  signing  a  written  agreement,  the  parties  made 
a  verbal  agreement,  varying  the  former,  provided  their  variations 
have  been  acted  upon,  and  the  original  agreement  can  no  longer  be 
enforced  without  a  fraud  on  one  party." 

The  distinction  taken  in  the  argument,  between  contracts  in  writing 
merely  and  contracts  under  seal,  appears  by  these  authorities  not  to 
be  important  as  it  respects  the  point  under  consideration,  and  jus- 
tice required  in  the  present  case,  that  the  parol  evidence  should  be 
received. 

It  was  said  that  the  promise  of  Payne  cannot  affect  Perkins,  and 
vice  versa.  But  as  they  were  joint  actors,  and  as  when  one  acted 
in  the  absence  of  the  other,  it  was  always  with  a  joint  view  to  the 
same  object,  they  cannot  be  separated,  but  must  be  considered  as 
joint  promisors. 

The  parol  promise,  it  is  contended,  was  without  consideration. 
This  depends  entirely  on  the  question  whether  the  first  contract 
was  waived.  The  plaintiff  having  refused  to  perform  that  contract, 
as  he  might  do,  subjecting  himself  to  such  damages  as  the  other 
parties  might  show  they  were  entitled  to  recover,  he  afterwards  went 
on  upon  the  faith  of  the  new  promise  and  finished  the  work.  This 
was  a  sufiicient  consideration.  If  Payne  and  Perkins  were  willing 
to  accept  his  relinquishment  of  the  old  contract  and  proceed  on  a 
new  agreement,  the  law,  we  think,  would  not  prevent  it. 

Motion  for  new  trial  overruled.^ 


LI:N^GEN'FELDER  et.  al..  Executors,  v.  THE  "WAIN'WRIGHT 
BREWING  COMPAI^Y,  Appellant 

Missouri  Supreme  Court,  October  Term,  1890 

[Reported  in   103  Missouri,   578.] 

Gantt,  p.  J.^  —  The  referee  found  that  Jungenfeld,  the  plaintiffs' 
testator,  was  not  entitled  to  the  commission  of  five  per  cent  on  the 
cost  of  the  refrigerator  plant.  He  found  that  Jungenfeld's  employ- 
ment as  architect  was  to  design  plans  and  make  drawings  and  speci- 
fications for  certain  brewery  buildings  for  the  Wainwright  Brewery 
Company   and   superintend   their   construction   to  completion   for   a 

>  Rtoudenmoicr  v.  Williamson,  20  Ala.  5.58;  Bishop  v.  Busse,  69  111.  403;  Cooke  v. 
Murphy,  70  111.  00;  Coyncr  v.  Lyndo,  10  Ind.  282;  Holmes  v.  Doanc,  9  Cush,  135; 
Ilollins  V.  Marsh,  128  Mass.  IIG;  Rotors  v.  RoRors,  1.30  Mass.  440;  Thomas  v.  Barnes, 
156  Mas.s.  581,  584;  Brieham  v.  Herrick,  17.3  Mass.  460,  467.  (But  see  Parrot  v. 
Mexican  Central  R.  Co.  207  Mass.  184);  Moore  v.  Detroit  Locomotive  Works,  14 
Mich.  206;  C,oc\,<\  v.  Linn,  47  Mich.  480;  ConklinR  v.  Tuttle,  52  Mich.  130;  Scanlan 
V.  Northwood,  147  Mich.  1.30;  Osborne  v.  O'Reilly,  42  N.  J.  Eq.  467;  Lattimore  v. 
Harsen,  14  .Johns.  .330;  Stewart  v.  Keteltas,  36  N.  Y.  388,  ncc.  See  also  Peck  v.  Rcqua, 
13  Gray,  407;  Kinj?  v.  Dulnth  Ry.  Co.  61  Minn.  482;  Hansen  v.  Gaar,  63  Minn.  94; 
Gaar  v.  Green.  6  N.  Dak.  48;  Dreifus  v.  Columbian  Co.,  104  Pa.  475;  Evans  v.  Oregon 
Ac.  R.  Co.  58  Wash.  420. 

'  The  statement  of  the  case  and  a  portion  of  the  opinion  arc  omitted. 


SECT.    Il]    LINGENFELDER   V.    WAINWRIGHT   BREWING    CO.  213 

commission  of  five  per  cent  on  the  cost  of  the  buildings.  He  found 
further  that  Jungenfeld's  contract  did  not  include  the  refrigerator 
plant  that  was  to  be  constructed  in  these  buildings.  He  further 
found,  and  the  evidence  do6s  not  seem  to  admit  of  a  doubt  as  to 
the  propriety  of  his  finding,  that  this  refrigerator  plant  was  ordered 
not  only  without  Mr.  Jungenfeld's  assistance,  but  against  his  wishes. 
He  was  in  no  way  connected  with  its  erection. 

"Mr.  Jungenfeld  was  president  of  the  Empire  Kefrigerating  Com- 
pany and  largely  interested  therein.  .  .  .  The  De  La  Vergne  Ice 
Machine  Company  was  a  competitor  in  business.  .  .  .  Against 
Mr.  Jungenfeld's  wishes  Mr.  Wainwright  awarded  the  contract  for 
the  refrigerating  plant  to  the  De  La  Vergne  Company.  .  .  .  The 
brewery  was  at  that  time  in  process  of  erection  and  most  of  the 
plans  were  made.  When  Mr.  Jungenfeld  heard  that  the  contract 
was  awarded  he  took  his  plans,  called  oflF  his  superintendent  on  the 
ground,  and  notified  Mr.  Wainwright  that  he  would  have  nothing 
more  to  do  with  the  brewery.  The  defendant  was  in  great  haste  to 
have  its  new  brewery  completed  for  divers  reasons.  It  would  be 
hard  to  find  an  architect  in  Mr.  Jungenfeld's  place  and  the  making 
of  new  plans  and  arrangements  when  another  architect  was  found 
would  involve  much  loss  of  time.  Under  these  circumstances  Mr. 
Wainwright  promised  to  give  Jungenfeld  five  per  cent  on  the  cost 
of  the  De  La  Vergne  ice  machine  if  he  would  resume  work.  Jungen- 
feld accepted  and  fulfilled  the  duties  of  superintending  architect  till 
the  completion  of  the  brewery. 

"As  I  understand  the  facts  and  as  I  accordingly  formally  find, 
defendant  promised  Jungenfeld  a  bonus  to  resume  work  and  com- 
plete the  original  contract  under  the  original  terms. 

"I  accordingly  submit  that  in  my  view  defendant's  promise  to 
pay  Jungenfeld  five  per  cent  on  the  cost  of  the  refrigerating  plant 
was  without  consideration,  and  recommend  that  tlie  claim  be  not 
allowed." 

The  referee  also  find  "that  Mr.  Jungenfeld  never  claimed  that  de- 
fendant had  broken  the  contract  or  intended  to  do  so,  or  that  any 
of  his  legal  rights  had  been  violated." 

The  learned  circuit  judge,  upon  this  state  of  facts,  held  that  the 
defendant  was  liable  on  this  promise  of  Wainwright  to  pay  the  ad- 
ditional five  per  cent  on  the  refrigerator  plant.  The  point  was  duly 
saved,  and  from  the  decision  this  appeal  is  taken. 

Was  there  any  consideration  for  the  promise  of  Wainwright  to 
pay  Jungenfeld  five  per  cent  on  the  refrigerator  plant  ?  If  there  was 
not,  plaintiff  cannot  recover  the  $3,449.75,  the  amount  of  that  com- 
mission. The  report  of  the  referee,  and  the  evidence  upon  which 
it  is  based,  alike  show  that  Jungenfeld's  claim  to  this  extra  compen- 
sation is  based  upon  Wainwright's  promise  to  pay  him  this  sum 
to  induce  him,  Jungenfeld,  to  complete  his  original  contract  under 
its  original  terms. 


214         LINGENFELDER    V.    WAINWRIGHT   BREWING    CO.     [CHAP.    I 

It  is  urged  upon  us  by  respondents  that  this  was  a  new  contract. 

JSTew  in  what?  Jungenfeld  was  bound  by  his  contract  to  design 
and  supervise  this  building.  Under  the  new  promise  he  was  not 
to  do  anything  more  or  anything  different.  What  benefit  was  to 
accrue  to  Wainwright?  He  was  to  receive  the  same  service  from 
Jungenfeld  under  the  new  that  Jungenfeld  was  bound  to  tender* 
under  the  original  contract.  What  loss,  trouble,  or  inconvenience 
could  result  to  Jungenfeld  that  he  had  not  already  assumed?  ISTo 
amount  of  metaphysical  reasoning  can  change  the  plain  fact  that 
Jungenfeld  took  advantage  of  Wainwright's  necessities,  and  extorted 
the  promise  of  five  per  cent  on  the  refrigerator  plant,  as  the  condi- 
tion of  his  complying  with  his  contract  already  entered  into.  !Nor 
had  he  even  the  flimsy  pretext  that  Wainwright  had  violated  any 
of  the  conditions  of  the  contract  on  his  part. 

Jungenfeld  himself  put  it  upon  the  simple  proposition  that,  "if 
he,  as  an  architect,  put  up  the  brewery,  and  another  company  put 
up  the  refrigerating  machinery,  it  would  be  a  detriment  to  the 
Empire  Refrigerating  Company"  of  which  Jungenfeld  was  presi- 
dent. To  permit  plaintiff  to  recover  under  such  circumstances  would 
be  to  offer  a  premium  upon  bad  faith,  and  invite  men  to  violate  their 
most  sacred  contracts  that  they  may  profit  by  their  own  wrong. 

''That  a  promise  to  pay  a  man  for  doing  that  which  he  is  already 
under  contract  to  do  is  without  consideration,"  is  conceded  by  re- 
spondents. The  rule  has  been  so  long  imbedded  in  the  common 
law  and  decisions  of  the  highest  courts  of  the  various  States  that 
nothing  but  the  most  cogent  reasons  ought  to  shake  it.  Harris  v. 
Carter,  3  E.  &  B.  559;  Silk  v.  Myrick,  2  Camp.  317;  1  Chitty  on 
Contracts  [11  Amer.  Ed.]  60;  Bartlett  v.  Wyman,  14  Johns.  260; 
Reynolds  v.  Nugent,  25  Ind.  328;  Ayres  v.  Railroad,  52  Iowa,  478; 
Festerman  v.  Parker,  10  Ind.  474;  Eblin  v.  Miller,  78  Ky.  371; 
Sherwin  &  Co.  v.  Brigham,  39  Ohio  St.  137;  Overdeer  v.  Wiley, 
30  Ala.  709;  Jones  v.  Miller,  12  Mo.  408;  Kick  v.  Merry,  23  Mo. 
72;  Laidlou  v.  Hatch,  75  111.  11;  Wimer  v.  Overseers  of  Poor,  104 
Penn.  St.  317;  Cobb  v.  Cowdery,  40  Yt.  25;  Vanderbilt  v.  Schreyer, 
91  N.  Y.  392. 

But  "it  is  carrying  coals  to  Newcastle"  to  add  authorities  on  a 
proposition  so  universally  accepted  and  so  inherently  just  and  right 
in  itself.  The  learned  counsel  for  respondents  do  not  controvert  the 
general  proposition.  Their  contention  is,  and  the  circuit  court 
agreed  with  them,  that,  when  Jungenfeld  declined  to  go  further  on 
his  contract,  the  defendant  then  bad  the  right  to  su^  for  damages, 
and  not  baving  elected  to  sue  Jungenfeld,  but  having  acceded  to  his 
demand  for  the  additional  compensation,  defendant  cannot  now  be 
hoard  to  say  his  promise  is  without  consideration.  While  it  is  true 
Jungenfeld  became  linble  in  damages  for  the  obvions  breach  of  his 
contract,  we  do  not  tbink  it  follows  that  defendant  is  estopped  from 
showing  its  promise  was  made  without  consideration. 


SECT.    Il]     LINGENFELDER    V.    WAINWRIGHT   BREWING    CO.  215 

It  is  true  that  as  eminent  a  jurist  as  Judge  Cooley,  in  Goebel  v. 
Linn,  47  Michigan,  489,  held  that  an  ice  company  which  had  agreed 
to  furnish  a  brewery  with  all  the  ice  they  might  need  for  their  busi- 
ness from  ISTovember  8,  1879,  until  January  1,  1881,  at  $1.75  per 
ton,  and  afterwards  in  May,  1880,  declined  to  deliver  any  more  ice 
unless  the  brewery  would  give  it  $3  per  ton,  could  recover  on  a 
promissory  note  given  for  the  increased  price.  Profound  as  is  our 
respect  for  the  distinguished  judge  who  delivered  that  opinion,  we 
are  still  of  the  opinion  that  his  decision  is  not  in  accord  with  the 
almost  universally  accepted  doctrine  and  is  not  convincing,  and  cer- 
tainly so  much  of  the  opinion  as  holds  that  the  payment  by  a  debtor 
of  a  part  of  his  debt  then  due  would  constitute  a  defence  to  a  suit 
for  the  remainder  is  not  the  law  of  this  State,  nor  do  we  think  of 
any  other  where  the  common  law  prevails. 

The  case  of  Bishop  v.  Busse,  69  111.  403,  is  readily  distinguishable 
from  the  case  at  bar.  The  price  of  brick  increased  very  considerably, 
and  the  owner  changed  the  plan  of  the  building,  so  as  to  require 
nearly  double  the  number;  owing  to  the  increased  price  and  change 
in  the  plans,  the  contractor  notified  the  party  for  whom  he  was 
building,  that  he  could  not  complete  the  house  at  the  original  prices, 
and,  thereupon,  a  new  arrangement  was  made,  and  it  is  expressly 
upheld  by  the  court  on  the  ground  that  the  change  in  the  buildings 
was  such  a  modification  as  necessitated  a  new  contract.  Nothing 
we  have  said  is  intended  as  denying  parties  the  right  to  modify  their 
contracts,  or  make  new  contracts,  upon  new  or  different  considera- 
tions and  bindinsT  themselves  thereby. 

"Wliat  we  hold  is  that,  when  a  party  merely  does  wbat  he  has  al- 
ready obligated  himself  to  do,  he  cannot  demand  an  additional  com- 
pensation therefor,  and,  although  by  taking  advantage  of  the  ne- 
cessities of  his  adversary,  he  obtains  a  promise  for  more,  the  law 
will  regard  it  as  nudum  pactum,  and  will  not  lend  its  process  to  aid 
in  the  wrong.^ 

»  Harris  v.  Watson,  Peake,  72;  Stilk  v.  Mvrick,  2  Camp.  317;  Fraser  v.  Hatton, 
2  C.  B.  N.  s.  218;  Jackson  v.  Cobbin,  8  M.  &  W.  790;  Mallalieu  v.  Hodgson,  16  Q.  B. 
689;  Harris  v.  Carter,  3  E.  &  B.  559;  Alaska  Packers'  Assoc,  v.  Domenico,  117  Fed. 
Rep.  99  (C.  C.  A.):  In  re  Riff,  205  Fed.  Rep.  406;  National  Elec.  Signalling  Co.  v. 
Fessenden,  207  Fed.  Rep.  915  (C.  C.  A.);  Frankfurt-Barnett  Co.  v.  William  Prym 
Co.  237  Fed.  Rep.  21  (C.  C.  A.)  Shriner  v.  Craft,  166  Ala.  146:  Feldman  v.  Fox,  112 
Ark.  223;  Main  Street  Co.  v.  Los  Angeles  Co.,  129  Cal.  301;  Poland  Paper  Co.  v. 
Foote,  118  Ga.  458:  Nelson  v.  Pickwick  Associated  Co.,  30  111.  App.  333;  Golds, 
borough  V.  Gable,  140  HI.  269;  Moran  v.  Peace,  72  HI.  App.  135,  139;  Allen  v.  Rouse- 
78  II.  App.  69;  Mader  v.  Cool  14  Ind.  App.  299;  Ayres  v.  Chicago,  &c.  R.  R.  Co., 
52  la.  478;  McCartv  v.  Hampton  Building  Assoc,  61  la.  287:  Awe  v.  Gadd,  179  la. 
520;  Westcott  v.  Mitchell,  95  Me.  377:  Bell  v.  Gates  97  Miss.  790:  Storck  v.  Mesker, 
55  Mo.  App.  26;  Smith  v.  Sickenger,  (Mo.  App.)  202  S.  W.  262;  Easteriy  v.  Jackson, 
29  Mont.  496;  Esterly  Co.  v.  Pringle,  41  Neb.  265;  Voorhees  v.  Combs,  33  N.  J.  L. 
494;  Natalizzio  v.  Valentino,  71  N.  J.  L.  500;  Bartlett  v.  Wyman,  14  Johns.  260; 
Vanderbilt  v.  Schreyer,  91  N.  Y.  392;  Carpenter  v.  Taylor,  164  N.  Y.  171;  Weed  v. 
Spears,  193  N.  Y.  289;  Schneider  v.  Henschenheimer,  55  N.  Y.  Supp.  630;  Festerman 
t.  Parker,  10  Ired.  474;  Gaar  v.  Green,  6  N.  Dak.  48;  Muir  v.  Morris,  80  Greg.  378; 
Erb.  V.  Brown,  69  Pa.  216;  Jones  v.  Risley,  91  Tex.  1;  Tolmie  v.  Deaa,  1  Wash.  Ter. 
46;   Magoon  v.  Marks,  11  Hawaii,  764,  ace.    See  also  Hartley  v.  Ponsonby,  7  E.  &  B. 


216  SHAD  WELL    V.    SHADWELL  [CHAP.   I 


SHAD  WELL  v.  SHADWELL  and  Another,  Executors,  &c. 

In  the  Common  Pleas,  November  26,  1860 

l^Beported  in  30  Law  Journal  Reports,  C.  P.  145] 

The  declaration  stated  that  the  testator  in  his  lifetime,  in  con- 
sideration that  the  plaintiff  would  marry  Ellen  Nicholl,  agreed  with 
and  promised  the  plaintiff,  who  was  then  unmarried,  in  the  terms 
contained  in  a  writing  in  the  form  of  a  letter  addressed  by  the  said 
testator  to  the  plaintiff,  which  writing  was  and  is  in  the  words, 
letters,  and  figures  following,  that  is  to  say :  — 

11th  August,  1838,  Geay's  Inn. 
My  dear  Lancey,  —  I  am  glad  to  hear  of  your  intended  marriage  with  Ellen 
Nicholl;  and,  as  I  promised  to  assist  you  at  starting,  I  am  happy  to  tell  you  that  I 
will  pay  to  you  one  hundred  and  fifty  pounds  yearly  during  my  life,  and  until  your 
annual  income  derived  from  your  profession  of  a  chancery  barrister  shall  amount  to 
six  hundred  guineas,  of  which  your  own  admission  will  be  the  only  evidence  that  I 
shall  receive  or  require. 

Your  ever  affectionate  uncle, 

Charles  Shadwell. 

Averment:  That  the  plaintiff  did  all  things  necessary,  and  all 
things  necessary  happened,  to  entitle  him  to  have  the  said  testator 
pay  to  him  eighteen  of  the  said  yearly  sums  of  150Z.  each  respec- 
tively, and  that  the  time  for  the  payment  of  each  of  the  said  eigh- 
teen yearly  sums  elapsed  after  he  married  the  said  Ellen  Nicholl, 
and  in  the  lifetime  of  the  said  testator;  and  that  the  plaintiff's  an- 
nual income  derived  from  his  profession  of  a  chancery  barrister 
never  amounted  to  six  hundred  guineas,  which  he  was  always  ready 
and  willing  to  admit  and  state  to  the  said  testator;  and  the  said 
testator  paid  to  the  plaintiff  twelve  of  the  said  eighteen  yearly  sums 
which  first  became  payable,  and  part,  to  wit,  12/.^,  of  the  thirteenth; 
yet  the  said  testator  made  default  in  paying  the  residue  of  the  said 
thirteenth  yearly  sum,  which  residue  is  still  in  arrear  and  unpaid, 
and  in  paying  the  five  of  the  said  eighteen  yearly  sums  which  last 
became  payable,  and  the  said  five  sums  are  still  in  arrear  and  unpaid. 

Fourth  plea:  That  before  and  at  the  time  of  the  making  of  the 
supposed  agreement  and  promise  in  the  declaration  mentioned,  the 
said  marriage  had  been  and  was,  without  any  request  by  or  on  the 
part  of  the  testator  touching  the  said  intended  marriage,  but  at  the 
request  of  the  plaintiff,  intended  and  agreed  upon  between  the  plain- 
tiff and  the  said  Ellen  Nicholl,  of  which  the  testator,  before  and  at 
the  time  of  making  the  supposed  agreement  and  promise,  also  had 
notice;  and  the  said  marriage  was,  after  tho  making  of  the  supposed 
agreement  and  promise,  duly  Imd  ;nid  solcinnizcd  as  in  the  dcclara- 


S72;  Eastman  v.  Miller,  11.3  la.  404;  Proctor  v.  Keith,  12  B.  Mon.  252;  Eblin  v. 
Miller's  Exec.  78  Ky.  .171;  Endriss  v.  Belle  Isle  Ico  Co.,  49  Mich.  279;  Conover  v. 
Stilwell,  34  N.  J.  L.  64,  57. 


SECT.    Il]  SHADWELL    V.    SHADWELL  217 

tion  mentioned,  at  the  request  of  the  plaintiff  and  without  the  request 
of  the  testator.  And  the  defendants  further  say  that,  save  and  ex- 
cept as  expressed  and  contained  in  the  writing  set  forth  in  the  dec- 
laration, there  never  was  any  consideration  for  the  supposed 
agreement  and  promise  in  the  declaration  mentioned,  or  for  the 
performance  thereof. 

Fifth  plea :  To  part  of  the  claim  of  the  plaintiff,  to  wit,  so  much 
thereof  as  accrued  due  in  and  after  the  year  1855,  the  defendants 
say  that,  although  the  supposed  agreement  and  promise  in  the  dec- 
laration mentioned  were  made  upon  the  terms  then  agreed  on  by 
the  plaintiff  and  the  testator,  that  the  plaintiff  should  continue  in 
practice  and  carry  on  the  profession  of  such  chancery  barrister  as 
aforesaid,  and  should  not  abandon  the  same;  yet  that,  after  the 
making  of  the  said  agreement  and  promise,  and  before  the  accruing 
of  the  supposed  causes  by  this  plea  pleaded  to  and  in  the  declaration 
mentioned,  or  any  part  thereof,  the  plaintiff  voluntarily,  and  with- 
out the  leave  or  license  of  the  testator,  relinquished  and  gave  up 
and  abandoned  the  practice  of  the  said  profession  of  a  chancery 
barrister,  which  before  and  at  the  time  of  the  said  making  of  the 
said  supposed  agreement  and  promise  he  had  so  carried  on  as  afore- 
said; and  although  the  plaintiff  could  and  might,  during  the  time 
in  this  plea  and  in  the  declaration  mentioned,  have  continued  to 
practise  and  carry  on  that  profession  as  aforesaid,  yet  the  plaintiff, 
after  such  abandonment  thereof,  never  was  ready  and  willing  to  prac- 
tise the  same  as  aforesaid,  but  practised  only  as  a  revising  barrister, 
that  is  to  say,  as  a  barrister  appointed  yearly  to  revise  the  list  of 
voters  for  the  year  for  the  county  of  Middlesex,  according  to  the 
provisions  of  the  statutes  in  that  behalf,  by  holding  open  courts  for 
such  revision  at  the  times  and  places  in  that  behalf  provided  by  the 
said  statutes. 

Second  replication  to  the  fourth  plea :  That  the  said  agreement 
declared  on  was  made  in  writing,  signed  by  the  said  testator,  and 
was  and  is  in  the  words,  letters,  and  figures  following,  and  in  none 
other,  that  is  to  say  (setting  out  the  letter  as  in  the  declaration 
above).  Averment:  That  the  plaintiff  afterwards  married  the  said 
Ellen  ISTicholl,  relying  on  the  said  promise  of  the  said  testator,  which 
at  the  time  of  the  said  marriage  was  in  full  force,  not  in  any  way 
vacated  or  revoked;  and  that  he  so  married  while  his  annual  in- 
come derived  from  his  profession  of  a  chancery  barrister  did  not 
amount,  and  was  not  by  him  admitted  to  amount,  to  six  hundred 
guineas. 

Second  replication  to  the  fifth  plea:  That  the  said  agreement  de- 
clared on  was  in  writing,  signed  by  the  said  testator,  and  was  and 
is  in  the  words,  letters,  and  figures  set  out  in  the  next  preceding 
replication,  and  in  none  other;  and  that  the  terms  upon  which  it 
is  in  the  fifth  plea  alleged  that  the  said  agreement  and  promise  were 
made,  were  no  part  of  the  agreement  and  promise  declared  on,  and 


218  SHAD  WELL    V.    SHAD  WELL  [CHAP.   I 

the  performance  of  them  by  the  plaintiff  was  not  a  condition  prece- 
dent to  the  plaintiff's  right  to  be  paid  the  said  annuity. 

Demurrers  to  the  replications  to  the  fourth  and  fifth  pleas.  Joinder 
in  demurrer. 

Bullar,  in  support  of  the  demurrers. 

V.  Harcourt,  in  support  of  the  replications. 

Ekle,  C.  J.,  now  delivered  the  judgment  of  himself  and  Keat- 
ing, J.  The  question  raised  by  the  demurrer  to  the  replication  to 
the  fourth  plea  is,  whether  there  was  a  consideration  to  support  the 
action  on  the  promise  to  pay  an  annuity  of  150L  per  annum.  If 
there  be  such  a  consideration,  it  is  a  marriage ;  therefore  the  promise 
is  within  the  Statute  of  Frauds,  and  the  consideration  must  appear 
in  the  writing  containing  the  promise,  that  is,  in  the  letter  of  the 
11th  of  August,  1838,  and  in  the  surrounding  circumstances  to  be 
gathered  therefrom,  together  with  the  averments  on  the  record.  The 
circumstances  are,  that  the  plaintiff  had  made  an  engagement  to  marry 
Ellen  ISTicholl,  his  uncle  promising  him  to  assist  him  at  starting,  by 
which,  as  I  understand  the  words,  he  meant  on  commencing  his 
married  life.  Then  the  letter  containing  the  promise  declared  on 
is  said  to  specify  what  the  assistance  would  be,  namely,  150/.  per 
annum  during  the  uncle's  life,  and  until  the  plaintiff's  professional 
income  should  be  acknowledged  by  him  to  exceed  six  hundred  guineas ; 
and  a  further  averment,  that  the  plaintiff,  relying  upon  his  promise, 
without  any  revocation  on  the  part  of  the  uncle,  did  marry  Ellen 
T^icholl.  Then,  do  these  facts  show  that  the  promise  was  in  consid- 
eration either  of  the  loss  to  be  sustained  by  the  plaintiff,  or  the 
benefit  to  be  derived  from  the  plaintiff  to  the  uncle,  at  his,  the 
uncle's,  request?  My  answer  is  in  the  affirmative.  First,  do  these 
facts  show  a  loss  sustained  by  the  plaintiff  at  the  uncle's  request? 
When  I  answer  this  in  the  affirmative,  I  am  aware  that  a  man's 
marriage  with  the  woman  of  his  choice  is  in  one  sense  a  boon,  and 
in  that  sense  the  reverse  of  a  loss;  yet,  as  between  the  plaintiff  and 
the  party  promising  an  income  to  support  the  marriage,  it  may  be 
a  loss.  The  plaintiff  may  have  made  the  most  material  changes  in 
his  position,  and  have  induced  the  object  of  his  affections  to  do  the 
same,  and  have  incurred  pecuniary  liabilities  resulting  in  embarrass- 
ment, which  would  be  in  every  sense  a  loss,  if  the  income  which  had 
been  promised  should  be  withheld ;  and  if  the  promise  was  made  in 
order  to  induce  the  parties  to  marry,  the  promise  so  made  would  be, 
in  legal  effect,  a  request  to  marry.  Secondly,  do  these  facts  show 
a  benefit  derived  from  the  plaintiff  to  the  uncle,  at  his  request?  In 
answering  again  in  the  affirmative,  I  am  at  liberty  to  consider  the 
relation  in  vvliicli  the  parties  stood,  and  the  interest  in  the  status 
of  the  nephew  which  the  uncle  declares.  The  marriage  primarily 
affects  the  parties  thereto :  but  in  the  second  degree  it  may  be  an 
object  of  interest  with  a  near  relative,  and  in  that  sense  a  benefit  to 
him.     The  benefit  is  also  derived  from  the  plaintiff  at  the  uncle's 


SECT.    Il]  SHADWELL   V.    SHADWELL  219 

request,  if  the  promise  of  the  annuity  was  intended  as  an  induce- 
ment to  the  marriage;  and  the  averment  that  the  plaintiff,  relying 
on  the  promise,  married,  is  an  averment  that  the  promise  was  one 
inducement  to  the  marriage.  This  is  a  consideration  averred  in 
the  declaration,  and  it  appears  to  me  to  be  expressed  in  the  letter, 
construed  with  the  surrounding  circumstances.  No  case  bearing  a 
strong  analogy  to  the  present  was  cited;  but  the  importance  of  en- 
forcing promises  which  have  been  made  to  induce  parties  to  marry 
has  been  often  recognized,  and  the  cases  of  Montefiori  v.  Montefiori 
and  Bold  v.  Hutchinson  are  examples.  I  do  not  feel  it  necessary 
to  add  any  thing  about  the  numerous  authorities  referred  to  in  the 
learned  arguments  addressed  to  us,  because  the  decision  turns  on 
a  question  of  fact,  whether  the  consideration  for  the  promise  is 
proved  as  pleaded.  I  think  it  is,  and  therefore  my  judgment  on  the 
first  demurrer  is  for  the  plaintiff.  The  second  demurrer  raises  the 
question,  whether  the  plaintiff's  continuing  at  the  bar  was  made  a 
condition  precedent  to  the  right  to  the  annuity.  I  think  not.  The 
uncle  promises  to  continue  the  annuity  until  the  professional  income 
exceeds  the  sum  mentioned,  and  I  find  no  stipulation  that  the  an- 
nuity shall  cease  if  the  professional  diligence  ceases.  My  judgment 
on  this  demurrer  is  also  for  the  plaintiff;  and  I  should  state  that 
this  is  the  judgment  of  my  brother  Keating  and  myself,  my  brother 
Byles  differing  with  us. 

Byles,  J.  I  am  of  opinion  that  the  defendant  is  entitled  to  the 
judgment  of  the  court  on  the  demurrer  to  the  second  replication  to 
the  fourth  plea.  It  is  alleged  by  the  fourth  plea,  that  the  defendant's 
testator  never  requested  the  plaintiff  to  enter  into  the  engagement 
to  marry,  or  to  marry,  and  that  there  never  was  any  consideration 
for  the  testator's  promise,  except  what  may  be  collected  from  the 
letter  itself  set  out  in  the  declaration.  The  inquiry,  therefore,  nar- 
rows itself  to  this  question :  Does  the  letter  itself  disclose  any  con- 
sideration for  the  promise?  The  consideration  relied  on  by  the 
plaintiff's  counsel  being  the  subsequent  marriage  of  the  plaintiff, 
I  think  the  letter  discloses  no  consideration.  It  is  in  these  words: 
[His  Lordship  read  it.]  It  is  by  no  means  clear  that  the  words  "at 
starting"  mean  "on  marriage  with  Ellen  l^icholl,"  or  with  any  one 
else.  The  more  natural  meaning  seems  to  me  to  be  "at  starting  in 
the  profession;"  for  it  will  be  observed  that  these  words  are  used 
by  the  testator  in  reciting  a  prior  promise,  made  when  the  testator 
had  not  heard  of  the  proposed  marriage  with  Ellen  Nicholl,  or.  so 
far  as  appears,  heard  of  any  proposed  marriage.  This  construction 
is  fortified  by  the  consideration,  that  the  annuity  is  not  in  terms 
made  to  begin  from  the  marriage,  but,  as  it  should  seem,  from  the 
date  of  the  letter.  Neither  is  it  in  terms  made  defeasible  if  Ellen 
Nicholl  should  die  before  marriage.  But  even  on  the  assumption 
that  the  words  "at  starting"  mean  "on  marriage,"  I  still  think  that 
no  consideration  appears  sufficient   to  sustain   the  promise.     The 


220  SHAD  WELL    V.    SHAD  WELL  [CHAP.    I 

promise  is  one  which  by  law  must  be  in  writing;  and  the  fourth 
plea  shows  that  no  consideration  or  request,  dehors  the  letter,  ex- 
isted, and  therefore  that  no  such  consideration  or  request  can  be 
alluded  to  by  the  letter.  Marriage  of  the  plaintiff  at  the  testator's 
express  request  would  be,  no  doubt,  an  ample  consideration;  but 
marriage  of  the  plaintiff  without  the  testator's  request  is  no  con- 
sideration to  the  testator.  It  is  true  that  marriage  is,  or  may  be, 
a  detriment  to  the  plaintiff,  but  detriment  to  the  plaintiff  is  not 
enough,  unless  it  either  be  a  benefit  to  the  testator,  or  be  treated  by 
the  testator  as  such,  by  having  been  suffered  at  his  request.  Suppose 
a  defendant  to  promise  a  plaintiff,  "I  will  give  you  500Z.  if  you 
break  your  leg;"  would  that  detriment  to  the  plaintiff,  should  it 
happen,  be  any  consideration?  If  it  be  said  that  such  an  accident 
is  an  involuntary  mischief,  would  it  have  been  a  binding  promise, 
if  the  testator  had  said,  "I  will  give  you  100?.  a  year  while  you 
continue  in  your  present  chambers?"  I  conceive  that  the  promise 
would  not  be  binding  for  want  of  a  previous  request  by  the  testator. 
Now,  the  testator  in  the  case  before  the  court  derived,  so  far  as  ap- 
pears, no  personal  benefit  from  the  marriage.  The  question,  there- 
fore, is  still  further  narrowed  to  this  point:  Was  the  marriage  at 
the  testator's  request?  Express  request  there  was  none.  Can  any 
request  be  impled  ?  The  only  words  from  which  it  can  be  contended 
that  it  is  to  be  implied  are  the  words,  "I  am  glad  to  hear  of  your 
intended  marriage  with  Ellen  ISTicholl."  But  it  appears  from  the 
fourth  plea,  that  that  marriage  had  already  been  agreed  on,  and 
that  the  testator  knew  it.  These  words,  therefore,  seem  to  me  to 
import  no  more  than  the  satisfaction  of  the  testator  at  the  engage- 
ment as  an  accomplished  fact.  No  request  can,  as  it  seems  to  me, 
be  inferred  from  them.  And  further,  how  does  it  appear  tliat  the 
testator's  implied  request,  if  it  could  be  implied,  or  his  promise,  if 
that  promise  alone  would  sufiice,  or  both  together,  were  intended  to 
cause  the  marriage,  or  did  cause  it,  so  that  the  marriage  can  be  said 
to  have  taken  place  at  the  testator's  request,  or,  in  other  words,  in 
consequence  of  that  request?  It  seems  to  me.  not  only  that  this  does 
not  appear,  but  that  the  contrary  appears;  for  the  plaintiff,  before 
the  letter,  had  already  bound  himself  to  marry,  by  placing  himself 
not  only  under  a  moral,  but  under  a  legal  oblicration  to  marry,  and 
the  testator  knew  it.  The  well-known  cases  which  have  been  cited 
at  thf  bar  in  support  of  the  position,  that  a  promise,  based  on  the 
consideration  of  doing  that  which  a  man  is  already  bound  to  do,  is 
invalid,  anply  to  this  case;  and  it  is  not  necessary,  in  order  to  in- 
validate the  considoration.  tlint  the  plaintiff's  prior  obligation  to 
afford  that  consideration  should  have  been  an  obligation  to  the  de- 
fendant. It  may  have  been  an  obligation  to  a  third  person:  see 
Herring  v.  Dorell  and  Atkinson  v.  Settree.  The  reason  why  the 
doing  what  a  man  is  already  bound  to  do  is  no  consideration,  is 
not  only  because  such  a  consideration  is  in  judgment  of  law  of  no 


SECT,     III  OE   CICCO    V.    SCHWEIZER  221 

value,  but  oecause  a  man  cau  iiardly  be  allowed  to  say  that  the  prior 
legal  obligation  was  not  his  uetui-mining  motive.  But,  whether  he 
can  be  allowed  to  say  so  or  not,  the  plaintiff  does  not  say  so  here. 
He  does,  indeed,  make  an  attempt  to  meet  this  difficulty  by  alleging, 
in  the  replication  to  the  fourth  plea,  that  he  married  relying  on  the 
testator's  promise;  but  he  shrinks  from  alleging  that,  though  he  had 
promised  to  marry  before  the  testator's  promise  to  him,  neverthe- 
less he  would  have  broken  his  engagement,  and  would  not  have 
married  without  the  testator's  promise.  A  man  may  rely  on  encour- 
agements to  the  performance  of  his  duty,  who  yet  is  prepared  to 
do  his  duty  without  those  encouragements.  At  the  utmost,  the  alle- 
gation that  he  relied  on  the  testator's  promise  seems  to  me  to  import 
no  more  than  that  he  believed  the  testator  would  be  as  good  as  his 
word.  It  appears  to  me,  for  these  reasons,  that  this  letter  is  no  more 
than  a  letter  of  kindness,  creating  no  legal  obligation.  In  their  judg- 
ment on  the  other  portions  of  the  record,  I  agree  with  the  rest  of  the 
Court.  Judgment  for  the  plaintiff} 


ATTILIO  DE  CICCO,  Respondent,  v.  JOSEPH  SCHWEIZER, 

Appellant 

New  Yokk  Court  of  Appeals,  October  15 — November  13,  1917 
[Reported  in  221  New  York,  431] 

Cakdozo,  J.  On  January  16,  1902,  "  articles  of  agreement "  were 
executed  by  the  defendant  Joseph  Schweizer,  his  wife  Ernestine, 
and  Count  Oberto  Gulinelli.  The  agreement  is  in  Italian.  We 
quote  from  a  translation  the  part  essential  to  the  declaration  of  this 
controversy :  "  Whereas,  Miss  Blanche  Josephine  Schweizer,  daughter 
of  said  Mr.  Joseph  Schweizer  and  of  said  Mrs.  Ernestine  Teresa 
Schweizer,  is  now  affianced  to  and  is  to  be  married  to  the  above  said 
Count  Oberto  Giacomo  Giovanni  Francesco  Maria  Gulinelli,  JSTow,  in 
consideration  of  all  that  is  herein  set  forth  the  said  Mr.  Joseph 
Schweizer  promises  and  expressly  agrees  by  the  present  contract  to 
pay  annually  to  his  said  daughter  Blanche,  during  his  own  life  and 
to  send  her,  during  her  lifetime,  the  sum  of  Two  Thousand  Five 
Hundred  dollars,  or  the  equivalent  of  said  sum  in  Francs,  the  first 
payment  of  said  amount  to  be  made  on  the  20th  day  of  January, 
1902."  Later  articles  provide  that  "  for  the  same  reason  heretofore 
set  forth,"  Mr.  Schweizer  will  not  change  the  provision  made  in  his 
will  for  the  benefit  of  his  daughter  and  her  issue,  if  any-  The 
yearly  payments  in  the  event  of  his  death  are  to  be  continued  by 
his  wife. 

1  Chichester  r.  Cobb,  14  L.  T.  Rep.  433:  Skeete  v.  Silberbprp:,  11  Times  L.  R.  491, 
ace.  Compare  Wright  v.  Wright,  114  la.  748;  Boord  v.  Boord.  Pelham  (So.  Aust.) 
58,  64;   Usher's  Ex.  v.  Flood,  83  Ky.  552;   Caborne  v.  Godfrey,  3  Desaus.  51 


222  DE   CICCO    V.    SCHWEIZER  [CHAP.    1 

On  January  20,  1902,  the  marriage  occurred.  On  the  same  day, 
the  defendant  made  the  first  payment  to  his  daughter.  He  con- 
tinued the  payments  annually  till  1912.  This  action  is  brought  to 
recover  the  installment  of  that  year.  The  plaintiff  holds  an  assign- 
ment executed  by  the  daughter,  in  which  her  husband  joined.  The 
question  is  whether  there  is  any  consideration  for  the  promised 
annuity. 

That  marriage  may  be  a  sufiicient  consideration  is  not  disputed. 
The  argument  for  the  defendant  is,  however,  that  Count  Gulinelli 
was  already  affianced  to  Miss  Schweizer,  and  that  the  marriage  was 
merely  the  fulfilment  of  an  existing  legal  duty.  For  this  reason,  it 
is  insisted,  consideration  was  lacking.  The  argument  leads  us  to 
the  discussion  of  a  vexed  problem  of  law  which  has  been  debated 
by  courts  and  writers  with  much  subtlety  of  reasoning  and  little 
harmony  of  results.  There  is  general  acceptance  of  the  proposition 
that  where  A  is  under  a  contract  with  B,  a  promise  made  by  one 
to  the  other  to  induce  performance  is  void.  The  trouble  comes  when 
the  promise  to  induce  performance  is  made  by  C,  a  stranger.  Dis- 
tinctions are  then  drawn  between  bilateral  and  unilateral  contracts; 
between  a  promise  by  C  in  return  for  a  new  promise  by  A,  and  a 
promise  by  C  in  return  for  performance  by  A.  Some  jurists  hold 
that  there  is  consideration  in  both  classes  of  cases  (Ames,  Two 
Theories  of  Consideration,  12  Harvard  Law  Eeview,  515;  13  id.  29, 
35;  Langdell,  Mutual  Promises  as  a  Consideration,  14  id.  496;  Leake, 
Contracts,  p.  622).  Others  hold  that  there  is  consideration  where 
the  promise  is  made  for  a  new  promise,  but  not  where  it  is  made 
for  performance  (Beale,  N^otes  on  Consideration,  17  Harvard  Law 
Review,  71;  2  Street,  Foundations  of  Legal  Liability,  pp.  114,  116; 
Pollock,  Contracts  (8th  ed.),  199;  Pollock,  Afterthoughts  on  Con- 
sideration, 17  Law  Quarterly  Review,  415;  7  Halsbury,  Laws  of 
England,  Contracts,  p.  385 ;  Abbott  v.  Doane,  163  Mass.  433).  Others 
hold  that  there  is  no  consideration  in  either  class  of  cases  (Willis- 
ton,  Successive  Promises  of  the  Same  Performance,  8  Harvard  Law 
Review,  27,  34;  Consideration  in  Bilateral  Contracts,  27  id.  503, 
521;  Anson  on  Contracts  [11th  ed.],  p.  92). 

The  storm-centre  about  which  this  controversy  has  raged  is  the 
case  of  Shadwell  v.  Shadwell  (9  C.  B.  [N.  S.]  159;  99  E.  C.  L. 
158)  which  arose  out  of  a  situation  similar  in  many  features  to  the 
one  before  us.  Nearly  everything  that  has  been  written  on  the  sub- 
ject has  been  a  commentary  on  that  decision.  There  an  uncle  prom- 
ised to  pay  his  nephew  after  marriage  an  annuity  of  £150.  At  the 
time  of  the  promise  the  nephew  was  already  engaged.  The  case  was 
heard  before  Erle,  Ch.  J.,  and  Kkatino  and  Byles,  JJ.  The 
first  two  judges  held  the  promise  to  be  enforeible.  Byles,  J.,  dis- 
sented. His  view  was  that  the  nephew,  being  already  affianced,  had 
incurred  no  detrimf-nt  upon  the  faith  of  tbe  promise,  and  hence  that 
consideration   was  lacking.     Neither  of  the  two  opinions  in  Shad- 


SECT.     Il]  DE    CICCO    V.    SCHWEIZER  223 

well  V.  Shadwell  can  rule  the  case  at  bar.  There  are  elements  of 
difference  in  the  two  cases  which  raise  new  problems.  But  the 
earlier  case,  with  the  literature  which  it  has  engendered,  gives  us 
a  point  of  departure  and  a  method  of  approach. 

The  courts  of  this  state  are  committed  to  the  view  that  a  promise 
by  A  to  B  to  induce  him  not  to  break  his  contract  with  C  is  void 
(Arend  v.  Smith,  151  N.  Y.  502;  Vanderbilt  v.  Schreyer,  91  N.  Y. 
392 ;  Seybolt  v.  N.  Y.,  L.  E.  &  W.  E.  K.  Co.,  95  N.  Y.  562 ;  Eobin- 
son  V.  Jewett,  116  N.  Y.  40).  If  that  is  the  true  nature  of  this 
promise,  there  was  no  consideration.  We  have  never  held,  however, 
that  a  like  infirmity  attaches  to  a  promise  by  A,  not  merely  to  B, 
but  to  B  and  C  jointly,  to  induce  them  not  to  rescind  or  modify  a 
contract  which  they  are  free  to  abandon.  To  determine  whether  that 
is  in  substance  the  promise  before  us,  there  is  need  of  closer  analysis. 

The  defendant's  contract,  if  it  be  one,  is  not  bilateral.  It  is  uni- 
lateral (Miller  v.  McKenzie,  95  JST.  Y.  575).  The  consideration 
exacted  is  not  a  promise,  but  an  act.  The  Count  did  not  promise 
anything.  In  effect  the  defendant  said  to  him:  If  you  and  my 
daughter  marry,  1  will  pay  her  an  annuity  for  life.  Until  marriage 
occurred,  the  defendant  was  not  bound.  It  would  not  have  been 
enough  that  the  Count  remained  willing  to  marry.  The  plain  im- 
port of  the  contract  is  that  his  bride  also  should  be  willing,  and  that 
marriage  should  follow.  The  promise  was  intended  to  affect  the 
conduct,  not  of  one  only,  but  of  both.  This  becomes  the  more  evident 
when  we  recall  that  though  the  promise  ran  to  the  Count,  it  was 
intended  for  the  benefit  of  the  daughter  (Durnherr  v.  Bau.  135  N. 
Y.  219).  When  it  came  to  her  knowledge,  she  had  the  right  to 
adopt  and  enforce  it  (Gifford  v.  Corrigan,  117  N".  Y.  257;  Buchanan 
V.  Tilden,  158  N.  Y.  109;  Lawrence  v.  Fox,  20  N.  Y.  268).  In 
doing  so,  she  made  herself  a  party  to  the  contract  (Gifford  v.  Cor- 
rigan, supra).  If  the  contract  had  been  bilateral,  her  position  might 
have  been  different.  Since,  however,  it  was  unilateral,  the  considera- 
tion being  performance  (Miller  v.  McKenzie,  supra),  action  on  the 
faith  of  it  put  her  in  the  same  position  as  if  she  had  been  in  form 
the  promisee.  That  she  learned  of  the  promise  before  the  marriage 
is  a  legitimate  inference  from  the  relation  of  the  parties  and  from 
other  attendant  circumstances.  The  writing  was  signed  by  her  par- 
ents; it  was  delivered  to  her  intended  husband;  it  was  made  four 
days  before  the  marriage;  it  called  for  a  payment  on  the  day  of 
the  marriage;  and  on  that  day  payment  was  made,  and  made  to 
her.  From  all  these  circumstances,  we  may  infer  that  at  the  time 
of  the  marriage  the  promise  was  known  to  the  bride  as  well  as  the 
husband,  and  that  both  acted  upon  the  faith  of  it. 

The  situation,  therefore,  is  the  same  in  substance  as  if  the  prom- 
ise had  run  to  husband  and  wife  alike,  and  had  been  intended  to 
induce  performance  by  both.  They  were  free  by  common  consent 
to  terminate  their  engagement  or  to  postpone  the  marriage.     If  they 


224  DE    CICCO    V.    SCHWEIZER  [CHAP.   I 

forbore  from  exercising  that  right  and  assumed  the  responsibilities 
of  marriage  in  reliance  on  the  defendant's  promise,  he  may  not 
now  retract  it.  The  distinction  between  a  promise  by  A  to  B  to 
induce  him  not  to  break  his  contract  with  C,  and  a  like  promise  to 
induce  him  not  to  join  with  C  in  a  voluntary  rescission,  is  not  a 
new  one.  It  has  been  suggested  in  cases  where  the  new  promise  ran 
to  B  solely,  and  not  to  B  and  C  jointly  (Pollock,  Contracts  [8th 
ed.],  p.  199;  Williston,  8  Harv.  L.  Rev.  36).  The  criticism  has  been 
made  that  in  such  circumstances  there  ought  to  be  some  evidence  that 
C  was  ready  to  withdraw  (Williston,  supra,  at  pp.  36,  37).  Whether 
that  is  true  of  contracts  to  marry  is  not  certain.  Many  elements 
foreign  to  the  ordinary  business  contract  enter  into  such  engage- 
ments. It  does  not  seem  a  far-fetched  assumption  in  such  cases 
that  one  will  release  where  the  other  has  repented.  We  shall  assume, 
•however,  that  the  criticism  is  valid  where  the  promise  is  intended 
as  an  inducement  to  only  one  of  the  two  parties  to  the  contract. 
It  may  then  be  sheer  speculation  to  say  that  the  other  party  could 
have  been  persuaded  to  rescind.  But  where  the  promise  is  held  out 
as  an  inducement  to  both  parties  alike,  there  are  new  and  different 
implications.  One  does  not  commonly  apply  pressure  to  coerce  the 
will  and  action  of  those  who  are  anxious  to  proceed.  The  attempt 
to  sway  their  conduct  by  new  inducements  is  an  implied  admission 
that  both  may  waiver;  that  one  equally  with  the  other  must  be 
strengthened  and  persuaded;  and  that  recission  or  at  least  delay  is 
something  to  be  averted,  and  something,  therefore,  within  the  range 
of  not  unreasonable  expectation.  If  pressure,  applied  to  both,  and 
holding  both  to  their  course,  is  not  the  purpose  of  the  promise,  it 
is  at  least  the  natural  tendency  and  the  probable  result. 

The  defendant  knew  that  a  man  and  a  woman  were  assuming  the 
responsibilities  of  wedlock  in  the  belief  that  adequate  provision  had 
been  made  for  the  woman  and  for  future  offspring.  He  offered  this 
inducement  to  both  while  they  were  free  to  retract  or  to  delay.  That 
they  neither  retracted  nor  delayed  is  certain.  It  is  not  to  be  expected 
that  they  should  lay  bare  all  the  motives  and  promptings,  some 
avowed  and  conscious,  others  perhaps  half-conscious  and  inarticulate, 
which  swayed  their  conduct.  It  is  enough  that  the  natural  conse- 
quence of  the  defendant's  promise  was  to  induce  them  to  put  the 
thought  of  rescission  or  delay  aside.  From  that  moment,  there  was 
no  longer  a  real  alternative.  There  was  no  longer  what  philosophers 
call  a  "living"  option.  This  in  itself  permits  the  inference  of  detri- 
ment (Smith  V.  Chadwick,  9  App.  Cas.  187,  196;  Smith  v.  Land 
S:  House  Corp.  28  Ch.  D.  7,  16;  Voorhis  v.  Olmstead,  66  N.  Y.  113, 
118;  Fottler  v.  Moseley,  179  Mass.  295).  "If  it  is  proved  that  the 
defendants  witli  a  view  to  induce  the  plaintiff  to  enter  into  a  contract 
made  a  statement  to  the  plaintiff  of  sucli  a  nature  as  would  be  likely 
to  induce  a  person  to  enter  into  the  contract,  it  is  a  fair  inference 
of  fact  that  he  was  induced  to  do  so  by  the  statement"  (Blackburn, 


SECT.     Il]  DE    CICCO    V.    SCHWEIZER  225 

L.  J.,  in  Smith  v.  Cliadwick,  supra).  The  same  inference  follows, 
not  so  inevitably,  but  still  legitimately,  where  the  statement  is  made 
to  induce  the  preservation  of  a  contract.  It  will  not  do  to  divert  the 
minds  of  others  from  a  given  line  of  conduct,  and  then  to  urge  that 
because  of  the  diversion  the  opportunity  has  gone  by  to  say  how 
their  minds  would  otherwise  have  acted.  If  the  tendency  of  the 
promise  is  to  induce  them  to  persevere,  reliance  and  detriment  may 
be  inferred  from  the  mere  fact  of  performance.  The  springs  of  con- 
duct are  subtle  and  varied.  One  who  meddles  with  them  must  not 
insist  upon  too  nice  a  measure  of  proof  that  the  spring  which  he 
released  was  effective  to  the  exclusion  of  all  others. 

One  other  line  of  argument  must  be  considered.  The  suggestion 
is  made  that  the  defendant's  promise  was  not  made  animo  contra- 
hendi. It  was  not  designed,  we  are  told,  to  sway  the  conduct  of 
any  one;  it  was  merely  the  oifer  of  a  gift  which  found  its  motive  in 
the  engagement  of  the  daughter  to  the  Count.  Undoubtedly,  the 
prospective  marriage  is  not  to  be  deemed  a  consideration  for  the 
promise  "unless  the  parties  have  dealt  with  it  on  that  footing." 
(Holmes,  Common  Law,  p.  292;  Fire  Ins.  Assn.  v.  Wickham,  141 
U.  S.  564,  579).  "Nothing  is  consideration  that  is  not  regarded  as 
such  by  both  parties"  (Philpot  v.  Gruninger,  14  Wall.  570,  577; 
Pire  Ins.  Assn.  v.  Wickham,  supra).  But  here  the  very  formality 
of  the  agreement  suggests  a  purpose  to  aifect  the  legal  relations  of 
the  signers.  One  does  not  commonly  pledge  one's  self  to  generosity 
in  the  language  of  a  covenant.  That  the  parties  believed  there  was 
a  consideration  is  certain.  The  document  recites  the  engagement  and 
the  coming  marriage.  It  states  that  these  are  the  "consideration" 
for  the  promise.  The  failure  to  marry  would  have  made  the  promise 
ineffective.  In  these  circumstances  we  cannot  say  that  the  promise 
was  not  intended  to  control  the  conduct  of  those  whom  it  was  de- 
signed to  benefit.  Certainly  we  cannot  draw  that  inference  as  one 
of  law.  Both  sides  moved  for  the  direction  of  a  verdict,  and  the 
trial  judge  became  by  consent  the  trier  of  the  facts.  If  conflicting 
inferences  were  possible,  he  chose  those  favorable  to  the  plaintiffs. 

The  conclusion  to  which  we  are  thus  led  is  reinforced  by  those 
considerations  of  public  policy  which  cluster  about  contracts  that 
touch  the  marriage  relation.  The  law  favors  marriage  settlements; 
and  seeks  to  uphold  them.  It  puts  them  for  many  purposes  in  a 
class  by  themselves  (Phalen  v.  U.  S.  Trust  Co.,  186  N.  Y.  178,  181). 
It  has  enforced  them  at  times  where  consideration,  if  present  at  all, 
has  been  dependent  upon  doubtful  inference  (MclSTutt  v.  MclSTutt, 
116  Ind.  545;  Appleby  v.  Appleby,  100  Minn.  408).  It  strains,  if 
need  be,  to  the  uttermost  the  interpretation  of  equivocal  words  and 
conduct  in  the  effort  to  hold  men  to  the  honorable  fulfilment  of 
engagements  designed  to  influence  in  their  deepest  relations  the  lives 
of  others. 

The  judgment  should  be  affirmed  with  costs. 
8 


226  ENGLAND    V.    DAVIDSON  [CHAP.    I 

ENGLAND  V.  DAVIDSON 

In  the  Queen's  Bench,  May  5,  1840 
[Reported  in  11  Adolphus  &  Ellis,  856] 

Assumpsit.  The  declaration  stated  that  heretofore,  to  wit,  &c., 
the  defendant  caused  to  be  published  a  certain  hand-bill,  placard, 
or  advertisement,  headed  'Tifty  pounds  reward;"  whereby,  after 
reciting  that,  late  on  the  night  of,  &c,,  the  mansion-house  of  defend- 
ant, at,  &c.,  was  feloniously  entered  by  three  men,  who  effected  their 
escajje;  that  two  men  had  been  taken  into  custody  on  suspicion  of 
having  been  concerned  in  the  felony;  and  that  a  third,  supposed  to 
belong  to  the  gang,  had  been  traced  to  Carlisle,  and  was  of  the  fol- 
lowing description,  &c.,  the  defendant  did  promise  and  undertake 
that  whoever  would  give  such  information  as  should  lead  to  the  con- 
viction of  the  offender  or  offenders  should  receive  the  above  reward : 
that  plaintiff,  confiding,  &c.,  did  afterwards,  to  wit,  on,  &c.,  give 
such  information  as  led  to  the  conviction  of  one  of  the  said  offenders, 
to  wit,  one  David  Robson ;  and  that  afterwards,  to  wit,  at  the  Assizes 
for  Northumberland,  ,D.  R.,  who  was  guilty  of  the  said  offence,  to 
wit,  the  feloniously  entering,  &c.,  was  in  due  course  of  law  convicted 
of  the  said  offence  of  feloniously  entering,  &-c.,  in  consequence  of 
such  information  so  given  by  plaintiff;  of  all  which  said  several 
premises  defendant  afterwards,  to  wit,  on,  &c.,  had  notice,  and  was 
then  requested  by  plaintiff  to  pay  him  the  said  sum  of  SOL ;  and  de- 
fendant afterwards,  to  wit,  on,  &c.,  in  consideration  of  the  premises, 
then  promised  plaintiff  to  pay  him  the  sum  of  507.  Breach :  that, 
although  defendant,  in  part  performance  of  his  said  promise  and 
undertaking,  to  wit,  on,  &c.,  did  pay  to  plaintiff  the  sum  of  5?.  55., 
in  part  payment  of  the  said  sum  of  507.,  yet,  &c.  (breach :  non-pay- 
ment of  the  residue). 

Third  plea :  That  heretofore,  and  long  before  and  at  the  time  when 
the  house  of  defendant  was  so  feloniously  entered,  and  continually 
from  thence  hitherto,  plaintiff  was,  and  now  is,  a  constable  and  po- 
lice officer  of  the  district  where  the  said  house  of  defendant  is  situ- 
ate, and  the  said  offence  was  committed;  and  it  then  was  the  duty 
of  plaintiff,  as  such  constable  and  police  officer,  to  have  given  and  to 
give  every  information  which  might  lead  to  the  conviction  of  the 
said  offender,  and  to  apprehend  and  prosecute  him  to  conviction, 
if  guilty,  without  any  payment  or  reward  to  him  made  in  that  be- 
half :  that,  by  the  said  advertisement  partly  set  out  in  the  declara- 
tion, defendant  gave  notice  and  promised  that  whoever  would  give 
8uch  information  to  plaintiff,  therein  described  as  police  officer 
Hexhnm,  as  shouh]  lead  to  the  conviction  of  the  offender  or  offenders, 
shonld  rfff'ivf  tlic  siiid  reward  in  the  said  advertisement  mentioned, 
niid  in  no  otiirr  nuitnicr  whatever:  and  that,  by  reason  of  the  premises, 
the  said  jtroinise  was  and  is  void  in  law.     Verification. 


SECT.    II  ]  POOL    V.    CITY   OF   BOSTON  227 

Demurrer :  assigning  for  causes  that  the  plea  amounts  to  the  gen- 
eral issue,  and  does  not  deny,  or  confess  and  avoid,  and  is  multifari- 
ous, and  tenders  an  immaterial  issue.     Joinder. 

Ingham  now  appeared  for  the  plaintiii;  but  the  Court  called  on 

Martin,  for  the  defendant,  JSTo  consideration  is  shown  on  this 
record  for  the  defendant's  promise;  the  plaintiff  was  bound  to  do 
that,  the  doing  of  which  is  stated  as  the  consideration.  The  duty 
of  a  constable  is  to  do  his  utmost  to  discover,  pursue,  and  appre- 
hend felons.  Com.  Dig.,  Leet  (M.  9),  (M.  10)  ;  Justices  of  Peace 
(B.  79).  It  has  been  laid  down  that  a  sailor  cannot  recover  on  a 
promise  by  the  master  to  pay  him  for  extra  work  in  navigating  the 
ship,  the  sailor  being  bound  to  do  his  utmost,  independently  of  any 
fresh  contract.  Harris  v.  Watson,^  explained  by  Lord  Ellenbor- 
ough  in  Stilk  v.  Myrick.^  The  principle  was  recognized  in  New- 
man V.  Walters,^  where  the  case  of  a  passenger  was  distinguished. 
[Coleridge,  J.  Those  cases  turn  merely  on  the  nature  of  the  con- 
tract made  by  the  sailor.]  If  the  duty  here  incumbent  on  the  plain- 
tiff was  to  do  all  that  the  declaration  lays  as  the  consideration,  the 
case  is  the  same  as  if  he  had  been  under  a  previous  contract  to  do 
all.  The  cases  on  the  subject  of  consideration  are  collected  in  note 
(b)  to  Barber  v.  Fox.  {^Ingham.  The  constable  was  not  bound  to 
procure  evidence.]  The  contract  here  declared  upon  is  against  public 
policy. 

LoKD  Denman",  C,  J.  I  think  there  maj  be  services  which  the 
constable  is  not  bound  to  render,  and  which  he  may  therefore  make 
the  ground  of  a  contract.  We  should  not  hold  a  contract  to  be  against 
the  policy  of  the  law,  unless  the  grounds  for  so  deciding  were  very 
clear. 

LiTTLEDALE,  Patteson,  and  Coleridge,  JJ.,  concurred. 

Judgment  for  the  plaintiff ^ 


GEORGE  F.  POOL  v.  THE  CITY  OF  BOSTON" 

Supreme  Judicial  Court  of  Massachusetts, 

November  Term,  1849 

{^Reported  in  5  Cushing,  219] 

This  was  an  action  of  assumpsit  brought  in  this  court  to  recover 
the  sum  of  $2000,  as  a  reward  to  which  the  plaintiff  alleged  he  was 
entitled,  and  was  submitted  to  the  court  upon  an  agreed  statement 
of  facts,  from  which  it  appeared  as  follows :  — 

The  city  government  of  Boston  having  authorized  the  mayor  to 
offer  a  reward  "for  the  detection  and  conviction  of  any  incendiary 

1  Peake,  N.  P.  C.  72.  3  2  Campb.  317;  s.  c.  6  Esp.  129. 

«  3  B.  &  P.  612.  *  See  Bent  v.  Wakefield  Bank.  4  C.  P.  D.  1. 


228  POOL    V.    CITY   OF   BOSTON  [CHAP.    I 

or  incendiaries"  who  had  set  fire  to  any  building  in  the  city,  or 
might  do  so,  within  a  given  period,  the  mayor  accordingly  offered 
the  reward  above  mentioned  "for  the  detection  and  conviction  of 
said  incendiary  or  incendiaries"  within  the  time  specified. 

The  plaintiff  was  a  watchman  of  the  city,  duly  appointed,  and 
while  in  the  performance  of  his  duty  as  such  watchman,  discovered 
one  Edmund  Hollihan  setting  fire  to  a  certain  outhouse  of  one  Chase, 
in  the  night  of  the  20th  of  September,  1845.  The  plaintiff  thereupon 
made  a  complaint  in  the  police  court  against  Hollihan  for  burning 
a  dwelling-house  in  the  night  time,  upon  which  complaint  he  was 
committed  for  trial.  He  was  afterwards  indicted  at  the  December 
term  of  the  municipal  court,  1845,  for  setting  fire  to  the  outhouse 
of  Chase,  in  the  night  time  following  the  20th  of  September,  1845, 
and  at  the  February  term,  1846,  was  tried,  found  guilty,  and  sentenced 
to  six  months'  imprisonment  in  the  house  of  correction. 

The  plaintiff,  thereupon,  claimed  the  above  reward  of  $2000,  and 
brought  this  action  to  recover  the  same. 

M.  S.  Clarhe  for  the  plaintiff. 

P.  W.  Chandler,  city  solicitor,  for  the  defendants. 

Wilde,  J.  The  defence  to  this  action  is,  that  the  plaintiff  has 
done  no  more  than  it  was  his  duty  as  a  watchman  to  do,  and  that 
a  promise  of  a  reward  to  a  man  for  doing  his  duty  is  illegal,  or  void 
for  want  of  consideration.  The  leading  case  in  support  of  the  de- 
fence is  that  of  Stotesbury  v.  Smith,  2  Bur.  924,  in  which  it  was 
held,  that  it  was  illegal  for  the  officer,  in  that  case,  to  take  money 
for  doing  his  duty.  He  was  a  bailiff,  and  the  defendant  promised  to 
pay  him  a  sum  of  money,  in  case  he  would  accept  the  defendant  and 
another  to  be  bail  for  a  third  person.  It  was  decided,  that  no  action 
could  be  maintained  on  such  a  promise.  See  also  England  v.  David- 
son, 3  P.  &  D.  594. 

The  same  principle  has  been  applied  to  promises  made  to  persons 
not  being  public  officers;  such  as  promises  to  seamen  to  pay  them 
extra  wages  for  the  performance  of  their  duty. 

"Every  seaman,"  says  Chancellor  Kent,  in  his  Commentaries  (3 
Kent,  185),  "is  bound,  from  the  nature  and  terms  of  his  contract,  to 
do  his  duty  in  the  service  to  the  utmost  of  his  ability,  and,  therefore, 
a  promise  made  by  the  master  when  the  ship  is  in  distress  to  pay 
extra  wages  as  an  inducement  to  extraordinary  exertion,  is  illegal 
and  void."  vSo  it  was  held  by  Lord  Kenyon,  in  the  case  of  Harris 
V.  Watson,  Peake,  72.  But  it  was  held  by  Lord  Ellenborough,  that 
sucli  a  promise  was  not  void  on  the  ground  of  illegality,  but  on  the 
groiiii(l  of  a  want  of  consideration,  whicli,  as  it  seems  to  us,  is  better 
founded  on  general  principles.  Stilk  v.  Myrick,  2  Camp.  317;  Bridge 
V.  <^^age,  Cro.  Jac.  103.  But  however  tliis  may  be,  it  is  well  settled 
that  such  a  promise  is  void. 

So  it  has  been  decided,  that  a  i)romise  of  extra  compensation  to 
a  witness,  in  case  he  would  attend  court,  and  give  testimony,  at  con- 


SECT.    II]  KEITH    &    HASTINGS    V.    MILES  229 

siderable  expense  and  inconvenience  to  himself,  was  void,  and  that 
he  could  only  recover  his  fees  allowed  by  law,  he  having  done  no 
more  than  he  was  in  duty  bound  to  do. 

These  decisions,  and  the  principles  on  which  they  are  founded, 
are  decisive  against  the  plaintiff's  claim  in  the  present  case;  it  was 
his  duty,  when  on  the  watch  he  discovered  Hollihan  setting  fire  to 
the  outhouse,  to  make  complaint,  and  cause  him  to  be  arrested,  or 
to  give  notice  to  the  mayor,  or  some  other  city  officer,  that  they  might 
prosecute  him.  He  preferred  himself  to  prosecute  rather  than  to 
give  notice  to  the  city  authorities;  doubtless  with  the  hope  of  en- 
titling himself  thereby  to  the  large  reward  offered.  But  this  will 
not  help  him.  The  principal  object  of  the  reward  offered  was  to 
obtain  the  detection  of  the  offender;  the  conviction  was  required 
to  ascertain  who  was  the  offender.  But  to  entitle  the  plaintiff  to 
the  reward,  he  must  show  that  he  is  so  entitled,  as  well  for  the  de- 
tection as  for  the  conviction  of  the  offender.  The  reward  cannot 
be  apportioned.  But  the  plaintiff  is  not  entitled  thereto  for  either 
service.  He  discovered  the  offender  while  he  was  on  duty  as  a  watch- 
man, and  was  bound  to  give  notice,  or  to  cause  him  to  be  arrested; 
and  he  preferred  the  latter  course;  but  he  could  not  thereby  subject 
the  defendants  to  a  liability,  to  which  they  would  not  be  subject,  if 
he  had  given  notice  to  some  one  of  the  city  officers. 

For  these  reasons,  briefly  stated,  and  on  principles  well  settled  by 
the  authorities,  we  are  of  opinion  that  this  action  cannot  be  main- 
tained; and  the  plaintiff  must  become  nonsuit.^ 


KEITH  &  HASTIIS^GS,  Admrs.,  &c.  v.  ALFRED  MILES 
Mississippi  Supreme  Court,  October  Term,  1860 
{^Reported  in  39  Mississippi  442] 
Error  to  the  Probate  Court  of  Panola  County.     Hon.  J.  T.  M. 

BURBRIDGE,    judge. 

H.  A.  Barr,  for  plaintiffs  in  error. 

1  Witty  V.  Southern  Pacific  Co.,  76  Fed.  Rep.  217;  Union  Pacific  R.  v.  Belek,  211 
Fed.  699;  Morrell  v.  Quarles,  .35  Ala.  544,  548;  Grafton  v.  St.  Louis,  &c.  Ry.  Co.,  51 
Ark.  504;  Lees  v.  Colgan,  120  Cal.  262;  Matter  of  Russell's  Application,  51  Conn. 
577;  Hogan  v.  Stophlet,  179  111.  150;  Hayden  v.  Souger,  56  Ind.  42,  48;  Taft  v.  Hyatt, 
105  Kas.  35,  42;  Marking  v.  Needy,  8  Bush,  22;  Da  vies  v.  Burns,  5  .\llen,  349;  Studley 
V.  Ballard,  169  Mass.  295;  Hartley  v.  Granville,  214  Mass.  38;  Foley  v.  Piatt,  105 
Mich.  635;  Day  v.  Putnam,  Ins.  Co.,  16  Minn.  408;  Ex  parte  Gore,  57  Miss.  251; 
Kick  V.  Merry,  23  Mo.  72;  Thornton  v.  Missouri,  &c.  Ry.  Co.,  42  Mo.  App.  58;  Ward 
V.  Adams,  95  Neb.  781;  Temple  v.  Brooks,  165  N.  Y.  App.  D.  661;  Gilmore  v.  Lewis, 
12  Ohio,  281;  Smith  v.  Whildin,  10  Pa.  39;  Stamper  v.  Temple,  6  Humph.  113;  Brown 
X.  Godfrey,  33  Vt.  120,  ace.  If  more  is  done  than  the  legal  duty  requires  there  is; 
sufficient  consideration.  Morrell  v.  Quarles,  35  Ala.  544;  Chambers  v.  Ogle,  117  Ark. 
242;  Hayden  v.  Souger,  56  Ind.  42;  Smith  x.  Fenner,  102  Kan.  830;  Trundle  v.  Riley, 
17  B.  Mon.  396;  Pilie  v.  New  Orleans,  19  La.  Ann.  274;  Forsythe  v.  Murnane,  113 
Minn.  181;  McCandless  v.  Alleghany,  &c.  Co.,  152  Pa.  139;  Texas  Cotton-Press  Co. 
V.  Mechanics'  Co.,  54  Tex.  319;  Davis  v.  Munson,  43  Vt.  576;  Reif  v.  Page,  55  Wis. 
496.    See  also  Bent  v.  Wakefield  Bank,  4  C.  P.  D.  1 ;   Long  v.  Neville,  36  Cal.  455. 


230  KEITH    &    HASTINGS    V.    MILES  [CHAP,    I 

The  item  in  tlie  account  for  board  ought  to  have  been  allowed. 
The  guardian  had  a  right  to  command  the  ward  to  board  with  him, 
and  the  ward  was  under  obligation  to  obey  him.  There  was  there- 
fore no  consideration  for  the  promise  of  the  guardian  to  board  him 
without  charge. 

If  the  master  of  a  ship  promise  his  crew  an  addition  to  their  fixed 
wages  in  consideration  of  extraordinary  exertions  during  a  storm, 
this  promise  is  nudum  pactum  —  the  performance  of  an  act  which 
it  was  before  legally  incumbent  on  the  party  to  perform,  being  in 
law  an  insufficient  consideration.     Chitty  on  Con.  54. 

And  so  it  would  be  in  any  case  where  the  only  consideration  of  the 
defendant's  promise  was  the  promise  of  the  plaintiff  to  do,  or  his 
actually  doing,  something  which  he  was  previously  bound  to  do. 
€hitty  on  Con.  54. 

JSTo  counsel  offered  for  defendant  in  error. 
Harris,  J.,  delivered  the  opinion  of  the  court: 
The  defendant  in  error,  when  about  ten  or  twelve  years  old,  left 
the  house  of  his  guardian,  Alexander  Miles,  plaintiffs'  intestate, 
and  went  to  the  house  of  his  uncle  by  marriage,  "and  there  in  the 
neighborhood  remained  until  his  guardian  persuaded  him  to  go  and 
live  with  him,  making  him  the  following  promises:  that  he,  the 
guardian,  would  not  charge  him,  the  said  defendant,  any  board; 
that  he  would  send  him  to  school  and  make  no  charge  for  the  same." 
The  defendant  went  to  live  with  plaintiff's  intestate,  his  said 
guardian,  and  remained  there  about  twelve  months. 

On  final  settlement  of  the  guardianship  account,  plaintiffs  in  error 
claimed  allowance  of  sixty  dollars  for  the  board  of  defendant,  and 
also  amounts  paid  for  tuition. 

Exceptions  were  filed  to  these  items  in  the  court  below,  and  sus- 
tained by  the  court.  This  writ  of  error  is  now  prosecuted  here  to 
revise  that  judgment. 

It  appears  in  this  record  that  the  defendant  paid  no  board  at  his 
uncle's  house  during  his  stay  there;  and  upon  this  ground,  we  sup- 
pose, it  was  thought,  in  the  court  below,  a  sufficient  consideration 
arose  to  sustain  the  promise  of  the  guardian  to  board  and  school  the 
defendant  without  charge. 

Between  adults,  or  where  no  duty  of  obedience  existed,  a  promise 
made  under  these  circumstances  would  doubtless  be  obligatory,  upon 
the  ground  that  injury  and  loss  would  otherwise  be  occasioned  to 
dcfoTidaut  by  his  abandonment  of  his  uncle's  house,  where  he  paid 
no  board.  But  a  different  rule  is  held  in  cases  where  it  is  the  legal 
duty  of  the  promisee  to  do,  without  reward,  the  act  induced  by  the 
promise  sought  to  be  enforced. 

No  action  will  lie  to  enforce  a  promise  for  doing  that  which  it 
was  thf!  y>urty's  legal  duty  to  do,  without  such  promise  or  reward, 
"for  this  would  bo  extortion  and  illegal."  2  Tucker's  Lect.  137; 
2  Burr.  1{.  924;  2  Black.  K.  204;  Chitty  on  Con.  54. 


SECT.   Il]  FINK   V.   SMITH  231 

The  ward  in  this  case,  being  under  the  legal  control  of  his  guar- 
dian, had  no  right  to  rebel  against  his  authority,  leave  his  house,  or 
refuse  obedience  to  his  lawful  directions.  It  was  his  legal  duty, 
as  well  as  his  highest  interest,  to  submit  himself  cheerfully  to  the 
directions  of  his  guardian;  and  he  cannot  be  permitted  to  exact 
a  reward  for  the  performance  of  a  duty  so  obviously  incumbent  on 
him.  The  law  will  not  presume  that  injury  or  loss  could  arise  to 
him  in  the  discharge  of  that  duty,  and  hence  no  consideration  for 
the  promise  to  board  and  school  him  could  arise  to  support  it,  against 
his  guardian. 

The  promise  relied  on  to  avoid  the  items  of  board  and  tuition 
claimed  in  the  account  of  plaintiff's  intestate  being  without  consid- 
eration is  void.  The  court  therefore  erred  in  rejecting  these  items 
on  that  ground. 

Let  the  judgment  and  decree  of  the  court  below  be  reversed,  and 
cause  remanded  for  further  proceedings  in  accordance  with  this 
opinion.^ 


WILLIAM  McCLELLAN  FINK  v.  H.  S.  SMITH,  Appellant 

Pennsylvania  Supreme  Court,  May  22-July  18,  1895 

l^Reported  in  170  Pennsylvania,  124] 

Dean,  J.  Smith,  the  defendant,  at  a  sheriff's  sale  of  the  per- 
sonal property  of  one  Sarah  Hyde,  wife  of  George  Hyde,  purchased 
a  mare;  then,  as  a  mere  act  of  kindness  towards  Mrs.  Hyde,  he  left 
the  animal  temporarily  with  her;  some  months  afterwards,  George 
Hyde,  the  husband,  sold  the  mare  to  Fink,  the  plaintiff,  who  took 
her  into  his  possession;  Smith,  the  owner,  hearing  of  this,  went  to 
Fink  and  demanded  his  property,  but  he  refused  to  surrender  pos- 
session; then  Smith  informed  Gallatin,  the  sheriff,  who  had  sold 
her  to  him,  of  the  wrong  and  threatened  to  replevy  her;  Gallatin 
replied  that  was  not  necessary  as  he  would  get  her  for  him;  Gallatin 
went  to  Fink,  and  obtained  a  promise  from  him  to  restore  the  mare 
to  Smith  without  a  replevin ;  then  Smith  again  went  to  Fink,  and 
the  mare  was  delivered  to  him  on  the  condition  that,  if  on  an  indict- 
ment for  larceny  of  the  mare  then  pending  against  George  Hyde 
there  should  be  an  acquittal,  the  mare  should  be  returned,  but  if 
Hyde  were  convicted.  Smith  was  to  keep  her.  Hyde  was  acquitted 
of  larceny.  Thereupon,  Fink  replevied  the  mare.  When  the  case 
came  to  trial,  the  facts  turned  out  as  we  have  stated  them  from  the 
admissions  of  the  parties  and  the  findings  ofthe  jury.  The  verdict 
was  for  Fink,  plaintiff,  in  damages  to  the  value  of  the  mare.  Hence 
this  appeal  by  Smith,  defendant. 

The  controlling  assignment  of  error  and  which  in  substance  em- 
braces all  the  error  alleged  is  raised  by  the  following  excerpt  from 
*  See  also  Orr  v.  Panford,  74  Mo.  App.  187. 


232  FINK    V.    SMITH  [CHAP.   I 

the  charge  of  the  learned  judge  of  the  court  below:  "The  only  ques- 
tion remaining  in  this  case  is  whether  the  mare  was,  under  this 
agreement,  to  be  returned  to  Fink,  if  Hyde  was  acquitted  of  the 
charge  in  court  of  the  larceny  of  the  mare.  If  so,  then  we  instruct 
you  that  there  was  sufficient  consideration  for  that  agreement  at 
the  time  of  the  lawsuit  in  order  to  recover  her,  and  at  the  time  this 
mare  was  involved  in  the  threatened  lawsuit;  and  the  only  way  that 
he  could  get  her  without  a  lawsuit  was  by  making  this  agreement  that 
it  is  alleged  on  the  part  of  plaintiff  was  made  between  Fink  and 
Smith,  If  you  believe  such  an  agreement  was  made  then  your 
verdict  should  be  for  the  plaintiff  for  the  value  of  the  mare  with 
interest  from  that  time," 

Was  this  correct  instruction,  as  to  the  law  applicable  to  the  evi- 
dence? There  was  no  dispute  as  to  the  ownership  of  the  property; 
the  mare,  it  was  conceded,  belonged  to  Smith ;  and  although  he  testi- 
fied no  such  conditional  bargain  was  made,  it  was  just  as  positively 
testified  to,  on  the  other  side,  that  it  was  made,  and  the  jury  have 
found  the  fact  against  him.  So,  we  have  the  unquestioned  owner 
of  the  mare  bargaining  with  one  in  wrongful  possession  for  her 
surrender;  the  possession  thereafter  to  be  determined  by  the  verdict 
in  a  criminal  prosecution  then  pending.  Was  his  possession,  thus 
obtained,  wrongful  as  against  Fink,  when  the  event  of  the  prosecu- 
tion was  the  acquittal  of  Hyde?  That  depends  on  the  validity  of 
the  contract  between  them, 

1,  The  contract  was  void,  because  based  on  a  fact  which  did  not 
exist,  though  both  parties  assumed  it  to  be  a  fact.  Fink  purchased 
from  George  Hyde;  both  assumed  that  Hyde's  title  would  neces- 
sarily be  determined  by  his  acquittal  or  conviction  of  larceny;  but 
the  event  of  the  prosecution  in  no  wise  determined  that ;  it  determined 
only  that  the  evidence  did  not  show,  beyond  a  reasonable  doubt,  a 
felonious  intent;  what  the  weight  of  it  showed,  we  do  not  know;  but 
the  admitted  facts  here,  that  the  mare  is  Smith's,  and  that  Hyde  sold 
her,  also  show  conclusively  that  Hyde  was  guilty  of  either  larceny 
or  trespass.  So  their  assumption,  that  the  criminal  prosecution 
would  determine  Hyde's  title,  and  necessarily  theirs,  was  a  mutual 
mistake  of  fact,  "Where  certain  facts  assumed  by  both  parties  are 
the  basis  of  a  contract,  and  it  subsequently  appears  such  facts  do 
not  exist,  the  contract  is  inoperative,"  Horbach  v.  Gray,  8  W.  497; 
Miles  V.  Stevens,  3  Pa.  21;  Willings  v.  Peters,  7  Pa.  287;  Prevail 
V.  Fitch,  5  Whart,  325. 

2,  There  was  no  consideration  to  support  Smith's  promise.  A 
promise  made  by  the  owner  to  obtain  possession  of  his  goods,  which 
at  the  time  are  wrongfully  withheld  from  him,  is  without  consid- 
eration :  Cliitfy  on  Contracts,  p.  51  ;  Addison  on  Contracts,  13.  This 
pririfiy)le  is  conceded  ])y  the  learned  judge  of  the  court  below,  and 
the  undoubted  wrongful  possession  by  Fink  of  Smith's  property  is 
also  conceded.    But  he  assumes,  there  is  no  evidence  that  Fink  knew 


SECT.    Il]  HAMER    V.    SIDWAY  233 

this  at  the  time  he  delivered  it  to  Smith,  and  therefore  the  contract 
should  be  treated  as  a  compromise  of  doubtful  litigation,  which  is 
a  good  consideration  to  support  a  contract.  But  the  error  in  this 
view  is,  that  Fink's  wrongful  possession  did  not  depend  on  what  he 
knew,  but  on  the  fact.  Was  it  Smith's  property?  Had  he  demanded 
it  from  him  who  wrongfully  detained  it?  If  these  were  the  facts,, 
and  they  are  not  denied,  then  there  was  no  consideration  for  Smith's 
promise,  for  no  benefit  passed  to  Smith,  and  Fink  sustained  no  loss 
by  the  contract;  to  hold  that  the  abandonment  of  a  wholly  wrongful 
detention  of  another's  property  can  form  the  basis  of  a  compromise 
contract  with  the  owner  is  direct  encouragement  to  the  commission 
of  wrong  for  profit,  and  for  this  very  reason  the  law  holds  the  con- 
tract to  be  without  consideration.  If  Fink  had  been  indicted  for  the 
larceny  of  the  mare,  his  knowledge  of  the  ownership  would  have 
been  material  in  determining  his  guilt,  but  it  is  of  no  moment  in 
determining  the  fact  of  ownership. 

3.  While  we  think  it  is  of  doubtful  public  policy  to  enforce  a 
contract,  where  the  right  to  property  is  made  to  turn  on  a  verdict 
in  a  criminal  prosecution,  in  which  both  parties  to  the  contract  are 
witnesses,  we  do  not  decide  the  case  on  that  point. 

We  are  of  opinion,  however,  the  contract  was  based  on  a  mutual 
mistake  of  a  fact,  which  had  no  existence,  and  further,  was  without 
consideration.     Therefore  the  judgment  is  reversed.^ 


LOUISA  W.  HAMEK,  Appellant,  v.  FRANKLIN  SIDWAY,  as 
Executor,  Respondent 

New  York  Court  of  Appeals,  February  24-April  14,  1891 

[Reported  in  124  New  York,  538] 

Parker,  J.^  The  question  which  provoked  the  most  discussion 
by  counsel  on  this  appeal,  and  which  lies  at  the  foundation  of  plain- 
tiff's asserted  right  of  recovery,  is  whether  by  virtue  of  a  contract 
defendant's  testator  William  E.  Story  became  indebted  to  his  nephew 
William  E.  Story,  2d,  on  his  twenty-first  birthday,  in  the  sum  of 
five  thousand  dollars.  The  trial  court  found  as  a  fact  that  "on  the 
20th  day  of  March,  1869,  .  .  .  William  E.  Story  agreed  to  and 
with  William  E.  Story,  2d,  that  if  he  would  refrain  from  drinking 
liquor,  using  tobacco,  swearing,  and  playing  cards  or  billiards  for 
money  until  he  should  become  21  years  of  age,  then  he,  the  said 
William  E.  Story,  would  at  that  time  pay  him,  the  said  William 

^  Cowper  V.  Green,  7  M.  &  W.  633;  Wendover  v.  Baker,  121  Mo.  273;  Conover  v 
Stilwell,  34  N.  J.  L.  54;  Crosby  v.  Wood,  6  N.  Y.  369;  Tolhiirst  v.  Powers,  133  N.  Y. 
460;  Erny  v.  Sauer,  234  Pa.  330;  Martin  v.  Armstrong,  62  S.  W.  Rep.  83  (Tex.  Civ. 
App.),  ace.  Compare  Rogers  Development  Co.  v.  Southern  Calif.  Ins.  Co.,  159  Cal.. 
735. 

*  A  portion  of  the  opinion  is  omitted. 


234  HAMER    V.    SID  WAY  [CHAP.   I 

E.  Story,  2d,  the  sum  of  $5,000  for  such  refraining,  to  which  the 
said  William  E.  Story,  2d,  agreed,"  and  that  he  "in  all  things  fully 
performed  his  part  of  said  agreement." 

The  defendant  contends  that  the  contract  was  without  considera- 
tion to  support  it,  and,  therefore,  invalid.  He  asserts  that  the 
promisee  by  refraining  from  the  use  of  liquor  and  tobacco  was  not 
harmed  but  benefited;  that  that  which  he  did  was  best  for  him  to 
do  independently  of  his  uncle's  promise,  and  insists  that  it  follows 
that  unless  the  promisor  was  benefited,  the  contract  was  without 
consideration.  A  contention,  which  if  well  founded,  would  seem  to 
leave  open  for  controversy  in  many  cases  whether  that  which  the 
promisee  did  or  omitted  to  do  was,  in  fact,  of  such  benefit  to  him  as 
to  leave  no  consideration  to  support  the  enforcement  of  the  prom- 
isor's agreement.  Such  a  rule  could  not  be  tolerated,  and  is  without 
foundation  in  the  law.  The  Exchequer  Chamber,  in  1875,  defined 
consideration  as  follows :  "A  valuable  consideration  in  the  sense  of 
the  law  may  consist  either  in  some  right,  interest,  profit,  or  benefit 
accruing  to  the  one  party,  or  some  forbearance,  detriment,  loss,  or 
responsibility  given,  suffered,  or  undertaken  by  the  other."  Courts 
*'will  not  ask  whether  the  thing  which  forms  the  consideration  does 
in  fact  benefit  the  promisee  or  a  third  party,  or  is  of  any  substantial 
value  to  any  one.  It  is  enough  that  something  is  promised,  done, 
forborne,  or  suffered  by  the  party  to  whom  the  promise  is  made  as 
consideration  for  the  promise  made  to  him.  Anson's  Prin.  of  Con. 
63. 

"In  general  a  waiver  of  any  legal  right  at  the  request  of  another 
party  is  a  sufficient  consideration  for  a  promise."  Parsons  on  Con- 
tracts, 444. 

"Any  damage,  or  suspension,  or  forbearance  of  a  right  will  be 
sufficient  to  sustain  a  promise."     (Kent,  vol.  2,  465,  12th  ed.) 

Pollock,  in  his  work  on  contracts,  page  166,  after  citing  the  defi- 
nition given  by  the  Exchequer  Chamber  already  quoted,  says :  "The 
second  branch  of  this  judicial  description  is  really  the  most  impor- 
tant one.  Consideration  means  not  so  much  that  one  party  is  profit- 
ing as  that  the  other  abandons  some  legal  right  in  the  present  or 
limits  his  legal  freedom  of  action  in  the  future  as  an  inducement 
for  the  promise  of  the  first." 

Now,  applying  this  rule  to  the  facts  before  us,  the  promisee  used 
tobacco,  occasionally  drank  liquor,  and  he  had  a  legal  right  to  do  so. 
Tliat  right  lie  abandoned  for  a  period  of  years  upon  the  strength 
of  the  promise  of  the  testator  that  for  such  forbearance  he  would 
give  him  five  thousand  dollars.  "We  need  not  speculate  on  the  effort 
which  may  have  been  required  to  give  up  the  use  of  those  stimulants. 
It  is  suffi(;i(!nt  that  lie  restricted  his  lawful  freedom  of  action  within 
certain  pr(;3cribed  limits  upon  the  faith  of  his  uncle's  agreement, 
and  now  having  fully  performed  the  conditions  imposed,  it  is  of  no 
moment  whether  such  performance  actually  proved  a  benefit  to  the 


SECT.    Il]  MILLER    V.    MILLER  235 

promisor,  and  the  court  will  not  inquire  into  it ;  but  were  it  a  proper 
subject  of  inquiry,  we  see  nothing  in  this  record  that  would  pernait 
a  determination  that  the  uncle  was  not  benefited  in  a  legal  sense» 
Few  cases  have  been  found  which  may  be  said  to  be  precisely  in 
point,  but  such  as  have  been  support  the  position  we  have  taken.^ 


MILLER  V.  MILLER 

lowA  Supreme  Couet,  December  13,  1887 

[Reported  in  78  Iowa,  177] 

Adams,  C.  J.  The  contract  sued  upon  is  in  these  words:  "This 
agreement,  made  this  fifth  day  of  August,  1885,  between  the  under- 
signed, husband  and  wife,  in  the  interest  of  peace  and  for  the  best 
interests  of  each  other  and  of  their  family,  is  signed  in  good  faith 
by  each  party,  with  the  promise,  each  to  the  other,  and  to  their 
children,  that  they  will  each  honestly  promise  to  help  each  other 
to  observe  a^d  keep  the  same,  which  is  as  follows,  to-wit:  All  past 
causes  and  subjects  of  dispute,  disagreement  and  complaint  of  what- 
ever character  or  kind  shall  be  absolutely  ignored  and  buried,  and 
no  allusion  thereto  by  word  or  talk  to  each  other  or  any  one  else 
shall  ever  be  made.  Each  party  agrees  to  refrain  from  scolding, 
fault-finding  and  anger  in  so  far  as  relates  to  the  future,  and  to  use 
every  means  within  their  power  to  promote  peace  and  harmony, 
and  that  each  shall  behave  respectfully,  and  fairly  treat  each  other; 
that  Mrs.  Miller  shall  keep  her  home  and  family  in  a  comfortable 
and  reasonably  good  condition,  and  Mr.  Miller  shall  provide  for 
the  necessary  expenses  of  the  family,  and  shall,  in  addition  thereto, 
pay  Mrs.  Miller  for  her  individual  use  two  hundred  dollars  per  year, 
payable,  sixteen  and  two-thirds  dollars  per  month,  in  advance,  so 
long  as  Mrs.  Miller  shall  faithfully  observe  the  terms  and  conditions 
of  their  contract.  They  agree  to  live  together  as  husband  and  wife 
and  observe  faithfully  the  marriage  relation,  and  each  to  live  vir- 
tuously with  the  other." 

The  petition  demurred  to  is  quite  long.  "We  cannot  set  it  out. 
The  defendant  demurred  upon  the  ground  that  it  showed  the  con- 
tract to  be  without  consideration  and  against  public  policy.  His 
position  is  that  the  plaintiff  merely  agreed  to  do  what  by  law  she 
was  bound  to  do.  The  majority  think  that  the  defendant's  position 
must  be  sustained.  The  writer  of  this  opinion  is  not  able  to  concur 
in  that  view.  The  petition  sets  out  several  reasons,  and  inducements 
for  making  the  contract.  Among  other  things,  it  avers,  in  substance, 
that  the  defendant,  while  improperly  spending  money  upon  other 
women,    refused    to    furnish    the    plaintiff    necessary   clothing,    and 

*  Talbott  V.  Stemmons'  Ex.,  89  Ky.  222,  ace.    See  also  Lindell  v.  Rokes,  60  Mo.  249:. 


236  SEWARD    &   SCALES    V.    MITCHELL  [CHAP.    I 

she  had  been  compelled  to  furnish  it  herself  by  her  personal  earnings. 
This  the  demurrer  admits.  It  appears  to  the  writer,  then,  that  the 
plaintiff  had  the  right  to  separate  from  the  defendant,  and  go  where 
she  could  best  provide  for  her  wants.  This  right  she  waived  in  con- 
sideration of  the  defendant's  contract  sued  upon.  The  waiver  of 
the  right,  it  seems  to  the  writer,  constituted  a  consideration  for  the 
contract;  but,  as  the  majority  think  otherwise,  the  judgment  must 
be  Affirmed. 

Seevers,  J.,  dissents  from  the  majority,  and  concurs  with  the 
writer  of  the  opinion.^ 


SEWARD  &  SCALES  v.  MITCHELL 

Tennessee   Supreme  Court,  April  Term,   1860 

^Reported  in  1  Coldwell,  87] 

This  cause  was  tried  at  the  November  Term,  1859,  before  Judge 
"Williams.    Verdict  and  judgment  for  plaintiff.    Defendant  appealed. 

T.  J.  Freeman,  for  plaintiffs  in  error. 

M.  R.  Hill,  for  defendant  in  error. 

Caruthers,  J.,  delivered  the  opinion  of  the  court :  — 

On  the  16th  Oct.,  1856,  Mitchell  sold  to  Seward  &  Scales,  for  the 
consideration  of  $8,596.50,  a  tract  of  land  in  the  county  of  Gibson, 
described  in  a  deed  of  that  date,  by  metes  and  bounds,  "containing 
521  acres,  being  a  part  of  a  5,000  acre  tract  granted  to  George 
Dougherty,  and  bounded  as  follows,"  &c. 

The  title  is  warranted  with  the  usual  covenants,  but  nothing  more 
said  about  the  grants  than  what  is  above  recited. 

Some  time  after  the  deed  was  made,  the  parties,  differing  as  to 
the  quantity  of  land  embraced  in  the  tract,  made  an  agreement  that 
it  should  be  surveyed  by  Gillespie,  and  if  there  were  more  than  five 
hundred  and  twenty-one  acres,  the  vendees  should  pay  for  the  excess 
at  the  rate  of  $16.50  per  acre,  that  being  the  price  at  which  the  sale 
was  made,  and  if  less,  then  the  vendor  should  pay  for  the  deficiency, 
at  the  same  rate.  It  turned  out  that  there  was  an  excess  of  fifty- 
seven  acres,  and  the  tract  embraced  in  the  deed  was  five  hundred  and 
seventy-eight  acres,  instead  of  five  hundred  and  twenty-one,  as  esti- 
mated in  the  sale.  For  this  excess,  the  present  suit  was  brought,  and 
recovery  had,  for  $1,079. 

It  is  objootod  here  that  the  court  below  erred  in  refusing  to  charge, 
as  requested,  that  the  agreement  sued  upon  was  void  for  want  of  a 
writing,  and  because  there  was  no  consideration  for  the  promise. 

'  On  rnbffiririK  tlu;  rlociHion  was  affirmed  on  iho  ground  that  tho  apropmcnt  was 
opposr-d  to  piililic  policy.  Tliis  Ix'inK  ho,  the  court  hcM  it  was  unnocossnry  to  con- 
Hi(l<r  tho  qucHtion  of  consideration. 


SECT.    Il]  SEWARD    &    SCALES    V.    MITCHELL  237 

1.  The  contract,  or  promise  sued  upon,  is  not  for  the  sale  of  land, 
so  as  to  require  a  writing,  under  the  Statute  of  Frauds. 

The  sale  had  already  been  reduced  to  writing.  This  was  a  sub- 
sequent collateral  agreement  in  relation  to  the  price,  which  was 
binding  by  parol,  and  to  which  the  Statute  can  have  no  application 
whatever.     This  is  too  plain  for  argument. 

2.  There  is  more  plausibility  in  the  second  objection,  that  there 
was  no  sufficient  consideration  for  the  promise.  But  this  is  also  un- 
tenable. The  argument  is,  that  the  deed  embraced  the  whole  tract, 
and  passed  a  perfect  title  to  the  extent  of  the  boundaries,  and  con- 
sequently there  was  nothing  passing  as  a  consideration  for  the  new 
promise,  that  the  party  did  not  own  before  by  a  perfect  legal  right. 

It  is  true,  if  the  sale  was  by  the  tract  and  not  by  the  acre,  as 
appears  from  the  deed,  and  no  stipulations  as  to  quantity,  that  the 
title  was  good  for  the  whole  and  covered  the  excess.  But  if  the  sale 
was  not  in  gross,  but  by  the  acre,  and  the  recitation  in  the  deed 
would  not  be  conclusive  in  a  court  of  equity  on  that  point  if  the 
fact  could  be  shown  to  be  otherwise,  then  there  would  be  mutual 
remedies  for  an  excess  or  deficiency  in  proper  cases,  as  we  held 
in  Miller  v.  Bents,  4  Sneed,  and  a  more  recent  case;  but  independent 
of  that,  and  taking  it  to  have  been  purely  a  sale  in  gross,  and  both 
parties  desiring  to  act  justly,  and  being  of  different  opinions  as  to 
the  quantity,  mutually  agreed  to  abide  by  an  accurate  survey  to 
ascertain  which  was  bound  to  pay,  and  recover  from  the  other,  and 
what  amount,  we  see  no  good  reason  in  law  or  morals  why  such  an 
agreement  should  not  be  binding  upon  them.  The  case  of  Howe  v. 
O'Malley,  1  Murphey's  L.  and  Eq.  K.,  287,  is  precisely  in  point.  The 
court  there  held  that  a  promise  to  refund  in  case  of  deficiency  is  a 
good  consideration  for  a  purpose  to  pay  for  any  excess  over  what 
is  called  for  in  the  deed,  —  that  such  mutual  promises  are  sufficient 
considerations  for  each  other. 

The  case  of  Smith  v.  Ware,  13  Johns.  Rep.  259,  which  is  sup- 
posed to  conflict  with  this,  is  entirely  different;  "there  was  no  mu- 
tuality" because  the  promise  sued  upon  was  to  pay  for  the  deficiency, 
without  any  obligation  on  the  other  party  to  pay  for  an  excess,  if 
any  there  had  been. 

The  principle  of  the  ISTorth  Carolina  case  commends  itself  to  our 
approbation,  because  of  its  equity  and  justice. 

Without  further  citation  of  authorities  we  are  satisfied  to  hold 
that  the  promise  in  this  case  was  binding  upon  the  defendant,  as 
his  Honor  charged,  and  therefore  affirm  the  judgment.^ 

1  March  D.  Pigott,  5  Burr.  2802;  Barnum  u.  Barnum,  8  Conn.  469;  Howe».  O'Mally, 
1  Murphey,  287;  Supreme  Assembly  v.  Campbell,  17  R.  I.  402,  ace.  See  also  Beckley 
V.  Newland,  2  P.  Wms.  182;  McElvain  i'.  Mudd,  44  Ala.  48;  Curry  v.  Davis,  44  Ala. 
171;  Pool  V.  Docker,  92  111.  601.    But  see  c(ynira  Smith  v.  Knight,  88  la.  257. 


238  LOYD    V.    LEE  [CHAP.    I 

BAEISTAED  v.  SIMONS 

Weit  of  Error  at  Serjeants'  Inn,  Michaelmas  Term,  1616 

[Reported  in  1  Rollers  Abridgment,  26,  placitum  39] 

If  a.  makes  a  void  assumpsit  to  B.,  and  afterwards  a  stranger 
comes  to  B.,  and,  in  consideration  that  B.  will  relinquish  the  assump- 
sit made  to  him  by  A.,  he  promises  to  pay  him  101.,  that  is  not  a 
good  consideration  to  charge  him,  because  the  first  assumpsit  was 
void.^ 


BIDWELL  V.  CATTOI^ 

Hilary  Term,  1618 
[Reported  in  Hohart,  216] 

BiDWELL,  an  attorney,  brought  an  action  of  the  case  against  Catton^ 
executor  of  Reve,  and  counted  that,  whereas  he  had  in  Michaelmas 
Term,  14  Jac,  prosecuted  an  attachment  of  privilege  against  Beve 
the  testator,  returnable  in  Hil.  Term,  the  testator  knowing  of  it,  in 
consideration  that,  at  his  request,  the  plaintiff  would  forbear  to 
prosecute  the  said  writ  any  further  against  the  said  testator,  the 
testator  did  promise  to  pay  him  50/.,  and  then  avers,  &c.  And  after 
a  verdict  it  was  excepted  in  arrest  of  judgment: 

First,  that  it  was  not  alleged  that  the  plaintiff  had  any  just  cause 
of  action. 

Secondly,   that   this   action   still  remains.    .    .    . 

But  the  Court  nevertheless  gave  judgment :  For  first,  suits  are 
not  presumed  careless,  and  the  promise  argues  cause,  in  that  he 
desired  to  stay  off  the  suit.  Quaere,  if  the  defendant  had  averred 
that  there  was  no  cause  of  suit. 

Secondly,  though  this  did  not  require  a  discharge  of  the  action, 
yet  it  requires  a  loss  of  the  writ,  and  a  delay  of  the  suit,  which  was 
both  benefit  to  the  one,  and  loss  to  the  other.   .    .    . 


LOYD  V.  LEE 

Before  Pratt,  C.  J.,  at  Nisi  Prttts,  1718 

[Reported  in  1  Strange,  94] 

A  married  woman  gives  a  promissory  note  as  a  feme  sole;  and 
after  her  husband's  death,  in  consideration  of  forbearance,  promises 
to  pay  it.     And  now,  in  an  action  against  her,  it  was  insisted  that, 

'  Famham  v.  O'Rripn,  22  Mo.  475;  Silvnrnail  v.  Cole,  12  Barb.  685;  Hooker  i». 
D«;  PaloH.,  28  Ohio  St.  257;  Shudor  v.  Ncwby,  85  Tenn.  348,  ace. 


SECT.    Il]  LONGRIDGE    V.   DORVILLE  239 

thougli,  she  being  under  coverture  at  the  time  of  giving  the  note,  it 
was  voidable  for  that  reason,  yet  by  her  subsequent  promise,  v^hen 
she  was  of  ability  to  make  a  promise,  she  had  made  herself  liable, 
and  the  forbearance  was  a  new  consideration.  But  the  C.  J.  held 
the  contrary,  and  that  the  note  was  not  barely  voidable,  but  absolutely 
void;  and  forbearance,  where  originally  there  is  no  cause  of  action, 
is  no  consideration  to  raise  an  assumpsit.  But  he  said  it  might  be 
otherwise,  where  the  contract  was  but  voidable.  And  so  the  plaintiff 
was  called.^ 


LONGEIDGE  AND  Others  v.  DORVILLE  and  Another 
In  the  King's  Bench,  October  29,  1821 
[Reported  in  5  Barnewall  &  Alderson,  117] 

Declaration  alleged,  "that  before  the  making  of  the  promise,  &c., 
a  certain  ship  called  the  Carolina  Matilda  had  then  lately  in  a  cer- 
tain place,  to  wit,  in  the  river  Thanif's,  to  wit,  at,  &c.,  run  foul  of  a 
certain  other  ship  called  the  Zenobia,  whereby  the  said  last- 
mentioned  ship  had  received  great  damage.  And  the  said  last-men- 
tioned ship  having  received  such  damage  in  consequence  of  being 
so  run  foul  of  as  aforesaid,  the  plaintiffs  being  the  agents  in  that 
behalf  of  one Symonds,  the  owner  of  the  Zenobia,  and  the  defend- 
ants being  the  agents  in  that  behalf  of  the  owners  of  the  Carolina 
Matilda,  the  former,  as  such  agents,  detained  the  Carolina  Matilda 
till  the  owners  of  the  said  last-mentioned  ship  should  have  made 
good  to  them  the  damage  so  done  to  the  Zenobia."  It  then  stated, 
"that  in  consequence  of  such  detention,  the  defendants  undertook 
that  they  would,  on  the  plaintiffs'  renouncing  all  claims  on  the  Caro- 
lina Matilda,  and  on  proving  the  amount  of  the  damages  sustained 
by  the  Zenobia,  indemnify  the  plaintiffs  for  any  sum  not  exceeding 
180/.,  the  exact  amount  to  be  ascertained  when  the  said  latter  ship 
should  have  been  repaired;"  and  then  alleged  that,  in  consequence 
of  such  undertaking,  the  plaintiffs  did  renounce  all  claim  on  the 
Carolina  Matilda,  and  did  permit  and  allow  her  to  proceed  on  her 
voyage,  and  that  the  Zenobia  had  been  repaired,  and  that  the  amount 
of  such  repairs  was  ascertained.  There  were  also  the  common  counts, 
and  the  defendants  pleaded  the  general  issue.  The  cause  was  tried 
before  Abbott,  C.  J.,  at  the  Sittings  after  Easter  Term,  1820,  when 
a  verdict  was  found  for  the  plaintiffs,  subject  to  the  opinion  of  this 
Court  upon  the  following  case :  — 

The  ISTorwegian  ship,  called  the  Carolina  Matilda,  on  her  voyage 
to  Norway,  in  sailing  down  the  river  Thames  in  November  last,  ran 

^  Other  early  English  decisions  holding  forbearance  of  a  groundless  claim  insuflS- 
cient  consideration  are  collected  in  12  Harv.  L.  Rev.  517,  n.  2. 


240  LONGRIDGE    V.   DORVILLE  [CHAP.   I 

foul  of  tlie  ship  called  the  Zenobia,  then  lying  at  anchor,  and  in  con- 
sequence of  which  the  latter  ship  sustained  considerable  damage. 
The  plaintiffs,  acting  as  the  agents  of  Mr.  E.  Symonds,  the  owner 
of  the  Zenobia,  instituted  a  proceeding  in  the  High  Court  of  Ad- 
miralty against  the  ship  Carolina  Matilda,  to  compel  her  owners  to 
make  good  the  damages  sustained  by  the  Zenobia  in  consequence  of 
being  so  run  foul  of.  Process  was  issued  against  the  Carolina  Ma- 
tilda, under  which  she  was  arrested  at  Gravesend  on  the  22d  ]^o- 
vember  last,  and  on  the  twenty-fourth  day  of  the  same  month  the 
defendants  wrote  a  letter  to  the  plaintiffs,  of  which  the  following  is 
a  copy:  — 

Me88bs.  Longkidge,  Bahnett,  and  Hodgson. 

Gentlemen,  —  In  consequence  of  your  having  detained  the  Norway  ship  Carolina 
Matilda  till  the  owners  make  good  to  you  the  damage  done  to  the  Zenobia,  bound  to 
Smyrna,  we  hereby  engage,  on  your  renouncing  all  claims  on  the  said  ship  CaroUna 
Matilda,  and  on  pro\ang  the  amount  of  damages  sustained  by  the  Zenobia,  to  indemnify 
you  for  any  sum  not  exceeding  1801.,  the  exact  amount  to  be  ascertained  when  the 
Zenobia  is  repaired. 

The  defendants  were  the  agents  of  the  owners  of  the  Carolina 
Matilda;  and  upon  the  receipt  of  this  letter  the  plaintiffs  withdrew 
proceedings  in  the  Admiralty  Court,  and  the  officer,  then  in  posses- 
sion of  the  Carolina  Matilda,  was  then  also  withdrawn,  and  such 
possession  delivered  up  to  the  defendants,  acting  on  behalf  of  her 
owners.  The  Zenobia  had  been  since  repaired,  and  the  amount  of 
damages  sustained  by  her  had  been  ascertained.  At  the  time  the 
Carolina  Matilda  sailed,  and  while  she  was  proceeding  down  the 
river  and  ran  foul  of  the  Zenobia,  she  had  the  regular  Trinity  House 
pilot  aboard,  who  had  been  placed  there  by  the  defendants. 

Puller,  for  the  plaintiff.  It  is  not  necessary  to  consider  the  ques- 
tion whether  the  owners  of  the  Carolina  are  liable  for  the  damage 
done  to  the  Zenobia,  under  the  circumstances  of  the  case;  for  the 
defendants  have  made  themselves  liable  by  an  express  promise, 
founded  upon  a  good  consideration.  The  plaintiffs  agree  to  release 
the  ship,  which  they  might  otherwise  have  detained  until  bail  was 
given;  and  the  defendants  agree  to  pay  a  stipulated  sum  by  way 
of  damage ;  waiving  all  question  as  to  the  legal  liability  of  the  owners. 
That  might  be  considered  as  doubtful,  there  having  been  contradic- 
tory decisions.^  The  defendants,  or  their  principals,  therefore,  have 
obtained  a  benefit  by  the  immediate  release  of  the  ship;  and  that 
constitutes  a  good  consideration  for  the  promise  laid  in  the  declara- 
tion. 

F.  Pollock,  contra.  There  is  no  sufficient  consideration  for  the 
promise  in  the  declaration,  because  the  plaintiffs  had  no  ground  for 
instituting  the  suit  in  the  Admiralty  Court  against  the  Carolina. 
The  question  whether  tbe  defendants  are  liable  upon  their  under- 
taking must  depend  upon  this,  whether  the  owners  were  liable  for 
the  injury,  the  ship  at  the  time  having  on  board  a  pilot,  as  required 

^  Neptune  the  Second,  1  Dobson,  Adm.  R.  467;  Ritchie  v.  Bowsfield,  7  Taunt.  309. 


SECT.    Il]  LONGRIDGE    V,    DORVILLE  241 

by  the  act  of  Parliament.  If  they  were  not  liable,  the  plaintiff  had 
no  right  to  institute  the  suit  in  the  Admiralty  Court;  and  the  for- 
bearance of  a  suit,  where  a  party  is  not  liable,  is  not  a  good  con- 
sideration. Tooley  ik  Windham^  and  King  v.  Hobbs^  are  authorities 
in  point. 

Abbott,  C.  J.  I  am  of  opinion  that  there  is  a  sufficient  consid- 
eration in  this  case  to  sustain  the  promise,  without  inquiring  whether 
the  owners  of  the  ship  are  liable  under  the  circumstances  of  the 
case.  It  appears  that  a  suit  had  been  instituted  by  the  plaintiffs  in 
the  Court  of  Admiralty  against  the  Carolina  Matilda,  to  compel 
her  owners  to  make  good  the  damage  done  by  her  running  foul  of 
another  vessel.  The  ship  might  have  been  redeemed  from  that  suit 
by  the  defendants'  giving  bail  that  proper  care  should  be  taken  of 
the  ship,  and  that  those  on  board  her  should  not  leave  the  kingdom 
until  means  were  taken  to  secure  that  evidence  which  would  enable 
the  judge  to  decide  the  suit,  and  the  plaintiffs  might  have  insisted 
on  such  bail.  The  defendants,  as  agents  for  the  foreign  owners  of 
the  ship,  write  a  letter,  in  which  they  engage,  on  the  plaintiffs'  re- 
nouncing all  claims  on  the  ship,  and  on  proving  the  amount  of  dam- 
ages sustained  by  the  Zenobia,  to  indemnify  them  for  any  sum  not 
exceeding  1801.,  the  exact  amount  to  be  ascertained  when  the  Zenobia 
is  repaired.  Now  the  plain  meaning  of  that  engagement  appears 
to  me  to  be  this :  Release  the  ship,  and  we  will  waive  all  questions 
of  law  and  fact,  except  the  amount  of  damage;  we  will  pay  you 
1807.,  if  the  damage  done  amounts  to  that  sum.  The  plaintiffs,  by 
not  insisting  upon  the  bail  required,  therefore  relinquished  a  benefit 
which  they  might  have  had,  if  the  law  had  been  with  them.  The 
law  might  fairly  be  considered  as  doubtful,  for  there  had  been  con- 
tradictory decisions  on  the  subject;  and  the  parties  agree  to  put 
an  end  to  all  doubts  on  the  law  and  the  fact,  on  the  defendants'  en- 
gaging to  pay  a  stipulated  sum.  I  am  of  opinion  that  this  case 
is  distinguishable  from  those  cited  in  argument,  inasmuch  as  in  this 
case  the  law  was  doubtful,  and  the  parties  agreed  to  waive  all  ques- 
tions of  law  and  fact.  I  am  therefore  of  opinion  that  the  plaintiff 
is  entitled  to  recover. 

Bayley,  J.  I  am  of  the  same  opinion.  Where  a  cause  is  de- 
pending, it  is  competent  to  a  party  to  refer  the  questions  of  liability 
and  damage  jointly,  or  to  acknowledge  his  liability,  and  refer  the 
question  of  damage  only;  and  in  this  case,  I  think,  the  effect  of  the 
agreement  is,  that  they,  the  defendants,  acknowledge  the  liability  of 
the  owners,  and,  in  consideration  of  the  plaintiffs  releasing  the  ship, 
they  agree  to  refer  the  question  as  to  the  amount  of  damage,  and 
pay  the  same,  provided  it  does  not  exceed  1807.  If  it  had  appeared 
in  this  case  that  the  owners  of  the  Carolina  could  not  have  been 
liable  at  all,  I  agree  that  the  consideration  for  the  promise  would 
have  failed.     But  the  facts  stated  in  the  case  by  no  means  show 

»  Cro.  Eliz.  206.  ^  Yelv.  25. 


242  HERRrNG    V.    DORELL  [CHAP.    I 

that  the  owners  would  not  have  been  liable;  for  by  the  pilot  act  the 
owners  are  only  protected  in  those  cases  where  the  loss  arises  from 
the  default,  neglect,  incapacity,  or  incompetency  of  the  pilot.  Now 
there  is  no  fact  in  this  case  which  shows  that  the  misconduct  of  the 
pilot  was  the  cause  of  the  injury. 

HoLKOYD,  J.  I  am  of  the  same  opinion.  If  a  person  is  about  to 
sue  another  for  a  debt,  for  which  the  latter  is  not  answerable,  the 
mere  consideration  of  forbearance  is  not  sufficient  to  render  him 
liable  for  that  debt.  Any  act  of  the  plaintiff,  however,  from  which 
the  defendant  derives  a  benefit  or  advantage,  or  any  labor,  detriment, 
or  inconvenience  sustained  by  the  plaintiff,  is  a  sufficient  considera- 
tion to  support  a  promise.  Now  the  consideration  of  forbearance  is 
a  benefit  to  the  defendant,  if  he  be  liable;  but  it  is  not  any  benefit 
to  him,  if  he  be  not  liable.  The  authorities  cited  proceed  on  that 
ground.  This  case  differs  materially  from  those;  for  here  a  suit 
actually  commenced  is  given  up,  and  a  suit  too  the  final  success  of 
which  was  involved  in  some  doubt.  The  plaintiff  might  sustain  a 
detriment  by  giving  up  all  claim  in  respect  of  the  expenses  incurred, 
and  the  defendant  might  derive  a  benefit  by  having  that  suit  put 
an  end  to,  without  further  trouble  or  investigation.  Now  I  am  of 
opinion  that  the  giving  up  of  a  suit  instituted  for  the  purpose  of 
trying  a  doubtful  question,  and  consenting  to  deliver  up  the  ship, 
which  might  otherwise  have  been  detained  until  the  security  re- 
quired was  given,  is  a  good  consideration  to  support  a  promise  to 
pay  a  stipulated  sum  by  way  of  damage,  in  case  the  actual  damage 
amount  to  that  sum.  In  Com.  Dig.,  tit.  Action  upon  the  Case  upon 
Assumpsit  (F.  8),  it  is  laid  down  that  an  action  does  not  lie  if  a 
party  promise  in  consideration  of  a  surrender  of  a  lease  at  will,  for 
the  lessor  might  determine  it;  unless  there  was  a  doubt  whether  it 
was  a  lease  at  will  or  for  years;  and  1  Eol.  23,  1.  25,  35,  and  1 
Brownlow,  6,  are  cited.  That  is  an  authority  to  show  that  the 
giving  up  of  a  questionable  right  is  a  sufficient  consideration  to 
support  a  promise.  Here,  therefore,  the  giving  up  of  a  suit,  insti- 
tuted to  try  a  question  respecting  which  the  law  is  doubtful,  is  a  good 
consideration  to  support  a  promise.  I  think,  therefore,  that  this 
action  is  sustainable. 

Best,  J.,  concurred. 


HERRING  V.  DORELL 

In  the  Queen's  Bench,  Trinity  Term,  1840 

[Reported  in  8  Bowling's  Practice  Cases,  604] 

R.  V.  Richards  showed  cause  against  a  rule  nisi,  obtained  by 
V.  Williams  for  arrest  of  judgment  or  a  new  trial  in  this  case. 
The  case  had  been  tried  before  the  sheriff  of  Brecon,  and  a  verdict 
found  in  favor  of  the  plaintiff  for  21.  lO.s.  Id.     The  ground  of  seek- 


SECT.    II ]  HERRING    V.    DORELL  243 

ing  to  arrest  the  judgment  was,  that  no  sufficient  consideration  for 
the  promise  by  the  defendant  was  disclosed  on  the  face  of  the  dec- 
laration. The  substance  of  the  declaration  was,  that  a  person  named 
Watkins  and  a  person  named  Voss  were  joint  debtors  to  the  plaintiff. 
The  plaintiff  proceeded  against  them,  and  ultimately  took  Watkins 
and  Voss  in  execution.  An  arrangement  was  made  between  Watkins 
and  the  plaintiff,  and  accordingly  the  former  was  discharged  out 
of  custody.  Voss  remained  in  custody,  and  in  consideration  of  the 
discharge  of  Voss,  the  declaration  alleged  that  the  defendant  under- 
took to  pay  the  sum  of  21.  10s.  Id.  due  from  Voss  to  the  plaintiff, 
and  Voss  was  accordingly  discharged.  It  was  contended  in  support 
of  the  rule  that,  the  plaintiff  having  discharged  Watkins,  who  was 
jointly  liable  with  Voss,  that  had  the  effect  of  entitling  Voss  to  his 
discharge,  Richards  submitted  that,  even  after  the  discharge  of 
Watkins,  some  step  being  necessary  in  order  to  obtain  the  discharge 
of  Voss,  some  portion  of  his  imprisonment,  until  that  step  could  be 
taken,  must  be  considered  as  lawful.  Suppose  the  prisoners  had  been 
confined  in  two  different  gaols,  one  in  Cornwall  and  the  other  in 
JSTorthumberland,  and  one  of  them  was  discharged  in  Cornwall,  some 
time  must  be  allowed  in  order  to  discharge  the  other  defendant  from 
the  gaol  in  ]!^orthumberland.  The  detention  of  the  second  defendant 
until  his  discharge  must  be  considered  as  lawful.  The  smallest  con- 
sideration was  sufficient  to  support  the  promise  alleged  in  the  dec- 
laration, and  here  was  some  consideration  for  that  purpose.  If 
the  proceeding  could  be  considered  as  a  nullity  then  the  plaintiff 
would  be  liable  to  an  action  of  trepass;  but  in  Crozer  v.  Pilling, 
it  appeared  that  an  action  on  the  case  was  the  proper  remedy,  and 
not  an  action  of  trespass.  There  it  was  held  that  a  plaintiff  is 
bound  to  accept  from  a  defendant  in  custody  under  a  ca.  sa.  the 
debt  and  costs  when  tendered  in  satisfaction  of  the  debt,  and  to 
sign  an  authority  to  the  sheriff  to  discharge  the  defendant  out  of 
custody;  and  that  an  action  on  the  case  will  lie  against  the  plaintiff 
for  maliciously  refusing  so  to  do.  The  case  of  Smith  v.  Eggington- 
was  an  authority  to  the  same  effect.  The  imprisonment  was  legal 
in  its  commencement,  and  therefore  the  sheriff  could  not  be  liable 
as  a  trespasser.  It  was  not  therefore  a  void  imprisonment.  The 
case  of  Atkinson  v.  Bayntun^  was  an  authority  to  show  that  suffi- 
cient consideration  was  disclosed  on  the  face  of  this  declaration  to 
support  the  defendant's  promise.  The  marginal  note  was:  "M. 
being  in  custody  on  execution  pursuant  to  a  warrant  of  attorney,  by 
which  he  had  agreed  that  execution  should  issue  from  time  to  time 
for  certain  instalments  of  a  mortgage  debt,  defendant,  in  considera- 
tion that  plaintiff  would  discharge  M.  out  of  custody,  undertook 
that  he  should,  if  necessary,  be  forthcoming  for  a  second  execution. 
Held,  that  defendant's  was  a  valid  contract."  He  cited  Sturlyn  v. 
Albany,  and  Pullin  v.  Stokes.*  There,  A.  having  recovered  judg- 
1  4  B.  &  C.  26  »  6  Dowl.  P.  C.  38.  ^  i  b.  N.  C.  444.  *  2  H.  Bl.  312. 


244  CALLISHER    V.    BISCHOFFSHEIM  [CHAP.   I 

ment  against  B.,  and  a  fi.  fa.  being  delivered  to  the  sheriff,  in  con- 
sideration that  A.  at  the  special  request  of  C.  had  requested  the 
sheriff  not  to  execute  the  writ,  C.  promised  to  pay  A.  the  debt  and 
costs,  together  with  the  sheriff's  poundage,  bailiff's  fees,  and  other 
charges.  On  a  judgment  by  default  and  error  brought,  the  promise 
was  holden  to  be  binding  on  C,  though  it  was  not  averred  that  the 
sheriff  did  in  fact  desist  from  the  execution,  nor  what  the  amount 
of  the  poundage,  &c.,  was,  nor  that  the  defendant  had  notice  of 
such  amount.  In  the  present  case,  Voss  was  not  taken  in  execution 
after  the  discharge  of  Watkins,  but  both  were  legally  in  custody  at 
the  time  of  Watkins's  discharge.  The  detention  of  one  prisoner  in 
such  a  case  could  not  be  considered  as  a  trespass.  But  suppose  it 
should  be  said  that  the  plaintiff  was  bound  to  take  steps  to  discharge 
Voss ;  if  he  was,  he  was  entitled  to  a  reasonable  time  for  that  purpose. 
During  the  time  that  elapsed  before  his  actual  discharge,  he  was  in 
legal  custody.  That  custody  furnished  a  sufficient  consideration  to 
support  the  defendant's  promise. 

V.  Williams,  in  support  of  the  rule. 

CoLEBiDGE,  J.  The  question  in  this  case,  whether  this  was  a 
good  consideration  or  not,  depends  upon  the  situation  of  Voss  at  the 
time  of  his  discharge.  Both  he  and  Watkins  had  been  taken  under 
a  joint  execution.  Watkins  made  certain  terms  with  the  plaintiff, 
and  the  latter  voluntarily  discharged  him.  No  terms  were  made  as 
to  the  situation  of  Voss;  his  rights  were,  therefore,  to  be  considered 
according  to  the  situation  in  which  the  law  had  placed  him.  Suppose 
Watkins  alone  had  been  in  custody,  it  is  clear  that  the  voluntary 
discharge  of  him  would  have  been  a  discharge  of  the  debt,  and  no 
other  proceedings  could  have  been  taken  to  recover  it.  It  seems  to 
me,  in  the  same  way,  that  the  discharge  of  Watkins  operated  to 
release  Voss,  his  co-debtor.  I  think  therefore,  both  on  principle 
and  authority,  that  this  rule  ought  to  be  made  absolute. 

Rule  absolute.^ 


CALLISHEK  v.  BISCHOFFSHEIM 

In  the  Queen's  Bench,  June  6,  1870 

\Reported  in  Law  Reports,  5  Queen's  Bench,  449] 

Declaration  that  the  plaintiff  had  alleged  that  certain  moneys 
were  due  and  owing  to  him,  to  wit,  from  the  government  of  Hon- 
flurns,  aiif]  from  Don  Carlos  Guttioroz  and  others,  and  had  threat- 
ened and  was  about  to  take  legal  proceedings  against  the  said 
government  and  persons  to  enforce  payment  of  the  same;  and  there- 
upon, in  consifleration  that  the  plaintiff  would  forbear  from  taking 

'  r'ommonwcalth  v.  .Johnson,  3  Cush.  454,  ace.  See  also  Rood  v.  Jones,  1  Doug. 
192. 


SECT.   Il]  CALLISHER    V.    BISCHOFFSHEIM  245 

such  proceedings  for  an  agreed  time,  the  defendant  promised  to 
deliver  to  the  plaintiff  certain  securities,  to  wit,  bonds  or  debentures, 
called  Honduras  Kailway  Loan  Bonds,  for  sums  to  the  amount  of 
600?.  immediately  the  bonds  should  be  printed.  Averment:  that  the 
plaintiff  did  not  take  any  proceedings  during  the  agreed  period  or 
at  all;  and  that  all  conditions  had  been  fulfilled  necessary  to  en- 
title him  to  sue  in  respect  of  the  matters  before  stated.  Breach : 
that  the  defendant  had  not  delivered  to  the  plaintiff  the  bonds  or 
any  of  them. 

Plea :  That  at  the  time  of  making  the  alleged  agreement  no  moneys 
were  due  and  owing  to  the  plaintiff  from  the  government  and  other 
persons. 

Demurrer  and  joinder. 

James,  Q.  C.  (Rose  with  him),  in  support  of  the  demurrer. 

Pollock,  Q.  C.   (Joyce  with  him)   contra. 

CocKBUKN,  C.  J.  Our  judgment  must  be  for  the  plaintiff.  N"o 
doubt  it  must  be  taken  that  there  was  in  fact  no  claim  by  the  plain- 
tiff against  the  Honduras  government  which  could  be  prosecuted  by 
legal  proceedings  to  a  successful  issue;  but  this  does  not  vitiate  the 
contract  and  destroy  the  validity  of  what  is  alleged  as  the  consider- 
ation. The  authorities  clearly  establish  that,  if  an  agreement  is 
made  to  compromise  a  disputed  claim,  forbearance  to  sue  in  respect 
of  that  claim  is  a  good  consideration;  and  whether  proceedings  to 
enforce  the  disputed  claim  or  have  not  been  instituted  makes 
no  difference.  If  the  defendant's  contention  were  adopted,  it  would 
result  that  in  no  case  of  a  doubtful  claim  could  a  compromise  be 
enforced.  Every  day  a  compromise  is  effected  on  the  ground  that 
the  party  making  it  has  a  chance  of  succeeding  in  it;  and  if  he 
bond  fde  believes  he  has  a  fair  chance  of  success,  he  has  a  reason- 
able ground  for  suing,  and  his  forbearance  to  sue  will  constitute  a 
good  consideration.  When  such  a  person  forbears  to  sue  he  gives 
up  what  he  believes  to  be  a  right  of  action,  and  the  other  party 
gets  an  advantage;  and,  instead  of  being  annoyed  with  an  action, 
he  escapes  from  the  vexations  incident  to  it.  The  defendant's  con- 
tention is  unsupported  by  authority. 

It  would  be  another  matter  if  a  person  made  a  claim  which  he 
knew  to  be  unfounded,  and  by  a  compromise  derived  an  advantage 
under  it :  in  that  case  his  conduct  would  be  fraudulent.  If  the  plea 
had  alleged  that  the  plaintiff  knew  he  had  no  real  claim  against  the 
Honduras  government,  that  would  have  been  an  answer  to  the  action. 

Blackburn,  J.  I  am  of  the  same  opinion.  The  declaration,  as 
it  stands,  in  effect  states  that  the  plaintiff,  having  alleged  that  cer- 
tain moneys  were  due  to  him  from  the  Honduras  government,  was 
about  to  enforce  payment,  and  the  defendant  suggested  that  the 
plaintiff's  claim,  whether  good  or  bad,  should  stand  over.  So  far, 
the  agreement  was  a  reasonable  one.  The  plea,  however,  alleges 
that  at  the  time  of  making  the  agreement  no  money  was  due.     If 


246  MILES    V.    NEW   ZEALAND   ALFORD   ESTATE    CO.     [CHAP.   I 

we  are  to  infer  that  the  plaintiff  believed  that  some  money  was  due 
to  him,  his  claim  was  honest,  and  the  compromise  of  that  claim 
would  be  binding,  and  would  form  a  good  consideration,  although 
the  plaintiff,  if  he  had  prosecuted  his  original  claim,  would  have 
been  defeated.  This  case  is  decided  by  Cook  v.  Wright,  in  that 
case  it  appeared  from  the  evidence  that  the  defendant  knew  tha]t  the 
original  claim  of  the  plaintiff  was  invalid,  yet  he  was  held  liable, 
as  the  plaintiff  believed  his  claim  to  be  good.  The  Court  say  that 
"the  real  consideration  depends  on  the  reality  of  the  claim  made, . 
and  the  bond  -fides  of  the  compromise."  If  the  plaintiff's  claim 
against  the  Honduras  government  was  not  hona  -fide,  this  ought  to 
have  been  alleged  in  the  plea;  but  no  such  allegation  appears. 

Mellor,  J.  I  am  of  the  same  opinion.  If  the  plaintiff's  claim 
against  the  Honduras  government  was  fraudulent,  the  defendant 
ought  to  have  alleged  it. 

Lush,  J.,  concurred.  Judgment  for  the  plaintiff. 


MILES  V.   NEW  ZEALAND  ALFORD  ESTATE  COMPANY 

In  the  Chancery  Division,  June  22-24,  1885,  February  4-6, 

11,  1886 

[^Reported  in  32  Chancery  Division,  266] 

The  plaintiff  in  1882  accepted  bills  for  £10,000  for  the  accommo- 
dation of  Samuel  Grant,  one  of  the  defendants  in  this  suit,  and  to 
secure  the  plaintiff  Grant  had  charged  125  shares  which  he  owned 
in  the  defendant  corporation  with  this  sum.  The  plaintiff  gave 
notice  to  the  company  of  his  interest  in  the  shares. 

Grant,  besides  being  a  promoter  of  the  company  and  the  holder 
of  the  above-mentioned  shares,  was  the  vendor  to  the  company  of 
the  property  in  New  Zealand  known  as  the  Alford  estate,  the  acqui- 
sition and  working  of  which  was  the  substantial  object  of  the  for- 
mation of  the  company.  He  was  also  the  chairman  of  the  board  of 
directors,  and  at  a  general  meeting  of  the  company  held  on  the  15th 
of  March,  1883,  an  angry  discussion  took  place,  at  the  close  of  which 
he  gave  to  the  company  q,  written  guarantee  or  warranty  signed  by 
himself  in  the  following  terms :  — 

"0(uitlr;men,  I  hereby  guarantee  that  a  dividend  (duly  earned 
during  the  year)  of  not  less  than  £3  per  centum  per  annum  be  paid 
to  the  shareholders  for  the  year  ending  the  30th  of  June,  1883,  and 
afterwards  that  there  shall  be  paid  to  them  a  yearly  dividend  of 
not  less  than  £5  per  centum  per  annum  (duly  earned  during  the 
year)  for  a  period  of  ninety  years;  and  I  undertake  within  three 
calendar  months  after  the  end  of  any  and  every  year  to  pay  to  you 
any  sum  requisite  to  pay  the  agreed  minimum  dividend  if  the  com- 
pany has  not  earned  it." 


SECT.   Il]     MILES    V.    NEW   ZEALAND   ALFORD   ESTATE   CO.  247 

No  resolution  was  passed  at  the  general  meeting  with  reference 
to  the  giving  of  the  guarantee. 

Grant  was  adjudicated  a  bankrupt  on  the  19th  of  Tebruary,  1884. 
In  May,  1884,  there  being  due  to  the  plaintiff  from  Grant  the  sum 
of  £7,885,  he  applied  to  the  company  to  do  and  concur  in  all  acts 
necessary  for  effecting  a  sale  and  transfer  of  the  125  shares. 

The  company,  however,  claimed  a  lien  on  the  shares  under  the 
guarantee  given  to  them  by  Grant  and  their  articles  of  association, 
in  priority  to  the  plaintiff's  charge;  and  they  refused  to  permit  any 
sale  or  transfer  of  the  shares  until  their  claim  was  satisfied.  The 
plaintiff  then  brought  this  action  against  the  company  and  Grant 
and  his  trustee  in  bankruptcy,  and  claimed  a  declaration  that  under 
the  deed  of  the  19th  of  October,  1882,  he  was  entitled  to  a  first  charge 
on  the  125  shares  for  the  principal  and  interest  secured  thereby; 
and  he  pleaded  that  the  guarantee  given  by  Grant  was  not  under 
seal,  that  no  consideration  had  been  given  for  it,  and  that  even  if 
consideration  had  been  given,  the  document  did  not  comply  with  the 
requirements  of  the  Statute  of  Frauds. 

The  evidence  upon  the  question  whether  any  consideration  was 
in  ,f act  given  for  a  guarantee  was  chiefly  derived  from  an  affidavit 
of  Mr.  J.  Redmayne,  the  secretary  of  the  company,  the  material 
paragraphs  of  which  were  as  follows :  — 

"1.  .  .  .  The  defendant  Grant  made  many  representations  to  the 
persons  who  originally  formed  the  company,  and  to  persons  who  be- 
came shareholders  thereof,  to  the  effect  that  the  Alford  estate  was 
of  great  value,  and  to  the  effect  that  the  labor  expenses  in  working 
the  said  estate  did  not  exceed  a  stated  sum,  and  other  representations 
calculated  to  induce  such  persons  to  find  moneys  to  form  and  become 
shareholders  in  the  company. 

"3.  It  was  subsequently  and  some  time  before  the  meeting  herein- 
after mentioned  discovered  that  the  statements  made  by  the  de- 
fendant Samuel  Grant  as  to  the  value  of  the  estate  were  untrue,  and 
that  the  labor  expenses  greatly  exceeded  the  amount  stated  by  him 
as  aforesaid. 

"4.  Claims  were  accordingly  made  on  the  defendant  Samuel  Grant 
by  the  defendant  company  and  on  behalf  of  the  shareholders  thereof, 
and  it  was  intimated  that  proceedings  would  be  taken  to  set  aside 
the  sale  and  recover  the  purchase-money  from  him. 

"5.  At  the  general  meeting  of  the  defendant  company  on  the  15th 
day  of  March,  1883,  .  .  .  the  threatened  proceedings  against  the 
defendant  Samuel  Grant  were  the  main  subject  discussed  by  the 
shareholders.  The  defendant  Samuel  Grant  was  told  that  it  was 
the  intention  of  the  defendant  company  to  take  immediate  proceed- 
ings against  him,  and  he  thereupon  made  two  or  three  offers  with 
a  view  to  the  settlement  of  the  matter  and  to  compromise  the  claim 
and  escape  legal  proceedings,  and  eventually  he  offered  to  sign  the 
guarantee  in  the  said  affidavits  mentioned  in  consideration  of  the  de- 


248  MILES    V.    NEW   ZEALAND   ALFORD   ESTATE    CO.     [CHAP.    I 

fendant  company  and  the  said  shareholders  agreeing  to  abandon  the 
contemplated  proceedings  against  him  and  agreeing  to  give  up  their 
claims  against  him  which  were  the  subject  of  the  intended  pro- 
ceedings. 

"6.  The  defendant  company  and  the  shareholders  were  advised 
that  their  claims  w^ere  substantially  of  such  a  nature  that  if  not 
enforced  at  once  they  could  not  be  enforced  at  all,  and  such  claims 
were,  in  fact,  claims  for  rescission  of  contract  which  could  not  be 
equitably  enforced  if  proceedings  were  not  immediately  taken;  and 
the  defendant  company,  in  pursuance  of  the  said  agreement  under 
which  the  said  guarantee  was  signed,  and  in  consideration  of  the  said 
guarantee,  abandoned  the  intention  of  taking  such  proceedings  and 
gave  up  such  claims  and  did  not  commence  any  proceedings  or  assert 
any  claim. 

At  the  trial  jSTorth,  J.,  held  that  the  claim  of  the  company  was 
valid,  the  forbearance  being  a  sufficient  consideration  under  Cal- 
lisher  v.  Bischoffsheim,  L  .E.  5  Q.  B.  449,  and  other  recent  decisions; 
but  that  the  company  could  not  by  its  by-law  entitle  itself  to  pri- 
ority over  the  plaintiff. 

From  this  judgment  the  company  appealed. 
Barber,  Q.  C,  and  BlaJce  Odgers,  in  support  of  the  appeal. 
Davey,  Q.  C,  and  Stirling,  for  the  plaintiff. 

Cotton,  L.  J.  .  .  .  But  then  comes  the  question,  had  the  com- 
pany in  fact  any  legal  claim  as  against  Grant?  Their  claim  was 
under  a  letter  signed  by  Grant  which  guarantees  or  undertakes  that 
a  certain  yearly  dividend  shall  be  paid  to  the  shareholders  during 
a  long  period  of  years;  and  it  is  objected  that  no  consideration  ap- 
pears upon  the  face  of  the  letter,  and  that  no  consideration  was  in 
fact  given  to  Grant  for  that  promise  (I  call  it  "promise,"  because 
to  call  it  "contract"  would  be  to  assume  there  was  consideration) 
given  by  the  shareholders. 

Now  there  was  much  argument  upon  the  question  what  is  a  good 
consideration  for  a  compromise;  and  there  are  authorities  which 
for  a  considerable  time  were  considered  as  laying  down  the  law  upon 
the  subject;  but  Lord  Esher,  the  present  Master  of  the  Kolls,  in 
Ex  parte  Banner,  17  Ch.  D.  480,  is  supposed  to  have  thrown  doubts 
on  these  authorities;  and  what  he  said  was  in  fact  that  if  the  ques- 
tion ever  came  before  this  court  the  authority  of  Callisher  v.  Bisch- 
offsheim, Law  Bep.  5  Q.  B.  449,  Ockford  v.  Barelli,  20  W.  R.  116, 
and  Cook  v.  Wright,  1  B.  &  S.  559,  would  have  to  be  considered. 

Now,  what  I  understand  to  be  the  law  is  this,  that  if  there  is  in 
fact  a  serious  claim  honestly  made,  the  abandonment  of  the  claim 
is  a  good  "consideration"  for  a  contract;  and  if  that  is  the  law,  what 
we  really  have  to  now  consider  is  whether  in  the  present  case  there 
is  any  evidence  on  which  the  court  ought  to  find  that  there  was  a 
serious  claim  in  fact  made,  and  whether  a  contract  to  abandon  that 
claim  was  the  consideration  for  this  letter  of  guarantee.     I  am  not 


SECT.    Il]     MILES    V.    NEW   ZEALAND   ALFORD   ESTATE    CO.  249 

going  into  the  question  at  present  as  to  how  far  the  Statute  of  Frauds 
will  raise  any  difficulty  in  the  way.  And  I  think  also  that  the  mere 
fact  of  an  action  being  brought  is  not  material  except  as  evidence 
that  the  claim  was  in  fact  made.  That,  I  think,  was  laid  down  by 
Lord  Blackburn  in  Cook  v.  "Wright,  and  also  in  Callisher  v.  Bischoif- 
sheim,  and,  subject  to  the  question  whether  these  cases  are  over- 
ruled, or  ought  to  be  considered  as  unsound,  that,  I  think,  is  a 
i^orrect  statement  of  the  law.  Now,  by  "honest  claim,"  I  think  is 
meant  this,  that  a  claim  is  honest  if  the  claimant  does  not  know 
that  his  claim  is  unsubstantial,  or  if  he  does  not  know  facts,  to  his 
knowledge  unknown  to  the  other  party,  which  show  that  his  claim 
is  a  bad  one.  Of  course,  if  both  parties  know  all  the  facts,  and 
with  knowledge  of  those  facts  obtain  a  compromise,  it  cannot  be 
said  that  that  is  dishonest.  That  is,  I  think,  the  correct  law,  and 
it  is  in  accordance  with  what  is  laid  down  in  Cook  v.  Wright,  1 
B.  &  S.  559 ;  and  Callisher  v.  Bischoffsheim,  L.  E.  5  Q.  B.  449 ;  and 
Ockford  V.  Barelli,  20  W.  K.  116.  What  was  stated  in  Cook  v. 
Wright,  1  B.  &  S.  569,  by  Lord  Blackburn  is  this :  "We  agree  that 
unless  there  was  a  reasonable  claim  on  the  one  side,  which  it  was 
bond  fide  intended  to  pursue,  there  would  be  no  ground  for  a  com- 
promise; but  we  cannot  agree  that  (except  as  a  test  of  the  reality 
of  the  claim  in  fact)  the  issuing  of  a  writ  is  essential  to  the  validity 
of  the  compromise."  Again,  what  his  Lordship  says  in  the  subse- 
quent case  of  Callisher  v.  Bischoffsheim,  L.  R.  5  Q.  B.  452,  is  this : 
"If  we  are  to  infer  that  the  plaintiff  believed  that  some  money  was 
due  to  him,  his  claim  was  honest,  and  the  compromise  of  that  claim 
would  be  binding  and  would  form  a  good  consideration,  although 
the  plaintiff,  if  he  had  prosecuted  his  original  claim,  would  have 
been  defeated."  The  doubt  of  the  Master  of  the  Bolls  seems  to  have 
been  whether  a  compromise  would  not  be  bad,  or  a  promise  to 
abandon  a  claim  would  be  a  good  consideration  if,  on  the  facts  being 
elicited  and  brought  out,  and  on  the  decision  of  the  court  being  ob- 
tained, it  was  found  that  the  claim  which  was  considered  the  con- 
sideration for  the  compromise  was  a  bad  one.  But  if  the  validity 
of  a  compromise  is  to  depend  upon  whether  the  claim  was  a  good 
one  or  not,  no  compromise  would  be  effectual,  because  if  it  was  after- 
wards disputed,  it  would  be  necessary  to  go  into  the  question  whether 
the  claim  was  in  fact  a  good  one  or  not;  and  I  consider,  notwith- 
standing the  doubt  expressed  by  the  Master  of  the  Rolls,  that  the 
doctrine  laid  down  in  Cook  v.  Wright  and  Callisher  v.  Bischoffsheim 
and  Ockford  ik  Barelli  is  the  law  of  this  court. 

Now,  was  there  here  any  claim  in  fact  made  on  behalf  of  the 
company  against  Grant,  and  was  there,  in  fact,  anything  which 
would  bind  the  company  to  abandon  that  claim?  The  conclusion 
at  which  I  have  arrived  is,  that  there  is  no  evidence  on  which  we 
ought  to  rely  that  there  was  in  fact  a  claim  intended  to  be  made 
against  Grant,  and,  in  my  opinion,  on  the  evidence  be  fore  us,  we 


250  MILES    V.    NEW    ZEALAND   ALFORD   ESTATE    CO.     [CHAP.    I 

ought  not  to  arrive  at  the  conclusion  that  there  was  ever  intended 
to  be  any  contract  by  the  company,  much  less  that  there  was  in  fact 
any  contract  binding  the  company  that  that  claim  should  not  be 
prosecuted,  and  should  be  given  up.  [His  Lordship  alluded  shortly 
to  the  facts  of  the  case,  and  continued:]  Now,  undoubtedly,  on  the 
evidence,  several  of  the  shareholders  present  at  the  general  meeting 
of  the  loth  of  March,  1883,  expressed  a  very  hostile  feeling  against 
Mr.  Grant,  who  had  sold  the  property  to  the  company;  that  is  ad- 
mitted by  him,  and  is  in  my  opinion  clear.  But  then  what  was 
done?  There  is  nothing  at  all  on  the  face  of  this  letter  of  guarantee, 
as  I  have  already  stated,  which  says  that  it  was  given  by  Grant  in 
consequence  of  the  company  giving  up  any  claim  they  might  have 
against  him,  and  there  is  nothing  whatever  in  the  minutes  of  the 
board  which  states  in  fact  that  this  was  so,  nor  is  there  anything 
after  that  time  in  the  minutes  of  the  board  of  directors  which  can  be 
referred  to  as  showing  an  agreement  by  them  to  give  up  any  claim 
they  otherwise  intended  to  prosecute  against  him.  What  I  should 
say  was  the  state  of  the  case  was  this :  there  was  angry  feeling,  and 
Mr.  Grant  thought  it  might  result  in  proceedings  being  taken  against 
him;  and,  therefore,  what  he  considered  the  wisest  course  was  to 
make  this  oflFer  in  the  hope  and  expectation  that  he  would  keep 
things  quiet,  and  let  things  go  on  peaceably. 

I^ow,  in  my  opinion  a  simple  expectation,  even  though  realized, 
would  not  be  a  good  consideration  for  the  promise  which  he  gave. 
In  order  to  make  a  good  consideration  for  the  promise  there  must 
be  something  binding  done  at  the  time  by  the  other  party,  there 
must  be  something  moving  from  the  other  party  towards  the  person 
giving  the  promise.  In  my  opinion  to  make  a  good  consideration 
for  this  contract  it  must  be  shown  that  there  was  something  which 
would  bind  the  company  not  to  institute  proceedings,  and  shown 
also  that  in  fact  proceedings  were  intended  on  behalf  of  the  company ; 
and,  in  my  opinion,  I  cannot  come  to  the  conclusion  as  a  matter  of 
fact  that  these  two  things  existed.  It  is  true  that  directors  were 
present  at  the  meeting,  and  that  their  guarantee  was  entered  on  the 
minutes,  but  although  this  was  the  case,  it  cannot  in  my  opinion 
be  considered  that  the  directors  by  being  there  entered  into  any  con- 
tract as  directors  not  to  enforce  the  claim  of  the  company.  The 
proper  mode  of  proving  any  agreement  made  by  the  directors  would 
be  the  production  of  evidence  of  its  having  been  made  at  a  meeting 
held  by  them  as  the  persons  having  the  conduct  of  the  business  of 
the  society.  No  doubt  they  might,  if  they  had  been  so  minded,  at 
a  meeting  of  the  board  agree  that  they  should  not  make  any  claim 
against  him  in  consideration  of  this  having  taken  place,  but  I  find 
nothing  of  that  kind.^ 

'  A  portion  of  Hio  oj)iiiions  in  which  iho.  Statute  of  Frniids  was  hold  inapplicable 
anf!  in  which  it  wiih  Ik^M  that  if  the  company  harl  a  valid  claim  that  claim  was  entitled 
to  priority  over    the    plaintid'H  claim,  in  omitted.     Some  other  abbreviations  of  the 


SECT.    II  ]  STRONG    V.    SHEFFIELD  251 


BENJAMIN  B.   STEONG,  Appellant,  v.  LOUISA  A. 
SHEFFIELD,  Eespondent 

JSTew  Yokk  Court  of  Appeals,  December  17,  1894- January  15,  1895 

[Reported  in  144  New  York,  392] 

Andrews,  C.  J.  The  contract  between  a  maker  or  indorser  of 
a  promissory  note  and  the  payee  forms  no  exception  to  the  general 
rule  that  a  promise,  not  supported  by  a  consideration,  is  midum 
■pactum.  The  law  governing  commercial  paper  which  precludes  an 
inquiry  into  the  consideration  as  against  hond  fide  holders  for  value 
before  maturity,  has  no  application  where  the  suit  is  betAveen  the 
original  parties  to  the  instrument.  It  is  undisputed  that  the  demand 
note  upon  which  the  action  was  brought  was  made  by  the  husband 
of  the  defendant  and  indorsed  by  her  at  his  request  and  delivered 
to  the  plaintiff,  the  payee,  as  security  for  an  antecedent  debt  owing 
by  the  husband  to  the  plaintiff.  The  debt  of  the  husband  was  past 
due  at  the  time,  and  the  only  consideration  for  the  wife's  indorsement, 
which  is  or  can  be  claimed,  is  that  as  part  of  the  transaction  there 
was  an  agreement  by  the  plaintiff  when  the  note  was  given  to  for- 
bear the  collection  of  the  debt,  or  a  request  for  forbearance,  which 
was  followed  by  forbearance  for  a  period  of  about  two  years  subse- 
quent to  the  giving  of  the  note.  There  is  no  doubt  that  an  agree- 
ment by  the  creditor  to  forbear  the  collection  of  a  debt  presently  due 

case  have  been  made.  Fry,  L.  J.  delivered  a  concurring,  and  Bowen,  L.  J.  a  dissent- 
ing opinion. 

In  America  many  courts  have  shown  a  disposition  to  follow  the  doctrine  of  the 
late  English  decisions.  Union  Bank  v.  Geary,  5  Pet.  99;  Sheppey  v.  Stevens,  185  Fed. 
147;  Kress  v.  Moscowitz,  105  Ark.  638;  Baldwin  v.  Central  Bank,  17  Col.  App.  7; 
In  re  Thomas,  85  Conn.  50;  Morris  v.  Munroe,  30  Ga.  630;  Hayes  v.  Massachusetts 
Co.,  125  111.  625,  639;  Ostrander  v.  Scott,  161  111.  339;  Melcher  v.  Insurance  Co.,  97 
Me.  512;  Prout  v.  Pittsfield  Fire  District,  154  Mass.  450;  Dunbar  v.  Dunbar,  180 
Mass.  170;  Layer  v.  Layer,  184  Mich.  663;  Hansen  v.  Gaar,  63  Minn.  94;  Kelley  v. 
Hopkins,  108  Minn.  155;  Majors  v.  Majors,  92  Neb.  473;  Latulippe  v.  N.  E.  Inv.  bo. 
77  N.  H.  31;  Grandin  v.  Grandin,  49  N.  J.  L.  508;  Post  v.  Thomas,  212  N.  Y.  264; 
Di  lorio  v.  Di  Brasio,  21  R.  I.  208;  Bellows  v.  Sowles,  55  Vt.  391;  Citizens'  Bank  v. 
Babbitt,  71  Vt.  182;    Hewett  v.  Currier,  63  Wis.  386. 

The  definition  given  in  other  cases  seems  to  require  the  claim  forborne  to  be  at 
least  reasonably  doubtful  in  fact  of  law  in  order  to  make  the  forbearance  or  promise 
to  forbear  a  good  consideration.  Stewart  v.  Bradford,  26  Ala.  410;  Ware  v.  Morgan, 
67  Ala.  461;  Richardson  ».  Comstock,  21  Ark.  69;  Russell  v.  Daniels,  5  Col.  App 
224;  Mulholland  v.  Bartlett,  74  111.  58;  Bates  v.  Sandy,  27  111.  App.  552  (see  later. 
Illinois  cases  sujyra);  U.  S.  Mortgage  Co.  ».  Henderson,  111  Ind.  24;  Sweitzer  i). 
Heasly,  13  Ind.  App.  567  (compare  Moon  v.  Martin,  122  Ind.  211);  Tucker  r.  Ronk, 
42  la.  80;  Peterson  v.  Breitag,  88  la.  418;  (see  Richardson  Co.  v.  Hampton,  70  la. 
573);  Price  v.  First  Nat.  Bank,  62  Kan.  743;  Cline  v.  Templeton,  78  Ky.  550;  Mills 
V.  O'Daniel,  62  S.  W.  Rep.  1123  (Ky.);  Schroeder  v.  Fink,  60  Md.  436;  Emmittsburg 
V.  Donoghue,  67  Md.  383;  Palfrey  v.  Portland,  &c.  R.  R.  Co.,  4  Allen,  55.  (See  later 
Massachusetts  cases,  supra) ;  Taylor  v.  Weeks,  88  N.  W.  Rep.  466  (Mich.) ;  Foster  ». 
Metts,  55  Miss.  77;  Gunning??.  Royal,  59  Miss.  45;  Longi'.  Towl,  42  Mo.  545;  Corbyn 
V.  Brokmeyer,  84  Mo.  App.  649;  Kidder  v.  Blake,  45  N.  H.  530;  O.  &  C.  R.  R.  Co.  v. 
Potter,  5  Oreg.  228;  Fleming  v.  Ramsey,  46  Pa.  252;  Sutton  v.  Dudley,  193  Pa.  194; 
Warren  v.  Williamson,  8  Baxter,  427,  McCloy  v.  Watkins,  88  Vt.  457;  Nicholsons. 
Neary,  77  Wash.  294;   Davisson  v.  Ford,  23  W.  Va.  617. 


252  STRONG    V.    SHEFFIELD  [CHAP.    I 

is  a  good  consideration  for  an  absolute  or  conditional  promise  of  a 
third  person  to  pay  the  debt,  or  for  any  obligation  he  may  assume 
in  respect  thereto.  Nor  is  it  essential  that  the  creditor  should  bind 
himself  at  the  time  to  forbear  collection  or  to  give  time.  If  he  is 
requested  by  his  debtor  to  extend  the  time,  and  a  third  person  under- 
takes in  consideration  of  forbearance  being  given  to  become  liable 
as  surety  or  otherwise,  and  the  creditor  does  in  fact  forbear  in  re- 
liance upon  the  undertaking,  although  he  enters  into  no  enforceable 
agreement  to  do  so,  his  acquiescence  in  the  request,  and  an  actual 
forbearance  in  consequence  thereof  for  a  reasonable  time,  furnishes 
a  good  consideration  for  the  collateral  undertaking.  In  other  words, 
a  request  followed  by  performance  is  sufficient,  and  mutual  promises 
at  the  time  are  not  essential,  unless  it  was  the  understanding  that 
the  promisor  was  not  to  be  bound,  except  on  condition  that  the  other 
party  entered  into  an  immediate  and  reciprocal  obligation  to  do  the 
thing  requested.  Morton  v.  Burn,  7  A.  &.  E.  19;  Wilby  v.  Elgee, 
L.  E.  10  C.  P.  497;  King  v.  Upton,  4  Maine,  387;  Leake  on  Con. 
p.  54;  Am.  Lead.  Cas.  vol.  2,  p.  96  et  seq.  and  cases  cited. ^  The 
general  rule  is  clearly,  and  in  the  main  accurately,  stated  in  the 
note  to  Forth  v.  Stanton  (1  Sauud.  210,  note  h).  The  learned  re- 
porter says :  "And  in  all  cases  of  forbearance  to  sue,  such  forbearance 
must  be  either  absolute  or  for  a  definite  time,  or  for  a  reasonable 
time;  forbearance  for  a  little,  or  for  some  time,  is  not  sufficient." 
The  only  qualification  to  be  made  is  that  in  the  absence  of  a  speci- 
fied time  a  reasonable  time  is  held  to  be  intended.  Oldershaw  v. 
King,  2  H.  &  N.  517;  Calkins  v.  Chandler,  36  Mich.  320.-  The 
note  in  question  did  not  in  law  extend  the  payment  of  the  debt.  It 
was  payable  on  demand,  and  although  being  payable  with  interest 
it  was  in  form  consistent  with  an  intention  that  payment  should  not 
be  immediately  demanded,  yet  there  was  nothing  on  its  face  to  pre- 
vent an  immediate  suit  on  the  note  against  the  maker  or  to  recover 
the  original  debt.  Merritt  v.  Todd,  23  N".  Y.  28;  Shutts  v.  Fingar, 
100  id.   539. 

In  the  present  case  the  agreement  made  is  not  left  to  inference, 
nor  was  it  a  case  of  request  to  forbear,  followed  by  forbearance, 
in  pursuance  of  the  request,  without  any  promise  on  the  part  of  the 
creditor  at  the  time.  The  plaintiff  testified  that  there  was  an  ex- 
press agreement  on  his  part  to  tlio  effect  that  he  would  not  pay  the 
note  away,  nor  put  it  in  any  bank  for  collection,  but  (using  the  words 
of  the  plaintiff)  "I  will  hold  it  until  such  time  as  I  want  my  money, 
I  will  niako  a  demand  on  you  for  it."     And  again:  "!N"o,  I  will  keep 

•  Cilogg  V.  Bromloy,  [1012]  3  K.  B.  474;  ErlKorton  v.  Weaver,  105  111.  43;  Newton 
V.  CarHon,  SO  Ky.  300;  Home  Inn.  Co.  v.  Watson,  50  N.  Y.  300,  ncc;  Mecorney  ?i. 
Stanley,  8  r:ii.sh.  K5;  Manter  v.  Churchill,  127  Mass.  31;  Rhupo  v.  Galbraith,  32  Pa. 
10,  conlra.     S<!e  also  Shaflhiirne  v.  Daly,  70  Tal.  35.'>;    Ivanibort  ?'.  rioivloy,  80  Me.  480. 

'  Moore  r.  McKenney,  83  Me.  80;  Plaslcell  v.  Tiikeslmry,  02  Me.  551;  Howe  ?'. 
Tagicart.  133  M.ass.  284;  rilasseoek  v.  Glasseoek.  Ofi  Mo.  027;  Hockenhury  v.  Meyer, 
34  N.  .h  L.  430;  VMiua.  r.  VanMorlyn  4  .Tf)hnH.  2.37;  Traders'  Nat.  Bank  v.  Parker,  130 
N.  Y.  415;   Citizen.s'  Bank  v.  Babbitt,  71  Vt.  182,  ace. 


SECT.    II]  LYNN    V.    BRUCE  253 

it  until  such  time  as  I  want  it."  Upon  this  alleged  agreement  the 
defendant  indorsed  the  note.  It  would  have  been  no  violation  of 
the  plaiutili's  promise  if,  immediately  on  receiving  the  note,  he 
had  commenced  suit  upon  it.  Such  a  suit  would  have  been  an 
assertion  that  he  wanted  the  money  and  would  have  fulfilled  the 
condition  of  forbearance.  The  debtor  and  the  defendant,  when  they 
became  parties  to  the  note,  may  have  had  the  hope  or  expectation 
that  forbearance  would  follow,  and  there  was  forbearance  in  fact. 
But  there  was  no  agreement  to  forbear  for  a  fixed  time  or  for  a 
reasonable  time,  but  an  agreement  to  forbear  for  such  time  as  the 
plaintiff  should  elect.  The  consideration  is  to  be  tested  by  the  agree- 
ment, and  not  by  what  was  done  under  it.  It  was  a  case  of  mutual 
promises,  and  so  intended.  We  think  the  evidence  failed  to  dis- 
close any  consideration  for  the  defendant's  indorsement,  and  that 
the  trial  court  erred  in  refusing  so  to  rule. 

The  order  of  the  general  Term  reversing  the  judgment  should  be 
affirmed,  and  judgment  absolute  directed  for  the  defendant  on  the 
stipulation,  with  costs  in  all  courts. 

All  concur,  except  Gkay  and  Bartlett,  JJ.,  not  voting,  and 
Haight,  J.,  not  sitting.  Ordered  accordingly. 


LYNN"  AND  Another  v.  BKUCE 

In  the  Common  Pleas,  July  1,  1794 

[Reported  in  2  Henry  Blackstone,  317] 

This  was  an  action  of  assumpsit.  The  first  count  of  the  declara- 
tion was  on  a  forbearance  to  sue  on  a  bond  given  by  the  defendant 
to  the  plaintiffs  for  200?.  The  second  was  as  follows :  "And  whereas 
also,  afterwards,  &c.,  in  consideration  that  the  said  Robert  and 
Thomas  (the  plaintiffs),  at  the  special  instance  and  request  of  the 
said  Charles  (the  defendant),  had  then  and  there  consented  and 
agreed  to  accept  and  receive  of  and  from  the  said  Charles  a  certain 
composition  of  fourteen  shillings  in  the  pound,  and  so  in  proportion 
for  a  lesser  sum  than  a  pound,  upon  a  certain  other  sum  of  one 
hundred  and  five  pounds  five  shillings  and  twopence,  then  due  and 
owing  from  the  said  Charles  to  the  said  Robert  and  Thomas  upon 
and  by  virtue  of  a  certain  other  writing  obligatory,  bearing  date, 
&c.,  made  and  executed  by  the  said  Charles  to  the  said  Robert  and 
Thomas,  whereby  he  became  held  and  firmly  bound  to  them  in  the 
sum  of  two  hundred  pounds,  in  full  satisfaction  and  discharge  of  the 
said  last-mentioned  writing  obligatory,  and  all  moneys  due  thereon, 
he  the  said  Charles  undertook  and  then  and  there  faithfully  promised 
the  said  Robert  and  Thomas  to  pay  them  the  said  composition  of 
fourteen  shillings  in  the  pound,  and  so  in  proportion  for  a  lesser 
sum  than  a  pound,  upon  the  said  last-mentioned  sum  of  one  hundred 


254  LYNN    V.    BRUCE  [CHAP.   I 

and  five  pounds  five  shillings  and  twopence,  upon  request;  and  the 
said  Robert  and  Thomas  in  fact  say  that  the  said  composition  of 
fourteen  shillings  in  the  pound,  and  so  in  proj)ortion  for  a  lesser 
sum  than  a  pound,  upon  the  said  last-mentioned  sum  of  one  hundred 
and  five  pounds  five  shillings  and  twopence,  amounted  to  a  large 
sum  of  money,  to  wit,  the  sum  of  seventy-three  pounds  thirteen  shil- 
lings and  sixpence,  to  wit,  at  Westminster  aforesaid,  whereof  the 
said  Charles  afterwards,  to  wit,  on  the  same  day  and  year  last  afore- 
said, at  Westminster  aforesaid,  had  notice  and  although  the  said 
Charles  hath  paid  to  the  said  Robert  and  Thomas  a  certain  sum 
of  money,  to  wit,  the  sum  of  seventy  pounds  and  six  shillings,  part 
of  the  said  last-mentioned  sum  of  seventy-three  pounds  thirteen 
shillings  and  sixpence,  the  amount  of  the  said  last-mentioned  com- 
position, yet  the  said  Charles  not  regarding,  &c.,  hath  not  yet  paid 
the  sum  of  three  pounds  seven  shillings  and  sixpence,  being  the 
residue  of  the  said  sum  of  seventy-three  pounds  thirteen  shillings 
and  sixpence,  the  composition  last  aforesaid,  or  any  part  thereof,"  &c. 

A  verdict  having  been  found  for  the  plaintiffs  on  the  whole  dec- 
laration, a  motion  was  made  in  arrest  of  judgment  on  the  ground  of 
the  insufficiency  of  the  second  count ;  and  after  argument  the  opinion 
of  the  Court  was  thus  delivered  by 

Lord  C.  J.  Eyre.  This  is  a  motion  made  in  arrest  of  judgment, 
on  an  objection  to  the  second  count  of  the  declaration.  The  sub- 
stance of  that  count  is  that,  in  consideration  that  the  plaintiff  at 
the  defendant's  request  had  consented  and  agreed  to  accept  and 
receive  from  the  defendant  a  composition  of  fourteen  shillings  in 
the  pound,  and  so  in  proportion  for  a  lesser  sum  than  a  pound,  upon 
1051.  5s.  2d.  due  from  the  defendant  to  the  plaintiff  on  a  bond  dated 
the  30th  March,  1792,  for  200?.,  in  full  satisfaction  and  discharge 
of  the  bond  and  all  money  due  thereon,  the  defendant  promised  to 
pay  the  said  composition.  It  is  then  averred  that  the  composition 
amounted  to  7Sl.  13s.  6d.,  and  that  the  defendant  had  paid  the  plain- 
tiff 70L  6s.,  part  thereof.  The  breach  is,  that  he  did  not  pay  3Z.  7s. 
f)d.,  the  residue.  This  will  be  found  to  be  a  very  clear  case,  when 
the  nature  of  the  objection  is  understood.  The  consideration  of  the 
promise  is,  as  stated  in  this  count,  an  agreement  to  accept  a  com- 
position in  satisfaction  of  a  debt.  Tf  this  is  an  agreement  which  is 
binding,  and  can  be  enforced,  it  is  a  good  consideration;  if  it  is 
not  binding,  and  cannot  be  enforced,  it  is  not  a  good  consideration. 
It  was  settled  in  the  case  of  Allen  v.  Harris,  1  Lord  Raym.  122,  upon 
consideration  of  all  the  cases,  that  upon  an  accord,  which  this  is, 
no  rcmefly  lies;  it  was  said  that  tlie  books  are  so  numerous  that  an 
accord  ought  to  be  executed,  that  it  was  impossible  to  overturn  all 
the  aiitliorifies:  the  expression  is,  "overthrow  all  the  books."  It 
was  added  tbat,  if  it  had  been  a  new  point,  it  might  have  been  worthy 
of  consideration.  But  we  tbink  it  was  rightly  settled  upon  sound 
principles.     Interest  reipuhlicce  ut  sit  finis  litium:  accord  executed 


SECT,    II ]  NASH    V.    ARMSTRONG  255 

is  satisfaction :  accord  executory  is  only  substituting  one  cause  of 
action  in  the  room  of  another,  which  might  go  on  to  any  extent.  The 
cases  in  which  the  question  has  been  raised,  whether  an  accord  execu- 
tory could  be  enforced,  and  in  which  it  has  been  so  often  determined 
that  it  could  not,  have  been  cases  in  which  it  has  been  pleaded  in  bar 
of  the  original  action.  But  the  reason  given  in  three  of  the  cases 
in  1  Rol.  Abr.,  tit.  Accord,  pi.  11,  12,  13,  is  because  the  plaintiff 
hath  not  any  remedy  for  the  whole,  or  where  part  has  been  per- 
formed, for  that  which  is  not  performed,  which  goes  directly  to  the 
gist  of  this  action,  as  it  is  stated  in  the  count  objected  to.  This 
is  an  action  brought  to  recover  damages  for  that  part  of  the  accord 
which  has  not  been  performed.  But  an  accord  must  be  so  com- 
pletely executed  in  all  its  parts  before  it  can  produce  legal  obligation 
or  legal  effect,  that  in  Peytoe's  Case,  9  Co.  79  h,  it  was  holden  that, 
where  part  of  the  accord  had  been  executed,  tender  of  the  residue 
would  not  be  sufficient  to  make  it  a  bar  to  the  action,  but  that  there 
must  be  an  acceptance  in  satisfaction.  There  are  two  cases  in  Cro. 
Eliz.  304,  305,  to  the  same  effect.  It  was  argued  according  to  the 
cases  in  Rol.  Abr.  that  an  accord  executory  in  any  part  is  no  bar, 
because  no  remedy  lies  for  it  for  the  plaintiff.  Perhaps  it  would 
be  a  better  way  of  putting  the  argument,  to  say  that  no  remedy  lies 
for  it  for  the  plaintiff,  because  it  is  no  bar;  but  put  either  way,  it 
concludes  in  support  of  the  objection  to  the  second  count  in  this 
declaration,  and  consequently  the  judgment  must  be  arrested. 

Rule  absolute  to  arrest  the  judgment. 


NASH,  Administrator  with  the  Will  annexed  of  John  Beatson,  de- 
ceased, V.  ARMSTROISTG 

In  the  Common  Pleas,  May  11,  1861 

\Iie'ported  in  10  Common  Bench  Reports,  New  Series,  259] 

The  declaration  stated  that,  by  deed  dated  the  29th  of  February, 
1860,  the  said  John  Beatson  let  to  the  defendant  certain  rooms,  part 
of  a  house  of  the  said  John  Beatson,  therein  described,  from  the 
1st  of  March  in  that  year  to  the  24th  of  June  in  that  year,  at  rent 
to  be  ascertained  by  two  valuers,  one  on  the  part  of  the  said  John 
Beatson,  and  one  on  the  part  of  the  defendant,  or  an  umpire  to  be 
agreed  on  by  the  said  two  valuers,  and  afterwards  the  said  valuers 
were  respectively  accordingly  duly  appointed,  but  did  not,  without 
any  default  of  the  said  John  Beatson  or  the  plaintiff  in  that  behalf, 
ascertain  the  rent  so  to  be  paid  as  aforesaid,  or  appoint  any  umpire; 
and  the  defendant  nevertheless,  at  his  request,  occupied  the  said 
rooms  under  the  said  demise  until  the  1st  of  September,  1860,  the 
said   John  Beatson  having  previously   died;    that   afterwards,   and 


256  NASH    V.    ARMSTRONG  [CHAP.    I 

whilst  the  amount  of  rent  to  be  paid  by  the  defendant  for  and  in 
respect  of  his  said  occupation  of  the  said  rooms  to  the  said  24th 
of  June,  and  thence  to  the  said  1st  of  September,  was  and  remained 
unascertained,  it  was  mutually  agreed  between  the  plaintiff  as  ad- 
ministrator as  aforesaid  and  the  defendant,  that,  if  the  plaintiff  as 
administrator  as  aforesaid  would  not  insist  upon  such  valuation  as 
aforesaid,  the  defendant  would  pay  to  the  plaintiff  as  administrator 
for  and  in  respect  of  his  occupation  of  the  said  rooms  under  the 
said  deed,  and  for  and  in  respect  of  the  said  subsequent  occupation 
thereof  as  tenant  to  the  plaintiff  as  administrator  as  aforesaid,  a 
reasonable  sum  in  that  behalf,  to  wit,  the  sum  of  70Z.;  and  that 
neither  the  plaintiff  as  administrator  as  aforesaid,  nor  the  defendant, 
should  ever  call  upon  the  other  of  them  to  carry  out  or  perform  or 
fulfil  the  terms  of  the  said  deed.  Averment :  that  the  plaintiff  did 
every  thing,  and  every  thing  existed  and  had  before  suit  happened 
to  entitle  the  plaintiff,  as  administrator  as  aforesaid,  to  payment 
of  the  said  sum  of  money  last  mentioned,  to  wit,  1^1.  Breach :  that 
no  part  thereof  had  been  paid. 

To  this  count  the  defendant  demurred,  the  ground  of  demurrer 
stated  in  the  margin  being,  "that  a  contract  under  seal  cannot  be 
varied  or  discharged  by  a  parol  agreement."     Joinder. 

R.  G.  Williams,  in  support  of  the  demurrer.^  There  is  no  valid 
consideration  for  the  promise  stated  in  the  declaration,  [Williams, 
J.  Why  is  it  not  a  good  consideration  in  assumpsit  that  the  plaintiff 
foregoes  his  rights  under  the  deed?]  It  is  varying  by  parol  the  terms 
of  a  deed.  [Williams,  J.  That  is  not  so.]  By  the  parol  agree- 
ment, the  defendant  is  to  pay  the  rent  ascertained  in  a  way  different 
from  that  provided  by  the  deed.  [Williams,  J.  The  plaintiff  is 
seeking  to  enforce  an  agreement  founded  upon  a  consideration  that 
the  plaintiff  will  not  put  in  force  his  rights  under  the  deed.]  A 
deed  can  only  be  varied  by  a  deed.  Would  a  recovery  in  this  action 
be  pleadable  in  bar  to  an  action  upon  the  deed?  [Willes,  J.  I 
should  have  thought  it  a  good  answer  by  way  of  equitable  plea.  The 
payment  of  the  70/.  under  the  agreement  would  surely  be  ground 
for  an  unconditional  perpetual  injunction  against  proceeding  upon 

'  The  points  marked  for  argument  on  the  part  of  the  defendant  were  as  follows:  — 

"1.  Tliat  th(;  plaintiff  by  the  first  count  is  seeking  to  recover  upon  a  deed  as  varied 
by  a  parol  agreement,  whereas  a  deed  can  only  be  varied  by  a  deed; 

"2.  That  the  alleged  agreement  could  be  carried  out  by  deed  only,  and  there  is 
no  allegalion  of  the  execution  of  any  such  deed; 

".■J.  That  the  mattf^rs  alleged  in  the  first  count  disclose  a  claim  which  can  be  en- 
forced only  in  efjuity,  and  not  at  law; 

"4.  That  there  is  no  consideration  for  the  alleged  agreement,  if  it  is  to  be  consid- 
ered OH  infleiK^ndent  of  th(!  deed; 

"5.  That  the  alleged  agreement  would  afford  no  answer  to  an  action  upon  the 
deed,  or  prevent  the  plaintiff  from  calling  upon  the  valuers  to  appoint  an  umpire,  or 
upon  the  defendant  to  carry  out  the  terms  of  the  deed,  and  the  consideration  for  it 
is  wholly  nuKatory; 

"0.  That  the  ulleKed  agreement  is  in  the  nature  of  an  accord  only,  and  cannot  be 
enforced  or  sued  upon." 


SECT.    Il]  NASH    V.    ARMSTRONG  257 

the  deed.]  The  declaration,  it  is  submitted,  must  be  treated  as  it 
would  have  been  before  equitable  pleas  were  known.  Most  of  the 
cases  upon  this  subject  are  cases  where  the  parol  agreement  is  set 
up  as  an  answer  to  an  action  on  the  deed;  but  the  grounds  of  the 
decision  in  White  v.  Parkin,  12  East,  578,  are  strongly  in  favor  of 
the  proposition  contended  for  here.^  ...  In  the  present  case,  it 
cannot  be  contended  that  the  parol  agreement  does  not  conflict  with 
the  deed.  There  is  an  utter  repugnance  between  the  two  instruments. 
In  the  course  of  the  argument  in  White  v.  Parkin,  a  case  of  Leslie 
V.  De  la  Torre  was  cited,  where  Lord  Kenyon  ruled  that,  the  agree- 
ment by  charter-party  being  under  seal,  the  plaintiff  could  not  set 
up  a  parol  agreement  inconsistent  with  it,  and  which  in  effect  was 
meant  in  a  certain  extent  to  alter  it.  [Williams,  J.  The  diffi- 
culty in  your  way  is,  that  there  is  here  an  undertaking  on  the  plain- 
tiff's part  to  forbear  from  enforcing  the  payment  of  rent  under  the 
deed.]  A  rent  would  be  payable  under  the  deed,  to  which  this  agree- 
ment would  be  no  answer.  "White  v.  Parkin^  was  cited  and  approved 
of  in  Thompson  v.  Brown,  7  Taunt,  656,  672.^  ...  A  deed  cannot 
be  varied  in  any  way  by  parol;  and  no  action  can  be  maintained 
on  a  parol  agreement  which  varies  the  deed.  In  the  case  of  a  con- 
tract for  the  sale  of  goods  within  the  17th  section  of  the  Statute 
of  Frauds,  where  another  day  for  payment  has  been  by  parol  sub- 
stituted for  that  originally  fixed  by  the  contract,  it  has  been  held  that 
the  subsequent  parol  agreement  cannot  be  made  the  foundation  of 
an  action.  Marshall  v.  Lynn,  6  M.  &  W.  109;  Mechlen  v.  Wallace, 
7  Ad.  &  E.  49,  2  K  &  P.  224;  Stead  v.  Dawber,  10  Ad.  &  E.  57. 
In  Chitty  on  Contracts,  6th  edit.  55,  it  is  said :  "If  there  be  an  en- 
tire consideration  for  the  defendant's  promise,  made  up  of  several 
particulars,  and  one  of  these  consist  of  an  agreement  by  the  defendant 
which  the  Statute  of  Frauds  requires  to  be  in  writing,  and  which 
for  want  of  such  writing  is  void,  the  whole  consideration  is  void, 
and  the  promise  cannot  be  supported."  Here,  there  would  be  nothing 
to  prevent  the  plaintiff  from  bringing  an  action  upon  the  deed,  even 
after  the  money  was  paid  under  the  agreement.  To  allow  this  dec- 
laration to  be  good  would  be  promoting  circuity  of  action. 
Raymond,  for  the  plaintiff,  was  not  called  upon.* 

1  The  learned  counsel  here  stated  that  case. 

^  Leslie  v.  De  la  Torre? 

5  The  learned  counsel  here  stated  the  case  of  Gwynne  v.  Davy,  1  M.  &  G.  857, 
G.  Scott,  N.  R.  29,  9  Dowl.  P.  C.  1. 

^  The  points  marked  for  argument  on  the  part  of  the  plaintiff  were  as  follows:  — 

"1.  That  the  contract  disclosed  by  the  first  count  does  not  infringe  upon  the  rule 
that  a  contract  under  seal  cannot  be  varied  by  parol  agreement; 

"2.  That,  although  a  contract  under  seal  cannot  be  varied  by  parol,  yet  it  is  com- 
petent to  the  parties  to  enter  into  a  fresh  agreement  by  parol,  and  for  a  good  con- 
sideration, not  to  put  in  force  the  original  contract; 

"3.   That  the  contract  declared  on  is  collateral  to  that  entered  into  by  the  deed, 
and  leaves  the  force  of  the  deed  itself  intact,  and  amounts  merely  to  an  agreement 
not  to  enforce  the  performance  of  the  original  contract  under  seal; 

"4.    That  such  new  contract  is  founded  upon  a  good  consideration,  and  is  there- 
fore valid." 
9 


258  NASH    V.    ARMSTRONG  [CHAP.    I 

Williams,  J.  I  am  of  opinion  tliat  there  should  be  judgment  for 
the  plaintiif  on  this  demurrer.  I  do  not  think  it  necessary  to  dis- 
pute the  correctness  of  many  of  the  doctrines  contended  for  in  the 
argument;  for  I  do  not  consider  that  the  conclusion  we  have  arrived 
at  in  any  degree  conflicts  with  any  of  the  rules  of  law  adverted  to. 
On  the  face  of  this  declaration  there  is  an  admitted  promise  by  the 
defendant  to  pay  a  certain  sum  of  money  at  a  stipulated  time,  and 
an  admitted  breach  of  that  promise.  That  is  a  perfectly  good  promise 
if  founded  upon  a  sufficient  legal  consideration;  and  the  simple 
question  is,  whether  there  is  a  sufficient  legal  consideration  disclosed 
on  the  declaration.  I  am  of  opinion  that  there  is.  It  appears  upon 
the  face  of  the  declaration  that  the  plaintiff,  as  the  personal  repre- 
sentative of  the  original  contracting  party,  being  in  a  condition  to 
bring  an  action  upon  tTie  original  contract,  or  otherwise  to  put  it 
in  force,  in  consideration  of  his  abstaining  from  enforcing  the  rights 
conferred  on  him  by  that  contract,  the  defendant  promised  to  pay 
in  respect  of  the  occupation  of  the  premises  under  the  deed  referred 
to,  and  in  respect  of  his  subsequent  occupation  thereof  as  tenant  to 
the  plaintiff  as  administrator,  a  reasonable  sum.  It  was  not  neces- 
sary, in  order  to  make  that  a  good  consideration,  that  the  mutual 
promises  should  amount  to  a  release  of  the  right  of  action  flowing 
from  the  original  contract.  The  plaintiff,  having  a  right  to  en- 
force the  benefits  conferred  on  him  by  the  contract,  enters  into  an 
agreement  not  to  do  so,  whereby  he  changes  his  situation  to  this  ex- 
tent, that,  whereas  before  he  had  a  right  to  sue  upon  the  deed,  if  he 
now  exercises  that  right  he  renders  himself  liable  to  an  action.  He 
has  therefore  plainly  given  a  good  consideration  for  the  defendant's 
promise,  and  there  is  a  complete  cause  of  action  disclosed  on  the  face 
of  the  declaration.  Upon  principle,  this  is  in  truth  nothing  more 
than  the  ordinary  case  to  be  found  in  the  old  books,  of  an  action 
against  an  heir  whose  ancestor  has  made  a  bond  binding  himself 
and  his  heirs,  and  who  has  assets  by  descent;  if  he  contracts  with 
the  obligee  of  the  bond  that,  if  the  latter  will  forbear  to  put  the 
bond  in  suit,  he  will  pay  the  sum  secured  by  a  given  day,  —  that 
is  a  good  assumpsit,  and  the  forbearance  till  the  day  named  is  a 
good  consideration  to  support  the  promise.  The  bond  is  not  re- 
leased by  that.  The  only  result  is, "to  subject  the  obligee  to  an  ac- 
tion if  he  puts  the  bond  in  suit  before  the  expiration  of  the  time 
agreed  on.  To  that  extent  the  terms  of  the  bond  are  varied,  and 
yet  the  bond  remains  unreleased ;  nevertheless,  the  consideration 
v/hich  flows  from  the  agreement  of  the  obligee  not  to  put  the  bond 
in  suit  is  good,  and  furnishes  a  ground  of  action  if  it  be  broken. 
That  principle  is  applicable  here. 

WiLLKH,  J.  I  am  entirely  of  the  same  opinion.  It  appears  to 
me  that  this  declaration  is  neither  open  to  the  objection  that  it  is 
an  attempt  fo  vary  by  parol  the  terms  of  a  deed,  nor  to  the  objection 
that  it  is  an  action  upon  an  accord. 


SECT.    II]  SCHWEIDER    V.    LANG  259 

Byles,  J.  I  had  at  first  some  doubt  whether  the  maxim  unum- 
quodque  dissolvitur  eodem  ligamine  quo  ligatur  was  not  applicable 
here;  for,  till  satisfaction,  the  plaintiff  might  always  have  an  ac- 
tion upon  the  deed,  and  one  cannot  but  see  that  this  would  lead  to 
circuity  of  action.  Further,  whatever  may  be  the  value  of  the  de- 
cision in  Leslie  v.  De  la  Torre,  the  reported  observations  of  Lord 
Kenyon  are  very  much  in  favor  of  Mr.  Williams's  argument.  But 
Gwynne  v.  Davy  is  not  so.  Three  of  the  judges  there  intimate  an 
opinion  that  an  action  might  be  maintained  on  the  parol  agreement. 
And  no  other  authorities  have  been  cited  to  show  that  the  rule  is 
applicable  to  a  cross-action,  and  is  not  confined  to  an  action  on  the 
deed. 

Keating,  J.  I  concur  with  the  rest  of  the  Court  in  thinking  that 
the  declaration  discloses  a  promise  founded  on  a  good  consideration, 
and  that  it  is  not  open  to  the  objection  that  the  plaintiff  is  seeking 
by  parol  to  vary  the  terms  of  an  instrument  under  seal. 

Judgment  for  the  plaintiff. 


JOHN  SCHWEIDEE  v.  GEORGE  LANG 

Minnesota  Supreme  Court,  July  3,  1882 

{^Reported  in  29  Minnesota,  254] 

Beery,  J.  On  September  27,  1881,  defendant,  as  payee,  holding 
plaintiff's  promissory  note,  upon  which  there  was  an  unpaid  balance 
of  $1,850,  falling  due  November  10,  1882,  with  interest  to  accrue, 
they  agreed  as  follows :  Defendant  agreed  to  accept  $1,750  in  full 
satisfaction  of  the  balance  of  principal  and  interest  called  for  by 
the  note;  $150  to  be  paid  by  plaintiff  within  one  week,  and  $1,600 
within  two  weeks  from  said  September  27 ;  the  note  to  be  thereupon 
delivered  up,  and  a  mortgage  securing  the  same  to  be  cancelled. 
Plaintiff  agreed  to  raise  the  $1,750  and  pay  the  same  to  defendant 
as  above  specified.  It  was  subsequently  mutually  agreed  that  de- 
fendant should  call  upon  plaintiff  at  his  residence,  within  a  week 
from  September  27,  to  receive  the  $150  payment,  plaintiff  to  have 
the  same  there  in  readiness.  Plaintiff  had  and  kept  the  $150  in 
readiness  during  the  week;  but  defendant  failed  to  call  for  it  at 
any  time,  and  plaintiff  was  unable  to  find  him  during  the  week 
mentioned.  Within  two  weeks  from  September  27,  plaintiff,  after 
much  expense  and  trouble,  procured  the  sum  of  $1,600,  and  on 
October  10,  1881,  duly  tendered  the  sum  of  $1,750  to  the  defendant 
in  fulfilment  of  his  (plaintiff's)  agreement,  and  requested  defendant 
to  fulfil  on  his  part.  Defendant  refused  to  receive  the  money  or  to 
perform  his  part  of  the  agreement,  having  on  October  1,  without 
plaintiff's  knowledge,  sold  and  transferred  the  note  and  mortgage 


260  RIGGS    V.   BULLINGHAM  [CHAP.    I 

to  a  third  party,  to  whom  plaintiff  became  thereby  bound  to  pay 
the  full  unpaid  amount  called  for  by  the  note.  Plaintiff  brings  this 
action  for  damages  for  defendant's  breach  of  contract. 

The  agreement  between  the  parties  was  not  for  the  sale  of  the 
note  and  mortgage,  but  one  by  which  the  maker  of  these  instru- 
mnts  was  to  be  discharged  from  liability  thereon  by  the  payee.  The 
agreement  is,  therefore,  not  within  the  statute  of  frauds,  so  as  to 
be  required  to  be  in  writing.  The  agreement  is  what  is  known  as 
an  accord  executory;  that  is  to  say,  it  is  an  agreement  upon  the 
sum  to  be  paid  and  received  at  a  future  day  in  satisfaction  of  the 
note.  If  the  accord  had  been  executed,  there  would  have  been  a 
satisfaction  extinguishing  the  note,  the  case  being  taken  out  of  the 
rule  by  which  payment  of  a  part  is  held  insufficient  to  satisfy  the 
whole  of  a  liquidated  indebtedness  by  the  fact  that  the  payment  was 
to  be  made  before  the  indebtedness  fell  due.  Sonnenberg  v.  Riedel, 
16  Minn.  83;  Brooks  v.  White,  2  Met.  283. 

The  case  is,  then,  one  of  a  promise  on  the  part  of  the  plaintiff  to 
do  something  of  advantage  in  law  to  the  defendant,  and  on  the  part 
of  the  defendant  to  do  something  of  advantage  in  law  to  the  plain- 
tiff —  a  case  of  mutual  promises,  one  of  which  is  the  consideration 
of  the  other.  The  agreement  was  valid  and  binding  upon  both 
parties.  The  plaintiff  has  duly  offered  to  perform  on  his  part.  The 
defendant  has  refused  to  accept  the  proffered  performance,  as  also 
to  perform  on  his  part  at  plaintiff's  request,  and  has  moreover  dis- 
abled himself  from  performing  by  disposing  of  the  note.  The  plain- 
tiff is,  therefore,  in  accordance  with  the  general  rule  which  gives 
damages  for  breach  of  contract,  entitled  to  recover  the  damages  which 
have  resulted  to  him  from  this  breach  by  defendant.  Billings  v. 
Vanderbeck,  23  Barb.  546;  Scott  v.  Frink,  53  Barb.  533;  Very  v. 
Levy,  13  How.  345.  Order  affirmed. 


C.  —  Executed   Consideration  and  Moeal   Consideration 


RIGGS  V.  BULLIT^GHAM 

In  the  Queen's  Bench,  Michaelmas  Term,  1599 

[Reported  in  Crohe  Elizaheth,  715] 

Assumpsit.  Whereas  he  was  seised  in  fee  of  the  advowson  of 
Beckiiigham,  in  the  county  of  Lincoln;  in  consideration  that  he  at 
the  defendant's  request,  by  his  deed,  dedissct  ct  concessisset  to  the 
defendant  the  first  and  next  avoidance  of  the  said  church,  the  de- 
fendant, 22  August,  37  Eliz.,  assumed  to  pay  to  the  plaintiff  lOOZ., 


SECT.    I]  BOSDEN    V.    SIR   JOHN   THINNE  261 

&c.  Upon  non  assumpsit  pleaded,  it  was  found  for  the  plaintiff,  and 
damages  assessed  to  an  1001.  xind  after  verdict  it  was  moved  in 
arrest  of  judgment  that  this  consideration  is  past,  and  therefore  not 
sufficient  to  ground  an  assumpsit;  for  there  is  not  any  time  of  the 
grant  alleged ;  and  it  might  have  been  divers  years  before  the  assump- 
sit made;  and  being  a  thing  executed  and  past,  no  assumpsit  after- 
wards can  be  good :  and  in  proof  thereof  Dyer,  272,  Hunt  v.  Bate 
was  cited.  But  all  the  Court  resolved  to  the  contrary;  for  the  grant 
being  made  at  his  request,  it  is  a  sufficient  consideration,  although 
it  were  divers  years  before;  especially  being  to  the  defendant  him- 
self, the  consideration  shall, be ,\to  continue.  But  if  the  grant  had 
been  to  a  stranger,  and  not  at 'the  defendant's  request,  it  had  per- 
adventure  been  otherwise.  .  .  .  Wherefore  it  was  adjudged  for  the 
plaintiff. 


BOSDEN"  V.  SIE  JOHN  THIITNE 

In  the  King's  Bench,  Michaelmas  Term,  1603 

[Reported  in  Yelverton,  40] 

The  plaintiff  declared,  quod  cum  ad  specialem,  instantiam  of  the 
defendant,  he  had  procured  credit  for  one  Mud  for  two  pipes  of 
wine  amounting  to  517.,  and  Flud,  super  credentiam  and  per  medium. 
of  the  plaintiff  at  the  request  of  the  defendant,  emisset  of  one 
Roberts  two  pipes  of  wine  for  51L,  and  superinde  the  plaintiff  with 
riud  entered  into  bond  of  1007.  to  Roberts  for  payment  of  the  said 
517,  at  a  day  to  come,  which  was  not  paid  at  the  day;  and  there- 
V  upon  Roberts  sued  the  plaintiff  upon  the  bond,  and  recovered,  and 
Imd  a  capias  against  him,  whereby  he  fuit  coactus  to  pay  Roberts 
6717.,  de  solutione  of  which  677.  causa  prceallegata  he  notified  to 
the  defendant,  who  in  consideratione  prcemissorum  promised  to 
pay  the  plaintiff  the  677.  at  Michaelmas;  and  showed  the  failure 
of  payment  of  the  677.  at  the  day,  &c.  And  upon  non  assumpsit 
pleaded,  it  was  found  against  the  defendant.  And  Yelverton  moved 
in  arrest  of  judgment,  that  the  action  upon  the  matter  shown  does 
not  lie,  because  the  consideration  was  past  and  executed  before  the 
promise,  and  the  defendant  had  no  profit  by  it,  but  all  the  benefit 
was  to  Flud,  a  stranger;  like  the  case  10  Eliz.,  Dy.  272,  where 
J.  S.  was  bail  for  the  servant  upon  an  arrest,  and  signified  all  to 
the  master  after  the  bail  entered  into,  who  promised  to  save  him 
harmless;  and  although  the  bail  was  condemned,  yet  no  assumpsit 
lay  against  the  master,  because  the  consideration  was  past  before 
the  promise :  and  it  seems  that  upon  the  first  request  only  to  give 
credit  to  Flud  for  two  pipes  of  wine,  no  assumpsit  lies;  for  a  bare 
request  does  not  imply  any  promise;  as  if  I  say  to  a  merchant,  I 
pray  trust  J.  S.  with  1007.,  and  he  does  so,  this  is  of  his  own  head, 


262  ROSCORLA    V.   THOMAS  [CHAP.    I 

and  he  shall  not  charge  me,  unless  I  say  I  will  see  you  paid  or  the 
like.  And  it  seems  likewise  that  the  promise  shall  not  have  re- 
lation to  the  first  request  of  giving  credit  to  Flud,  because  the  en- 
treaty for  the  credit  was  but  for  two  pipes  of  wine  amounting  to 
oil.,  and  the  promise  is  for  67^.^  and  so  they  differ  in  the  sums; 
as  if  I  request  J.  S.  to  enter  into  bond  for  J.  D.  for  lOL,  and  I 
will  see  him  paid;  now  if  J.  S.  enters  into  bond  of  20Z.  for  the 
payment  of  10/.  for  J.  D,,  which  20Z.  is  recovered  against  him,  he 
shall  not  charge  me  on  my  promise  but  lOZ,  But  non  allocatur 
per  Fennee,  Gawdy,  and  Popham;  for  although  upon  the  first  re- 
quest only  assumpsit  does  not  lie,  yet  the  promise  coming  after 
shall  have  reference  to  the  first  request;  and  although  the  request 
was  but  for  two  pipes  of  wine  amounting  to  51L,  that  Flud  might 
have  credit  for  that;  yet  when  Roberts,  who  sold  the  wine,  would 
not  take  (as  appears)  security  but  by  bond  of  100/.  for  payment 
of  51/.,  and  all  this  matter  is  signified  afterwards  to  the  defendant, 
who  agrees  to  it,  and  promises  to  pay  the  67/.,  this  shall  charge 
him;  because  it  has  its  essence  and  commencement  from  the  first 
request  made  by  the  defendant.  As  {per  Gawdy)  if  I  request  one 
to  marry  my  cousin,  who  does  so,  and  afterwards  tells  me  of  it, 
and  thereupon  I  promise  him  100/.,  this  is  a  good  promise  to  charge 
me,  although  the  marriage  was  past,  which  is  the  consideration; 
because  now  the  promise  shall  have  reference  to  the  request,  which 
was  before  the  marriage.  Vide  this  case,  Dy.  272  h.  The  same 
law  (by  him)  if  I  entreat  one  to  be  bail  for  my  servant,  and  he 
thereupon  becomes  bail,  and  is  condemned,  and  afterwards  tells 
me  of  it,  and  I  promise  him  to  save  him  harmless,  it  is  good,  and 
he  shall  recover  his  damage  in  toto.  Wherefore  judgment  was 
given  for  the  plaintiff.     But  Yelverton,  J.,  was  contra  clearly.^ 


ROSCORLA  V.   THOMAS 

In  the  Queen's  Bench,  May  30,  1842 

{^Reported  in  3   Queen's  Bench  Reports,  234] 

Assumpsit.  The  declaration  stated  that,  whereas  heretofore,  to 
wit,  (fee,  in  consideration  that  plaintiff  at  the  request  of  defendant 
had  bought  of  defcMidant  a  certain  horse,  at  and  for  a  certain  price, 
&c.,  to  wit,  &c.,  defendant  promised  plaintiff  that  the  horse  did  not 
exceed  five  years  old,  and  was  sound,  &c.,  and  free  from  vice;  never- 
theless defendant  did  not  perform  or  regard  his  said  promise,  but 
thereby  deceived  and  defraud(xl  plaintiff  in  this,  to  wit,  that  the 
saifl  liorse  at  the;  time  of  tlu^  mnkiTig  of  tlie  said  promise  was  not 

'  Lfimplfifrli  v.  P.r.-illiwnit,  Hobart,  105,  uud  other  decisions,  ace.  See  Langdell, 
Summary  of  TIontractH,  §§92-94. 


SECT.   II ]  ROSCORLA   V.   THOMAS  263 

free  from  vice;  but,  on  the  contrary  thereof,  was  then  very  vicious, 
restive,  ungovernable,  and  ferocious;  whereby,  &c. 

Pleas.     1.    Non  assumpsit.    Issue  thereon. 

2.  That  the  horse,  at  the  time  of  the  supposed  promise,  was 
free  from  vice,  and  was  not  vicious,  restive,  ungovernable,  or  fero- 
cious, in  manner,   &c. ;   conclusion   to  the  country.     Issue  thereon. 

On  the  trial,  before  Wightman,  J.,  at  the  Cornwall  Spring  As- 
sizes, 1841,  a  verdict  was  found  for  the  plaintiff  on  both  the  above 
issues.  In  Easter  Term,  1841,  Bompas,  Serjt.,  obtained  a  rule  nisi 
for  arresting  the  judgment  on  the  first  count.     In  last  Term 

Erie  and  Butt  shewed  cause.  The  objection  is,  that  the  first 
count  states  only  a  nudum  pactum.  But  there  is  an  executed  con- 
sideration, which  with  a  request  will  support  a  promise.  Now  the 
request  need  not  be  express;  wherever  the  law  will  raise  a  promise, 
a  request  by  the  party  promising  will  be  implied;  note  (c)  to  Os- 
borne V.  Rogers.^  Payne  v.  Wilson  was  the  converse  of  the  present 
case :  there  a  consideration,  which  in  its  form  was  executed,  was 
declared  on  as  executory;  and  this  was  held  to  be  no  variance,  be- 
cause in  reality  the  consideration  was  continuing.  Here  the  dec- 
laration states  an  executed  consideration  in  form;  but  it  is  practi- 
cally executory  because  the  sale  and  warranty  would  be  coincident. 
In  Thornton  v.  Jenyns  ^  the  declaration  charged  that,  in  considera- 
tion that  plaintiff  had  promised  to  defendant,  defendant  then  prom- 
ised plaintiff.  It  was  objected  that  this  was  an  executed  considera- 
tion without  a  request,  which  was  insufficient  where  the  law  would 
not  raise  a  promise ;  and  Brown  v.  Crump  ^  was  cited ;  but  the 
Court  held  that  the  two  promises  might  be  considered  as  simul- 
taneous, and  that  the  objection  therefore  could  not  be  sustained.* 

Bompas,  Serjt.,  and  Slade,  contra.  The  warranty  ought  to  be 
given  at  the  time  of  the  sale :  if  made  after,  it  is  without  considera- 
tion. 3  Blackst.  Com.  166;  Com.  Dig.,  Action  upon  the  Case  for 
a  Deceipt  (A.  11);  Roswel  v.  Vaughan,^  Pope  v.  Lewyns.^  Thorn- 
ton V.  Jenyns  was  a  case  of  mutual  promises,  which  can  never 
literally  be  made  at  the  same  moment :  here  the  declaration  defi- 
nitely lays  the  perfect  sale  as  antecedent  to  and  distinct  from  the 
warranty.  And  the  warranty  is  a  matter  not  implied  by  the  law 
upon  a  sale.  Parkinson  v.  Lee.'^  Even  an  express  promise  without 
a  legal  consideration  is  invalid.  Collins  v.  Godfroy.^  In  Hopkins 
V.  Logan  there  was  an  executed  consideration  from  which  a  promise 
to  pay  on  request  would  have  arisen;  and  it  was  holden  tliat  this 
did  not  support  a  promise  to  pay  on  a  future  day  named.  [Pat- 
TESON,  J.,  referred  to  Hunt  v.  Bate,  as  cited  in  Eastwood  v.  Ken- 
yon,  and  to  Lampleigh  v.  Brathwait.]  Cur.  adv.  vuU. 

1  1  Wms.  Saund.  264  a.  2  1  Man.  &  G.  166.  3  1  Marsh.  567 

^  It  was  also  argued  that  the  warranty  might  here,  after  verdict,  be  taken  to  be 

coincident  with  the  sale:    to  which  it  was  answered  that  if  it  were  so,  the  evidence 

negatived  the  declaration. 

6  Cro.  Jac.  196.  «  Cro.  Jac.  630.  '  2  East.  314.  »  1  B.  &  Ad.  950. 


264  ROSCORLA    V.    THOMAS  [CHAP.   I 

Lord  Denman,  C.  J.,  in  this  Term  (May  30)  delivered  the  judg- 
ment of  the  Court. 

This  was  an  action  of  assumpsit  for  breach  of  warranty  of  the 
soundness  of  a  horse.  The  first  count  of  the  declaration,  upon 
which  alone  the  question  arises,  stated  that,  in  consideration  that 
the  plaintiff  at  the  request  of  the  defendant  had  bought  of  the 
defendant  a  horse  for  the  sum  of  SOl.^  the  defendant  promised  that 
it  was  sound  and  free  from  vice.  And  it  was  objected,  in  arrest 
of  judgment,  that  the  precedent  executed  consideration  was  insuffi- 
cient to  support  the  subsequent  promise.  And  we  are  of  opinion 
that  the  objection  must  prevail. 

It  may  be  taken  as  a  general  rule,  subject  to  exceptions  not  ap- 
plicable to  this  case,  that  the  promise  must  be  coextensive  with  the 
consideration.  In  the  present  case,  the  only  promise  that  would 
result  from  the  consideration  as  stated,  and  be  coextensive  with  it, 
would  be  to  deliver  the  horse  upon  request.  The  precedent  sale 
without  a  warranty,  though  at  the  request  of  the  defendant,  im- 
poses no  other  duty  or  obligation  upon  him.  It  is  clear  therefore 
that  the  consideration  stated  would  not  raise  an  implied  promise 
by  the  defendant  that  the  horse  was  sound  or  free  from  vice. 

But  the  promise  in  the  present  case  must  be  taken  to  be,  as  in 
fact  it  was,  express  and  the  question  is,  whether  that  fact  will 
warrant  the  extension  of  the  promise  beyond  that  which  would  be 
implied  by  law;  and  whether  the  consideration,  though  insufficient 
to  raise  an  implied  promise,  will  nevertheless  support  an  express 
one.     And  we  think  that  it  will  not. 

The  cases  in  which  it  has  been  held  that,  under  certain  circum- 
stances, a  consideration  insufficient  to  raise  an  implied  promise 
will  nevertheless  support  an  express  one,  will  be  found  collected 
and  reviewed  in  the  note  (a)  to  Wennall  v.  Adney,^  and  in  the 
case  of  Eastwood  v.  Kenyon.  They  are  cases  of  voidable  contracts 
subsequently  ratified,  of  debts  barred  by  operation  of  law  subse- 
quently revived,  and  of  equitable  and  moral  obligations  which,  but 
for  some  rule  of  law,  would  of  themselves  have  been  sufficient  to 
raise  an  implied  promise.  All  these  cases  are  distinguishable  from, 
and  indeed  inapplicable  to,  the  present,  which  appears  to  us  to 
fall  within  the  general  rule,  that  a  consideration  past  and  executed 
will  support  no  other  promise  than  such  as  would  be  implied  by 
law. 

The  rule  for  arresting  the  judgment  upon  the  first  count  must 
therefore  be  made  absolute.  Rule  absolute.^ 

>  3  Boh.  .t  PmI.  240. 

'  "In  LamrilciKli  ?).  Brathwait,  it  was  assumed  that  the  journeys  which  tho  plain- 
tiff pf-rformfd  at  thf;  roquost  of  tho  (Icfcndant,  and  tho  other  sorvicoa  he  rendered, 
would  have  l)eon  sufhoiont  to  make  any  promis(>  hindinp;  if  it  had  been  connected 
thorowitli  in  one  contract;  th(!  peculiarity  of  tlio  dccimon  lies  in  connectinR  a  subse- 
q\u:ui  r)romim!  with  a  prior  conHideration  after  it  had  boon  executed.  Probably  at  the 
present  day,  such  Bervice  on  such  rcqucat  would  have;  rai.sod  a  promise  by  implication 


SECT.    Il]  MOORE    V.    ELMER  265 

JOSEPHINE  L.  MOORE  v.  NELSON  L.  ELMER  and 
Another,  Administratoks 

Supreme  Judicial  Court  of  Massachusetts,  September  24- 
October  18,  1901 

[Reported  in  180  Massachusetts,  15] 

Bill  of  Equity  by  the  owner  of  certain  land  subject  to  a 
mortgage  assumed  by  her,  to  restrain  the  administrators  of  Willard 
Elmer,  the  holders  of  the  mortgage,  from  foreclosing  it,  or  dis- 
posing of  it  and  the  note  secured  thereby,  and  for  an  order  to  the 
defendants  to  discharge  the  mortgage  and  cancel  the  note,  filed  July 
7,   1900. 

The  bill  alleged  that  the  plaintiff  was  the  owner  of  a  tract  of 
land  to  which  she  derived  title  by  a  deed  of  one  Herman  E.  Bo- 
gardus,  by  which  deed  she  assumed  and  agreed  to  pay  a  certain 
mortgage  of  the  premises  given  by  Bogardus,  which  mortgage  and 
the  note  for  $1,300  thereby  secured  had  been  assigned  to  Willard 
Elmer,  the  defendants'  intestate,  that  the  defendants'  intestate  on 
or  about  January  11,  1898,  executed  and  delivered  to  the  plaintiff 
the  following  agreement:  "Springfield,  Mass.,  Jan.  11,  1898.  In 
Consideration  of  Business  and  Test  Sittings  Reseived  from  Mme. 
Sesemore,  the  Clairvoyant,  otherwise  known  as  Mrs.  Josephene  L. 
Moore  on  Numerous  occasions  I  the  undersigned  do  hear  by  agree 
to  give  the  above  named  Josephene  or  her  heirs,  if  she  is  not  alive, 
the  Balance  of  her  Mortgage  note  whitch  is  the  Herman  E.  Bo- 
gardus Mortgage  note  of  Jan.  5,  1893,  and  the  Interest  on  same 
on  or  after  the  last  day  of  Jan.  1900,  if  my  Death  occurs  before 
then  whitch  she  has  this  day  Predicted  and  Claims  to  be  the  truth, 
and  whitch  I  the  undersighned  Strongly  doubt.  Wherein  if  she 
is  right  I  am  willing  to  make  a  Recompense  to  her  as  above  stated, 
but  not  payable  unless  death  Occurs  before  1900.     Willard  Elmer." 

The  bill  alleged,  that  by  the  foregoing  instrument  the  premises 
were  released  and  discharged  from  the  operation  of  the  mortgage 
deed,  and  the  note  secured  thereby  was  paid  in  full  and  became  null 
and  void,  upon  the  death  of  Willard  Elmer,  which  occurred  before 
the  year  1900,  to  wit,  on  September  15,  1899. 

The  bill  also  alleged,  that  before  the  execution  of  the  above  agree- 
ment, at  the  request  of  Willard  Elmer,  the  plaintiff  gave  to  Elmer 
the  business  and  test  sittings  referred  to  in  the  agreement  as  the 
consideration  for  the  agreement,  and  at  his  request  devoted  much 
time   and  labor  thereto. 

The  defendants  demurred,  and  among  the  causes  of  demurrer 
alleged,  that  the  above  agreement  annexed  to  the  bill  was  a  wager- 
to  pay  what  it  was  worth;  and  the  subsequent  promise  of  a  sum  certain  would  have 
been  evidence  for  the  jury  to  fix  the  amount."  —  Erie,  C.  J.,  Kennedy  v.  Broun,  13 
C.  B.  N.  s.  677,  740.    See  also  Stewart  v.  Casey,  [1892]  1  Ch.  104,  115. 


266  MOORE    V.    ELMER  [CHAP.   I 

ing  contract  and  against  public  policy  and  void,  and  that  it  was 
without  consideration. 

In  the  Superior  Court  the  case  was  heard  by  Lawton,  J.,  who 
made  a  decree  sustaining  the  demurrer  and  dismissing  the  bill. 
The  plaintiff  appealed  and,  at  the  request  of  the  plaintiff,  the  judge 
reported  the  case  for  the  determination  of  this  court.  If  the  de- 
murrer was  sustained  rightly,  the  bill  was  to  be  dismissed;  other- 
wise, the  demurrer  was  to  be  overruled  and  the  defendants  were  to 
answer  to  the  plaintiff's  bill. 

W.  E.  McClintoch  {J.  B.  Carroll  with  him)  for  the  plaintiff. 

C.  W.  Bosivorth,  for  the  defendants. 

Holmes,  C.  J.  It  is  hard  to  take  any  view  of  the  supposed  con- 
tract in  which,  if  it  were  made  upon  consideration,  it  would  not 
be  a  wager.  But  there  was  no  consideration.  The  bill  alleges  no 
debt  of  Elmer  to  the  plaintiff  prior  to  the  making  of  the  writing. 
It  alleges  only  that  the  plaintiff  gave  him  sittings  at  his  request. 
This  may  or  may  not  have  been  upon  an  understanding  or  impli- 
cation that  he  was  to  pay  for  them.  If  there  was  such  an  under- 
standing it  should  have  been  alleged  or  the  liability  of  Elmer  in 
some  way  shown.  If,  as  we  must  assume  and  as  the  writing  seems 
to  imply,  there  was  no  such  understanding,  the  consideration  was 
executed  and  would  not  support  a  promise  made  at  a  later  time. 
The  modern  authorities  which  speak  of  services  rendered  upon 
request  as  supporting  a  promise  must  be  confined  to  cases  where 
the  request  implies  an  undertaking  to  pay,  and  do  not  mean  that 
what  was  done  as  a  mere  favor  can  be  turned  into  a  consideration 
at  a  later  time  by  the  fact  that  it  was  asked  for.  See  Langdell, 
Contracts,  §§  92  et  seq.;  Chamberlin  v.  Whitford,  102  Mass.  448, 
450;  Dearborn  v.  Bowman,  3  Met.  155,  158;  Johnson  v.  Kimball, 
172  Mass.  398,  400. 

It  may  be  added  that  even  if  Elmer  was  under  a  previous  lia- 
bility to  the  plaintiff  it  is  not  alleged  that  the  agreement  sued  upon 
was  received  in  satisfaction  of  it,  either  absolutely  or  conditionally, 
and  this  again  cannot  be  implied  in  favor  of  the  plaintiff's  bill. 
It  is  not  necessary  to  consider  what  further  difficulties  there  might 
be  in  the  way  of  granting  relief.  Bill  dismissed.^ 

*  In  the  following  cases  a  subsequent  promise  was  held  ineffectual.  Walker  v. 
Brown,  104  Ga.  357;  MUm  v.  Bryson,  67  la.  591;  Walker  v.  Irwin,  04  la.  448;  Hollo- 
way  V.  Rudy,  00  S.  W.  Rep.  650  (Ky.);  Cleaver  v.  Lenhart,  182  Pa.  285;  Valentine 
t.  Bell,  66  Vt.  280;  Stonoburner  v.  Motley,  95  Va.  784,  ace.  See  also  Bailey  v.  Bussing, 
29  f>nin.  1;  Marsh  v.  Chown,  104  la.  556;  Beaty  v.  Carr,  109  la.  183;  Stout  v.  Hum- 
phrey, 69  N.  J.  L.  532;   Shepard  v.  Rhodes,  7  R.  I.  470. 

The  new  promise  was  enforccid  in  Bradford  v.  Roulston,  8  Ir.  C.  L.  468;  Lonsdale 
v.  Brown,  4  Wash.  C.  C  148,  \r>0;  Friedman  v.  Suttle,  10  Ariz.  57;  Winefield  v.  Fedcr, 
169  111.  Ai)p.  480;  Daily  v.  Minniek,  117  la.  .563;  Viley  v.  Pettit,  96  Ky.  578;  Pool 
r.  Horner,  64  Md.  131;  Stuht  v.  Sweesy,  48  Neb.  767;  Wilson  v.  Edmonds,  24  N.  H. 
502;  Hicks  v.  Burlians,  10  .Johns.  243;  Oatfield  v.  Waring,  14  Johns.  188;  Greaves 
V.  M'Allister.  2  Binn.  .'',92;  Landis  v.  Royer,  59  Pa.  95;  Rutch's  Estate,  201  Pa.  305; 
Bilvorthorn  v.  Wylie,  96  Wis.  09;  Raifo  v.  Gorrell,  105  Wis.  636.  Sec  also  Carson 
V.  r;iark,  2  111.  113;  Montgomery  v.  Downey,  88  N.  W.  Rep.  810  (la.);  Freeman  v. 
Robinson,  38  N.  J.  L.  383;  f-haffee  v.  Thomas,  7  f'ow.  358;  Comstock  v.  Smith,  7  Johns. 
87;    Boothc  v.  Fitzpatrick,  30  Vt.  081;   Sc;ymour  v.  Marlboro,  40  Vt.  171. 


SECT.    II]  WATSON    V.   TURNER  267 


EDMONDS'  CASE 

In  the  Common  Pleas,  Michaelmas  Term,  1586 

[Reported  in  3  Leonard,  164] 

In  an  action  upon  the  case  against  Edmonds,  the  case  was,  that 
the  defendant,  being  within  age,  requested  the  plaintiff  to  be 
bounden  for  him  to  another  for  the  payment  of  30Z.^  which  he  was 
to  borrow  for  his  own  use  to  which  the  plaintiff  agreed,  and  was 
bounden,  ut  supra.  Afterwards  the  plaintiff  was  sued  for  the  said 
debt,  and  paid  it.  And  afterwards,  when  the  defendant  came  of 
full  age,  the  plaintiff  put  him  in  mind  of  the  matter  aforesaid, 
and  prayed  that  he  might  not  be  damnified  so  to  pay  30Z.,  it  being 
the  defendant's  debt :  whereupon  the  defendant  promised  to  pay 
the  debt  again  to  the  plaintiff :  upon  which  promise  the  action  was 
brought.  And  it  was  holden  by  the  Court  that,  although  here  was 
no  present  consideration  upon  which  the  assumpsit  could  arise,  yet 
the  court  was  clear  that  upon  the  whole  matter  the  action  did  lie; 
and  judgment  was  given  for  the  plaintiff.^ 


WATSON  V.   TURNER  et  al 

In  the  Exchequer,  Trinity  Term,  1767 

[Reported  in  Butler's  Nisi  Prius,  129] 

An  action  was  brought  by  an  apothecary  against  the  overseers 
of  a  parish  for  the  cure  of  a  pauper,  who  boarded  with  her  son 
out  of  the  parish,  under  an  agreement  made  with  him  by  the  de- 
fendant Turner,  who  was  the  only  acting  overseer  of  the  parish. 
The  pauper  was  suddenly  taken  ill,  and  her  son  called  in  the  plain- 
tiff, who  had  attended  her  for  four  months,  and  cured  her.  After 
the  cure  Turner  was  applied  to,  and  promised  to  pay  the  plain- 
tiff's bill.  It  was  held,  that  though  there  was  no  precedent  request 
from  the  overseers,  yet  the  promise  was  good,  notwithstanding  the 
Statute  of  Frauds;  for  overseers  are  under  a  moral  obligation  to 
provide  for  the  poor.  Secondly,  that  as  Turner  was  the  only  acting 
overseer,  the  other  was  bound  by  his  promise.^ 

*  In  the  report  of  the  same  case  in  Godb.  138,  nom.  Barton  and  Edmonds'  Case,  it 
is  said:  "But  if  a  feme  covert  and  another  at  her  request  had  been  bounden  in  such  a 
bond,  and  after  the  death  of  her  husband  she  had  assumed  to  have  saved  the  other 
harmless  against  such  bond,  such  assumpsit  should  not  have  bound  the  wife."  For 
cases  in  accord  with  Edmonds'  Case  see  1  Williston,  Contracts,  §  239. 

2  See  Paynter  v.  Williams,  1  Cr.  &  M.  810. 


268  ATKINS    V.    HILL  [CHAP.   I 

ATKINS  ET  UxoE  V.  HILL 

In  the  King's  Bench,  Eastee  Term,  1775 

{Reported  in  Cowper,  284] 

In  assumpsit  the  plaintiffs  declared  against  Charles  Hill,  being 
in  the  custody,  &e. :  For  that  whereas  James  Clarke,  &c.,  by  his  last 
will,  &.,  did  give  and  bequeath  to  the  plaintiff's  wife  the  sum  of 
60Z.,  &c.,  and  of  his  last  will  and  testament  made  the  said  Charles 
Hill  sole  executor,  &c.,  and  the  said  Charles  Hill  took  upon  himself 
the  burthen  and  execution  of  the  said  will :  And  the  said  N.  and  A. 
further  say  that  divers  goods  and  chattels,  &c.,  afterwards,  &c.,  came 
to  the  hands  of  the  said  Charles  Hill  as  executor  of  the  said  J.  C, 
which  said  goods  and  chattels  were  more  than  sufficient  to  satisfy 
and  pay  all  the  just  debts  and  legacies  of  the  said  J.  C,  &c.,  of 
which  the  said  C.  H.  then  and  there  had  notice :  By  reason  of  which 
said  premises,  the  said  Charles  Hill  became  liable  to  pay  to  the  said 
]Sr.  and  A.  the  said  sum  of  601.;  and,  being  so  liable,  he,  the  said  C, 
in  consideration  thereof,  afterwards,  &c.,  undertook  and  faithfully 
promised  to  pay  to  them  the  said  sum  of  601.,  whenever,  &c. 

To  this  declaration  the  defendant   demurred  generally. 

Mr.  Le  Blanc,  in  support  of  the  demurrer.^ 

Mr.  BuUer,  contra,  for  the  plaintiff.  The  question  is,  whether  the 
facts  stated  in  this  declaration,  namely,  that  the  defendant  was  execu- 
tor and  had  assets,  &c.,  are  a  sufficient  consideration  for  a  promise. 
As  to  that  question,  it  is  a  settled  point  that,  wherever  an  express 
promise  is  made  upon  a  good  consideration,  an  action  lies.  And  the 
slightest  ground  is  sufficient  to  maintain  a  promise.  1  Vent.  40,  41, 
Wells  V.  Wells;  1  Lev.  273,  s.  c;  Stone  v.  Withipool,  Latch,  21,  in 
which  latter  case  it  is  laid  down,  "that  it  is  an  usual  allegation  for 
a  rule,  that  any  thing  which  is  a  ground  for  equity  is  a  sufficient 
consideration." 

But  here  an  express  promise  is  made,  and  by  the  demurrer  ad- 
mitted. It  is  objected,  however,  that  there  is  no  averment  that  the 
funeral  expenses  are  paid.  The  answer  is,  it  is  averred  that  he  had 
assets  to  pay,  which  is  alone  sufficient,  and  so  it  was  expressly  held 
by  Lord  King,  in  the  case  of  Camden  v.  Turner,  Sittings  after  Tr., 
5  Geo.  T.,  C.  B.;  Select  Cases  of  Evidence  by  Sir  John  Strange. 

Lord  Mansfield.  This  is  a  case  in  which  the  declaration  particu- 
larly states  that  assets  have  been  received  by  the  defendant,  the  ex- 
ecutor, more  than  sufficient  to  pay  all  the  testator's  debts  and  legacies. 
If  HO,  it  most  UTi(lou])tofny  must  b(^  taken  upon  the  pleadings  that 
tbcre  was  sufficient  to  discharge  the  funeral  expenses,  because  they 
are  payablf;  first;  consequently,  if  there  was  less  than  the  amount 
of  tlicm,  t,h(Te  could  not  be;  sufficient  to  discharge  the  debts  and  leg- 

'  Only  80  miioli  of  ihc  arKumcnte  and  decision  is  here  given  as  relates  to  the  ques- 
tion <>{  "ConHidcrutiou." 


SECT.    II]  ATKINS    V.    HILL  269 

acies.  The  declaration  then  goes  on  to  state  that,  in  consideration 
of  there  being  full  sufficient  assets  as  aforesaid,  the  defendant  under- 
took and  promised  to  pay  the  plaintiff  his  legacy.  No  doubt  then 
but,  at  any  time  after  an  executor  has  assented,  the  property  vests; 
and  if  it  be  a  pecuniary  legacy,  an  action  at  law  will  lie  for  the 
recovery  of  it.  Formerly,  upon  a  bill  being  filed  in  chancery  against 
an  executor,  one  part  of  the  prayer  of  it  was,  that  he  should  assent 
to  the  bequests  in  his  testator's  will.  If  he  had  assets,  he  was  bound 
to  assent.  And  when  he  had  assented,  the  legacy  became  a  demand 
which  in  law  and  conscience  he  was  liable  to  pay.  But,  in  the  present 
case,  there  is  not  only  an  assent  to  the  legacy,  but  an  actual  promise 
and  undertaking  to  pay  it;  and  that  promise  founded  on  a  good 
consideration  in  law,  as  appears  from  the  cases  cited  by  Mr.  Buller, 
particularly  the  case  of  Camden  v.  Turner,^  where  acknowledgment 
by  an  executor,  "that  he  had  enough  to  pay,"  was  held  a  sufficient 
ground  to  support  an  assumpsit.  Here  the  defendant,  by  his  de- 
murrer, admits  he  had  sufficient  to  pay;  therefore  this  is  not  the 
case  that  Mr.  Le  Blanc  has  been  arguing  upon;  but  it  is  the  case  of 
a  promise  made  upon  a  good  and  valuable  consideration,  which,  in 
all  cases,  is  a  sufficient  ground  to  support  an  action.  It  is  so  in 
cases  of  obligations  which  would  otherwise  only  bind  a  man's  con- 
science, and  which,  without  such  promise,  he  could  not  be  compelled 
to  pay.  For  instance,  where  an  infant  contracts  debts  during  his 
minority;  if  after  he  comes  of  age  he  consents  to  pay  them,  an  ac- 
tion lies.  So  a  conveyance  executed  by  an  infant,  which  he  was 
compellable  to  do  by  equity,  is  a  good  conveyance  at  law.  Co.  Lit., 
Attornment,  315  a.  In  this  case  the  promise  is  grounded  upon  a 
reasonable  and  conscientious  consideration;  namely,  that  the  defend- 
ant had  assets  to  discharge  the  legacy.  If  so,  he  was  compellable 
in  a  court  of  equity,  or  in  the  ecclesiastical  court,  to  pay  it.  I 
give  my  opinion  upon  this  case  as  it  stands ;  that  is,  that  it  is  an  ex- 
press promise  made  upon  a  good  and  sufficient  consideration. 
The  three  other  judges  concurred. 

Per  Cur.   Judgment  for  the  plaintiff.^ 

Mr.  Le  Blanc  then  moved  for  liberty  to  withdraw  the  demurrer, 
and  plead  the  general  issue;  but  the  Court  refused  it. 

1  Sittings  after  Trinity  Term,  6  Geo.  I.,  C.  B.,  coram.  King,  C.  J. 

2  Hawkes  v.  Saunders,  Cowp.  289,  ace.     But  see  Smith  v.  Carroll,   112  Pa.  390; 
Dunham  v.  Elford,  13  Rich.  Eq.  190. 


270  TRUEMAN    V.    FENTON  [CHAP.    I 

TRUEMAN  V.  FENTON 

In  the  King's  Bench,  January  28,  1777 

[Reported  'in  Cowper,  544] 

This  was  an  action  on  a  promissory  note,  bearing  date  the  11th 
Eebruary,  1775,  payable  to  one  Joseph  Trueman  (the  plaintiff's 
brother),  three  months  after  date,  for  67^.,  and  indorsed  by  him  to 
the  plaintiff. 

The  declaration  contained  other  counts  for  goods  sold,  money  had 
and  received,  and  on  an  account  stated.  The  defendant  pleaded, 
first,  non  assumpsit;  secondly,  "that  on  the  19th  January,  1775,  he 
became  bankrupt,  and  that  the  debt  for  which  the  said  note  was 
given  was  due  to  the  plaintiff  before  such  time  as  he,  the  defendant, 
became  bankrupt,  and  that  the  note  was  given  to  Joseph  Trueman 
for  the  use  of,  and  for  securing,  the  said  plaintiff  his  debt  so  due." 
The  cause  was  tried  before  Lord  Mansfield  at  the  Sittings  after 
Michaelmas  Term,  1776,  when  the  jury  found  a  verdict  for  the  plain- 
tiff, damages  72?.  125.,  costs  405.,  subject  to  the  opinion  of  the  Court 
upon  a  special  case,  stating  the  answer  of  the  plaintiff  in  this  action 
to  a  bill  filed  against  him  in  the  Exchequer  by  the  present  defendant 
for  a  discovery  of  the  consideration  of  the  note;  the  substance  of 
which  was  as  follows:  "That  on  the  15th  of  December,  1774,  the 
defendant,  Eenton,  purchased  a  quantity  of  linen  of  the  plaintiff, 
Trueman;  and  it  being  usual  to  abate  51.  per  cent  to  persons  of  the 
defendant's  trade,  the  price,  after  such  abatement  made,  amounted 
to  126?.  18s.  That  at  the  time  of  the  sale  it  was  agreed  that  one- 
half  of  the  purchase-money  should  be  paid  at  the  end  of  six  weeks, 
and  the  other  half  at  the  end  of  two  months :  And  in  consideration 
thereof,  the  plaintiff,  Trueman,  drew  two  notes  on  the  defendant 
for  63?.  95.  each,  payable  to  his  own  order,  at  six  weeks  and  two 
months  respectively.  That  the  defendant  accepted  the  notes,  and 
thereupon  the  plaintiff  gave  him  a  discharge  for  the  sum.  He  then 
denied  that  he  had  proved  or  claimed  any  debt  or  sum  of  money 
under  the  commission ;  but  set  forth  that  he  acquainted  the  defendant 
he  was  surprised  at  his  ungenerous  behavior  in  purchasing  so  large 
a  quantity  of  linen  of  him  at  the  eve  of  his  bankruptcy,  and  in- 
formed him  he  had  paid  away  the  above  two  notes:  upon  which  the 
defendant  pressed  him  to  take  up  the  two  notes,  and  proposed  to 
give  him  a  security  for  part  of  the  debt.  That  afterwards,  on  the 
nth  February,  1775,  the  defendant  called  upon  the  plaintiff,  and 
voluntarily  proposed  to  secure  to  him  the  payment  of  67?.  in  satis- 
faction of  his  debt,  if  he  would  take  up  the  two  notes  and  cancel 
or  deliver  them  up  to  the  defendant.  That  the  plaintiff  agreed  to 
accept  this  proposal  with  the  approbation  of  his  attorney,  and  de- 
si  re*!  the  note  to  be  made  payable  to  his  brother,  Joseph  Trueman, 
or  order,  three  months  after  date.     That  he  took  up  the  two  ac- 


SECT.    II ]  TRUEMAN    V.    FENTON  271 

ceptances  and  delivered  them  to  the  defendant  to  be  cancelled,  and 
accepted  the  above  note  for  671.  in  satisfaction  and  discharge  thereof. 
That  a  commission  of  bankruptcy  issued  against  the  defendant  on 
the  19th  of  January,  1775,  and  that  the  bankrupt  obtained  his  cer- 
tificate on  the  17th  of  April  following."  The  question  reserved  was, 
Whether  the  facts  above  stated  supported  the  merits  of  the  defendant's 
plea  ?  If  they  did  not,  then  a  verdict  was  to  be  entered  for  the  plain- 
tiff on  the  general  issue;  but  if  the  merits  of  the  second  plea  sup- 
ported the  defendant's  case,  then  a  verdict  was  to  be  entered  for  the 
defendant  on  that  plea. 

Mr.  Buller,  for  the  plaintiff. 

Mr.  Davenport,  contra. 

LoKD  Mansfield.  The  plea  put  in,  in  this  case,  is  that  the  debt 
was  due  at  the  time  of  the  act  of  bankruptcy  committed;  and  on 
that  plea,  in  point  of  form,  there  was  a  strong  objection  made  at 
the  trial  that  the  allegation  was  not  strictly  true;  because  at  the 
time  of  the  sale,  credit  was  given  to  a  future  day;  which  day,  as  it 
appeared  in  evidence,  was  subsequent  to  the  act  of  bankruptcy  com- 
mitted. To  be  sure,  on  the  form  of  the  plea,  the  defendant  must 
fail.  But  I  never  like  to  entangle  justice  in  matters  of  form,  and 
to  turn  parties  round  upon  frivolous  objections  where  I  can  avoid 
it.  It  only  tends  to  the  ruin  and  destruction  of  both.  I  put  it  there- 
fore to  the  counsel  on  the  part  of  the  plaintiff  to  give  up  the  objec- 
tion in  point  of  form,  and  to  take  the  opinion  of  the  Court,  whether, 
according  to  the  facts  and  truth  of  the  case,  the  defendant  could 
have  pleaded  his  certificate  in  bar  of  the  debt  in  question;  and  in 
case  they  had  refused  to  do  so,  I  should  have  left  it  to  the  jury  upon 
the  merits.  The  counsel  for  the  plaintiff  very  properly  gave  up  the 
point  of  form.  The  question,  therefore,  upon  the  case  reserved,  is 
worded  thus :  "Whether  the  facts  support  the  merits  of  the  defendant's 
plea  ?  That  is.  Whether,  on  the  merits  of  the  case,  properly  pleaded, 
the  certificate  of  the  defendant  would  have  been  a  bar  to  the  plain- 
tiff's action?  Wow,  in  this  case  there  is  no  fraud,  no  oppression, 
no  scheme  whatsoever  on  the  part  of  the  plaintiff  to  deceive  or  im- 
pose on  the  defendant;  and  as  to  collusion  with  respect  to  the  cer- 
tificate, where  a  creditor  exacts  terms  of  his  debtor  as  the  considera- 
tion for  signing  his  certificate,  and  obtains  money  or  a  part  of  his 
debt  for  so  doing,  the  assignees  may  recover  it  back  in  an  action. 
But  that  is  not  the  case  here.  So  far  from  it,  the  transaction  itself 
excluded  the  plaintiff  from  having  any  thing  to  do  with  the  certifi- 
cate. ISTo  man  can  vote  for  or  against  the  certificate  till  he  has  proved 
his  debt.  Here  the  plaintiff  delivers  up  the  two  drafts  bearing 
date  prior  to  the  act  of  bankruptcy,  and  by  agreement  accepts  one 
for  little  more  than  half  their  amount,  bearing  date  after  the  com- 
mission of  bankruptcy  sued  out.  Most  clearly,  therefore,  he  could 
not  have  proved  that  note  under  the  commissions;  and  if  not,  he 
could  have  nothing  to  do  with  the  certificate.     That  brings  it  to  the 


272  TRUEMAN    V.    FENTON  [CHAP.    I 

general  question,  Whether  a  bankrupt,  after  a  commission  of  bank- 
ruptcy sued  out,  may  not,  in  consideration  of  a  debt  due  before  the 
bankruptcy,  and  for  which  the  creditor  agrees  to  accept  no  dividend 
or  benefit  under  the  commission,  make  such  creditor  a  satisfaction 
in  part  or  for  the  whole  of  his  debt,  by  a  new  undertaking  and  agree- 
ment? A  bankrupt  may  undoubtedly  contract  new  debts;  there- 
fore, if  there  is  an  objection  to  his  reviving  an  old  debt  by  a  new 
promise,  it  must  be  founded  upon  the  ground  of  its  being  nudum 
pactum.  As  to  that,  all  the  debts  of  a  bankrupt  are  due  in  con- 
science, notwithstanding  he  has  obtained  his  certificate;  and  there 
is  no  honest  man  who  does  not  discharge  them,  if  he  afterwards  has 
it  in  his  power  to  do  so.  Though  all  legal  remedy  may  be  gone, 
the  debts  are  clearly  not  extinguished  in  conscience.  How  far  have 
the  courts  of  equity  gone  upon  these  principles?  Where  a  man 
devises  his  estate  for  payment  of  his  debts,  a  court  of  equity  says 
(and  a  court  of  law  in  a  case  properly  before  them  would  say  the 
same)  :  All  debts  barred  by  the  Statute  of  Limitations  shall  come 
in  and  share  the  benefit  of  the  devise,  because  they  are  due  in  con- 
science. Therefore,  though  barred  by  law,  they  shall  be  held  to  be 
revived  and  charged  by  the  bequest.  What  was  said  in  the  argument 
relative  to  the  reviving  a  promise  at  law,  so  as  to  take  it  out  of  the 
Statute  of  Limitations,  is  very  true.  The  slightest  acknowledgment 
has  been  held  sufficient;  as  saying,  "Prove  your  debt,  and  I  will 
pay  you,"  —  "I  am  ready  to  account,  but  nothing  is  due  to  you." 
And  much  slighter  acknowledgments  than  these  will  take  a  debt  out 
of  the  statute.  So  in  the  case  of  a  man,  who  after  he  comes  of  age 
promises  to  pay  for  goods  or  other  things,  which  during  his  minority 
one  cannot  say  he  has  contracted  for,  because  the  law  disables  him 
from  making  any  such  contract,  but  which  he  has  been  fairly  and 
honestly  supplied  with,  and  which  were  not  merely  to  feed  his  ex- 
travagance, but  reasonable  for  him  (under  his  circumstances)  to 
have;  such  promise  shall  be  binding  upon  him,  and  make  his  former 
undertaking  good.  Let  us  see  then  what  the  transaction  is  in  the 
present  case.  The  bankrupt  appears  to  me  to  have  defrauded  the 
plaintiff  by  drawing  him  in,  on  the  eve  of  a  bankruptcy,  to  sell  him 
such  a  quantity  of  goods  on  credit.  It  was  grossly  dishonest  in  him 
to  contract  such  a  debt,  at  a  time  when  he  must  have  known  of  his 
own  insolvency,  and  which  it  is  clear  the  plaintiff  had  not  the 
smallest  suspicion  of,  or  he  would  not  have  given  credit  and  a  day 
of  payment  in  futuro.  On  the  other  hand,  what  is  the  conduct  of 
the  plaintiff?  He  relinquishes  all  hope  or  chance  of  benefit  from 
a  dividend  under  the  commission,  by  forbearing  to  prove  his  debt; 
gives  up  the  securities  he  had  received  from  the  bankrupt,  and  ac- 
cepts of  a  note,  amounting  to  little  more  than  half  the  real  debt,  in 
full  satisfaction  of  bis  whole  demand.  Ls  that  against  conscience? 
Is  it  not  on  the  contrary  a  fair  consideration  for  the  note  in  question? 
He  might  foresee  prospects  from  the  way  of  life  the  bankrupt  was 


SECT.  Il]  GRANT    V.    PORTER  273 

in,  which  might  enable  him  to  recover  this  part  of  his  debt,  and  he 
takes  his  chance;  for  till  then  he  could  get  nothing  by  the  mere  im- 
prisonment of  his  person.  He  uses  no  threats,  no  menace,  no  op- 
pression, no  undue  influence;  but  the  proposal  first  moves  from, 
and  is  the  bankrupt's  own  voluntary  request.  The  single  question 
then  is.  Whether  it  is  possible  for  the  bankrupt,  in  part  or  for  the 
whole,  to  revive  the  old  debt?  As  to  that,  Mr.  Justice  Aston  has 
suggested  to  me  the  authority  of  Bailey  v.  Dillon,  where  the  Court 
would  not  hold  to  special  bail,  but  thought  reviving  the  old  debt 
was  a  good  consideration.  The  two  cases  cited  by  Mr.  Buller  are 
very  material.  Lewis  v.  Chase,  1  P.  Wms.  620,  is  much  stronger 
than  this ;  for  that  smelt  of  the  certificate ;  and  the  Lord  Chancellor's 
reasoning  goes  fully  to  the  present  question.  Then  the  case  of  Bar- 
nardiston  v.  Coupland,  in  C.  B.,  is  in  point.  Lord  Chief  Justice 
Willes  there  says,  "that  the  revival  of  an  old  debt  is  a  sufficient  con- 
sideration." That  determines  the  whole  case.  Therefore  I  am  of 
opinion  that,  if  the  plea  put  in  had  been  formally  pleaded,  the  merits 
of  the  case  would  not  have  been  sufficient  to  bar  the  plaintiff's  de- 
mand. 

AsTON,  J.  As  a  case  of  conscience,  I  am  clearly  of  opinion  that 
the  plaintiff  is  entitled.  Wherever  a  party  waives  his  right  to  come 
in  under  the  commission,  it  is  a  benefit  to  the  rest  of  the  creditors. 
In  the  case  of  Bailey  v.  Dillon,  the  Court  on  the  last  day  of  the  Term 
were  of  opinion,  "that  the  defendant  could  not  be  held  to  special 
bail,  yet  they  would  not  say  that  he  might  [not?]  revive  the  old 
debt  which  was  clearly  due  in  conscience."  A  bankrupt  may  be  and 
is  held  to  be  discharged  by  his  certificate  from  all  debts  due  at  the 
time  of  the  commission;  but  still  he  may  make  himself  liable  by  a 
new  promise.  If  he  could  not,  the  provision  in  the  Stat.  5  Geo.  IL, 
c.  30,  sect.  11,  by  which  every  security  for  the  payment  of  any  debt 
due  before  the  party  became  bankrupt,  as  a  consideration  to  a  credi- 
tor to  sign  his  certificate,  is  made  void,  would  be  totally  nugatory. — 
LoKD  Mansfield  added  that  this  observation  was  extremely  forcible 
and  strong.  Per  Cur.     Judgment  for  the  plaintiffs 


GRANT  V.  PORTER 

ISTew  Hampshire  Supreme  Court^  June,  1884 

[Reported  in  63  New  Hampshire,  229] 

Allen,  J.  The  plaintiff  and  the  other  creditors  of  Porter  Brothers 
(of  which  firm  the  defendant  is  sued  as  surviving  partner)  each  ac- 
cepted an  offer  of  forty-five  per  centum  of  his  claim  in  full  settle- 

'  The  cases  on  promises  to  pay  debts  discharged  by  bankruptcy  are  collected  in 
1  Williston,  Contracts,  §  158. 


274  GRANT    V.    PORTER  [CHAP.   I 

ment,  and  Hodgdon,  who  received  all  the  debtors'  property  for  the 
purpose  of  paying  the  amount  agreed  upon  as  a  compromise  and 
obtaining  from  the  creditors  a  discharge  of  the  indebtedness,  gave 
each  creditor  a  note  or  forty-five  per  centum  of  his  claim,  and  at 
the  same  time  took  an  assignment  from  each,  under  seal,  of  his  de- 
mand and  of  the  right  to  prosecute  it  to  final  judgment.  These 
notes,  including  the  plaintiff's,  were  subsequently  paid  by  Hodgdon, 
and  Porter  Brothers  gave  the  plaintiff  the  note  in  suit  for  the  balance 
of  his  demand. 

Ordinarily,  payment  and  acceptance  of  a  smaller  sum  for  a  larger 
one  due  is  no  discharge  of  the  larger.  Blanchard  v.  ISToyes,  3  N.  H. 
519;  Mathewson  v.  Bank,  45  I^.  H.  104,  107.  But  payment  by  a 
third  person  at  the  request  of  the  debtor,  either  in  money  or  by 
a  note,  accepted  by  the  creditor  in  full  satisfaction  and  discharge  of 
the  debt,  is  an  exception  to  the  rule,  and  extinguishes  the  debt. 
Brooks  V.  White,  2  Met.  283.  The  assignee  of  the  defendant's  firm 
received  their  property  for  the  express  purpose  and  on  the  express 
consideration  of  obtaining  a  discharge  of  their  indebtedness  by  the 
payment  of  forty-five  per  centum  of  the  same;  and  when  the  plain- 
tiff accepted  from  the  assignee  that  sum  in  full  satisfaction,  his  de- 
mand against  the  defendant  was  extinguished.  His  debt  being 
satisfied  and  extinguished,  there  was  no  consideration  for  the  note 
in  suit.  It  is  not  the  case  of  a  debt  discharged  by  the  order  of  a 
court  in  bankruptcy  proceedings.  In  a  case  of  that  kind  a  new  prom- 
ise to  pay  the  debt,  made  after  discharge,  revives  the  debt  which 
is  not  extinguished  by  the  discharge,  and  the  consideration  for  the 
original  demand  is  a  good  consideration  for  a  new  promise.  Bank 
V.  Wood,  59  K  H.  407 ;  Wiggin  v.  Hodgdon,  63  IN".  H.  39. 

The  assignment  of  the  plaintiff's  demand  to  the  assignee  was  in 
writing,  under  seal;  and  if,  as  the  plaintiff  claims,  this  was  only 
formal  and  intended  as  a  receipt  to  the  defendant  and  a  voucher  for 
the  assignee,  it  was  certainly  a  valid  as  well  as  formal  transfer  of 
the  claim,  with  all  rights  of  action  upon  it,  to  the  assignee.  The 
plaintiff,  having  parted  with  all  interest  in  the  claim  and  all  right 
of  action  upon  it,  nothing  remained  to  him  which  could  be  treated 
as  a  consideration  for  the  note  in  suit,  and  there  can  be  no  recovery 
upon  it.  Judgment  for  the  defendant. 

Carpenter,  J.,  did  not  sit:  the  others  concurred.^ 

1  Ex  parte  Hall,  1  Deacon,  171;  Samuel  v.  Fairgrieve,  21  Ont.  App.  418;  Ras- 
musHf'ii  V.  State  Bank,  11  Col.  301;  Lewis  v.  Simons,  1  Handy,  82;  Callahan  v.  Ackley 
9  Phila.  90,  ncc.  Similarly  in  case  of  a  voluntary  release  or  accord  and  satisfaction. 
Warrr^n  v  Whitney,  24  Mo.  501;  Phelps  ?).  Dennett,  57  Me.  491;  Ingcrsoll  v.  Martin, 
68  Md.  07;  Hall  v.  Rice,  124  Mass.  292;  Manson  v.  Campbell,  27  Minn.  64;  Zoebisch 
V.  Von  Minden,  47  Hun,  21.3  (see  .s.  c.  120  N.  Y.  400);  Snevily  v.  Read,  9  Watts,  396; 
Shfi)arfl  V.  Rhodes,  7  R.  I.  470;  Taylor  v.  Skilea,  113  Tenn.  288.  But  see  Jamison  v. 
Ludlow,  3  La.  Ann.  492;  WillinR  v.  Peters,  12  S.  &  R.  177,  contra.  Compare  Re 
Merriman,  44  Conn.  687;    Higgius  v.  Dale,  28  Minn.  126. 


SECT.    II  ]  BARNES    V.    HEDLEY  275 

BAKNES,  DowDiNG,  and  Baetley,  v.  HEDLEY  and  Conway 

In  the  Common  Pleas,  November  24,  1809. 

[Beported  in  2  Taunton,  184] 

This  was  an  issue  between  the  plaintiifs,  who  were  the  executors 
of  William  Webb,  deceased,  and  the  defendants,  who  were  assignees 
under  a  commission  of  bankruptcy  which  issued  against  William 
Harre  and  Henry  Suthmier,  directed  by  order  of  the  Lord  Chan- 
cellor, in  order  to  try  whether  the  bankrupts  on  the  13th  of  August, 
1802,  were  indebted  to  Webb  in  any  and  what  sum  of  money.  The 
trial  came  on  at  the  Sittings  in  London,  Mich.  Term,  1808,  before 
Mansfield,  C.  J.,  when  a  verdict  was  found  for  the  plaintiffs  for  the 
sum  of  11,672?.  4s.  2d.  subject  to  the  opinion  of  the  Court  on  the 
following  case:  By  a  written  agreement  made  on  the  15th  of  May, 
1800,  between  Webb  and  the  bankrupts,  the  former  agreed  to  advance 
money  from  time  to  time  upon  interest  at  5  per  cent,  to  Harre  and 
Suthmier,  who  carried  on  the  business  of  sugar  bakers  in  copartner- 
ship, in  order  to  enable  them  to  purchase  raw  sugars;  and  in  con- 
sideration of  such  advances  the  bankrupts  were  also  to  pay  to  Webb 
a  commission  of  5  per  cent,  for  all  sugars  which  were  to  be  bought 
of  him,  or  provided  for  Messrs.  Harre  and  Suthmier;  and  in  order 
to  secure  to  Webb  the  balance  which  might  become  due  to  him  on 
these  transactions,  Harre  and  Suthmier  executed  and  gave  to  him 
certain  deeds  and  securities.  Webb  made  out  four  several  successive 
half-yearly  accounts  between  him  and  Harre  and  Suthmier,  on  the 
footing  of  this  agreement,  and  various  sums  of  money  were  paid 
to  Webb  on  these  accounts  from  time  to  time  by  the  bankrupts ;  these 
accounts  closed  on  the  10th  of  August,  1802,  when  a  considerable 
balance  was  due  from  the  bankrupts  to  Webb.  These  accounts  com- 
prised the  principal  moneys  actually  advanced,  and  interest  at  5 
per  cent.;  and  also  5  per  cent,  on  all  sugars  purchased  by  the  bank- 
rupts. Webb  never  purchased  or  procured  any  sugars  for  the  bank- 
rupts; but  the  same  were  always  purchased  by  the  bankrupts 
themselves  in  their  own  names.  It  was  admitted  on  the  trial  that 
the  original  agreement  of  the  15th  of  May,  1800,  was  illegal  and 
usurious,  and  that  no  part  of  the  balance  could  have  been  recovered 
by  Webb  from  Harre  and  Suthmier,  if  they  had  set  up  the  usury; 
and  Webb  was  informed  by  the  attorney  of  Harre  and  Suthmier 
in  July,  1802,  that  these  transactions  were  usurious,  and  that  his 
whole  debt  was  in  danger  of  being  lost,  and  a  writ  of  latitat  was 
actually  sued  out  by  the  bankrupts'  attorneys  upon  the  Statute  of 
Usury;  but  this  fact  was  unknown  to  Webb.  In  consequence  of  this 
intimation,  it  was  agreed  between  Harr^  and  Suthmier  and  Webb, 
that  Webb  should  make  out  fresh  accounts,  leaving  out  all  the  charges 
for  commission;  and  should  only  charge  them  with  the  principal 


276  LEE    V.    MUGGERIDGE  [CHAP.   I 

money,  together  with  legal  interest;  and  that  the  original  deeds  and 
articles  in  the  possession  of  Webb  should  be  given  up  by  him  and 
cancelled  accordingly.  Webb  accordingly  made  out  such  fresh  ac- 
count, in  which  he  omitted  the  whole  charge  for  commission;  and 
the  balance  due  to  him  amounted  to  the  sum  of  11,672/.  45.  2d., 
which  balance  was  composed  of  principal  moneys  actually  advanced 
under  the  agreement  of  15th  May,  1800,  and  of  interest  at  5  per 
cent,  fairly  and  legally  calculated;  the  whole  commission  and  every 
objectionable  charge  being  omitted.  This  account,  so  corrected, 
was,  on  the  12th  of  August,  1802,  delivered  to  the  agent  of  Harre 
and  Suthmier,  and  on  the  following  day  they  acknowledged  this 
balance  to  be  due  to  Webb,  and  promised  to  pay  the  same;  where- 
upon the  deeds  and  securities  executed  to  Webb  by  Harre  and  Suth- 
mier, when  the  original  agreement  was  entered  into,  were  produced 
by  Webb  or  his  agent,  in  the  presence  of  Harre  and  Suthmier,  and 
were  then  cancelled  and  burnt.  The  question  for  the  opinion  of  the 
Court  was,  whether,  under  the  circumstances  of  this  case,  the  plain- 
tiffs were  entitled  to  recover  the  above  balance  of  11,672?.  4s.  2d. 
If  the  Court  should  be  of  that  opinion,  a  verdict  for  such  sum  was 
to  be  entered  for  the  plaintiffs;  if  otherwise,  the  verdict  to  be  en- 
tered for  the  defendants. 

This  cause  was  twice  argued:  first,  in  Easter  Term,  1809,  by  Best, 
Serjt.,  for  the  plaintiffs,  and  Vaughan,  Serjt.,  for  the  defendants; 
and  again  in  Trinity  Term,  1809,  by  Shepherd,  Serjt.,  for  the  plain- 
tiffs, and  Lens,  Serjt.,  for  the  defendants. 

In  the  course  of  the  present  Term  the  judges  of  the  court  sent  to 
the  Lord  Chancellor  the  following  certificate  of  their  opinion:  — 

"This  case  has  been  argued  before  us  by  counsel,  and  we  are  of 
opinion  that  under  the  circumstances  the  plaintiffs  are  entitled  to 
recover  the  above  balance  of  11,672L  4s.  2d."  ^ 


LEE  V.  MUGGERIDGE  and  Another,  Executors  of  Mary 
MuGGERiDQE,  deceased 

In  the  Common  Pleas,  Trinity  Term,  June  29,  1813 

[Reported  in  5  Taunton,  36] 

This  was  an  action  of  assumpsit,  brought  under  the  following  cir- 
cumstances: In  1799,  Joseph  Hillor,  the  son  of  Mrs.  Muggeridge, 
the  defendants'  testatrix,  by  a  former  husband,  falling  into  embar- 
rassed circumstances,  she,  in  order  to  induce  the  plaintiff,  his  father- 
in-law,  to  relieve  him,  proposed  by  letter  to  become  security  to  the 
extent  of  2000Z.  by  a  bond  payable  at  her  death.     The  plaintiff  ac- 

>  FliRht  V.  "Rfiffl.  1  IT.  &  C.  703;  G,ir\nn  v.  Linton,  62  Ark.  370;  Kilboiirn  v.  Brad- 
Icy,  3  Day,  .3.'i0;  KawsiriK  "•  Ordway,  100  la.  fill;  Vcrnifnilo  v.  Vormo\ilo,  05  Mo.  138; 
Shflflon  V.  Haxtuii,  01  N.  Y.  124,  (icc.  Son  also  Tucker  v.  West,  20  Ark.  386;  Gwinn 
V.  Simcs,  61  Mo.  335;   Mclchoir  v.  McCarty,  31  Wis.  252. 


SECT.    Il]  LEE    V.    MUGGERroGE  277 

cordingly  advanced  the  money  to  Joseph  Hiller;  and  Mrs.  Mug- 
geridge  by  her  bond,  dated  the  4th  of  August,  1799,  became  bound 
to  the  plaintiff  in  the  penal  sum  of  4000^^  with  condition  that  the 
heirs,  executors,  or  administrators  of  Mrs.  Muggeridge  should,  within 
six  months  after  her  decease,  pay  to  the  plaintiff  1999L  19s.,  with 
such  part  of  the  interest  as  Joseph  Hiller  should  omit  to  pay;  it 
being  agreed  that  he  should  pay  the  interest  half  yearly.  Joseph 
Hiller  having  neglected  to  pay  the  interest,  the  plaintiff  in  the  year 
1804  wrote  to  Mrs.  Muggeridge,  requesting  payment  of  the  arrears; 
to  which  she,  after  her  husband's  death,  returned  an  answer  by 
letter,  stating  "that  it  was  not  in  her  power  to  pay  the  bond  off, 
her  time  here  was  but  short,  and  that  would  be  settled  by  her  exec- 
utors." 

It  appeared  that  Mrs.  Muggeridge  had  a  considerable  separate 
estate  when  the  bond  was  given,  which  she  acquired  from  the  father 
of  Joseph  Hiller,  and  the  bulk  of  which  she  gave  by  her  will  to 
the  defendant,  JSTathaniel  Muggeridge.  After  an  ineffectual  attempt 
to  establish  that  the  bond  constituted  an  equitable  lien  or  charge 
upon  the  separate  estate  of  Mrs.  Muggeridge  (see  1  V.  &  B.  118), 
the  plaintiff  brought  the  present  action,  founded  upon  the  promise 
contained  in  the  letter  above  referred  to.  The  declaration  stated 
(inter  alia)  that  the  testatrix,  after  the  death  of  her  husband,  and 
whilst  she  was  sole,  to  wit,  on  the  11th  of  July,  1804,  "in  considera- 
tion of  the  premises  undertook  to  the  plaintiff  that  the  bond,  that 
is  to  say,  the  principal  money  and  interest  secured  by  the  bond, 
should  be  settled,  that  is  to  say,  paid,  by  her  executors."  The  de- 
fendants pleaded  the  general  issue;  and  upon  the  trial  of  the  cause 
at  the  Sittings  after  Hilary  Term,  1813,  at  Guildhall,  before  Gibbs, 
J.,  the  jury  found  a  verdict  for  the  plaintiff.^ 

Shepherd,  Serjt.,  in  Easter  Term  last,  moved  in  arrest  of  judg- 
ment, on  the  ground  that  no  sufficient  consideration  was  shewn  for 
the  promise  of  the  deceased.     The  Court  granted  a  rule  nisi. 

Lens  and  Best,  Serjts.,  in  this  term  shewed  cause. 

Shepherd  and  Vaughan,  Serjts.,  contra. 

Mansfield,  C.  J.  The  counsel  for  the  plaintiffs  need  not  trouble 
themselves  to  reply  to  these  cases :  it  has  been  long  established,  that 
where  a  person  is  bound  morally  and  conscientiously  to  pay  a  debt, 
though  not  legally  bound,  a  subsequent  promise  to  pay  will  give  a 
right  of  action.  The  only  question  therefore  is.  Whether  upon  this 
declaration  there  appears  a  good  moral  obligation !  Now  I  cannot 
conceive  that  there  can  be  a  stronger  moral  obligation  than  is  stated 
upon  this  record.  Here  is  this  debt  of  2,000?.  created  at  the  desire 
of  the  testatrix,  lent  in  fact  to  her,  though  paid  to  Hiller.     After 

^  In  the  original  report  the  declaration  is  set  forth  with  much  fulness;  but  as  it  is 
exceedingly  prolix,  and  most  of  it  is  wholly  irrelevant  to  the  one  question  argued  and 
decided  in  the  case,  it  is  here  omitted,  and  a  statement  of  the  material  facts  is  substi- 
tuted in  its  place.  Some  of  the  facts  stated  have  been  obtained  from  the  report  in 
1  V.  &  B.  118. 


278  BINNINGTON    V.   WALLIS  [CHAP.   I 

her  husband's  death,  she,  knowing  that  this  bond  had  been  given, 
that  her  son-in-law  had  received  the  money,  and  had  not  repaid  it, 
knowing  all  this,  she  promises  that  her  executors  shall  pay;  if,  then, 
it  has  been  repeatedly  decided  that  a  moral  consideration  is  a  good 
consideration  for  a  promise  to  pay,  this  declaration  is  clearly  good. 
This  case  is  not  distinguishable  in  principle  from  Barnes  v.  Hedley; 
there,  not  only  the  securities  were  void,  but  the  contract  was  void; 
but  the  money  had  been  lent,  and,  therefore,  when  the  parties  bad 
stripped  the  transaction  of  its  usury,  and  reduced  the  debt  to  mere 
principal  and  interest,  the  promise  made  to  pay  that  debt  was  bind- 
ing. Lord  Mansfield's  judgment  in  the  case  of  Doe  on  the  demise 
of  Carter  v.  Straphan  is  extremely  applicable.  Here,  in  like  manner, 
the  wife  would  have  been  grossly  dishonest,  if  she  had  scrupled  to 
give  a  security  for  the  money  advanced  at  her  request. 

Bule  discharged.'^ 


BUvr^INGTON  V.  WALLIS 

In  the  King's  Bench,  June  29,  1821 

[Reported  in  4  Barnewall  &  Alderson,  650] 

Declaration  stated  that,  before  the  making  of  the  promise  and 
undertaking,  the  plaintiff  had  cohabited  with  the  defendant  as  his 
mistress,  and  an  immoral  connection  and  intercourse  had  existed  be- 
tween them  for  a  long  space  of  itme,  to  wit,  for  the  space  of  twelve 
years;  and  the  plaintiff  had  thereby  been  greatly  injured  in  her 
character  and  reputation,  and  deprived  of  the  means  of  honestly 
procuring  a  livelihood;  and  that,  before  the  time  of  the  making  of 
the  promise,  to  wit,  on  the  1st  of  January,  1816,  at,  &c.,  the  plaintiff 
wholly  ceased  to  cohabit  with  the  said  defendant  as  his  mistress, 
and  to  have  any  immoral  intercourse  with  him;  and  thereupon  it 
was  determined  and  agreed  between  them  that  no  immoral  inter- 
course or  connection  should  ever  again  take  place  between  them; 
and  that  the  defendant,  as  a  compensation  for  the  injury  so  sustained 
by  the  plaintiff,  should  pay  and  allow  to  the  plaintiff  the  quarterly 
sum  of  10?.,  while  she  should  be  and  continue  of  good  and  virtuous 

'  Walker  V.  Arkansas  Nat.  Bank,  25G  Fot).  1;  Brownson  v.  Weeks,  47  La.  Ann. 
1042;  Wilson  v.  Burr,  25  Wend,  38G;  GouUlinR  v.  Da\adson,  26  N.  Y.  604;  Hemphill 
V.  McClimans,  24  Pa.  367;  Leonard  v.  Duflin,  04  Pa.  218;  Brooks  v.  Merchants'  Bank, 
—  125  Pa.  .394;  Rathfon  v.  Locker,  215  Pa.  571,  ace;  Dixie  v.  Worthy.  11  U.  C.  Q.  B. 
32H;  Watson  v.  Dunlap,  2  Cranch  C.  C.  14;  Thompson  v.  Hudgins,  116  Ala.  93; 
Waters  v.  Bean,  15  Cn.  358;  Thomp.son  v.  Minnich,  227  111.  430;  Maher  v.  Martin, 
43  Ind.  314;  Lonp;  n.  Brown,  60  Ind.  160;  Au.stin  v.  Davis,  128  Ind.  472;  HoUoway's 
AssiKnee  v.  Rtidy,  60  S.  W.  Rep.  650  (Ky.);  Lyell  v.  Walbach,  113  Md.  574;  Porter- 
field  V.  Buthr,  47  MI.h.h.  165;  Mii.sick  v.  Dodson,  76  Mo.  624;  BraRK  v.  Israel,  86  Mo. 
App.  3.38;  Kent  v.  Raud,  64  N.  H.  45;  Condon  v.  Barr,  49  N.  .1.  L.  53;  Long  v.  Rankin, 
108  N.  C.  333;  Wilcox  v.  Arnold,  116  N.  C.  708;  Hayward  v.  Barker,  52  Vt.  429: 
Valentine  v.  Bell,  06  Vt.  280,  contra.    See  also  Parker  v.  C'owan,  1  Heisk,  618. 


SECT.    II ]  LITTLEFIELD    V.    SHEE  279 

life,  conversation,  and  demeanor;  and  thereupon,  in  consideration 
of  the  premises,  and  that  the  plaintiff  at  the  request  of  the  defendant 
would  resign  and  give  up  the  said  quarterly  sum,  he  undertook  to 
pay  her  so  much  money  as  the  said  quarterly  sum  was  reasonably 
worth,  in  order  to  enable  her  to  continue  to  live  in  a  virtuous  and 
decorous  manner.  The  declaration  then  averred  that  the  plaintiff 
did  resign  and  give  up  the  said  quarterly  sum,  and  the  same  from 
thence  wholly  ceased  and  determined ;  and  that  she  had  always,  from 
the  time  of  the  cessation  of  the  immoral  connection,  lived  in  a  vir- 
tuous and  decorous  manner,  and  been  of  virtuous  life,  conversation, 
and  demeanor.  It  then  averred  that  the  quarterly  sum  was  reason- 
ably worth  400L;  and  then  alleged  as  a  breach  non-payment  by  the 
defendant.  The  other  counts  omitted  any  mention  of  the  quarterly 
allowance,  and  in  other  respects  were  similar  to  this.  To  this  dec- 
laration there  was  a  general  demurrer. 

ParJce,  in  support  of  the  demurrer. 

Holt,  contra. 

Per  Cukiam.  The  declaration  is  insufficient.  It  is  not  averred 
that  the  defendant  was  the  seducer,  and  there  is  no  authority  to  show 
that  past  cohabitation  alone,  or  the  ceasing  to  cohabit  in  future,  is 
a  good  consideration  for  a  promise  of  this  nature.  The  cases  cited^ 
are  distinguishable  from  this,  because  they  are  all  cases  of  deeds; 
and  it  is  a  very  different  question  whether  a  consideration  be  suffi- 
ciently good  to  sustain  a  promise,  and  whether  it  be  so  illegal  as 
to  make  the  deed  which  required  no  consideration  void.  There  must 
therefore  be  judgment  for  the  defendant. 

Judgment  for  defendant.^ 


LITTLEFIELD,  Executrix  of  John  Littlefield  v. 
ELIZABETH  SHEE 

In  the  King's  Bench,  November  4,  1831 

[Reported  in  2  Barnewall  &  Adolphus,  811] 

Assumpsit  for  goods  sold  and  delivered.  The  fourth  count  stated 
that  John  Littlefield  in  his  lifetime,  at  the  special  instance  and  re- 
quest of  the  defendant,  had  supplied  and  delivered  to  her  divers 
goods  and  chattels  for  the  sum  of  16L;  and  thereupon,  in  considera- 
tion of  the  premises,  and  of  the  said  sum  of  money  being  due  and 
unpaid,  the  defendant,  after  the  death  of  the  said  John  Littlefield, 
undertook  and  promised  the  plaintiff  as  executrix  of  J.  L.  to  pay 

1  Annandale  v.  Harris,  2  Peere  W.  433;  Turner  v.  Vaughan,  2  Wils.  339.  See  also 
Nye  V.  Moseley,  6  B.  &  C.  133;   Massey  v.  Wallace.  32  S.  C.  149. 

^  In  Beaumont  v.  Reeve,  8  Q.  B.  483,  it  was  held  that  even  though  the  defendant 
was  the  seducer,  a  subsequent  promise  was  not  binding.  Wallace  v.  Rappleye,  103  El. 
229,  250,  ace.  See  also  Wiggins  v.  Keizer,  6  Ind.  252.  Shenk  v.  Mingle,  13  Serg  & 
R.  29,  contra.    See  also  Jennings  v.  Brown,  9  M.  &  W.  496;  Wyant  v.  Lesher,  23  Pa.  338. 


280  LITTLEFIELD    V.    SHEE  [CHAP,    I 

her  the  said  sum  of  money  as  soou  as  it  was  in  her  (the  defendant's) 
power  so  to  do.  And  although  afterwards,  to  wit,  on,  &c.,  at,  &c., 
it  was  in  her  power  to  pay  the  said  sum,  yet  she  did  not  do  so.  Plea : 
the  general  issue.  At  the  trial  before  Gaselee,  J.,  at  the  last  As- 
sizes for  Sussex,  it  appeared  that  the  action  was  brought  to  recover 
151.  for  butcher's  meat  supplied  by  the  testator  to  the  defendant,  for 
her  own  use,  between  September,  1825,  and  March,  1826.  During 
that  time  the  defendant  was  a  married  woman,  but  her  husband  was 
abroad.  After  his  death  she  promised  to  pay  the  debt  when  it  should 
be  in  her  power,  and  her  ability  to  pay  was  proved  at  the  trial.  The 
learned  judge  held  that,  the  defendant  having  been  a  feme  covert 
at  the  time  when  the  goods  were  supplied,  her  husband  was  originally 
liable,  and  consequently  there  was  no  consideration  for  the  promise 
declared  upon.  The  plaintiff  was  therefore  nonsuited.  Hutchin- 
son, on  a  former  day  in  this  Term,  moved  to  set  aside  the  nonsuit, 
and  to  enter  a  verdict  for  the  plaintiff  on  the  fourth  count;  on  the 
ground  that,  the  goods  having  been  supplied  to  the  defendant  while 
she  was  living  separate  from  her  husband,  she  was  under  a  moral 
obligation  to  pay  for  them,  and  such  obligation  was  a  sufficient  con- 
sideration for  a  subsequent  promise.  It  was  not  necessary  that  there 
should  have  been  an  antecedent  legal  obligation.  Barnes  v.  Hedley, 
Lee  V.  Muggeridge.  Cur.  adv.  vult. 

Lord  Tenterden,  C.  J.,  now  delivered  the  judgment  of  the  Court. 
The  fourth  count  of  the  declaration  states  that  the  testator  had  at 
the  request  of  the  defendant  supplied  her  with  goods,  and  that  in 
consideration  of  the  premises,  and  of  the  price  of  the  goods  being 
due  and  impaid,  the  defendant  promised.  Now,  that  is  in  substance 
an  allegation  that  those  sums  were  due  from  her,  and  the  plaintiff 
failed  in  proof  of  that  allegation,  because  it  appeared  that  the  goods 
were  supplied  to  her  whilst  her  husband  was  living,  so  that  the  price 
constituted  a  debt  due  from  him.  We  are  therefore  of  opinion  that 
the  declaration  was  not  supported  by  the  proof,  and  that  the  nonsuit 
was  right.  In  Lee  v.  Muggeridge  all  the  circumstances  which  showed 
that  the  money  was  in  conscience  due  from  the  defendant  were  cor- 
rectly set  forth  in  the  declaration.  It  there  appeared  upon  the  record 
that  the  money  was  lent  to  her,  though  paid  to  her  son-in-law,  while 
she  was  a  married  woman;  and  that  after  her  husband's  death,  she, 
knowing  all  the  circumstances,  promised  that  her  executor  should 
pay  the  sum  duo  on  the  bond.  I  must  also  observe  that  the  doctrine 
that  a  moral  obligation  is  a  sufficient  consideration  for  a  subsequent 
promise  is  one  which  should  be  received  with  some  limitation. 

Rule   refused.'^ 

•  Meyer  v.  Haworth,  8  A.  &  E.  407,  presented  similar  facts  except  that  the  defend- 
ant w.i«  HvinK  in  op<',n  adultery  (which  pxcmptod  her  husband  from  liability  for  her 
necfHHary  cxpfinHcs)  and  the  plaintiff  was  ignorant  when  he  furnished  the  goods  of 
both  the  defendant's  marriage  and  her  adultery.  The  court  held  the  plaintiff  could 
not  recover. 


SECT.    IlJ  MILLS    V.   WYMAN  281 

DANIEL  MILLS  v.  SETH  WYMAN 

Supreme  Judicial  Court  of  Massachusetts,  October  Term,  1825 
[Reported  in  3  Pickering,  207] 

This  was  an  action  of  assumpsit  brought  to  recover  a  compensa- 
tion for  the  board,  nursing,  &c.,  of  Levi  Wyman,  sou  of  the  defendant, 
from  the  5th  to  the  20th  of  February,  1821.  The  plaintiff  then  lived 
at  Hartford,  in  Connecticut;  the  defendant,  at  Shrewsbury,  in  this 
State.  Levi  Wyman,  at  the  time  when  the  services  were  rendered, 
was  about  twenty-five  years  of  age,  and  had  long  ceased  to  be  a 
member  of  his  father's  family.  He  was  on  his  return  from  a  voyage 
at  sea,  and  being  suddenly  taken  sick  at  Hartford,  and  being  poor 
and  in  distress,  was  relieved  by  the  plaintiff  in  the  manner  and  to 
the  extent  above  stated.  On  the  24th  of  February,  after  all  the  ex- 
penses had  been  incurred,  the  defendant  wrote  a  letter  to  the  plain- 
tiff, promising  to  pay  him  such  expenses.  There  was  no  consideration 
for  this  promise,  except  what  grew  out  of  the  relation  which  sub- 
sisted between  Levi  Wyman  and  the  defendant;  and  Howe,  J.,  be- 
fore whom  the  cause  was  tried  in  the  Court  of  Common  Pleas, 
thinking  this  not  sufficient  to  support  the  action,  directed  a  non- 
suit.    To  this  direction  the  plaintiff  filed  exceptions. 

/.  Davis  and  Allen,  in  support  of  the  exceptions. 

Brigham  for  the  defendant. 

Parker,  C.  J.  General  rules  of  law  established  for  the  protection 
and  security  of  honest  and  fair-minded  men,  who  may  inconsider- 
ately make  promises  without  any  equivalent,  will  sometimes  screen 
men  of  a  different  character  from  engagements  which  they  are  bound 
in  foro  conscientice  to  perform.  This  is  a  defect  inherent  in  all 
human  systems  of  legislation.  The  rule  that  a  mere  verbal  promise, 
without  any  consideration,  cannot  be  enforced  by  action,  is  uni- 
versal in  its  application,  and  cannot  be  departed  from  to  suit  par- 
ticular cases  in  which  a  refusal  to  perform  such  a  promise  may  be 
disgraceful. 

The  promise  declared  on  in  this  case  appears  to  have  been  made 
without  any  legal  consideration.  The  kindness  and  services  towards 
the  sick  son  of  the  defendant  were  not  bestowed  at  his  request.  The 
son  was  in  no  respect  under  the  care  of  the  defendant.  He  was 
twenty-five  years  old,  and  had  long  left  his  father's  family.  On  his 
return  from  a  foreign  country,  he  fell  sick  among  strangers,  and 
the  plaintiff  acted  the  part  of  the  good  Samaritan,  giving  him 
shelter  and  comfort  until  he  died.  The  defendant,  his  father,  on 
being  informed  of  this  event,  influenced  by  a  transient  feeling  of 
gratitude,  promised  in  writing  to  pay  the  plaintiff  for  the  expenses 
he  had  incurred.  But  he  has  determined  to  break  this  promise,  and 
is  willing  to  have  his  case  appear  on  record  as  a  strong  example  of 
particular  injustice  sometimes  necessarily  resulting  from  the  opera- 
tion of  general  rules. 


282  MILLS    V.    WYMAN  [CHAP.    I 

It  is  said  a  moral  obligation  is  a  sufficient  consideration  to  sup- 
port an  express  promise;  and  some  authorities  lay  down  the  rule 
thus  broadly;  but  upon  examination  of  the  cases  we  are  satisfied 
that  the  universality  of  the  rule  cannot  be  supported,  and  that  there 
must  have  been  some  pre-existing  obligation,  which  has  become  in- 
operative by  positive  law,  to  form  a  basis  for  an  effective  promise. 
The  cases  of  debts  barred  by  the  Statute  of  Limitations,  of  debts  in- 
curred by  infants,  of  debts  of  bankrupts,  are  generally  put  for  il- 
lustration of  the  rule.  Express  promises  founded  on  such  pre-ex- 
isting equitable  obligations  may  be  enforced;  there  is  a  good 
consideration  for  them;  they  merely  remove  an  impediment  created 
by  law  to  the  recovery  of  debts  honestly  due,  but  which  public  policy 
protects  the  debtors  from  being  compelled  to  pay.  In  all  these  cases 
there  was  originally  a  quid  pro  quo,  and  according  to  the  principles 
of  natural  justice  the  party  receiving  ought  to  pay;  but  the  legisla- 
ture has  said  he  shall  not  be  coerced;  then  comes  the  promise  to  pay 
the  debt  that  is  barred,  the  promise  of  the  man  to  pay  the  debt  of 
the  infant,  of  the  discharged  bankrupt  to  restore  to  his  creditor  what 
by  the  law  he  had  lost.  In  all  these  cases  there  is  a  moral  obligation 
founded  upon  an  antecedent  valuable  consideration.  These  promises, 
therefore,  have  a  sound  legal  basis.  They  are  not  promises  to  pay 
something  for  nothing;  not  naked  pacts,  but  the  voluntary  revival 
or  creation  of  obligations  which  before  existed  in  natural  law,  but 
which  had  been  dispensed  with,  not  for  the  benefit  of  the  party 
obliged  solely,  but  principally  for  the  public  convenience.  If 
moral  obligation,  in  its  fullest  sense,  is  a  good  substratum  for 
an  express  promise,  it  is  not  easy  to  perceive  why  it  is 
not  equally  good  to  support  an  implied  promise.  What  a  man 
ought  to  do,  generally  he  ought  to  be  made  to  do,  whether  he 
promise  or  refuse.  But  the  law  of  society  has  left  most  of 
such  obligations  to  the  interior  forum,  as  the  tribunal  of  con- 
science has  been  aptly  called.  Is  there  not  a  moral  obligation  upon 
every  son  who  has  become  affluent  by  means  of  the  education  and 
advantages  bestowed  upon  him  by  his  father,  to  relieve  that  father 
from  pecuniary  embarrassment,  to  promote  his  comfort  and  happi- 
ness, and  even  to  share  with  him  his  riches,  if  thereby  he  will  be 
made  happy?  And  yet  such  a  son  may,  with  impunity,  leave  such 
a  father  in  any  degree  of  penury  above  that  which  will  expose  the 
community  in  which  he  dwells  to  the  danger  of  being  obliged  to 
preserve  him  from  absolute  want.  Is  not  a  wealthy  father  under 
strong  moral  obligation  to  advance  the  interest  of  an  obedient,  well- 
disposed  son,  to  furnish  him  with  the  means  of  acquiring  and  main- 
taining a  becoming  rank  in  life,  to  rescue  him  from  the  horrors  of 
debt  incurred  by  misfortune?  Yet  the  law  will  uphold  him  in  any 
degree  of  parsimony,  short  of  that  Avhich  would  reduce  his  son  to 
the  necessity  of  seeking  public  charity. 

"Without  doubt  there  are  great  interests  of  society  which  justify 


SECT.    Il]  MILLS    V.    WYMAN  283 

withholding  the  coercive  arm  of  the  law  from  these  duties  of  im- 
perfect obligation,  as  they  are  called;  imperfect,  not  because  they 
are  less  binding  upon  the  conscience  than  those  which  are  called 
perfect,  but  because  the  wisdom  of  the  social  law  does  not  impose 
sanctions  upon  them. 

A  deliberate  promise  in  writing,  made  freely  and  without  any 
mistake,  one  which  may  lead  the  party  to  whom  it  is  made  into  con- 
tracts and  expenses,  cannot  be  broken  without  a  violation  of  moral 
duty.  But  if  there  was  nothing  paid  or  promised  for  it,  the  law, 
perhaps  wisely,  leaves  the  execution  of  it  to  the  conscience  of  him 
who  makes  it.  It  is  only  when  the  party  making  the  promise  gains 
something,  or  he  to  whom  it  is  made  loses  something,  that  the  law 
gives  the  promise  validity.  And  in  the  case  of  the  promise  of  the 
adult  to  pay  the  debt  of  the  infant,  of  the  debtor  discharged  by  the 
Statute  of  Limitations  or  bankruptcy,  the  principle  is  preserved  by 
looking  back  to  the  origin  of  the  transaction,  where  an  equivalent 
is  to  be  found.  An  exact  equivalent  is  not  required  by  the  law;  for 
there  being  a  consideration,  the  parties  are  left  to  estimate  its  value : 
though  here  the  courts  of  equity  will  step  in  to  relieve  from  gross 
inadequacy  between  the  consideration  and  the  promise. 

These  principles  are  deduced  from  the  general  current  of  decided 
cases  upon  the  subject,  as  well  as  from  the  known  maxims  of  the 
common  law.  The  general  position,  that  moral  obligation  is  a  suffi- 
cient consideration  for  an  express  promise,  is  to  be  limited  in  its 
application  to  cases  where  at  some  time  or  other  a  good  or  valuable 
consideration  has  existed. 

A  legal  obligation  is  always  a  sufficient  consideration  to  support 
either  an  express  or  an  implied  promise;  such  as  an  infant's  debt 
for  necessaries,  or  a  father's  promise  to  pay  for  the  support  and 
education  of  his  minor  children.  But  when  the  child  shall  have  at- 
tained to  manhood,  and  shall  have  become  his  own  agent  in  the 
world's  business,  the  debts  he  incurs,  whatever  may  be  their  nature, 
create  no  obligation  upon  the  father;  and  it  seems  to  follow,  that 
his  promise  founded  upon  such  a  debt  has  no  legally  binding  force. 

The  cases  of  instruments  under  seal  and  certain  mercantile  con- 
tracts, in  which  considerations  need  not  be  proved,  do  not  contradict 
the  principles  above  suggested.  The  first  import  a  consideration 
in  themselves,  and  the  second  belong  to  a  branch  of  the  mercantile 
law,  which  has  found  it  necessary  to  disregard  the  point  of  con- 
sideration in  respect  to  instruments  negotiable  in  their  nature  and 
essential  to  the  interests  of  commerce. 

Instead  of  citing  a  multiplicity  of  cases  to  support  the  positions 
T  have  taken,  I  will  only  refer  to  a  very  able  review  of  all  the  cases 
in  the  note  in  3  Bos.  &  Pul.  249.  The  opinions  of  the  judges  had 
been  variant  for  a  long  course  of  years  upon  this  subject,  but  there 
seems  to  be  no  case  in  which  it  was  nakedly  decided,  that  a  promise 
to  pay  the  debt  of  a  son  of  full  age,  not  living  with  his  father,  though 


284  MILLS    V.    WYMAN  [CHAP.    I 

the  debt  were  incurred  by  sickness  which  ended  in  the  death  of  the 
sou,  without  a  previous  request  by  the  father  proved  or  presumed, 
could  be  enforced  by  action. 

It  has  been  attempted  to  show  a  legal  obligation  on  the  part  of 
the  defendant  by  virtue  of  our  statute,  which  compels  lineal  kindred 
in  the  ascending  or  descending  line  to  support  such  of  their  poor 
relations  as  are  likely  to  become  chargeable  to  the  town  where  they 
have  their  settlement.  But  it  is  a  sufficient  answer  to  this  position, 
that  such  legal  obligation  does  not  exist  except  in  the  very  cases  pro- 
vided for  in  the  statute,  and  never  until  the  party  charged  has  been 
adjudged  to  be  of  sufficient  ability  thereto.  We  do  not  know  from 
the  report  any  of  the  facts  which  are  necessary  to  create  such  an 
obligation.  Whether  the  deceased  had  a  legal  settlement  in  this 
Commonwealth  at  the  time  of  his  death,  whether  he  was  likely  to 
become  chargeable  had  he  lived,  whether  the  defendant  was  of  suffi- 
cient ability,  are  essential  facts  to  be  adjudicated  by  the  court  to 
which  is  given  jurisdiction  on  this  subject.  The  legal  liability  does 
not  arise  until  these  facts  have  all  been  ascertained  by  judgment, 
after  hearing  the  party  intended  to  be  charged. 

For  the  foregoing  reasons  we  are  all  of  opinion  that  the  nonsuit 
directed  by  the  Court  of  Common  Pleas  was  right,  and  that  judg- 
ment be  entered  thereon  for  costs  for  the  defendant.^ 

1  Loomis  V.  Newhall,  15  Pick,  159;  Dodge  v.  Adams,  19  Pick.  429;  Kelley  v.  Davis 
49  N.  H.  187;  Freeman  v.  Robinson,  38  N.  J.  L.  383;  Nine  v.  Starr,  8  Org.  49;  Val- 
entine V.  Bell,  66  Vt.  280,  ace.  Similarly,  the  promise  of  a  child  to  pay  for  past  sup- 
port of  an  indigent  parent  has  been  held  invalid.  Cook  v.  Bradley,  7  Conn.  57;  Parker 
V.  Carter,  4  Munf.  273;  Davis  v.  Anderson,  99  Va.  625.  See  also  Ellicott  v.  Turner, 
4  Md.  476;   Hook  v.  Pratt,  78  N.  Y.  371. 

In  a  reporter's  note  to  Wennall  v.  Adney,  3  B.  &  P.  249,  published  in  1804,  the 
reporter  thus  summarised  the  result  of  the  decisions: 

"An  express  promise,  therefore,  as  it  should  seem,  can  only  revive  a  precedent  good 
consideration,  which  might  have  been  enforced  at  law  through  the  medium  of  an 
implied  promise,  had  it  not  been  suspended  by  some  positive  rule  of  law,  but  can 
give  no  original  right  of  action,  if  the  obligation  on  which  it  is  founded  never  could 
have  been  enforced  at  law,  though  not  barred  by  any  legal  maxim  or  statute  provision." 

In  most  jurisdictions  a  moral  obligation  is  now  held  insufficient  consideration,  and 
the  distinction  suggested  in  the  note  to  Wennall  v.  Adney  is  invoked  to  support  only 
such  promises  as  the  ratification  of  an  infant's  promise  or  a  promise  to  pay  a  debt 
barred  by  bankruptcy  or  the  Statute  of  Ijimitations.  See  53  L.  R.  A.  353  n.  In  a 
few  jurisdictions,  however,  the  doctrine  that  moral  obligation  may  support  a  promise 
is  still  in  force.  Ga.  Code,  §  2741 ;  McElven  v.  Sloan,  56  Ga.  208,  209;  Gray  v.  Hamil, 
82  Ga.  .375;  Brown  v.  Latham,  92  Ga.  280;  Spear  r.  Griffith,  86  111.  552;  Lawrence 
V.  Ogle.sby,  178  III.  122  (but  see  Hobbs  v.  Greifenhagen,  91  111.  App.  400);  Pierce  v. 
Walton,  20  Ind.  App.  66;  Robinson  v.  Hurst,  78  Md.  59;  Edwards  v.  Nelson,  51 
Mich,  121;  Hemphill  v.  McClimans,  24  Pa.  307;  Landis  «.  Royer,  59  Pa.  95;  Stcbbina 
V.  Crawford,  92  Pa.  289;  Holden  v.  Banes,  140  Pa.  63;  Sutch's  Appeal,  201  Pa.  305; 
State  r.  Butler.  11    Lea,  418.     See  also  Ferguson  v  Harris,  39  S.  C.  323. 


SECT.    II]  GROB    V.   GROSS  285 


ISEAEL  GROB  and  Another  v.  DAVID  GROSS 

ISTew  Jersey,  July  5,  1912-ISrovember  11,  1912 

[Reported  in  83  New  Jersey  Law,  430] 

Kalisch,  J.  The  plaintiffs  obtained  a  judgment  against  the  de- 
fendant for  $500  in  the  Second  District  Court  of  Jersey  City,  the 
court  sitting  without  a  jury. 

The  trial  judge  found  the  facts  following: 

"I  find  that  on  the  23d  day  of  May,  1911,  the  defendant,  David 
Gross,  executed  and  delivered  the  following  guarantee  at  the  plain- 
tiffs' request,  namely: 

"  'Hoboken,  N.  J.,  May  23d,  1911. 

"  'I  hereby  agree  to  pay  to  I.  Grob  &  Co.  for  any  amount  of  flour 
delivered  to  Mrs.  Rose  Bier  of  No.  114  Willow  avenue,  Hoboken, 
N.  J.,  to  any  amount  to  $500.00  (five  hundred  00/100). 

"'D.  Gross, 

"'421  N'ewark  Street, 
"  'Hoboken,  N.  J.' 

"And  that  immediately  after  its  execution  plaintiffs  furnished 
flour  to  Rose  Bier  to  the  value  of  $99,  and  that  the  defendant  then 
told  the  plaintiffs  to  advance  no  further  credit  on  his  said  guarantee 
to  Rose  Bier.  That  in  August,  1911,  defendant  promised  to  pay  and 
said  he  would  live  up  to  his  guarantee.  Thereafter,  disregarding 
such  request,  plaintiffs  continued  to  advance  credit  to  Rose  Bier 
from  time  to  time,  until  the  29th  day  of  July,  1911.  Between  the 
time  of  the  signing  of  the  guarantee  and  the  29  th  day  of  July,  1911, 
plaintiffs  sold  and  delivered  to  Rose  Bier  flour  as  set  forth  in  the 
bill  of  particulars  annexed  to  the  plaintiffs'  state  of  demand,  amount- 
ing to  $2,168.11,  whereon  she  made  payments  aggregating  $1,669.95, 
on  the  days  and  in  the  amounts  set  forth  in  the  credits  annexed  to 
the  plaintiffs'  state  of  demand,  so  that  at  the  time  action  was  brought 
there  was  due  from  Rose  Bier  to  the  plaintiffs  $502.16,  and  that 
the  excess  over  $500  was  waived  by  plaintiffs;  that  by  virtue  of  said 
guarantee  above  set  forth  I  find  that  the  defendant,  David  Gross,  is 
indebted  to  the  plaintiffs  in  the  sum  of  $500." 

It  is  to  be  observed  that  when  the  defendant  made  the  promise  to 
pay  and  said  he  would  live  up  to  the  agreement  the  goods  had  al- 
ready to  be  furnished  to  Mrs.  Bier,  the  last  bill  sold  being  July  29th. 

At  the  time  the  plaintfffs  were  notified  by  the  defendant  not  to 
advance  any  further  credit  to  Rose  Bier  on  the  guarantee,  her  in- 
debtedness to  the  plaintiffs  was  $99  for  goods  furnished  her  by  them, 
and  which  was  subsequently  paid  by  her. 

The  limit  of  $500  in  the  guarantee  has  reference  to  the  amount  of 
the  guarantor's  liability,  and  not  to  the  amount  of  dealing  between 


286  RINDGE    V.    KIMBALL  [CHAP.    I 

the  purchaser  and  the  one  giving  credit.     The  guarantee  in  question 
did  not  contemplate  a  single  transaction. 

Under  the  adjudicated  cases  of  this  state  the  guarantee  was  a 
continuing  one.  Columhia  Electrical  Co.  v.  Kemmet,  38  Vroom  18; 
ISTewcomb  v.  Kloeblen,  48  Id.  791. 

It  is  equally  clear  that  the  guarantee  was  revocable. 

Speaking  of  this  class  of  guarantees,  Lush,  L.  J.,  in  Lloyds  v. 
Harper,  16  Ch.  Div.  319,  says :  "Instances  of  the  second  class  are  more 
familiar.  They  are  where  a  guarantee  is  given  to  secure  the  bal- 
ance of  a  running  account  at  a  banker's,  or  a  balance  of  a  running 
account  for  goods  supplied.  There  the  consideration  is  supplied 
from  time  to  time ;  and  it  is  reasonable  to  hold,  unless  the  guarantee 
stipulates  to  the  contrary,  that  the  guarantor  may  at  any  time  termi- 
nate the  guarantee.  He  remains  answerable  for  all  the  advances 
made,  or  all  the  goods  supplied  upon  his  guarantee,  before  the  no- 
tice to  determine  it  is  given;  but  at  any  time  he  may  say,  'I  put 
a  stop  to  this;  I  do  not  intend  to  be  answerable  any  further;  there- 
fore do  not  make  any  more  advances,  or  supply  any  more  goods, 
upon  my  guarantee.'  As  at  present  advised,  I  think  it  is  quite  com- 
petent for  a  person  to  do  that  where,  as  I  have  said,  the  guarantee 
is  for  advances  to  be  made  or  goods  to  be  supplied,  and  where  noth- 
ing is  said  in  the  guarantee  about  how  long  it  is  to  endure."  20 
Cyc.  1479,  and  cases  there  cited. 

The  guarantee  having  been  revoked  by  the  defendant,  the  plain- 
tiffs after  notice  of  such  revocation  continued  to  furnish  goods  to 
Mrs.  Bier,  and  now  seek  to  hold  the  defendant  liable  because  sub- 
sequently to  the  incurred  indebtedness  it  appears  that  the  defendant 
made  a  verbal  promise  to  pay  and  said  he  would  live  up  to  his  guar- 
antee. 

This  promise  made,  as  it  was,  after  the  goods  had  been  furnished 
to  Mrs.  Bier,  was  the  promise  to  pay  the  debt  of  another  and  was 
without  any  consideration. 

The  judgment  of  the  District  Court  will  he  reversed. 


SAMUEL  B.  RIT^DGE  v.  WILLIAM  H.  KIMBALL 

SuPEEME  Judicial  Court  of  Massachusetts,  March  6,  1878 
[Reported  in  124  Massachusetts,  209] 

Contract  upon  a  promissory  note  for  $500,  payable  to  the  order 
of  tlio  defendant,  and  indorsed  by  him  to  the  plaintiff. 

At  the  trial  in  the  Superior  Court,  before  Pitman,  J.,  without  a 
jury,  it  ap]>f!irc(]  tliat  no  demand  had  been  made  on  the  note  or  no- 
tice of  non-payment  given  to  the  defendant;  but  it  was  admitted  that 
the  defendant  wrote  on  the  back  of  the  note  the  words,  "Waive  de- 


SECT.    Il]  DUSENBURY    V.    HOYT  287 

mand  and  notice."     The  evidence  was  conflicting  upon  the  question 
whether  these  words  were  written  before  or  after  the  note  was  due. 

The  defendant  testified  that  he  wrote  these  words  upon  the  note 
intelligently  and  intentionally,  with  a  full  knowledge  of  all  the  mate- 
rial facts.  The  judge  ruled  that  such  a  waiver  of  demand  and  notice 
was  as  effectual  after  as  before  the  maturity  of  the  note,  and  ordered 
judgment  for  the  plaintiil.    The  defendant  alleged  exceptions. 

R.  Lund,  for  the  defendant. 

/.  Cutler,  for  the  j^laintiff,  was  not  called  upon. 

By  the  Court.  This  point  has  been  repeatedly  determined  by 
recent  decisions  of  this  court,  and  should  not  have  been  brought  up 
again.  Matthews  v.  Allen,  16  Gray,  594;  Harrison  v.  Bailey,  99 
Mass.  620;  Third  National  Bank  v.  Ashworth,  105  Mass.  503. 

Exceptions  overruled.^ 


BEN'JAMIN  G.  DUSENBUEY  v.  MAKK  HOYT 

New   Yoke   Court  of  Appeals,   September   29-October   7,   1873 
[Reported  in  53  New  York,  521] 

Appeal  from  a  judgment  of  the  General  Term  of  the  Superior 
Court  of  the  city  of  New  York,  affirming  a  judgment  in  favor  of  de- 
fendant entered  upon  a  verdict,  and  affirming  order  denying  motion 
for  a  new  trial.     (Eeported  below,  45  How.  Pr.  147.) 

The  action  was  upon  a  promissory  note.  The  defendant  pleaded 
his  discharge  in  bankruptcy.  Upon  the  trial,  after  proof  of  the  dis- 
charge, plaintiff  offered  to  prove  a  subsequent  promise  of  the  de- 
fendant to  pay  the  note.  Defendant  objected  upon  the  ground  that 
the  action  was  upon  the  note,  not  upon  the  new  promise.  The  Court 
sustained  the  objection,  and  directed  a  verdict  for  defendant,  which 
was  rendered  accordingly. 

D.  M.  Porter,  for  the  appellant. 

Cephas  Brainerd,  for  the  respondent. 

Andrews,  J.  The  34th  section  of  the  bankrupt  law  declares  that 
a  discharge  in  bankruptcy  releases  the  bankrupt  from  all  debts  prov- 
able under  the  act,  and  that  it  may  be  pleaded  as  a  full  and  complete 
bar  to  all  suits  brought  thereon. 

The  legal  obligation  of  the  bankrupt  is  by  force  of  positive  law 
discharged,  and  the  remedy  of  the  creditor  existing  at  the  time  the 
discharge  was  granted  to  recover  his  debt  by  suit  is  barred.  But 
the  debt  is  not  paid  by  the  discharge.  The  moral  obligation  of  the 
bankrupt  to  pay  it  remains.  It  is  due  in  conscience,  although  dis- 
charged in  law,   and  this  moral  obligation,  uniting  with  a  subse- 

*  The  numerous  decisions  in  accord  are  collected  in  1  Williston,  Contracts,  §  157. 
Decisions  in  which  a  surety,  who  had  been  discharged  by  lack  of  notice  of  acceptance 
or  dishonor,  was  held  bound  by  a  promise  to  pay,  are  collected  in  Ames's  Cases  on 
Suretyship,  227,  n. ;    and  in  1  Williston,  Contracts,  §  157. 


288  DUSENBURY    V.    HOYT  [CHAP.   I 

quent  promise  by  the  bankrupt  to  pay  the  debt,  gives  a  right  of 
action.  It  was  held  in  Shippey  v.  Henderson  (14  Johns.  178),  that 
it  was  proper  for  the  plaintiff,  when  the  bankrupt  had  promised  to 
pay  the  debt  after  his  discharge,  to  bring  his  action  upon  the  original 
demand-,  and  to  reply  the  new  promise  in  avoidance  of  the  discharge 
set  out  in  the  plea.  The  Court,  following  the  English  authorities, 
said  that  the  replication  of  the  new  promise  was  not  a  departure 
from  the  declaration,  but  supported  it  by  removing  the  bar  inter- 
posed by  the  plea,  and  that  in  point  of  pleading  it  was  like  the  cases 
where  the  defence  of  infancy  or  the  Statute  of  Limitations^  was  re- 
lied upon.  The  case  of  Shippey  v.  Henderson  was  followed  in  sub- 
sequent cases,  and  the  doctrine  declared  in  it  became,  prior  to  the 
Code,  the  settled  law.  MclSTair  v.  Gilbert,  3  Wend.  344;  Wait  v. 
Morris,  6  id.  394;  Fitzgerald  v.  Alexander,  19  id.  402. 

The  question  whether  the  new  promise  is  the  real  cause  of  action, 
and  the  discharged  debt  the  consideration  which  supports  it,  or 
whether  the  new  promise  operates  as  a  waiver  by  the  bankrupt  of 
the  defence  which  the  discharge  gives  him  against  the  original  de- 
mand, has  occasioned  much  diversity  of  judicial  opinion.  The  former 
view  was  held  by  Marct,  J.,  in  Depuy  v.  Swart  (3  Wend.  139), 
and  is  probably  the  one  best  supported  by  authority.  But,  after  as 
before  the  decision  in  that  case,  the  Court  held  that  the  original  de- 
mand might  be  treated  as  the  cause  of  action,  and,  for  the  purpose 
of  the  remedy,  the  decree  in  bankruptcy  was  regarded  as  a  discharge 
of  the  debt  sub  modo  only,  and  the  new  promise  as  a  waiver  of  the 
bar  to  the  recovery  of  the  debt  created  by  the  discharge.  We  are 
of  opinion  that  the  rule  of  pleading  so  well  settled  and  so  long  es- 
tablished, should  be  adhered  to.  The  original  debt  may  still  be  con- 
sidered the  cause  of  action  for  the  purpose  of  the  remedy.  The 
objection  that,  as  no  replication  is  now  required  the  pleadings  will 
not  disclose  the  new  promise,  is  equally  applicable  where  a  new 
promise  is  relied  upon  to  avoid  the  defence  of  infancy  or  the  Statute 
of  Limitations,  and  in  these  cases  the  plaintiff  may  now,  as  before 
the  Code,  declare  upon  the  original  demand.  (Esselstyn  v.  Weeks, 
12  N.  Y.  635.) 

The  offer  of  the  plaintiff  to  prove  an  unconditional  promise  by 
the  defendant,  after  his  discharge,  to  pay  the  debt,  was  improperly 
overruled,  and  the  judgment  should,  for  this  reason,  be  reversed, 
and  a  new  trial  ordered,  with  costs  to  abide  the  event. 

All  concur,  except  Folger,  J.,  not  voting.     Judgment  reversed.'^ 

'  See  Encyc.  of  Pleading  and  Practice,  vol.  13,  p.  247. 

*  See  Lowell  on  Bankruptcy,  §  248;   1  Williston,  Contracts,  §  168. 


SECT.   II]  ILSLEY    V.    JEWETT  289 

DAVID  ILSLEY  v.  JOHN  JEWETT  and  Others 

SuPEEME  Judicial  Court  of  Massachusetts,  ISTovembee  Term,  1841 

{Reported  in  3  Metcalf,  439] 

This  was  an  action  of  debt  on  a  bond  for  the  liberty  of  the  prison 
limits,  and  was  submitted  to  the  Court  on  the  following  facts  agreed 
bj  the  parties :  — 

In  1814,  the  plaintiff  paid  money  as  surety  for  John  Jewett,  one 
of  the  defendants,  and  in  1840  brought  a  suit  against  him  to  recover 
back  the  money  so  paid.  Said  Jewett,  among  other  defences,  relied 
on  the  Statute  of  Limitations.  The  plaintiff,  to  meet  this  part  of 
the  defence,  proved  a  part  payment  by  the  defendant,  in  1839,  and 
by  reason  thereof  recovered  judgment  against  him  at  November  Term, 
1840,  as  stated  and  shown  in  the  report  of  the  case  of  Ilsley  v.  Jewett, 
2  Met.  168,  which  is  to  be  considered  as  part  of  this  case.  Said 
judgment  was  for  the  sum  of  $349.89  damages,  and  $44,95  costs  of 
suit,  and  the  plaintiff  took  out  execution  thereon,  and  caused  the 
defendant  to  be  committed,  on  said  execution,  to  the  jail  in  Ipswich. 
Said  defendant,  and  his  co-defendants  in  this  suit,  as  his  sureties, 
thereupon  gave  bond  for  the  liberty  of  the  prison  limits,  conditioned 
(as  is  required  by  the  Eev.  Stats.,  c.  97,  §  63),  that  he  would  not 
go  without  the  exterior  limits  of  the  prison  until  he  should  be  law- 
fully discharged,  &c.  But  after  the  giving  of  said  bond,  and  be- 
fore the  commencement  of  this  suit,  and  also  before  he  was  dis- 
charged, he  went,  several  times,  without  the  boundaries  of  the  town 
of  Ipswich, 

Defendants  to  be  defaulted,  if  such  going  without  the  boundaries 
of  the  town  of  Ipswich  was  a  breach  of  the  condition  of  said  bond; 
if  not,  the  plaintiff  to  become  nonsuit. 

0.  P.  Lord,  for  the  plaintiff.  By  the  Eev.  Stats,,  c.  14,  §  14,  a 
debtor,  committed  on  execution  issuing  upon  a  judgment  recovered 
on  a  contract  made  before  the  2d  of  April,  1834,  is  entitled  only 
to  the  limits  of  the  jail  yard  as  established  by  Stat,  1834,  c.  201 ;  viz,, 
the  boundaries  of  the  city  or  town  in  which  the  jail  to  which  he  is 
committed  is  situated.  The  single  question  presented  by  the  facts 
agreed  is,  therefore,  this.  Was  the  judgment  recovered  by  the  plain- 
tiff against  John  Jewett,  in  1840,  recovered  on  a  contract  made  in 
1814  or  in  1839?  on  the  old  contract,  which  arose  upon  the  plain- 
tiff's paying  money  for  him,  as  his  surety,  or  on  the  new  promise 
made  by  him,  in  1839,  by  his  making  part  payment? 

The  Statute  of  Limitations  bars  only  the  remedy  on  a  contract, 
and  does  not  discharge  the  contract  itself.  Unless  a  new  promise 
or  acknowledgment  is  made,  the  remedy  is  barred  from  considerations 
of  public  policy,  laying  out  of  the  question  any  consideration  whether 
the  debt  be  or  be  not  paid.  Per  Sedgwick,  J,,  7  Mass,  517;  S.  P, 
13  Mass.  203.  But  when  a  new  promise  or  acknowledgment  is  made, 
10 


290  ILSLEY    V.    JEWETT  [CHAP.   I 

"the  contract  is  not  within  the  intent  of  the  statute."  Baxter  v. 
Penniman,  8  Mass,  134;  Fiske  v.  Needham,  11  Mass.  453.  See  also 
Newlin  v.  Duncan,  1  Harring.  204. 

A  judgment  on  a  demand  which  is  taken  out  of  the  operation  of 
the  Statute  of  Limitations  by  a  new  promise  is  recovered  on  the 
original  contract,  and  not  on  the  new  promise.  This  appears  from 
various  considerations.  Thus :  In  Cogswell  v.  Dolliver,  2  Mass.  223, 
it  was  said  by  Sedgwick,  J.,  that  if  any  articles  charged  in  an  ac- 
count were  sold  and  delivered  within  six  years  next  before  action 
brought,  "they  will  draw  after  them  the  articles  beyond  six  years, 
and  exempt  them  from  the  operation  of  the  statute." 

An  acknowledgment  made  after  action  brought  will  support  the 
action  on  the  original  contract.  Yea  ik  Fouraker,  2  Bur.  1099.  So 
an  acknowledgment  by  an  executor,  administrator,  or  guardian,  will 
bind  the  estate  of  the  deceased  or  the  ward.  Brown  v.  Anderson, 
13  Mass.  203;  Emerson  v.  Thompson,  16  Mass.  429;  Manson  v. 
Felton,  16  Pick.  206.  So  an  acknowledgment  made  to  a  stranger 
will  prevent  the  operation  of  the  statute.  Pichardson  v.  Pen,  Lofft, 
86;  Mountstephen  v.  Brooke,  3  Barn.  &  Aid.  141;  Peters  v.  Brown, 
4  Esp.  46;  Harvey  v.  Tobey,  15  Pick.  99.  And  a  parol  acknowledg- 
ment of  a  contract,  required  by  the  Statute  of  Frauds  to  be  in  writ- 
ing, has  the  same  effect.  Gibbons  v.  M'Casland,  1  Barn.  &  Aid. 
690.  So  an  acknowledgment  by  one  joint  debtor  will  bind  the  others. 
Whitcomb  v.  Whiting,  2  Doug.  652;  Perham  v.  Raynal,  2  Bing. 
306;  Johnson  v.  Beardslee,  15  Johns.  3;  White  v.  Hale,  3  Pick.  291. 
Even  by  one  partner  after  a  dissolution  of  the  partnership.  Wood  v. 
Braddick,  1  Taunt,  104;  Simpson  v.  Geddes,  2  Bay,  533. 

In  addition  to  all  these  proofs  that  the  original  contract  has  always 
been  regarded  as  the  cause  of  action,  is  the  universal  practice  of 
declaring  on  the  original  contract,  and  the  established  doctrine  that 
proof  of  a  new  promise  supports  such  declaration.  Leaper  v.  Tatton, 
16  East,  423;  Upton  v.  Else,  12  Moore,  304. 

Perkins  (Ward  was  with  him),  for  the  defendants.  John  Jewett, 
by  giving  the  plaintiff  a  negotiable  note  in  part  payment  (2  Met, 
169),  entered  into  a  new  contract,  and  gave  the  plaintiff  a  new 
remedy.  "The  reason,"  say  Lord  Ellenborough  and  Parke,  J.,  "why 
a  part  payment  takes  a  case  out  of  the  statute  is,  that  it  is  evidence 
of  a  fresh  promise."  1  Barn.  &  Aid.  93;  3  Barn.  &  Adolph.  511; 
S.  P,  Sigourney  v.  Drury,  14  Pick.  390,  391;  Clark  v.  Hooper,  10 
Bing.  481,  A  new  promise  subjects  a  defendant  to  the  remedy  ap- 
plicable to  a  new  contract.  In  Presbrey  v.  Williams,  15  Mass.  194, 
where  part  payment  had  been  made  on  a  note,  Jackson,  J.,  said, 
the  plaintiff  "might  have  brought  his  action"  on  the  day  of  such 
payment,  "as  upon  the  new  promise  then  made."  In  Little  v.  Blunt, 
9  Pick.  494,  Wilde,  J.,  says:  "the  new  promise  actually  gives  the 
remedy,  and  is  substantially  the  cause  of  action."  And  Richardson, 
C.   J.,  in   Exeter  Bank  v.  Sullivan,  6  N.   H.   136,   says,  "the  new 


SECT.    II]  ILSLEY    V.    JEWETT  291 

promise  is  not  deemed  to  be  a  continuance  of  the  original  promise, 
but  a  new  contract  supported  by  the  original  consideration."  S.  P. 
3  Bing.  643,  per  Gaselee,  J.,  Pittam  v.  Foster,  1  Barn.  &  Ores.  ^50; 
Tanner  v.  Smart,  6  Barn.  &  Ores.  606 ;  Jones  v.  Moore,  5  Binn. 
577;  4  Phil.  Ev.  (4th  Amer.  ed.)  138;  Bell  v.  Morrison,  1  Pet.  371. 
Acknowledgment  of  a  promise  by  a  party,  and  that  he  has  not  per- 
formed it,  "creates  a  debt,"  says  Bayley,  J.,  16  East,  423.  These 
authorities  show  that  a  new  promise  does  not  operate  by  way  of  re- 
viving the  old  promise  or  waiving  the  statute  bar,  but  by  creating 
a  fresh  contract.  There  is,  at  the  present  day,  no  difference  between 
promises  to  pay  debts  barred  by  the  Statute  of  Limitations  and  debts 
discharged  under  a  bankrupt  or  insolvent  act,  or  debts  contracted 
during  infancy.  An  express  promise  is  necessary  to  remove  either 
of  these  bars.  Eobarts  v.  Eobarts,  3  Car.  &  P.  296;  Oakes  v.  Mit- 
chell, 3  Shepley,  360;  Moore  v.  Bank  of  Columbia,  6  Pet.  86;  Sands 
V.  Gelston,  15  Johns.  519.  As  it  regards  the  Statute  of  Limitations, 
there  must  be  a  cause  of  action  within  six  years;  and  that  cause 
accrues  upon  the  making  of  a  new  express  promise.  The  old  promise 
—  as  in  case  of  a  bankrupt  or  infant  —  is  merely  a  basis  or  con- 
sideration for  the  new  one.  Lonsdale  v.  Brown,  4  Wash.  C.  C.  150; 
Searight  v.  Craighead,  1  Pennsyl.  138;  Mills  v.  Wyman,  3  Pick. 
209,  210.  The  new  promise  may  be  declared  on  (1  Selw.  N.  Prius, 
4th  Amer.  ed.,  49),  which  shows  that  it  is  a  new  cause  of  action. 
It  is,  indeed,  the  common  practice,  as  Lord  Ellenborough  says,  16 
East,  423,  to  declare  on  the  original  contract.  "Probably,"  says 
Best,  C.  J.,  12  Moore,  304,  "the  new  promise  ought  in  strictness  to 
be  declared  on  specially,  but  the  practice  is  inveterate  the  other  way." 
In  3  Bing.  332,  he  expressed  a  still  stronger  opinion.  But  this 
practice  is  anomalous,  and  is  not  allowed  in  suits  by  executors  or 
administrators.  In  England,  and  perhaps  in  all  the  States  of  the 
Union  except  Massachusetts  and  New  Hampshire,  if  an  executor  or 
administrator  sues  for  a  debt  of  the  deceased,  and  relies  on  a  new 
promise  to  himself  to  take  it  out  of  the  Statute  of  Limitations,  he 
must  declare  specially  on  the  new  promise,  or  the  evidence  of  such 
promise  will  not  support  the  declaration.  Stephen  PI.  405,  406; 
Gould  PI.  453,  454;  2  Stark.  Ev.  552,  and  American  cases  cited  in 
the  notes;  1  Chitty  PI.  (6th  Amer.  ed.)  234,  392.  See  also  Pittam 
V.  Foster,  1  Barn.  &  Cres.  248;  Lawes  PI.  in  Assump.  730-732.  In 
Baxter  v.  Penniman,  8  Mass.  133,  and  in  Buswell  v.  Roby,  3  N.  H. 
467,  it  was  held,  however,  that  an  administrator  need  not  declare  on 
the  new  promise;  and  thus  the  anomaly  has  been  extended  further, 
in  this  Commonwealth  and  in  ISTew  Hampshire,  than  is  known  to 
have  been  done  elsewhere.  But  whether  the  one  or  the  other  form 
of  declaring  is  adopted,  yet,  as  said  by  "Wilde,  J.,  "the  new  promise 
gives  the  remedy,  and  is  substantially  the  cause  of  action;  for  with- 
out it  there  was  no  cause  of  action."  9  Pick.  492,  494.  The  statute 
bar  is  removed  by  a  new  promise,  either  because  the  presumption 


292  ILSLEY    V.    JEWETT  [CHAP.    I 

of  payment  is  thereby  removed;  or  because  the  defendant  thereby 
waives  the  benefit  of  the  statute ;  or  because  a  new  contract  is  thereby 
made,  which  is  supported  by  the  old  consideration.  The  cases  that 
have  been  cited  show  that  the  latter  is  the  only  reason  which  courts 
now  recognize;  and  therefore,  as  the  new  contract  gives  the  remedy, 
and  is  the  contract  on  which  in  effect  the  judgment  is  recovered,  the 
defendant,  if  committed  in  execution  on  the  judgment,  is  entitled  to 
the  enlarged  jail  limits;  viz.,  the  whole  county.  Eev.  Stats.,  c. 
14,  §  13. 

Shaw,  C.  J.  In  debt  on  a  prison  bond  given  July  14,  1841,  the 
question  is,  whether  the  bond  was  broken  by  the  escape  of  the  pris- 
oner ;  and  this  again  depends  upon  the  question,  what  were  the  prison 
limits  of  Ipswich  jail,  for  this  prisoner,  in  1841  ?  This  depends 
upon  Rev.  Stats.,  c.  14,  §§  13,  14,  prescribing  different  limits  in 
different  cases.  "On  executions  issuing  upon  judgments,  recovered 
upon  contracts  made  before  the  2d  of  April,  1834,  the  limits  of  each 
jail  shall  remain  as  the  same  were  established  previously  to  that 
day."  §  14,  It  is  conceded  that,  prior  to  1834,  the  jail  limits  in- 
cluded a  space  much  less  than  the  bounds  of  the  town  of  Ipswich.  If, 
then,  the  contract  on  which  the  plaintiff  recovered  his  former  judg- 
ment, in  pursuance  of  which  the  defendant  was  committed,  was 
made  prior  to  the  2d  of  April,  1834,  so  that  the  limits  for  him  were 
those  which  existed  in  1834,  then  the  defendant  made  an  escape,  and 
the  bond  was  forfeited. 

It  appears  that  Adams  and  Ilsley  were  sureties  for  John  Jewett 
on  a  promissory  note;  that  Adams  paid  the  whole  in  the  first  in- 
stance; that  afterwards  Adams  demanded  of  the  plaintiff  one-half, 
by  way  of  contribution,  as  he  had  a  right  to  do;  and  the  plaintiff 
paid  the  same,  as  he  was  bound  to  do.  On  that  payment,  the  de- 
fendant, John  Jewett,  as  principal  promisor,  became  indebted  to 
the  plaintiff,  and  liable  to  pay  him  the  same  amount  on  demand. 
This  liability  arose  from  the  implied  promise  of  the  principal,  made 
at  the  time  of  the  plaintiff's  becoming  his  surety,  that,  in  case  the 
plaintiff  should  be  called  on  to  pay  any  thing  in  consequence  of 
such  suretyship,  the  principal  would  repay  the  same  on  demand. 
[See  Appleton  v.  Bascom,  3  Met.  171.] 

Afterwards,  in  1839,  the  transaction  took  place,  as  stated  in  2 
Met.  188,  which  was  hold  by  the  Court  sufficient  evidence  of  part 
payment  to  take  the  case  out  of  the  Statute  of  Limitations,  and  the 
plaintiff  had  judgment;  and  the  question  is,  whether  this  is  a  judg- 
ment recovered  on  a  contract  made  before  April,  1834.  The  case 
has  been  very  well  argued  on  both  sides,  and  all  the  authorities,  we 
believe,  fully  cited.  The  Court  are  of  opinion  that  the  judgment 
must  be  corisidered  as  renflored  on  the  old  contract;  that  a  payment, 
or  new  prorriiHc,,  or  an  admission  from  which  a  new  promise  may  be 
infcrr(!d,  is  considered  as  removing  out  of  the  way  a  bar  arising 
from  the  Statute  of  Limitations,  so  as  to  enable  the  creditor  to  re- 


SECT.    II]  WAY    V.    SPERRY  293 

cover  notwithstanding  tlie  limitation;  and  not  as  the  creation  of  a 
new  substantive  contract,  which  is  to  be  the  basis  of  the  judgment. 
We  are  therefore  of  opinion  that  the  facts  show  a  breach  of  this 
bond,  and  that  the  plaintiff  is  entitled  to  recover. 

Defendants  defaulted} 


LOKIN  WAY  V.  CHAELES  SPERRY 

Supreme  Judicial  Court  of  Massachusetts,  October  Term,  1850 

[Reported  in  6  Gushing,  238] 

This  was  an  action  of  assumpsit,  commenced  on  the  12th  of  July, 
1848,  to  recover  the  amount  of  three  promissory  notes,  signed  by  the 
defendant,  and  indorsed  by  the  several  payees  thereof  to  the  plaintiff 
on  the  day  of  the  commencement  of  the  action.  These  notes  were 
described  in  the  plaintiff's  bill  of  particulars,  as  follows :  "One  dated 
February  23,  1836,  for  $18,  payable  to  Ebenezer  Watson,  or  order, 
in  one  year,  with  interest;  one  dated  March  2,  1838,  for  $7.36,  pay- 
able to  Ebenezer  Watson  and  one  Flanders,  or  order,  on  demand, 
with  interest;  and  one  dated  March  14,  1839,  for  $18.30,  payable 
to  Ebenezer  Watson,  or  order,  on  demand,  with  interest." 

The  defendant  pleaded  the  general  issue,  and  in  defence  relied  on 
the  Statute  of  Limitations,  and  a  discharge  in  bankruptcy,  dated 
January  9,  1843,  which  was  duly  proved,  and  by  its  terms  embraced 
the  note  in  question. 

At  the  trial  in  the  Court  of  Common  Pleas,  before  Mellen,  J., 
it  was  in  evidence,  that  the  defendant,  in  May,  1843,  left  Columbia, 
in  the  State  of  New  Hampshire,  where  the  notes  were  dated,  and 
became  an  inhabitant  of  Lowell. 

It  was  also  testified  by  Watson,  the  payee  of  the  notes,  that  the 
defendant,  in  the  year  1845,  being  then  at  Claremont,  in  ISTew  Hamp- 
shire, said  he  would  pay  Watson  the  notes  as  soon  as  he  possibly 
could;  that  he  was  not  then  in  a  situation  to  pay  them,  but  that 
Watson  need  not  give  himself  any  uneasiness,  the  notes  should  be 
paid  as  soon  as  possible;  that  in  January,  1846,  he  again  saw  the 
defendant  in  Lowell,  who  said,  that  he  was  then  engaged  upon  a 
job  of  stone-work,  and  should  have  the  money  in  April,  and  that 
if  Watson  would  come  or  send  down  then,  he  would  pay  one  half 
of  the  notes ;  but  the  defendant  declined  taking  up  the  notes  and  giv- 
ing a  new  one  for  them. 

There  was  also  evidence  that  the  defendant  was  of  ability  to  pay 
the  notes,  but  no  evidence  of  any  new  consideration  for  his  promises 
to  pay  them. 

The  defendant,  upon  this  evidence,  contended,  that  the  first  de- 

^  Cases  involving  the  effect  of  new  promises  upon  the  Statute  of  Limitations  are 
so  numerous  that  reference  must  be  made  to  the  treatises  on  the  subject. 


294  WAY    V.    SPERRY  [CHAP.   I 

scribed  note  was  barred  by  the  Statute  of  Limitations;  that  no  ac- 
tion could  be  maintained  on  the  notes,  or  on  the  defendant's  new 
promises,  without  showing  a  consideration  for  the  latter;  that  the 
promise  of  the  defendant  to  pay  the  notes,  made  subsequently  to  his 
discharge  in  bankruptcy,  if  available  at  all,  could  only  support  an 
action  in  favor  of  the  promisee,  and  did  not  revive  the  negotiable 
quality  of  the  notes,  so  as  to  entitle  a  subsequent  indorsee  to  main- 
tain an  action,  either  upon  the  notes  or  upon  the  new  promise. 

But  the  presiding  judge  was  of  opinion,  that  the  action  could  be 
maintained  upon  the  evidence,  and  directed  the  jury  accordingly, 
who  returned  a  verdict  for  the  plaintiff,  whereupon  the  defendant 
excepted. 

T.  Wentworth,  for  the  defendant. 

/.  O.  Ahhott,  for  the  plaintiff. 

The  opinion  of  the  Court  was  delivered  at  the  October  Term,  1851. 

Metcalf,  J.  The  case  of  Bulger  v.  Roche,  11  Pick.  36,  is  a  de- 
cisive answer  to  the  defence  set  up  by  the  defendant,  under  the 
Statute  of  Limitations,  against  the  first  note  specified  in  the  plaintiff's 
bill  of  particulars;  and  the  only  other  point  to  be  decided  is,  whether 
the  defendant's  discharge  in  bankruptcy  is  a  defence  to  that  and  the 
two  other  notes  in  suit. 

The  plaintiff  relies  on  a  promise  made  to  the  payee  of  the  notes, 
by  the  defendant,  since  his  discharge.  And  it  is  well  settled,  that 
a  distinct  and  unequivocal  promise  to  pay  a  debt  so  discharged,  or 
a  promise  to  pay  it  on  a  condition  which  is  afterwards  fulfilled,  is 
binding  on  the  promisor,  and  may  be  enforced  by  action.  Upon  these 
exceptions,  it  must  be  taken  that  a  binding  promise  by  the  defendant 
was  proved  at  the  trial.  No  new  consideration  was  necessary  to 
the  validity  of  the  promise;  Chit.  Con.  (5th  Amer.  ed.)  190;  Penn 
V.  Bennett,  4  Campb.  205 ;  and  no  statute  requires  it  to  be  in  writing. 

But  the  defendant  contends  that  if  he  is  bound  at  all  by  his  prom- 
ise, he  is  bound  only  to  the  payee  of  the  notes,  to  whom  he  made  it, 
and  that  it  did  not  revive  or  restore  the  negotiability  of  the  notes. 
And  his  counsel  cited  Dupuy  v.  Swart,  3  Wend.  135 ;  Moore  v. 
Viele,  4  Wend.  420,  and  Walbridge  v.  Harroon,  18  Verm.  448,  where 
it  was  so  decided.  Since  the  argument,  a  similar  decision  of  the 
court  of  Maine  has  been  published.  White  v.  Cushing,  17  Shepley, 
267.  The  grounds  of  these  decisions,  as  stated  in  the  report  of  the 
first  of  them,  were,  that  "the  new  promise  is  the  contract  upon  which 
the  action  must  rest;"  that  "the  now  promise  does  not  renew  the  old 
contract,  and  renovate  the  note  given  on  that  contract;"  that  "the 
existence  of  the  note  is  destroyed  by  the  discharge,  and  cannot  be 
revived  and  restored  to  all  its  former  properties  by  the  maker's  en- 
tering into  a  now  contract,  by  which  ho  becomes  liable  to  pay  what 
was  duo  on  the  old  contract;"  and  that  "the  defendant's  liability, 
therefore,  is  on  the  new  contract,  and  that  the  suit  should  be  in  the 
name  of  him  witb  whom  such  contract  is  made." 


SECT.    Il]  WAY    V.    SPERRY  295 

We  are  not  satisfied  with  these  grounds  of  decision.  For  we  take 
it  to  be  well  established  that,  in  actions  brought  on  promises  made  by 
infants,  and  ratified  after  they  come  of  age;  on  promises  which 
have  been  renewed  after  the  Statute  of  Limitations  has  furnished 
a  bar ;  and  on  unconditional  promises  by  discharged  insolvent  debtors 
and  bankrupts,  to  pay  debts  from  which  they  have  been  discharged, 
the  plaintiff  may  declare  on  the  original  promise;  and  that  when  in- 
fancy, the  Statute  of  Limitations,  or  a  discharge  in  insolvency  or 
bankruptcy,  is  pleaded  or  given  in  evidence,  as  a  defence,  the  new 
promise  may  be  replied  or  given  in  evidence,  in  support  of  the  prom- 
ise declared  on;  that  a  replication,  alleging  such  new  promise,  is 
not  a  departure,  and  that  evidence  thereof  is  not  irrelevant.  And 
we  do  not  hold  that  a  note,  promise,  or  debt,  is  "destroyed"  by  a 
discharge  in  bankruptcy.  If  it  were,  it  not  only  could  not  be  re- 
newed or  revived,  but  it  could  not  be  a  consideration  for  a  new 
promise.  Yet  nothing  is  clearer,  on  authority,  than  that  the  old 
debt  is  a  sufficient  consideration  for  such  promise.  In  all  the  cases 
above  mentioned,  the  new  promise  operates  as  a  waiver,  by  the 
promisor,  of  a  defence  with  which  the  law  has  furnished  him  against 
an  action  on  the  old  promise  or  demand.  Maxim  v.  Morse,  8  Mass. 
127 ;  Foster  v.  Valentine,  1  Met.  522,  523. 

We  cannot  perceive  any  legal  difference,  as  to  the  point  now  in 
question,  between  the  case  of  a  debt  that  has  been  discharged  by 
a  process  in  bankruptcy,  and  a  claim  voidable  on  the  ground  of 
infancy,  or  barred  by  the  Statute  of  Limitations.  In  the  latter  case, 
it  has  been  decided  that  a  new  promise  removes  the  statute  bar,  but 
does  not  create  a  new  and  substantive  cause  of  action  which  is  the 
basis  of  a  judgment;  and  that  the  judgment  must  be  considered  as 
rendered  on  the  old  contract.  Ilsley  v.  Jewett,  3  Met.  439.  And 
where  an  infant  gave  a  negotiable  note,  which  he  ratified  by  a  new 
promise  after  he  was  of  age,  it  was  decided  that  he  was  liable  on  it 
to  an  indorsee  to  whom  the  payee  negotiated  it  after  the  ratification. 
The  Court  said  the  ratification  gave  the  contract  "the  same  effect 
as  if  the  promisor  had  been  of  legal  capacity  to  make  the  note  when 
he  made  it.  This  made  it  a  good  negotiable  note  from  that  time, 
according  to  its  tenor;  of  course,  when  transferred  to  the  plaintiff, 
he  took  it  as  a  negotiable  note,  and  may  maintain  an  action  on  it." 
Reed  v.  Batchelder,  1  Met.  559.  And  the  indorsement  of  a  note, 
after  a  new  promise  to  the  payee  has  taken  it  out  of  the  Statute  of 
Limitations,  enables  the  indorsee  to  sue  the  maker.  Little  v.  Blunt, 
9  Pick.  488,  and  16  Pick.  359.  The  same  rule  is  applicable  to  the 
case  at  bar.  A  new  promise  made  to  the  payee  of  a  negotiable  note 
is  a  promise  to  pay  him  or  order,  or  bearer,  according  to  its  tenor. 

Exceptions  overruled.^ 

'  Bird  V.  Adams,  7  Ga.  505;  Soulden  v.  Van  Rensselaer,  9  Wend.  293;  Clark  v 
Atkinson   2  E.  D.  Smith,  112,  ace.;   Thompson  v.  Gilreath,  3  Jones  L.  493,  contra. 


296  ARMSTRONG    V.    LEVAN  [CHAP.   I 

STATE  TKUST  COMPANY  v.  JOHN  A.  SHELDON  et  als. 
Vermont  Supreme  Court,  October  Term,  1895 

{Reported  in  68  Vermont,  259] 

Thompson,  J.  As  a  part  of  the  promises  and  undertaking  in  the 
declaration  mentioned,  and  at  the  time  of  making  the  same,  the  de- 
fendants agreed  in  writing  to  waive  the  Statute  of  Limitations  in 
respect  to  such  promises  and  undertaking.  Relying  upon  this  agree- 
ment the  plaintiff  did  not  bring  its  action  until  more  than  six  years 
from  the  time  that  it  accrued.  The  question  presented  by  the  plead- 
ings is  whether  the  defendants  are  estopped  by  the  agreement  from 
pleading  the  Statute  of  Limitations  in  bar  of  plaintiff's  action. 

It  is  urged  that  the  agreement  to  waive  the  statute  is  void  because 
by  private  agreement  it  seeks  to  avoid  a  statute,  and  is  against  public 
policy. 

The  general  rule  is,  that  no  contract  or  agreement  can  modify  a 
law,  but  the  exception  is,  that  where  no  principle  or  public  policy 
is  violated,  parties  are  at  liberty  to  forego  the  protection  of  the  law. 
Statutory  provisions  designed  for  the  benefit  of  individuals  may  be 
waived,  but  where  the  enactment  is  to  secure  general  objects  of 
policy  or  morals,  no  consent  will  render  a  non-compliance  with  the 
statute  effectual.  The  statute  limiting  the  time  within  which  actions 
shall  be  brought  is  for  the  benefit  and  repose  of  individuals  and  not 
to  secure  general  objects  of  policy  or  morals.  Its  protection  may, 
therefore,  be  waived  in  legal  form  by  those  who  are  entitled  to  it, 
and  such  waiver,  when  acted  upon,  becomes  an  estoppel  to  plead 
the  statute.  Sedgw.  Stat,  and  Const.  Law  (2d  ed.),  86-87;  Quick 
V.  Corliss,  39  N.  J.  L.  11;  Burton  v.  Stevens,  24  Vt.  131;  Gay  v. 
Hassom,  64  Yt.  495;  Eandom  v.  Tobey,  11  How.  (U.  S.  493). 
When  such  waiver  is  made  it  is  continuous,  unless  by  its  terms  it  is 
limited  to  a  specified  time.  There  was  no  such  limitation  in  the 
waiver  of  the  defendants.  We,  therefore,  hold  that  they  are  estopped 
from  the  pleading  the  statute  of  limitations  in  bar  of  plaintiff's 
actions. 
Judgment  ajjfirmed  and  cause  remanded  for  assessment  of  damages.^ 


ARMSTRONG  v.  LEVAN 

Pennsylvania  Supreme  Court,  March  2,  1885 
[Reported  in  109  Pennsylvania,  177] 

Mr.  Justice  Paxon  delivered  the  opinion  of  the  court,  October  5, 

1885. 

The  defendant  below  was  sued  for  breach  of  official  duty  as  pro- 

*  Ab  to  tho  timo  when  a  new  promise  must  be  made  to  be  efifectual,    see  1  Willis- 
ton,  ContractH,  §§  ](V.i,  1H3. 


SECT.    Il]  ARMSTRONG    V.    LEVAN  297 

thonotary  in  not  properly  entering  a  judgment,  by  means  whereof 
its  lien  was  postponed  and  the  plaintiff  suffered  a  loss. 

The  defendant  pleaded  the  general  issue  and  the  Statute  of  Limi- 
tations. To  meet  the  plea  of  the  statute  the  plaintiff  called  a  witness, 
who  testified  as  follows :  "After  I  discovered  that  there  was  no 
judgment  in  favor  of  Hannah  Levan  against  Enoch  Rohrbach,  but 
there  was  one  against  Enoch  Rothenberger,  which  I  knew  from  the 
number  to  be  meant  as  the  one  against  Rohrbach,  I  went  to  see  Mr. 
Armstrong  in  reference  to  the  matter.  I  said  to  him  that  he  had 
made  this  mistake,  or  if  not  he,  his  clerk,  and  that  unless  this  matter 
was  fixed  up,  I  would  be  obliged  to  sue.  He  then  made  the  remark 
that  he  would  have  to  see  his  lawyer  first,  Mr.  Reber.  On  the  after- 
noon of  the  same  day,  I  think  it  was,  he  came  to  my  office,  alone 
that  time,  and  he  said  that  I  should  see  Mr.  Reber;  and  I  said  to 
him  again  what  I  said  in  the  morning  in  reference  to  suing.  He 
said  that  I  should  not  sue;  that  if  Mrs  Levan  suffered  any  loss  by 
reason  of  this  mistake,  he  would  make  it  good  to  her ;  that  she  should 
not  lose  anything  through  his  mistake.  That  was  in  the  spring  of 
1879,  I  think  during  the  first  days  of  April." 

The  court  below  held  that  this  evidence,  if  believed  by  the  jury, 
was  sufficient  to  bar  the  running  of  the  statute;  and  that  the  six 
years  would  only  commence  to  run  from  the  date  of  such  promise. 

The  plaintiff  in  error  has  given  us  an  elaborate  argument  to  show 
that  a  promise  to  pay  after  the  statute  has  run  will  not  revive  a 
tort,  and  has  cited  numerous  authorities  in  support  of  this  propo- 
sition. We  concede  his  law  to  be  sound ;  his  authorities  fully  sustain 
his  point.^  The  difficulty  in  his  way  is  they  do  not  meet  his  case. 
It  was  not  the  question  of  the  revival  of  a  tort  by  a  promise  to  pay 
made  after  six  years.  The  conversation  referred  to  occurred  before 
the  statute  had  run,  and  it  was  a  distinct  promise  to  pay  in  considera- 
tion that  the  plaintiff  below  would  not  sue.  If,  therefore,  she  re- 
lied upon  this  promise;  if  she  was  thereby  lulled  into  security,  and 
thus  allowed  the  six  years  to  go  by  before  she  commenced  her  suit, 
with  what  grace  can  the  defendant  now  set  up  the  statute?  The 
promise  operated  not  to  revive  a  dead  tort,  but  as  by  way  of  estoppel. 
It  has  all  the  elements  of  an  estoppel.  The  plaintiff  r-elied  and 
acted  upon  it ;  she  has  been  misled  to  her  injury ;  but  for  the  defend- 
ant's promise  she  would  have  commenced  her  action  before  the  six 
years  had  expired.  "We  think  the  learned  judge  below  was  right 
in  holding  that  the  six  years  would  only  commence  to  run  from 
the  date  of  the  promise. 

The  defendant's  fourth  point  called  upon  the  court  to  instruct  the 
jury  that  under  the  pleadings  and  the  evidence  in   this  case  the 

1  See  1  Williston,  Contracts  §186.  A  new  promise  can  revive  from  the  bar  of  the 
Statute  of  Limitations  only  a  right  of  action  in  assumpsit,  id.  §  §  187,  188.  Indeed, 
according  to  the  English  authorities  only  a  right  of  action  in  general  or  indebitatus 
assumpsit.  Darley  &  Bosanquet's  Statutes  of  Limitations  (2d  ed.),  105.  See  WetzeU 
».  Bussard,  11  Wheat,  309,  316. 


298  GILLINGHAM    V.    BROWN  [CHAP.   I 

verdict  should  be  for  the  defendant.  This  the  court  declined  to  do. 
It  was  urged  in  support  of  this  point  that  the  record  testimony 
established  the  fact  that  the  plaintiff's  judgment  was  properly  en- 
tered in  the  judgment  docket  although  erroneously  indexed  in  the 
judgment  index;  and  that  the  subsequent  Singmaster  judgment, 
therefore,  acquired  no  prior  lien,  notwithstanding  the  finding  and 
decision  of  the  auditor. 

This  is  to  ask  us  to  overrule  the  auditor  and  court  below  upon 
the  question  of  distribution,  arising  in  another  and  distinct  pro- 
ceeding. We  find  no  trace  in  this  record  that  any  such  question  was 
made  in  the  court  below.  The  learned  judge  makes  no  reference  to 
it,  and  no  such  specific  point  was  put  to  the  court.  That  question 
has  been  settled  by  a  court  of  competent  jurisdiction,  and  it  shows 
that  the  plaintiil  has  lost  a  portion  of  her  money  by  reason  of  the 
defendant's  mistake.     This  is  sufficient  to  entitle  her  to  recover. 

Judgment  affirmed. 

Mercur,  C.  J.,  and  Gordon,  J.,  dissented.^ 


THOMAS  C.  GILLINGHAM  v.  THOMAS  W.  BKOWI^ 

Supreme  Judicial  Court  of  Massachusetts,  November  14,  1900- 

April  3,  1901 

[Reported  in  178  Massachusetts,  417] 

Hammond,  J.  This  is  an  action  upon  a  demand  note  dated  Octo- 
ber 22,  1872.  At  the  trial,  the  plaintiff,  in  order  to  meet  the  de- 
fence of  the  Statute  of  Limitations,  proved  that  the  defendant  de- 
livered to  the  agent  of  the  plaintiff  in  April,  1898,  $5;  and  the  chief 
question  was  whether  this  money  was  delivered  in  part  payment  of 
the  note,  and,  if  so,  whether  under  the  circumstances  it  had  the 
effect  of  making  the  defendant  liable  to  pay  the  remainder  of  the 
note  at  once,  or  only  by  instalments. 

The  plaintiff's  evidence  tended  to  show  that  in  February,  1898, 
the  defendant  orally  agreed  to  pay  the  note  in  monthly  instalments 
of  $10  each,  the  first  instalment  to  be  paid  on  the  first  of  the  fol- 
lowing month;  that,  the  defendant  failing  to  pay  as  promised,  the 
plaintiff's  sister  as  his  agent  called  upon  the  defendant  and  de- 
manded payment  "of  the  ten  dollars,"  or  a  payment  "on  account  of 
the  note";  that  the  defendant  said  he  could  not  pay  $10,  but  would 
pay  her  $.5,  and  did  so,  and  the  payment  was  indorsed  on  the  note. 

The  defendant  admitted  giving  the  agent  the  $5,  but  testified  that 
"it  was  an  act  of  charity"  and  that  it  was  done  "to  get  rid  of  her," 
and  tbat  in  giving  it  he  stated  that  it  was  not  on  account  of  the 

'  Ronackowsky  v.  Board  of  Water  Conimissioucrs,  122  Mich.  613,  ace.  See  further 
1  WilliBtoii,  Contractfl,   §  139. 


SECT.    Il]  GILLINGHAM    V.    BROWN  299 

note;  and  he  denied  tliat  he  ever  agreed  to  pay  in  monthly  instal- 
ments. 

In  this  state  of  the  evidence  the  defendant  asked  the  court  to  rule 
that  if  the  jury  should  find  that  the  defendant  agreed  to  pay  the 
note  only  in  instalments  of  $10  j)er  month,  and  that  the  payment  of 
the  $5  was  given  and  taken  in  pursuance  thereof,  the  plaintiff  could 
only  recover  the  instalments  due  to  the  date  of  the  writ.  The  court 
declined  so  to  rule,  and  instructed  the  jury  in  substance  that  if  the 
defendant  made  this  payment  on  account  of  the  note  their  verdict 
should  be  for  the  plaintiff  for  the  amount  of  the  note  and  interest 
from  the  date  of  demand,  after  deducting  the  payments  indorsed  on 
the  note.  To  the  refusal  to  rule  as  above  requested  and  to  the  ruling 
given  the  defendant  excepted.  The  jury  found  for  the  plaintiff  in 
the  sum  of  $1,049.40. 

The  verdict  shows  that  the  jury  found  that  the  $5  was  paid  by 
the  defendant  on  account  of  the  note  and  not  as  an  act  of  charity 
as  he  contended.  But  it  does  not  settle  the  question  whether  it  was 
paid  in  pursuance  of  an  agreement  to  pay  on  instalments,  or  upon 
the  note  generally  without  reference  to  that  agreement;  and,  since 
the  evidence  would  warrant  a  finding  either  way  on  that  question, 
it  is  plain  that  if  it  was  material  it  should  have  been  submitted  to 
the  jury. 

The  St.  21  Jac.  I.  c.  16,  in  which  first  appears  a  limitation  as  to 
the  time  of  bringing  personal  actions,  and  upon  which  are  modelled 
the  various  Statutes  of  Limitation  in  the  United  States,  expressly 
provides  that  all  such  actions  should  be  brought  within  the  times 
therein  prescribed;  and  it  makes  no  mention  of  the  effect  of  a  new 
promise,  acknowledgment  or  part  payment.  In  every  form  of  action 
but  that  of  assumpsit,  the  construction  has  been  in  unison  with  the 
express  words  of  the  statute,  but,  as  to  that  action,  the  statute  has 
had  a  varied  experience  in  running  the  gauntlet  of  judicial  exposi- 
tion. There  was  early  read  into  it  a  provision  that  in  an  action 
of  assumpsit  a  promise  of  payment  within  six  years  prior  to  the 
action  would  avoid  the  statute,  but  that  a  confession,  or  simple  ac- 
knowledgment by  the  debtor  that  he  owed  the  debt  would  not  be 
sufficient.  Dickson  v.  Thomson,  2  Show.  126.  At  a  later  period, 
however,  it  was  held  that  an  acknowledgment  was  evidence  from 
which  a  jury  might  properly  find  a  new  promise  to  pay.  Heyling 
V.  Hastings,  1  Ld.  Eaym.  421 ;  S.  C.  Comyns,  54.  Still  later,  Lord 
Mansfield  said  in  Quantock  v.  England,  Burr.  2628,  that  the  statute 
did  not  destroy  the  debt,  but  only  took  away  the  remedy;  and  that 
if  the  debt  be  older  than  the  time  limited  for  bringing  the  action  the 
debtor  may  waive  this  advantage,  and  in  honesty  he  ought  not  to 
defend  by  such  a  plea,  "and  the  slightest  word  of  acknowledgment 
will  take  it  out  of  the  statute."  In  Tanner  v.  Smart,  6  B.  &  C.  603, 
however,  the  pendulum  swung  the  other  way,  and  Lord  Tenterden, 
C.  J.,  after  saying  that  there  were  undoubtedly  authorities  to  the 


300  GILLINGHAM    V.   BROWN  [CHAP.    I 

effect  that  the  statute  is  founded  on  a  presumption  of  payment,  that 
whatever  repels  that  presumption  is  an  answer  to  the  statute,  that 
any  acknowledgment  which  repels  that  presumption  is  in  legal  effect 
a  promise  to  pay  the  debt,  and  that,  though  such  acknowledgment 
is  accompanied  with  only  a  conditional  promise  or  even  a  refusal 
to  pay,  the  law  considers  the  condition  or  refusal  void,  and  the  ac- 
knowledgment itself  an  unconditional  answer  to  the  statute,  pro- 
ceeds in  an  able  opinion  to  say  in  substance  that  these  cases  are 
unsatisfactory  and  in  conflict  with  some  others,  and  that  the  true 
doctrine  is  that  an  acknowledgment  can  be  an  answer  to  the  statute 
only  upon  the  ground  that  it  is  an  evidence  of  a  new  promise,  and 
that,  while,  upon  a  general  acknowledgment,  where  nothing  is  said 
to  prevent  it,  a  general  promise  to  pay  may  and  ought  to  be  implied, 
yet,  where  a  debtor  guards  his  acknowledgment  and  accompanies  it 
with  a  declaration  to  prevent  any  such  implication,  a  promise  to 
pay  could  not  be  raised  by  implication.  This  is  a  leading  case  in 
England  on  this  subject. 

In  this  country,  it  has  very  generally  been  held  that  the  Statute 
of  Limitations  is  a  wise  and  beneficial  law,  not  designed  merely 
to  raise  a  presumption  of  payment  of  a  just  debt  from  lapse  of  time, 
but  to  afford  security  against  stale  demands  after  the  true  state  of 
things  may  have  been  forgotten,  or  may  be  incapable  of  explanation 
by  reason  of  the  loss  of  evidence,  that  if  a  new  express  promise  be 
set  up  in  answer  to  the  statute,  its  terms  ought  to  be  clearly  proved, 
and  that,  if  there  be  no  express  promise,  but  a  promise  is  to  be 
raised  in  law  from  the  acknowledgment  of  the  debtor,  such  an  ac- 
knowledgment ought  to  contain  an  unqualified  admission  of  a  previ- 
ous subsisting  debt  for  which  the  party  is  liable  and  which  he  is 
willing  to  pay.  It  follows  that  if  the  acknowledgment  be  accom- 
panied by  circumstances,  or  words,  which  repel  the  idea  of  an  in- 
tention to  pay,  no  promise  can  be  implied.  Bell  v.  Morrison,  1 
Pet.  351;  Jones  v.  Moore,  5  Binn.  573;  Berghaus  v.  Calhoun,  6 
"Watts,  219;  Sands  v.  Gelston,  15  Johns.  511;  Danforth  v.  Culver, 
11  Johns.  146;  Purdy  v.  Austin,  3  Wend.  187.  In  this  last  case 
the  court  say  that  the  statute  is  one  of  repose  and  should  be  main- 
tained as  such;  that,  while  the  unqualified  and  unconditional  ac- 
knowledgment of  a  debt  is  adjudged  in  law  to  imply  a  promise  to 
pay,  the  acknowledgment  of  the  original  justice  of  the  claim  with- 
out recognizing  its  present  existence  is  not  sufficient;  and  that  any- 
thing going  to  negative  a  promise  or  intention  to  pay  must  be  re- 
garded as  qualifying  the  language  used. 

This  doctrine  was  approved  by  thia  court  in  the  leading  case  of 
Bangs  /'.  Hall,  2  Pick.  368,  in  which  Putnam,  J.,  after  a  review  of  the 
authorities,  says;  "On  the  whole,  we  are  satisfied  that  there  must  be 
an  unqualified  acknowledgment,  not  only  that  the  debt  was  just  orig- 
inally, but  that  it  continues  to  be  so,  .  .  .  or  that  there  has  been  a 
conditional  promise  which  has  been  performed,  as  is  before  explained." 


SECT.    Il]  GILLINGHAM    V.   BROWN  301 

To  answer  the  statute  there  must  be  a  promise  express  or  implied 
from  an  acknowledgment  of  the  debt  as  a  present  existing  debt.  If 
the  promise  whether  express  or  implied  be  conditional,  it  must  be 
shown  that  the  conditions  have  been  fulfilled.  Cambridge  v.  Hobart, 
10  Pick.  232;  Sigourney  v.  Drury,  14  Pick.  387;  Krebs  v.  01m- 
stead,  137  Mass.  504. 

While  the  original  debt  is  the  cause  of  action,  Ilsley  v.  Jewett, 
3  Met.  439,  the  liability  of  the  debtor  is  determined  not  by  the  terms 
of  the  old  but  by  those  of  the  new  promise.  As  stated  by  Vice  Chan- 
cellor Wigran  in  Phillips  v.  Phillips,  3  Hare,  281,  300,  'The  new 
promise,  and  not  the  old  debt,  is  the  measure  of  the  creditor's  right. 
...  If  the  debtor  promises  to  pay  the  old  debt  when  he  is  able, 
or  by  instalments,  or  in  two  years,  or  out  of  a  particular  fund,  the 
creditor  can  claim  nothing  more  than  the  promise  gives  him."  Custy 
V.  Donlan,  159  Mass.  245;  Boynton  v.  Moulton,  159  Mass.  248. 

Pub.  Sts.  c.  197,  §  15,  provides  that  no  acknowledgment  or  promise 
shall  be  evidence  of  a  new  or  continuing  contract  to  take  the  case 
out  of  the  operation  of  the  statute,  unless  contained  in  some  writing 
signed  by  the  debtor,  and  in  §  16,^  that  nothing  in  this  provision 
shall  be  taken  to  alter,  take  away  or  lessen  the  effect  of  a  part  pay- 
ment of  principal  or  interest;  and  it  may  be  contended  that  the 
effect  of  these  two  sections  is  to  exclude  all  parol  evidence  whatever 
bearing  upon  an  acknowledgment  or  new  promise  by  part  payment 
or  otherwise,  whether  the  creditor  be  attempting  to  avail  himself 
of  it  for  attack,  or  the  debtor  for  defence.  But  that  does  not  seem 
to  us  to  be  the  result.  The  language  is  that  the  provision  of  the 
fifteenth  section  shall  not  be  taken  to  alter,  take  away  or  lessen 
the  effect  of  part  payment.  But  what  was  the  effect  of  part  pay- 
ment before  this  statute  requiring  the  promise  or  acknowledgment 
to  be  in  writing?  Its  effect  depended  upon  the  circumstances.  If 
a  debtor  made  a  part  payment  as  such,  it  was  considered  as  an  ac- 
knowledgment that  the  whole  debt  was  due,  otherwise  it  could  not 
be  a  part  payment;  and  so  it  stood  upon  the  same  footing  as  any 
other  unconditional  acknowledgment,  and  from  it  the  law,  in  the 
absence  of  anything  to  the  contrary,  implied  a  promise  to  pay  the 
whole.  It  had  no  validity  to  answer  the  statute  except  as  an  acknowl- 
edgment of  the  debt.  In  the  language  of  Tindal,  C.  J.  in  Clark  v. 
Hooper,  10  Bing.  480,  in  the  mind  of  the  party  paying  such  a  pay- 
ment must  be  "a  direct  acknowledgment  and  admission  of  the  debt, 
and  is  the  same  thing  in  effect  as  if  he  had  written  in  a  letter  to 
a  third  person  that  he  still  owed  the  sum  in  question." 

But  suppose  a  debtor  says  to  his  creditor  "I  acknowledge  the 
debt  to  be  just,  that  it  never  has  been  paid,  and  that  I  have  no  de- 
fence except  the  Statute  of  Limitations.  I  am  willing  to  pay  and  I 
do  hereby  pay  to  you  one-half  of  the  debt,  but  I  do  not  intend  to 

^  As  to  the  statutes  requiring  a  writing  to  make  valid  a  new  promise  to  pay  a  debt 
barred  by  the  Statute  of  Limitations,  see  1  Williston  Contracts,  §  164. 


302  GILLINGHAM    V.    BROWN  [CHAP.    I 

waive  the  statute  as  to  the  rest.  On  the  contrary  I  insist  on  my 
defence  as  to  that,  and  I  never  will  pay  any  more."  Can  it  be  said 
that  from  such  a  part  payment,  accompanied  by  such  a  distinct  affirm- 
ation of  the  debtor's  intention  not  to  pay  more  but  to  insist  upon  his 
defence  under  the  statute,  the  law  would  have  implied  a  promise 
to  pay  the  remaining  half? 

Again,  suppose  a  debtor  says  to  his-  creditor,  "Your  claim  against 
me  is  just,  it  never  has  been  paid,  and  my  only  defence  to  it  is  the 
Statute  of  Limitations.  I  am  not  able  to  pay  it  now,  but  I  will 
pay  it  when  and  as  fast  as  I  am  able,  but  I  will  not  pay  in  any 
other  way,  and  I  insist  upon  my  defence  under  the  statute  except 
so  far  as  I  now  waive  it.  I  am  able  to  pay  and  I  do  now  pay  you 
ten  dollars  with  this  understanding."  Can  it  be  said  that  from  such 
a  part  payment  the  law  would  have  implied  a  promise  to  pay  the 
debt  according  to  its  original  terms? 

To  come  a  little  more  closely  to  what  the  jury  might  have  found 
the  facts  to  be  in  this  case,  suppose  the  debtor  agrees  to  pay  in  in- 
stalments and  in  no  other  way,  and  clearly  declares  his  intention 
to  pay  in  no  other  way,  and  then  makes  a  payment  in  compliance 
with  the  new  promise.  Can  it  be  said  that  from  such  a  part  pay- 
ment the  law  would  have  implied  a  promise  to  pay  the  debt  in  any 
other  way?  Such  an  interpretation  of  the  words  and  act  of  the 
debtor  would  be  inconsistent  with  the  understanding  of  both  parties, 
and  would  be  unreasonable  and  unjust. 

Such  a  partial  payment  as  that  named  in  either  of  the  three 
cases  above  supposed  must  be  construed  as  a  conditional  and  not  an 
absolute  waiver.  The  waiver  must  be  taken  as  it  is,  absolute  if  ab- 
solute, conditional  if  conditional.  And  on  principle  that  must  be 
so,  whether  it  be  found  in  a  verbal  promise  or  in  a  payment.  There 
is  no  ground  for  a  satisfactory  distinction  between  a  waiver  by  word 
and  a  waiver  by  an  act.  Each  is  evidence  of  a  new  promise  and 
operative  only  as  such;  and  while  the  cause  of  action  is  the  old 
promise,  the  measure  of  the  liability  is  determined  by  the  new  one. 

Now  it  is  expressly  declared  in  Pub.  Sts.  c.  197,  §  16,  that  the 
provisions  of  the  preceding  section  shall  not  be  taken  to  alter,  take 
away  or  lessen  the  effect  of  a  part  payment.  There  can  be  no  doubt 
that  prior  to  the  passage  of  the  law  contained  in  §  15  a  partial  pay- 
ment made  in  pursuance  of  an  agreement  to  pay  by  instalments  did 
not  have  the  effect  of  making  the  debtor  liable  in  any  other  way. 
To  say  that  the  provisions  of  §  15  do  have  that  effect  is  to  alter  the 
effect  of  such  a  part  payment,  and  so  is  inconsistent  with  §  16.  The 
law  with  respect  to  part  payment  is  to  remain  as  before,  and  the 
language  accompanying  the  payment  is  admissible  to  show  the  in- 
tent with  which  the  payment  is  made,  just  as  it  was  admissible  be- 
fore, and  that  is  so  whether  or  not  it  contains  a  promise  to  pay 
upon  which  the  creditor  could  have  maintained  an  action  prior  to 
the  requirement  that  it  should  be  in  writing. 


SECT.   II]    BIG  DIAMOND   CO.    V.   C,   M.    &   ST.   P.   RY.   CO.  303 

In  the  case  at  bar  there  was  evidence  tending  to  show  that  the 
defendant  had  orally  agreed  to  pay  in  monthly  instalments  of  $10 
each,  and  if  such  an  agreement  had  been  in  writing  it  could  have 
been  enforced  according  to  its  terms,  but  the  right  of  the  creditor 
as  against  a  plea  of  the  statute  would  have  been  measured  by  this 
new  promise;  and,  even  if  the  debtor  had  failed  to  pay,  the  creditor 
could  recover  only  the  instalment  due  under  the  terms  of  the  agree- 
ment; and  that  would  be  so  even  if  the  defendant  had  made  several 
of  the  payments.  The  creditor  could  take  the  money  under  the 
terms  which  the  debtor  had  prescribed,  and  upon  no  other. 

And  by  the  reason  of  the  thing  the  same  principle  must  apply 
where  the  payment  is  made  upon  an  agreement  which,  not  being  in 
writing,  could  not  be  enforced.  If  this  $5  was  paid  in  part  per- 
formance of  his  agreement  to  pay  by  instalments,  then  it  cannot  be 
inferred  that  he  intended  to  recognize  the  existence  of  the  old  debt 
as  an  actual  subsisting  obligation  in  any  other  way.  The  nature 
of  the  act  is  to  be  determined  by  the  intention  of  the  debtor  as  shown 
by  the  act,  his  words,  and  the  circumstances  accompanying  and  ex- 
plaining it.  Taylor  v.  Foster,  132  Mass.  30;  Eoscoe  v.  Hale,  7 
Gray,  274.  See  also  13  Am.  &  Eng.  Encyc.  of  Law,  750  et  seq., 
for  a  good  collection  of  the  cases. 

While  in  this  case  the  evidence  is  conflicting,  we  think  it  would 
warrant  a  finding  that  the  only  express  promise  made  by  the  de- 
fendant was  to  pay  in  monthly  instalments  of  $10  each,  and  that 
he  paid  the  $5  solely  under  that  agreement.  If  that  was  so,  then  no 
other  promise  can  be  inferred  from  this  payment,  and  the  instruction 
requested  should  have  been  given.  Exceptions  sustained.^ 


BIG   DIAMOOT)    MILLING   COMPANY   v.    CHICAGO, 
MILWAUKEE   &   ST.    PAUL   KY.    COMPxlNY 

Minnesota  Supeeme  Court,  April   11,   1919 

[Reported  in  171  Northwestern  Reporter,  799] 

Hallam,  J.^  This  is  an  action  to  recover  excessive  freight 
charges  demanded  by  the  defendant  and  paid  by  the  plaintiff. 
The  validity  of  the  charges  depended  on  certain  questions  then 
pending  before  the  United  States  Supreme  Court.  Under  the 
decision  of  that  court  the  plaintiff  became  entitled  to  recover  the 
charges  if  its  action  was  seasonably  brought. 

The  action  was  not  begun  until  after  the  statutory  period  had 
erpired   since   the   freight   in   question   was   paid;    but   within   the 

*  See  also  Strong  v.  Andros,  34  App.  D.  C.  278;  Galvin  v.  O'Gorman,  40  Mont. 
391;   Equitable  Trust  Co.  v.  MacLaire,  77  N.  Y.  Misc.  116. 

*  The  statement  of  facts  is  abbreviated  and  a  portion  of  the  opinion  omitted. 


304  BIG   DIAMOND    CO.    V.    C,    M.    &    ST.    P.   RY.    CO.     [CHAP.    I 

statutory  period  the  defendant  had  issued  a  statement  "to  the 
public"  which  was  signed  by  the  Minnesota  railroad  commission, 
and  by  all  the  railroads  interested,  including  the  defendant.  In 
this  statement  it  was  said  that  "properly  supported  claims"  would 
be  paid  by  the  railroad  companies. 

The  question  is,  does  this  constitute  a  new  promise  sufficient 
to  remove  the  bar  of  the  Statute  of  Limitations?  The  trial  court 
held  not.     In  our  opinion  this  was  an  error. 

One  reason  urged  in  support  of  the  court's  ruling  is  that  the 
writing  does  not  identify  the  plaintiff's  claims  and  promise  to  pay 
them.  It  must,  of  course,  do  so  in  order  to  constitute  a  "new 
promise."  Eussell  &  Co.  v.  Davis,  51  Minn.  482,  53  N.  W.  766; 
Anderson  v.  Nystrom,  103  Minn.  168,  114  N.  W.  742,  13  L.  E.  A. 
(K  S.)  1141,  123  Am.  St.  Eep.  320,  14  Ann.  Cas.  54.  But  specific 
reference  to  a  particular  claim  is  not  necessary.  If  the  language 
would  be  sufficiently  specific  in  a  bond  to  pay  claims,  surely  it 
is  sufficient  in  a  new  promise  by  the  debtor.  A  general  admission 
of  unsettled  matters  of  account  between  the  parties  is  not  sufficient. 
Conway's  Ex'r  v.  Eeyburn's  Ex'r,  22  Ark.  290,  292.  But  if  the 
general  language  refers,  with  certainty,  to  the  debt,  that  is  suffi- 
cient. A  promise  to  pay  "every  cent  he  owed  him,"  it  is  held, 
sufficiently  identifies  the  debt  sued  on.  O'Hara  v.  Murphy,  196 
111.  599,  63  ]Sr.  E.  1081.  It  is  not  necessary  that  the  new  prom- 
ise should  state  the  amount  of  the  debt.  Conway's  Ex'r  v.  Eey- 
burn's Ex'rs,  22  Ark.  290;  First  Nat.  Bank  v.  Woodman,  93 
Iowa,  668,  62  N.  W.  28,  57  Am.  St.  Eep.  287;  Wetz  v.  Greffe, 
71  111.  App.  313;  Kincaid  v.  Archbald,  73  K  Y.  189,  192; 
Abrahams  v.  Swann,  18  W.  Va.  274,  280,  41  Am.  Eep.  692. 
!N"or  even  that  the  amount  should  have  been  fixed.  "We  owe  you 
for  three  years'  salary"  is  held  sufficient  though  the  salary  had 
never  been  fixed.  Schmidt  v.  Pfau,  114  111.  494,  502,  2  N".  E. 
522,  527.  An  admission  of  some  balance  due,  the  amount  to  be 
ascertained  by  arbitration,  is  held  sufficient.  Cheslyn  v.  Dalby, 
10  L.  J.  Exch.  4.  A  promise  to  pay  if  the  debt  is  established  is 
held  a  good  new  promise.  Stanton  v.  Stanton,  2  N.  H.  425; 
Shay  V.  Lambert,  14  App.  Div  265,  43  K  Y.  Supp.  470;  Eead  v. 
Wilkinson,  20  Fed.  Cas.  359,  No.  11,611;  Haplin  v.  Ilaftings, 
12  Mod.  223.  So  is  a  promise  to  pay  if  the  debtor  cannot  prove 
payment.  Eichmond  v.  Fugua,  33  N.  C.  445;  Sweet  v.  Hubbard, 
36  Yt.  294;  Sothoron  v.  Hardy,  8  Gill.  &  J.  (Md.)  133.  And  a 
prediction  that  nothing  will  be  found  due,  it  is  held,  does  not 
vitiate  thn  promise.  25  Cyc.  1343;  Bliss  v.  Allard,  49  Vt.  350; 
Eead  v.  Wilkinson,  20  Fed.  Cas.  359,  No.  11,611. 

A  promise  to  pay  all  claims  of  a  definite  class  is  in  our 
opinion  Hnfficiently  definite.  The  language  of  the  letter  "to  the 
public"  pronii.siiii^  to  pay  all  claims  of  th(^  class  to  which  plaintiff's 
claims  belong  sufficiently  identified   plaintiff's   claims.     This   is  in 


SECT.    Il]  MARRECO    V.   RICHARDSON  305 

accordance  with  the  decision  of  the  Washington  Supreme  Court, 
in  Belcher  v.  Tacoma  Eastern  K.  Co.,  99  Wash.  34  168  Pac. 
782,  a  case  so  similar  to  this  one  that,  as  to  matter  of  identification 
of  the  claim,  we  cannot  distinguish  it. 


MAEEECO  AND  Others  v,  EICHAEDSON 

In  the  Court  of  Appeal,  May  14,  15,  1908 

[Reported  in  (1908)  2  K.  B.  584] 

The  defendant,  being  indebted  to  his  solicitor  in  respect  of  a  bill 
of  costs,  handed  him  on  May  10,  1900,  a  cheque  in  part  payment 
of  the  bill;  at  the  same  interview  it  was  verbally  agreed  between  the 
parties  that  the  cheque  should  not  be  presented  for  payment  before 
June  20.  On  June  20  the  cheque  was  presented  for  payment  at  the 
defendant's  bankers,  and  was  duly  paid.  On  June  18,  1906,  the 
executors  of  the  solicitor,  who  had  meanwhile  died,  issued  the  writ 
in  the  present  action  to  recover  the  balance  of  the  debt  upon  the  bill 
of  costs : — 

Fletcher  Moulton,  L.  J.  The  facts  of  this  case  are  curious,  but 
I  have  no  doubt  that  the  decision  of  Bray  J.  was  correct.  It  was 
very  early  recognized  by  the  Courts  that  a  clear  acknowledgment  of 
the  existence  of  a  debt  was  an  act  from  which  a  fresh  promise  to 
pay  the  debt  might  be  implied,  the  consideration  being  the  then  ex- 
isting liability  to  pay  it.  Such  a  promise  might  be  proved  in  any 
way  in  which  a  promise  is  capable  of  being  proved;  it  might  be 
in  writing,  it  might  be  oral;  it  might  be  inferred  or  implied  from 
the  conduct  of  the  parties.  This  state  of  the  law  was  found  to  lead 
to  abuse,  and  Lord  Tenterden's  Act  was  passed,  which  provided  that 
an  acknowledgment  or  promise  to  pay,  in  order  to  take  a  case  out 
of  the  Statute  of  Limitations,  must  be  in  writing,  with  the  striking 
limitation,  however,  that  nothing  should  affect  the  consequences 
arising  from  part  payment  of  a  debt.  There  is  no  doubt  that  this 
exception  arose  from  the  fact  that  the  Courts  had  been  in  the  habit 
of  giving  special  recognition  to  payment  of  part  of  a  debt  on  ac- 
count of  the  whole  as  being  conduct  which  might  well  amount  to 
a  recognition  of  the  debt  and  enable  the  Courts  to  infer  a  fresh 
promise  to  pay  the  remainder.  Lord  Tenterden's  Act  therefore  left 
the  existing  decisions  as  to  the  effect  of  part  payment  of  a  debt 
untouched.  These  decisions  make  it  clear  that  part  payment  by 
itself,  and  apart  from  the  circumstances  under  which  it  is  made,  does 
not  necessarily  carry  with  it  a  promise  to  pay  the  remainder ;  the  part 
payment  must  be  made  under  circumstances  from  which  a  promise 
to  pay  the  remainder  can  be  inferred.  It  is  evident  that  the  cir- 
cumstances surrounding  a  part  payment  may  be  such  as  to  make 
it  ineffectual  as  a  new  promise.     If  the  debtor  were  to  say  "Take 


306  MARRECO    V.    RICHARDSON  [CHAP.    I 

that,  it's  all  you'll  get,"  the  language  accompanying  the  payment 
would  clearly  negative  any  promise  by  him  to  pay  the  remainder  of 
the  debt. 

The  Courts  have  loyally  administered  Lord  Tenterden's  Act,  but 
in  one  respect  they  have  enlarged  the  effect  of  the  proviso.  They 
have  held  that  the  delivery  of  a  negotiable  instrument  by  a  debtor 
to  his  creditor  in  part  discharge  of  the  debt  is  equivalent  to  part 
payment.  Therefore  where  delivery  of  a  negotiable  instrument  is 
made  under  circumstances  from  which  there  can  be  implied  a  promise 
to  pay  the  remainder  of  the  debt  the  case  is  taken  out  of  the  Statute 
of  Limitations. 

The  present  case  is  an  instance  of  this,  and  when  we  once  realize 
that  in  such  a  case  the  principle  of  law  still  survives  that  there  may 
be  an  effective  acknowledgment  of  a  debt  by  conduct,  any  apparent 
difficulties  in  this  case  disappear.  When  was  the  act  done  from 
which  the  promise  to  pay  the  remainder  of  the  debt  may  be  implied  ? 
Beyond  question,  it  was  when  the  cheque  for  20Z.  was  given  in  part 
payment  of  the  original  debt;  and  if  in  this  case  the  six  years  from 
the  original  creation  of  the  debt  had  expired  the  day  after  the 
cheque  was  given,  the  giving  of  the  cheque  would  take  the  case  out 
of  the  statute,  and  accordingly  the  debt  might  have  been  sued  for 
at  any  time  within  six  years  from  the  date  of  the  cheque.  But  in 
this  case  the  period  of  six  years  from  the  date  of  the  cheque  had 
expired  before  this  action  was  brought,  and  it  is  now  urged  by  the 
plaintiffs  that,  because  by  arrangement  between  the  parties  the 
cheque  was  not  presented  for  payment  for  several  weeks  after  it  was 
given  to  the  creditor,  it  must  be  taken  that  when  the  cheque  was  in 
fact  paid  it  operated  on  that  date  as  a  part  payment  of  the  debt.  In 
one  sense  that  is  true,  for  the  201.,  when  paid  on  June  20,  went  towards 
the  extinction  of  the  debt;  but  that  payment  was  only  the  honoring 
of  the  cheque  which  had  been  given  some  weeks  before.  The  only 
conclusion  I  can  draw  from  the  facts  is  that  on  June  20  the  de- 
fendant fulfilled  his  obligation  to  pay  the  cheque — I  cannot  infer 
from  that  act  any  promise  made  by  him  on  that  day  to  pay  the 
remainder  of  his  debt.  Suppose  that  on  May  10  the  defendant  had 
given  a  promissory  note  payable  three  months  after  date,  payment 
could  clearly  not  be  enforced  for  three  months; — that  would  be 
a  stronger  case  for  the  plaintiffs  than  the  present  one  —  there  can 
be  no  doubt  that  payment  of  the  note  at  the  due  date  would  be  noth- 
ing more  than  a  discharge  of  the  obligation  entered  into  when  the 
note  was  actually  made.  There  would  not  be  in  that  case,  and  there 
is  not  in  the  present  case,  any  fresh  act  or  conduct  from  which  we 
could  infer  that  the  debtor  was  promising  to  pay  the  remainder  of 
the  debt,  or  was  doing  anything  more  than  carrying  out  his  obliga- 
tion of  honoring  tlui  negotia])lo  instrument  which  he  had  given. 
The  result  is  tliat  there  is  only  one  net  and  one  moment  of  time 
which  can  be  looked  at  hero  in  dclermining  whether  there  has  been 


SECT.    Il]    SECURITY   BANK   OF   N.    Y.    V.    FINKELSTEIN  307 

a  renewal  or  a  prolongation  of  the  period  within  which  this  action 
could  be  brought,  and  that  is  the  giving  of  the  cheque  on  May  10; 
but  that  was  more  than  six  years  before  the  commencement  of  this 
action,  and  it  is  therefore  statute-barred.^ 


THE    SECURITY    BANK    OF    NEW    YORK,    Appellant, 
V.    HERMAN    FINKELSTEIN,    Respondent 

New  York  Supreme  Court,  Appellate  Division 
December  31,  1913 

{Rejported  in  160  New  YorJc  Appellate  Division,  315] 

Laughlin,  J. :  This  is  an  action  on  a  promissory  note  made 
by  the  defendant  on  the  3d  day  of  January,  1906,  for  $2,005.35, 
payable  on  demand  to  the  order  of  the  plaintiff  under  its  former 
name,  which  was  the  Fourteenth  Street  Bank,  with  interest,  to 
recover  a  balance  of  $375.67.  The  action  was  commenced  on  the 
19th  day  of  February,  1912.  It  is  alleged  that  there  were  pay- 
ments made  to  apply  on  the  note  as  follows :  January  8,  1906, 
$502.67;  June  13,  1906,  $751.34,  and  March  28,  1907,  $375.67. 
The  allegations  with  respect  to  these  payments  were  put  in  issue 
by  the  answer  in  which  the  Statute  of  Limitations  was  also 
pleaded.  The  payments  made,  which  were  thus  put  in  issue,  were 
dividends  received  by  the  plaintiff  from  the  receiver  of  the 
Cooper  Exchange  Bank,  under  an  assignment,  as  collateral 
security  for  the  note,  of  defendant's  claim  against  said  bank  as 
a  depositor. 

The  defendant's  note  to  the  plaintiff  authorized  the  payee  to 
appropriate  and  apply  on  the  defendant's  indebtedness  the 
collateral  securing  the  note,  if  the  defendant  should  make  default; 
and  the  note  contained  further  an  express  promise  by  the  de- 
fendant to  pay  any  deficiency.  The  question  presented  by  the 
appeal  is  whether  the  last  payments  made  on  the  note  give  rise 
by  implication  of  law  to  promises  then  made  by  the  defendant  to 
pay  the  balance  of  his  indebtedness. 

The  effect,  on  the  running  of  the  Statute  of  Limitations,  of 
the  payment  of  principal  or  interest  is  declared  by  judicial  de- 
cisions, but  there  is  no  statutory  provision  governing  it.  The  only 
statutory  reference  to  it  is  contained  in  section  395  of  the  Code  of 
Civil  Procedure,  which  is  as  follows :  "An  acknowledgment  or 
promise  contained  in  a  writing,  signed  by  the  party  to  be  charged 
thereby,  is  the  only  competent  evidence  of  a  new  or  continuing 
contract,  whereby  to  take  a  case  out  of  the  operation  of  this  title. 
But  this  section  does  not  alter  the  effect  of  a  payment  of  prin- 

^  The  statement  of  facts  is  abbreviated.  Sir  Gorell  Barnes,  President,  and  Farwell, 
L.  J.  delivered  concurring  opinions. 


308  SECURITY   BANK   OF   N.    Y.    V.    FINKELSTEIN    [CHAP,    I 

cipal  or  interest."  By  judicial  decisions  a  rule,  doubtless  now  as 
binding  as  a  statutory  enactment,  has  been  declared  to  the  effect 
that  a  payment  of  either  principal  or  interest  made  by  the  debtor 
gives  rise  to  an  implied  promise,  or  justifies  an  inference  of  a 
new  promise,  on  his  part  made  at  that  time,  in  the  absence  of 
evidence  showing  that  he  disclaimed  the  intent  to  have  his  act 
given  that  effect,  to  pay  the  balance  of  the  indebtedness ;  and  that  the 
Statute  of  Limitations  from  that  time  commences  to  run  on  the 
new  promise  renewing  the  contract.  (Murdock  v.  "Waterman,  145 
N.  Y.  55;  Harper  v.  Fairley,  53  id.  442;  Smith  v.  Eyan,  Q6 
id.  352;  Pickett  v.  Leonard,  34  id.  175.) 

So  rigidly  have  the  courts  adhered  to  the  underlying  reason 
for  this  rule  that  it  has  been  repeatedly  held  that  a  payment  by 
one,  jointly  or  otherwise  liable  with  others  on  the  same  instru- 
ment, even  with  the  knowledge  of  the  others  liable  thereon  and 
whose  liability  is  thus  reduced,  suspends  the  running  of  the 
Statute  of  Limitations  only  as  against  himself.  (Hoover  v. 
Hubbard,  202  N.  Y.  289;  Murdock  v.  Waterman,  supra; 
Gould  V.  Cayuga  County  Nat.  Bank,  86  K  Y.  75;  McMullen 
V.  Rafferty,  89  id.  456;  Harper  v.  Fairley,  supra.)  The  only 
exceptions  to  the  rule  that  a  payment,  in  order  to  prevent  the 
running  of  the  statute,  must  be  made  by  the  debtor,  who  pleads 
the  statute,  are,  where  the  payment  is  made  by  his  authorized 
agent  clothed  with  sufficient  authority  to  disclaim  for  him  any 
intention  to  have  the  effect  given  the  payment  which  by  legal  in- 
ference or  presumption  would  otherwise  attach  thereto  and  he 
fails  to  so  disclaim;  or  where  he  ratifies  a  payment  made  in  his 
behalf.  (Pickett  v.  Leonard,  supra;  Harper  v.  Fairley,  supra; 
Smith  V.  Ryan,  supra;  Murdock  v.  Waterman,  supra.)  It  is 
well  settled  that  where  the  debtor  assigns  collateral  as  security 
for  his  note  or  other  obligation,  his  debtor,  in  making  a  pay- 
ment to  the  assignee  on  the  obligation  thus  assigned,  is  not  his 
agent,  and  that  such  a  payment  does  not  give  rise  to  a  new 
promise  on  the  part  of  the  debtor  (Harper  v.  Fairley,  supra; 
Smith  V.  Ryan,  supra;  Acker  v.  Acker,  81  IST.  Y.  143)  ;  and  the 
same  has  been  held  with  respect  to  payment  by  a  general 
assignee  for  creditors.  (Pickett  v.  Leonard,  supra.)  It  has 
also  been  held  that  the  creditor  in  selling  and  applying  the  pro- 
ceeds of  collateral  to  the  payment  of  the  obligation  is  not  the 
agent  of  the  debtor  for  this  purpose.  (Brooklyn  Bank  v.  Bar- 
naby,  197  'N.  Y,  210.)  In  view  of  these  authorities  it  requires 
no  further  argument  to  show  that  the  receiver  of  the  Cooper 
Exchange  Bank  in  paying  the  dividends  was  not  the  agent  of 
the  defendant,  and  that  there  is  no  legal  presumption  or  infer- 
ence to  be  drawn  from  snch  payments  that  a  new  promise  was 
then  and  there  made  by  the  debtor  to  pay  the  balance  owing  on 
the   note.      Nor   can    it   be   successfully   contended   that   the   plain- 


SECT.    Il]    SECURITY   BANK   OF   N.    Y.    V.    FINKELSTEIN  309 

tiff  itself  was  the  defendant's  agent  in  collecting  and  applying 
the  dividends.  The  plaintiff  in  collecting  the  dividends  acted 
for  itself  pursuant  to  the  rights  derived  by  it  under  the  assign- 
ment. There  was  no  act  involved  in  the  collection  or  applica- 
tion of  the  dividends  to  the  payment  of  the  note  that  it  was 
necessary  to  perform  in  the  name  of  the  defendant.  The 
money  when  received  became  the  property  of  the  bank  so  far 
as  required  in  paying  the  note.  Its  application  to  the  payment  of 
the  note  was  a  mere  mental  operation  or  bookkeeping  entries  which 
the  officers  of  the  plaintiff  performed  in  its  behalf  and  for  it. 

It  cannot  be  said  as  matter  of  law  that  defendant  ratified  the  pay- 
ments as  made  or  applied  on  the  note  by  the  bank  so  that  they  are 
to  be  regarded  the  same  as  if  he  brought  the  money  in  and  paid 
it  over  the  counter.  The  question  of  ratification  was  submitted 
to  the  jury  as  a  question  of  fact  and  was  found  by  them  adversely 
to  the  appellant.  We  would  not  be  justified  in  disturbing  the  verdict 
on  that  point  unless  as  matter  of  law  the  evidence  shows  a  rati- 
fication. The  defendant  was  not  consulted  with  respect  to  the 
appropriation  of  the  dividends  to  the  payment  of  the  note.  He  was 
merely  informed  that  the  dividends  had  been  received  and  so 
applied.  He  had  no  voice  in  the  matter  and  he  had  no  standing 
to  question  the  right  of  the  plaintiff  to  make  the  application.  He 
was  not  called  upon  to  protest  against  the  doing  of  that  which 
plaintiff  had  a  right  to  do;  nor  was  he  since  the  act  was  not  his, 
required  to  disclaim  its  effect  on  the  Statute  of  Limitations  or 
with  respect  to  a  new  promise. 

The  only  debatable  point  is  whether  the  plaintiff  is  entitled 
to  recover  on  the  theory  that  the  note  itself  or  the  assignment 
containsi  a  promise,  separate  and  apart  from  the  promise  con- 
tained in  the  note  proper,  to  pay  any  deficiency  arising  after  the 
application  of  the  moneys  received  under  the  assignment.  In 
Brooklyn  Bank  v.  Barnaby  (supra)  the  Court  of  Appeals  had 
this  question  under  consideration  in  an  action  on  a  note  in  sub- 
stantially the  same  form  as  that  in  the  case  at  bar,  and  the  col- 
lateral was  sold  and  the  proceeds  applied  thereon.  There  the 
deficiency  could  not  be  ascertained  until  the  sale  of  the  collat- 
eral and  on  that  ground  three  of  the  judges  maintained  that  a 
cause  of  action  on  the  promise  to  pay  the  deficiency  did  not  arise 
until  the  deficiency  was  known;  but  the  majority  of  the  court 
decided  otherwise,  and  that  decision  is  controlling  on  this  court 
on  that  proposition. 

I  am  also  of  opinion  that  the  action  cannot  be  main- 
tained on  the  theory  of  a  promise  contained  in  the  assignment 
to  pay  the  deficiency.  The  action  is  upon  the  note  and  not  on 
the  assignment.  This  provision  of  the  assignment  is  not  set 
forth  in  the  complaint.  It  would  now  be  too  late,  if  the  attempt 
were   made  —  but    it    is    not    by   counsel    for    appellant  —  to    read 


310  BUSH    V.    STOWELL  [CHAP.    I 

it  into  it  now,  for  the  action  evidently  was  not  tried  on  that 
theory  and  the  proof  is  not  sufficient  to  show  that  no  more  could 
have  been  realized  under  the  assignment,  nor  does  it  appear  but  that 
there  might  have  been  some  other  defense  had  the  action  been  on 
the  assignment.  However,  it  would  seem  doubtful  whether  the 
action,  if  properly  brought  on  the  assignment,  could  be  sustained 
on  that  theory.  In  Brooklyn  Bank  v.  Barnaby  (supra)  it  does  not 
appear  that  there  was  a  separate  formal  assignment  such  as 
in  the  case  at  bar.  On  the  theory  upon  which  that  case  was 
decided,  however,  I  am  of  opinion  that  the  separate  assignment 
does  not  materially  distinguish  the  case  at  bar  from  it.  The 
court  there  held  that  there  was  but  one  promise  and  that  was  the 
promise  in  the  note  proper  to  pay  the  indebtedness,  and  that  the 
promise  to  pay  the  deficiency  had  reference  to  the  unconditional 
promise  to  pay  the  indebtedness  and  was  to  be  so  construed.  These 
views  require  an  affirmance. 

It  follows  that  the  determination  should  be  affirmed,  with  costs. 

McLaughlin  and  Dowling,  JJ,,  concurred;  Ingeaham,  P.  J.^ 
and  HoTCHKiss,  J.,  dissented. 


BUSH    V.    STOWELL,    et    al. 

Supreme  Court  of  Pennsylvania,  March  11,  1872 

[Reported  in  71  Pennsylvania,  208] 

This  was  an  action  brought  May  22,  1865,  on  a  promissory  note 
made  jointly  by  the  four  defendants,  payable  in  four  instalments; 
the  first  of  which  was  due  June  1,  1865,  and  the  others  in  three 
successive  years  on  the  first  of  June.  Indorsements  of  partial 
payments  were  made  on  June  4,  1856,  and  on  May  3,  1862.  This  last 
payment  was  made  by  one  of  the  defendants,  Hezekiah  Stowell. 
D.  A.  Stowell,  another  of  the  defendants,  according  to  the  plain- 
tiff's evidence,  had  made  a  new  promise  in  1867  to  pay  the  debt. 
The  jury  found  a  verdict  for  the  full  amount  unpaid  on  the  note 
against  the  defendant  who  had  made  the  payment  in  1862  and 
the  defendant  Avho  had  made  the  new  promise.  Against  the 
other  two  defendants  a  verdict  was  given  for  the  single  instalment 
of  the  note  on  which  the  Statute  of  Limitations  had  not  run  at  the 
time  of  bringing  the  action. 

On  exception  to  the  judge's  charge,  the  plaintiff  took  out  a  writ 
of  error. ^ 

SiiARHwooD,  J.  —  Lord  Coke  announced  the  distinction  between 

actions  of  debt  and  of  covenant  or  assumpsit  upon  an  agreement 

to  pay  a  sum  of  money  by  instalments,  which  has  been  recognized 

and  followed  since:  "If  a  man  be  bound  in  a  bond  or  by  contract 

'  The  statement  of  facts  has  been  abbreviated. 


SECT.    II ]  BUSH    V.    STOWELL  311 

to  another  to  pay  a  hundred  pounds  at  five  several  days,  he  shall 
not  have  an  action  of  debt  before  the  last  day  be  passed."  "But 
if  a  man  be  bound  in  a  recognizance  to  pay  a  hundred  pounds  at 
five  several  days,  presently  after  the  first  day  of  payment  he  shall 
have  execution  upon  recognizance  for  that  sum,  and  shall  not  tarry 
till  the  last  be  past,  for  that  it  is  in  the  nature  of  several  judg- 
ments." "And  so  it  is  of  a  covenant  or  promise,  after  the  first 
default  an  action  of  covenant  or  an  action  upon  the  case  doth  lie, 
for  they  are  several  in  their  nature."  Co.  Litt.  292  b.  Lord 
Loughborough  reviewed  all  the  law  on  this  subject  in  Rudder  v. 
Price,  1  H.  Bl.  547,  in  which  it  was  held  that  an  action  of  debt 
will  not  lie  on  a  promissory  note,  payable  by  instalments,  till  the 
last  day  of  payment  be  past.  He  shows  that  prior  to  the  case  of 
Cooke  y.  Whorwood,  2  Saund.  337,  it  was  the  uniform  course 
where  an  action  of  assumpsit  was  brought  before  all  the  instal- 
ments were  due,  to  allow  a  recovery  in  damages  for  those  still  to 
accrue  and  come  due,  upon  the  notion  that  after  a  judgment  on 
the  contract  no  further  recovery  could  be  had :  Beckwith  v.  ISTott, 
Cro.  Jac.  504;  Peck  v.  Ambler,  Dyer  113  and  note;  Milles  v. 
Milles,  Cro.  Car.  241.  But  in  Cooke  v.  Whorwood,  which  was 
assumpsit  to  perform  an  award  to  pay  money  in  instalments,  it  was 
objected  that  all  the  days  of  payment  were  not  past;  but  the  Court 
of  King's  Bench,  Sir  Matthew  Hale  being  then  Chief  Justice,  was 
clear  that  the  action  might  be  brought  for  such  money  only  as  was 
due  at  the  time  of  bringing  the  action,  and  the  plaintiff  could 
recover  damages  accordingly;  and  when  another  sum  of  the  money 
awarded  should  become  due,  the  plaintiff  might  commence  a  new 
action  for  that  also,  and  so  toties  quoties.  The  law  must  be  now 
considered  as  settled  in  conformity  to  this  doctrine:  Tucker  v. 
Eandall,  2  Mass.  283 ;  Greenleaf  v.  Kellogg,  Id.  568 ;  Cooley  v.  Rose, 
3  Id.  221. 

If  then  the  plaintiff  could  have  maintained  a  suit  for  the  first 
instalment  in  this  case  immediately  after  it  fell  due,  his  cause  of 
action  then  accrued,  and  the  Statute  of  Limitations  began  to  run. 
It  is  unnecessary  to  inquire  what  the  law  would  have  been  if  this 
had  been  an  action  of  debt,  and  the  plea  actio  non  accrevit  infra 
sex  annos;  for,  as  we  have  seen,  an  action  of  debt  could  not  have 
been  maintained  on  this  promissory  note  until  after  all  the  instal- 
ments had  fallen  due.  But  being  assumpsit,  there  would  seem  to 
be  no  question  that,  as  to  the  first  instalment,  the  action  was 
barred:  Burnham  v.  Brown,   23  Me.   400;   2   Pars,  on  Cont.   373. 

ISTor  is  it  any  longer  open  to  question  that  a  payment  on  account 
or  an  acknowledgment  by  one  of  two  or  more  joint  debtors  will 
not  take  the  case  out  of  the  statute  as  to  the  others :  Coleman  v. 
Pobes,  10  Harris  156;  Levy  v.  Cadet,  17  S.  &  R.  126;  Searight 
V.  Craighead,  1  Penna.  Rep.  135;  Houser  v.  Irvine,  3  W.  &  S. 
345 ;  Schoneman  v.  Fegley,  7  Barr  433. 


312  BUSH    V.    STOWELL  [CHAP.    I 

What,  then,  is  the  effect  of  this  rule  when  applied  in  a  joint 
action  against  several  joint  debtors?  Certainly  not  that  it  shall 
sever  the  judgment,  which  in  a  joint  action  ex  contractu  would  be 
an  anomaly.  In  such  a  proceeding  if  evidence  is  offered  of  an 
acknowledgment  or  payment  by  one  only  of  the  defendants,  it  is 
strictly  inadmissible,  unless  indeed  offered  to  be  followed  by  a 
similar  acknowledgment  or  payment  by  the  others,  which  would 
be  sufficient  to  take  the  case  out  of  the  statute  as  to  all.  It  fol- 
lows that  in  this  case  the  jury  should  have  been  instructed  to  find 
for  the  plaintiff  as  against  all  the  defendants  only  the  amount  of 
the  second  instalment  and  interest.  Whether  the  plaintiff  could 
maintain  an  action  against  those  not  affected  by  the  bar  of  the 
statute  in  consequence  of  their  acknowledgment  or  payment  for 
the  first  instalment,  need  not  now  be  discussed,  nor  on  what  prin- 
ciple contribution  between  the  joint  debtors  is  to  be  regulated. 
Sufficient  for  the  day  is  the  evil  thereof.  Upon  a  writ  of  error  by 
the  defendants,  the  verdict  and  general  judgment  entered  on  the 
verdict  could  not  have  been  sustained.  It  is  in  effect  several 
judgments  in  a  joint  action.  We  must  assume  that  the  defendants 
acquiesce,  as  they  do  not  complain.  But  what  injury  has  been 
done  to  the  plaintiff  in  error?  He  has  in  his  joint  action,  by  the 
verdict  and  judgment  below,  all  the  benefits  which  he  could  possibly 
have  attained  had  he  brought  several  actions  against  each  defendant. 
It  would  evidently  be  an  injury  to  him  to  reverse  his  judgment, 
and  send  the  case  back  for  another  trial,  which  must  result  in  a 
verdict  and  judgment  against  all  for  the  less  sum,  leaving  the  plain- 
tiff to  pursue  his  separate  remedies  against  those  as  to  whom  the  bar 
of  the  statute  is  saved.  Judqment  ajfirmed. 

Thompson^  C.  J.  —  As  applicable  to  the  case  in  hand,  I  dissent. 


CHAPTER  II 

FORMATION   OF   CONTRACTS   UNDER   SEAL 


SECTION  I 
FORMALITIES   OF   EXECUTION 


TAUNTON  V.  PEPLER 

In  Chancery,  1820 

[Reported  in  6  Maddock,  166] 

The  bill  was  filed  by  tbe  next  of  kin,  against  tbe  defendant,  as 
administrator  of  the  intestate,  for  an  account. 

The  defendant  pleaded  a  release. 

Mr.  Phillimore  objected  to  the  plea  of  the  release;  first,  because  it 
was  founded  only  on  the  receipts  of  the  administrator,  as  they  then 
stood;  and,  secondly,  because  the  release  was  only  said  to  be  "sealed 
and  delivered,"  without  also  saying  "signed;"  and  cited  Blackstone,^ 
who  says  a  deed  must  be  signed  as  well  as  sealed  and  delivered. 

Mr.  Koe,  contra. 

The  Vice-Chancellor.  The  release  states  that  the  administrator 
had  received  all  the  property  belonging  to  the  intestate;  I  cannot 
therefore  assume  that  he  has  received  anything  since.  There  is  no 
authority  for  saying  that  a  release,  to  be  effectual,  must  be  signed  as 
well  as  sealed  and  delivered.  The  plea  must  he  allowed.^ 


STONE  V.  BALE 

Common  Pleas,  1693 

[Reported  in  3  Levinz,  348] 

Debt  on  obligation,  and  declares,  that  March  20,  34  Car.  2,  the 
defendant  by  obligation  dated  October  10,  33  Car.  2,  sed  primo  de- 
liberaf  20  March,  34  Car.  became  bound,  etc.  The  defendant  pleads, 
that  upon  the  said  tenth  of  October,  when  the  obligation  bears  date, 
there  was  no  such  person  in  rerum  natura  as   the   plaintiff.     To 

1  Blackstone's  Com.  305;  Blackstone's  words  are:  "It  is  requisite  that  the  party 
whose  deed  it  is  should  seal;   and  now,  in  -most  cases,  I  apprehend,  shonM.  si^n  it  also." 

*  Cromwell  v.  Grunsden,  2  Salk.  462;  Jeffery  r.  Underwood,  1  Ark.  108,  ace.  See 
also  Cooch  V.  Goodman,  2  Q.  B.  597;   Shepp.  Touch.  (Preston's  ed.),  66  &. 


314  WARREN    V.    LYNCH  [CHAP.   II 

which  the  plaintiff  demurs :  and  now  upon  argument  it  was  adjudged 
by  the  whole  court  for  the  plaintiff :  they  agreed  where  the  plaintiff 
declares  on  a  date  he  cannot  afterward  reply  that  it  was  primo  de- 
liberate at  another  day;  for  that  would  be  a  departure,  and  so  are 
the  books  to  be  intended,  Co,  2  Eep.  4  b,  and  1  H.  6,  1  b,  there 
cited;  for  prima  facie  every  deed  is  supposed  to  be  made  the  same 
day  that  it  bears  date.  But  where  the  date  is  mistaken,  the  party 
may  declare,  or  in  his  first  plea  plead,  that  by  a  deed  bearing  date 
such  a  day,  but  prima  deUherat'  at  another  day,  the  party  granted, 
or  became  bound,  etc.  For  God  forbid,  when  a  deed  is  duly  made 
that  by  negligence  or  mistake  of  the  clerk  in  writing  the  date,  the 
party  should  lose  the  whole  benefit  of  the  deed,  and  be  without 
remedy;  and  so  are  Dy.  307  a,  315  a;  Cro.  Eliz.  773,  890;  5  H.  7, 
27  a,  to  be  understood  upon  this  difference.  Levinz  of  the  counsel 
with  the  plaintiff.^ 


WAEREN  V.  LYNCH 

New  Yoek  Supreme  Court  of  Judicature,  1810 
[Reported  in  5  Johnson,  239] 

Kent,  C.  J.,  delivered  the  opinion  of  the  Court.  The  two  ques- 
tions made  upon  this  case  are:  1.  What  is  the  legal  import  of  the 
instrument  upon  which  the  suit  is  brought  ?  and,  2.  Was  the  evidence 
sufficient  to  entitle  the  plaintiff  to  recover  ?  ^ 

I.  The  note  was  given  in  Virginia,  and  by  the  laws  of  that  state 
it  was  a  sealed  instrument  or  deed.  But  it  was  made  payable  in 
New  York,  and  according  to  a  well-settled  rule,  it  is  to  be  tested 
and  governed  by  the  law  of  this  state.  4  Johns.  Rep.  285.  Inde- 
pendent then  of  the  written  agreement  of  the  parties  (and  on  the 
operation  of  which  some  doubt  might  possibly  arise),  this  paper 
must  be  taken  to  be  a  promissory  note,  without  seal,  as  contradis- 
tinguished from  a  specialty.  We  have  never  adopted  the  usage  pre- 
vailing in  Virginia  and  in  some  other  states,  of  submitting  a  scrawl 
for  a  seal;  and  what  was  said  by  Mr.  Justice  Livingston,  in  the  case 
of  Mcridith  v.  Hinsdale  (2  Caines,  362),  in  favor  of  such  a  sub- 
stitute, was  his  own  opinion,  and  not  that  of  the  Court.     A  seal, 

'  OHbourn  v.  Ridor,  Cro.  Jac.  135;  Cromwell  v.  Grunsden,  2  Salk.  462;  Goddard's 
Casr;,  2  C'oki;  4  l>;  Hall  v.  Cazenovc,  4  East,  477;  Thompson  v.  Thompson,  9  Ind.  323; 
Lf!0  V.  MasH.  Ins.  Co.,  6  Mass.  208,  219;  Banning  v.  Edes,  6  Minn.  402;  Jackson  v. 
Schoonmakor,  2  .Johns.  230;  Gciss  v.  Odonhoimcr,  4  Yeates,  278;  Swan  v.  Hodges, 
3  Hftad.  251;    McMichacl  v.  Carlylc,  53  Wis.  .504,  ncc. 

But  the  f;x('cution  is  prrsumod  in  tho  absonco  of  evidence  to  the  contrary  to  have 
taken  place  fjn  the  day  a  rleed  is  dated.  O.shey  v.  Hicks,  Cro.  .Tac.  264;  Savery  v. 
lirowiiiK,  IH  la.  246;  Lyon  v.  Mcllvaine,  24  la.  9;  McConnell  v.  Brown,  Litt.  Sel.Cas. 
4.'»9;  Banning  v.  Edes,  6  Minn.  402;  Colquhoun  v.  Atkinsons,  6  Munf.  550;  Raines  c. 
Walker.  77  Va.  92;  Wheeler  v.  Single,  62  Wis.  380.  See  also  Anderson  v.  Weston, 
6  Bing.  N.  C.  290. 

'  Only  BO  much  of  the  opinion  as  relates  to  the  first  question  is  reprinted. 


SECT.    l]  WARREN    V.    LYNCH  315 

according  to  Lord  Coke  (3  Inst.  169),  is  wax  with  an  impression. 
Sigillum  est  cera  impressa,  quia  cera  sine  impressione  non  est  sigil- 
lum.  A  scrawl  with  a  pen  is  not  a  seal,  and  deserves  no  notice.  The 
law  has  not  indeed  declared  of  what  precise  materials  the  wax  shall 
consist;  and  whether  it  be  a  wafer  or  any  other  paste  or  matter 
sufficiently  tenacious  to  adhere  and  receive  an  impression,  is  per- 
haps not  material.  But  the  scrawl  has  no  one  property  of  a  seal. 
Multum  ahludit  imago.  To  adopt  it  as  such  would  be  at  once  to 
abolish  the  immemorial  distinction  between  writings  sealed  and 
writings  not  sealed.  Forms  will  frequently,  and  especially  when 
they  are  consecrated  by  time  and  usage,  become  substance.  The 
calling  a  paper  a  deed  will  not  make  it  one,  if  it  want  the  requisite 
formalities,  "Notwithstanding,"  says  Perkins  (sect.  129),  "that 
words  obligatory  are  written  on  parchment  or  paper,  and  the  ob- 
ligator delivereth  the  same  as  his  deed,  yet  if  it  be  not  sealed,  at 
the  time  of  the  delivery,  it  is  but  an  escrowl,  though  the  name  of 
the  obligator  be  subscribed."  I  am  aware  that  ingenious  criticism 
may  be  indulged  at  the  expense  of  this  and  of  many  of  our  legal 
usages;  but  we  ought  to  require  evidence  of  some  positive  and  serious 
public  inconvenience,  before  we,  at  one  stroke,  annihilate  so  well 
established  and  venerable  a  practice  as  the  use  of  seals  in  the  authen- 
tication of  deeds.  The  object  in  requiring  seals,  as  I  humbly  pre- 
sume, was  misapprehended  both  by  President  Pendleton,  and  by 
Mr.  Justice  Livingston.  It  was  not,  as  they  seem  to  suppose,  be- 
cause the  seal  helped  to  designate  the  party  who  affixed  it  to  his 
name.  Ista  ratio  nullius  pretii  (says  Vinnius,  in  Inst.  2,  10,  5) 
nam  et  alieno  annullo  signare  licet.  Seals  were  never  introduced 
or  tolerated  in  any  code  of  law,  because  of  any  family  impression, 
or  image,  or  initials  which  they  might  contain.  One  person  might 
always  use  another's  seal,  both  in  the  English  and  in  the  Roman  law. 
The  policy  of  the  rule  consists  in  giving  ceremony  and  solemnity 
to  the  execution  of  important  instruments,  by  means  of  which  the 
attention  of  the  parties  is  more  certainly  and  effectually  fixed,  and 
frauds  less  likely  to  be  practised  upon  the  unwary.  President  Pen- 
dleton, in  the  case  of  Jones  and  Temple  v.  Logwood  (1  "Wash.  Eep, 
42),  which  was  cited  upon  the  argument,  said  that  he  did  not  know 
of  any  adjudged  case  that  determines  that  a  seal  must  necessarily 
be  something  impressed  on  wax;  and  he  seemed  to  think  that  there 
was  nothing  but  Lord  Coke's  opinion  to  govern  the  question.  He 
certainly  could  not  have  examined  this  point  with  his  usual  diligence. 
The  ancient  authorities  are  explicit,  that  a  seal  does,  in  legal  con- 
templation, mean  an  impression  upon  wax.  "It  is  not  requisite," 
according  to  Perkins  (sect.  134),  "that  there  be  for  every  grantor 
who  is  named  in  the  deed  a  several  piece  of  wax,  for  one  piece  of 
wax  may  serve  for  all  the  grantors,  if  every  one  put  his  seal  upon 
the  same  piece  of  wax."  And  Brooke  (tit.  Faits,  30  and  17)  uses 
the  same  language.     In  Lightfoot  and  Butler's  case,  which  was  in 


316  WARREN    V.    LYNCH  [CHAP.    II 

the  Exchequer,  29  Eliz.  (2  Leon,  21),  the  Barons  were  equally  ex- 
plicit, as  to  the  essence  of  a  seal,  though  they  did  not  all  concur 
upon  the  point,  as  stated  in  Perkins.  One  of  them  said  that  twenty 
men  may  seal  with  one  seal  upon  one  piece  of  wax  only,  and  that 
should  serve  for  them  all,  if  they  all  laid  their  hands  upon  the  seal; 
but  the  other  two  Barons  held  that  though  they  might  all  seal  a 
deed  with  one  seal,  yet  it  must  be  upon  several  pieces  of  wax.  In- 
deed this  point,  that  the  seal  was  an  impression  upon  wax,  seems  to 
be  necessarily  assumed  and  taken  for  granted  in  several  other  pas- 
sages which  might  be  cited  from  Perkins  and  Brooke,  and  also  in 
Mr.  Selden's  "Notes  to  Fortescue"  (De  Land,  p.  72) ;  and  the  nature 
of  a  seal  is  no  more  a  matter  of  doubt  in  the  old  English  law  than  it 
is  that  a  deed  must  be  written  upon  paper  or  parchment,  and  not 
upon  wood  or  stone.  Nor  has  the  common  law  ever  been  altered 
in  Westminster  Hall,  upon  this  subject ;  for  in  the  late  case  of  Adam 
V.  Keer  (1  Bos.  and  Puller,  360),  it  was  made  a  question  whether  a 
bond  executed  in  Jamaica,  with  a  scrawl  of  the  pen,  according  to 
the  custom  of  that  island,  should  operate  as  such  in  England,  even 
upon  the  strength  of  that  usage. 

The  civil  law  understood  the  distinction  and  solemnity  of  seals 
as  well  as  the  common  law  of  England.  Testaments  were  required 
not  only  to  be  subscribed,  but  to  be  sealed  by  the  witnesses.  Suh- 
scriptione  testium,  et  ex  edicto  prcetoris,  signacula  testamentis  im- 
ponerentur  (Inst.  2,  10,  3).  The  Romans  generally  used  a  ring,  but 
the  seal  was  valid  in  law,  if  made  with  one's  own  or  another's  ring; 
and,  according  to  Heineccius  (Elementa  juris  civilis  secundum  ord. 
Inst.  497),  with  any  other  instrument,  which  would  make  an  im- 
pression, and  this,  he  says,  is  the  law  to  this  day  throughout  Ger- 
many. And  let  me  add,  that  we  have  the  highest  and  purest  clas- 
sical authority  for  Lord  Coke's  definition  of  a  seal;  Quid  si  in  e jus- 
modi  cera  centum  sigilla  hoc  annulo  impressero?  (Cicero,  Academ. 
Quffist.    Lucul.  4,  26). 1 

^  In  National  Provincial  Bank  v.  Jackson,  33  Ch.  D.  1,  11,  Cotton,  L.  J.,  said: 
"Although  these  instruments  are  expressed  to  be  signed,  sealed,  and  delivered  in  the 
presence  of  the  attesting  wdtness,  who  was  one  of  R.  Jackson's  clerks,  there  is  no  trace 
of  any  seal,  but  merely  the  piece  of  ribbon  for  the  usual  purpose  of  keeping  the  wax 
on  the  parchment.  In  my  opinion  the  only  conclusion  we  can  come  to  is  that  these 
instniments  were  never  in  fact  sealed  at  all.  They  were  somehow  or  other  prepared 
by  R.  Jackson,  but  never  in  fact  executed  by  him  in  such  a  way  as  to  rcconvey  the 
legal  estate.  It  is  said,  and  said  truly,  that  neither  wax  nor  wafer  is  necessary  in  order 
to  constitute  a  seal  to  a  deed,  and  that  frequently,  as  in  the  case  of  a  corporation 
party  to  a  floed,  there  is  only  an  impression  on  the  paper;  and  hi  re  Sandilands,  Law. 
Rep.  0  C.  P.  411  was  referred  to,  where  an  instnmient  had  been  forwarded  from 
the  coloni<"H  together  with  an  official  certificate  of  its  ha\'ing  been  duly  acknowledged, 
and  this  wa.s  recognized  by  the  Court  as  a  deed,  although  there  was  no  seal  but  only 
the  ribbon  on  it.  That  case  is  not  now  tmder  appeal,  but  it  is  evident  tliat  the  ques- 
tion w!iH  merely  as  to  what  was  the  true  inference  of  fact,  and  altliough  perhaps, 
having  regard  to  thf;  certificate,  it  was  right  there  to  hold  that  the  deed  had  been 
sealed,  here  in  my  ojjinion  it  would  be  wrong  to  do  .so.  It  is  true  that  if  the  finger  bo 
pressed  upon  1-lie  rib))oii  that  may  amount  to  sealing,  but  no  such  inference  can  be  drawn 
here  wlieri'  the  ;it testing  vvitiKSS  who  has  given  (■vi(Ienc<'  recollects  nothing  of  tlie  sort, 
and  when  .Jackson  had  already  committed  one  fraud  in  the  matter  and  perhaps  then 


SECT.  I]  LORAH  V.    NISSLEY  317 

LOEAH,  Appellant,   v.   l^ISSLEY 

Pennsylvania  Supreme  Court,  1893 

\Reported  in  156  Pennsylvania,  329] 

Rule  to  open  judgment  entered  on  note  alleged  to  be  under  seal. 
The  note  was  in  the  following  form: 

"$200.00.  "Mount  Joy,  Pa.,  August  the  22,  1881. 

"Five  months  after  date  I  promise  to  paj'  to  Jacob  E.  Lorah  or  order,  at  the  First 
National  Bank  of  Mount  Joy,  Two  Hundred  Dollars  and  without  defalcation  or  stay 
of  execution,  value  received.  And  I  do  hereby  confess  judgment  for  the  said  sum, 
costs  of  suit  and  release  of  all  errors,  waiving  inquisition  and  confess  condemnation 
of  real  estate.  And  I  do  further  waive  all  exemption  laws,  and  agree  that  the  same 
may  be  levied  by  attachment  upon  wages  for  labor  or  otherwise. 

"Witness:  Henry  B.  Nissley,        Seal. 

George  Shiers.  Seal  ." 

The  word  "seal"  following  the  signature  of  the  maker  was  printed. 
The  Court  held  that  the  note  was  not  under  seal,  and  made  absolute 
the  rule  to  open  the  judgment,  so  as  to  permit  defendant  to  plead 
the  statute  of  limitations,  in  an  opinion  by  McMullen,  J.,  1  Dist. 
R.  410. 

Error  assigned  was  above  order. 

A.  S.  Hershey  and  B.  F.  Davis,  for  appellant. 

/.  Hay  Brown,  W.  U.  Hensel  with  him,  for  appellee. 

Mr.  Justice  Mitchell.  The  days  of  actual  sealing  of  legal  docu- 
.ments,  in  its  original  sense  of  the  impression  of  an  individual  mark 
or  device  upon  Avax  or  wafer,  or  even  on  the  parchment  or  paper 
itself,  have  long  gone  by.  It  is  immaterial  what  device  the  impres- 
sion bears,  Alexander  v.  Jameson,  5  Bin.  238,  and  the  same  stamp 
may  serve  for  several  parties  in  the  same  deed,  l^ot  only  so,  but 
the  use  of  wax  has  almost  entirely  and  even  of  wafers  very  largely 
ceased.  In  short  sealing  has  become  constructive  rather  than  ac- 
tual, and  is  in  a  great  degree  a  matter  of  intention.  It  was  said 
more  than  a  century  ago  in  McDill's  Lessee  v.  McDill,  1  Dal.  63, 
that  "the  signing  of  a  deed  is  now  the  material  part  of  the  execution ; 
the  seal  has  become  a  mere  form,  and  a  written  or  ink  seal,  as  it  is 
called,  is  good;"  and  in  Long  v.  Ramsay,  1  S.  &  R.  72,  it  was  said 
by  Tilghman,  C.  J.,  that  a  seal  with  a  flourish  of  the  pen  "is  not 
now  to  be  questioned."  Any  kind  of  flourish  or  mark  will  be  suffi- 
cient if  it  be  intended  as  a  seal.  "The  usual  mode,"  said  Tilghman, 
C.  J.,  in  Taylor  v.  Glaser,  2  S.  &  R.  502,  "is  to  make  a  circular 
oval,  or  square  mark,  opposite  to  the  name  of  the  signer;  but  the 
shape  is  immaterial."    Accordingly  it  was  held  in  Hacker's  Appeal, 

intended  another.  The  question  is  merely  one  of  fact,  and  upon  the  e^^dence  it  is 
impossible  to  conclude  that  these  instruments  were  ever  executed  as  deeds  so  as  to 
reconvey  the  estate."  Lindley,  L.  J.,  in  the  same  case  said:  "In  re  Sandilands  was, 
I  think,  a  good-natured  decision,  in  which  I  am  not  sure  that  I  could  have  concurred." 
American  decisions  sustaining  the  common-law  definition  of  a  seal  are:  Woodbury 
V.  U.  S.  Casualty  Co.,  284  111.  227;  Manning  v.  Perkins,  86  Me.  419;  Bates  v.  Boston 
&c.  R.  Co.,  10  Allen,  251;  Perrine  v.  Cheeseman,  6  Halst.  174. 


318  LORAH    V.    NISSLEY  [CHAP.   II 

121  Pa.  192,  that  a  single  horizontal  dash,  less  than  an  eighth  of 
an  inch  long,  was  a  sufficient  seal,  the  context  and  the  circumstances 
showing  that  it  was  so  intended.  On  the  other  hand  in  Taylor  v. 
Glaser,  supra,  a  flourish  was  held  not  a  seal,  because  it  was  put 
under  and  apparently  intended  merely  as  a  part  of  the  signature. 
So  in  Duncan  v.  Duncan,  1  Watts,  322,  a  ribbon  inserted  through 
slits  in  the  parchment,  and  thus  carefully  prepared  for  sealing,  was 
held  not  a  seal,  because  the  circumstances  indicated  the  intent  to  use 
a  well-known  mode  of  sealing,  by  attaching  the  ribbon  to  the  parch- 
ment with  wax  or  wafer,  and  the  intent  had  not  been  carried  out. 

These  decisions  establish  beyond  question  that  any  flourish  or 
mark,  however  irregular  or  inconsiderable,  will  be  a  good  seal,  if 
so  intended,  and  a  fortiori  the  same  result  must  be  produced  by 
writing  the  word  "seal,"  or  the  letters  "L.  S.,"  meaning  originally 
locus  sigilli,  but  now  having  acquired  the  popular  force  of  an  ar- 
bitrary sign  for  a  seal,  just  as  the  sign  "&"  is  held  and  used  to  mean 
"and"  by  thousands  who  do  not  recognize  it  as  the  Middle  Ages 
manuscript  contraction  for  the  Latin  "et." 

If  therefore  the  word  "seal"  on  the  note  in  suit  had  been  written 
by  ]!^issley  after  his  name,  there  could  have  been  no  doubt  about 
its  efficacy  to  make  a  sealed  instrument.  Does  it  alter  the  case  any 
that  it  was  not  written  by  him,  but  printed  beforehand?  "We  can- 
not see  any  good  reason  why  it  should.  Ratification  is  equivalent 
to  antecedent  authority,  and  the  writing  of  his  name  to  the  left  of 
the  printed  word,  so  as  to  bring  the  latter  into  the  usual  and  proper 
place  for  a  seal,  is  ample  evidence  that  he  adopted  the  act  of  the 
printer  in  putting  it  there  for  a  seal.  The  note  itself  was  a  printed 
form  with  blank  spaces  for  the  particulars  to  be  filled  in,  and  the 
use  of  it  raises  a  conclusive  presumption  that  all  parts  of  it  were 
adopted  by  the  signer,  except  such  as  were  clearly  struck  out  or  in- 
tended to  be  cancelled  before  signing.  The  pressure  of  business  life 
and  the  subdivision  of  labor  in  our  day,  have  brought  into  use  many 
things  ready-made  by  wholesale  which  our  ancestors  made  singly 
for  each  occasion,  and  among  others  the  conveniences  of  printed 
blanks  for  the  common  forms  of  written  instruments.  But  even  in 
the  early  days  of  the  century,  the  act  of  sealing  was  commonly 
done  by  adoption  and  ratification  rather  than  as  a  personal  act,  as 
we  are  told  by  a  very  learned  and  experienced,  though  eccentric  pre- 
decessor, in  huiguage  that  is  worth  quoting  for  its  quaintness:  "lUi 
robur  et  aes  triplex.  He  was  a  bold  fellow  who  first  in  these  colonies, 
and  particularly  in  Pennsylvania,  in  time  whereof  the  memory  of 
man  runneth  not  to  the  contrary,  substituted  the  appearance  of  a 
seal  by  tlif  firfumflcx  of  a  pen,  whicli  has  been  sanctioned  by  usage 
and  the  adjudication  of  the  courts,  as  equipollent  with  a  stamp  con- 
taining some  effigies  or  inscription  on  stone  or  metal.  .  .  .  How 
could  a  jury  distinguish  the  hieroglyphic  or  circumflex  of  a  pen  by 
one  man  from  another?     In  fact  the  circumflex  is  usually  made  hy 


SECT.   I]  ANONYMOUS  319 

the  scrivener  drawing  the  instrument,  and  the  word  seal  inscribed 
within  it."  Brackenridge,  J.,  in  Alexander  v.  Jameson,  5  Bin.  238, 
244. 

We  are  of  opinion  that  the  note  in  suit  was  duly  sealed. 

We  have  not  derived  much  light  from  the  decisions  in  other  states, 
but  so  far  as  we  have  found  any  analogous  cases  they  are  in  har- 
mony with  the  views  herein  expressed.  In  Whitney  v.  Davis,  1 
Swan  (Tenn.),  333,  the  word  "seal"  without  any  scroll,  was  held  to 
be  a  good  seal  even  to  a  public  deed  by  the  clerk  of  a  court,  he  stat- 
ing in  the  certificate  that  no  seal  of  office  had  been  provided.  And 
in  Lewis  v.  Overby,  28  Gratt.  (Va.)  627,  the  word  "seal"  without 
any  scroll  was  held  a  good  seal  within  a  statute  enacting  that  "any 
writing  to  which  the  person  making  it  shall  affix  a  scroll  by  way 
of  seal  shall  be  of  the  same  force  as  if  it  were  actually  sealed." 

The  learned  Court  below,  and  the  counsel  for  appellee  placed  much 
reliance  on  the  decision  in  Bennett  v.  Allen,  10  Pa.  C.  C.  R.  256. 
In  that  case  the  signature  was  placed  to  the  left  but  below  the  printed 
letters  "L.  S.,"  and  it  is  said  in  the  opinion  that  there  v/as  a  space 
of  half  an  inch  between.  The  decision  might  possibly  be  sustained 
on  the  ground  that  the  position  and  distance  showed  that  the  signer 
did  not  intend  to  adopt  the  letters  "L.  S."  as  part  of  his  act,  but 
unless  distinguished  on  that  special  ground  the  decision  is  con- 
trary to  the  settled  trend  of  our  cases,  and  cannot  be  approved. 
Order  opening  judgment  is  reversed  and  judgment  reinstated} 


AITONYMOUS 

Common  Pleas,  1536 

[Reported  in  1  Dyer,  19  a] 

An  obligation  was  thus,  "for  the  well  and  faithful  payment  of 
which  I  bind  myself  by  these  presents,  dated,  &c.,"  and  not  said 
"sealed  with  my  seal,"  nor  "in  witness  whereof:"  wherefore  it  was 
asked  of  the  Court,  if  such  an  obligation  be  good  or  not?  And  it 
seemed  to  Shelley  and  Fitzhekbert,  that  the  obligation  is  well 
enough,  if  a  seal  be  put  to  the  deed,  etc.^ 

^  Bertrand  v.  Byrd,  4  Ark.  195;  Hastings  v.  Vaughan,  5  Cal.  315;  Trasher  v. 
Everhart,  3  G.  &  J.  234;  Underwood  v.  DoUins,  47  Mo.  259;  Groner  v.  Smith,  49 
Mo.  318;    English  v.  Helms,  4  Tex.  228;    Green  v.  Lake,  2  Mackey,  162,  ace. 

In  many  other  states  statutes  have  enlarged  the  legal  conception  of  what  consti- 
tutes a  seal,  so  as.to  include  a  scroll  or  other  device. 

2  "For  there  are  but  three  things  of  the  essence  and  substance  of  a  deed;  that  is 
to  say  writing  in  paper  or  parchment,  sealing,  and  delivery,  and  if  it  hath  these  three, 
although  it  wanted,  in  cujvs  rei  testimoniuvi  sigillum  suum  apposi/if,  yet  the  deed  is 
sufficient,  for  the  delivery  is  as  necessary  to  the  essence  of  a  deed,  as  the  putting  of 
the  seal  to  it,  and  yet  it  need  not  be  contained  in  the  deed  that  it  was  delivered." 
Goddard's  Case,  2  Coke,  4  h,  5  a.  Bedow's  Case,  1  Leon.  25;  Peters  v.  Field,  Hetly, 
75;    Thompson  v.  Butcher,  3  Bulstr.  300,  302  (but  see  Clement  v.  Gunhouse,  5  Esp. 


320  AUSTIN    V.    WHITLOCK  [CHAP.    II 

AUSTIN'S   Administratrix   v.   WHITLOCK'S   Executors 

Supreme  Court  of  Appeals  of  Virginia,  1810 

[Reported  in  1  Munf.  487] 

To  an  action  of  covenant  the  defendants,  without  craving  oyer, 
pleaded  conditions  performed,  and  issue  was  joined.  At  the  trial 
the  plaintiff  produced  a  writing  which  concluded  "As  witness  my 
hand  this  22d  day  of  February,  1791.  D.  Whitlock,"  with  a  written 
scroll  annexed  to  the  signature.  The  defendants  moved  the  Court 
to  exclude  this  evidence,  but  the  Court  overruled  the  motion  and  a 
verdict  and  judgment  for  the  plaintiff  followed.  On  appeal  the 
judgment  was  reversed,  whereupon  the  plaintiff  appealed  to  this 
Court. 

Peyton  Randolph,  for  the  defendant. 

WicTcham,  contra. 

Judge  Tucker,  after  stating  the  case.  That  a  covenant  is  a  deed, 
and  that  a  seal  is  one  of  the  essential  parts  of  a  deed,  is  evident  from 
the  authorities  generally,  and  especially  Co.  Litt.  6  a,  35  b,  175  b, 
225  a  and  b,  229  b.,  and  Litt.  s.  371,  372.  From  several  of  which, 
and  particularly  the  two  last,  it  is  apparent  that  the  clause  of  in 
cujus  rei  testimonium  ought  to  recite  that  the  maker  of  the  deed  hath 
thereunto  put  his  seal  for,  otherwise,  a  supposititious  seal  may  be 
affixed  to  any  instrument  of  writing,  without  proof  of  the  acknowl- 
edgment thereof  by  the  maker  of  the  instrument,  and  a  mere  parol 
promise  or  agreement  may  be  converted  into  a  covenant,  which  is  an 
instrument  of  a  much  higher  nature;  insomuch,  that  what  might  be 
considered  as  mere  nudum  pactum,  as  in  the  case  of  Hite,  Ex'r  of 
Smith  V.  Fielding  Lewis's  Ex'rs,  in  this  Court,  October  29,  1804 
(MS.),  may,  by  the  subsequent  addition  of  a  seal  or  scroll,  be  con- 
"v^erted  into  an  obligation  which  should  not  only  bind  the  maker  and 
his  executors,  but  his  heirs  also.  For  such  would  have  been  the 
effect  of  the  writing  signed  by  Fielding  Lewis,  in  that  case,  "whereby 
he  obliged  himself,  his  heirs,  executors,  and  administrators  to  in- 
demnify Mrs.  Smith,"  as  executrix  of  Charles  Smith,  for  the  latter 
having  become  security  for  his  son,  if  there  had  been  a  seal,  or  scroll, 
added  to  that  instrument,  and  acknowledged  by  the  maker,  in  the 
clause  of  attestation.     But  if  such  mention  be  unnecessary  in  the 


R.3);  Burton  v.  LcRoy,  5  Sawy,  510;  Joffory  v.  Underwood,  1  Ark.  lOS;  Bertrand  v. 
Byrrl,  4  Ark.  V.)r>;  Cuniniins  v.  Woodruff,  5  Ark.  IKl;  Conino  v.  Jiniction  R.  Co., 
3  IIouHt.  'ZHH;  EamcH  v.  PrcHton,  20  111.  3S0;  Hubbard  i'.  Bcckwith,  1  Bil)b,  492;  Wing 
V.  Ch.'iHf,  :<.'>  Mf.  2(10;  Traslu-r  v.  Evcrhart,  8  C.  &  J.  234,  240;  Mill  Dam  Foundry  v. 
Hovey,  21  T'ick.  417,  42S.  Sticknoth's  Est.,  7  Nov.  223,  2.34;  Ingram  v.  Hall,  1  Hayw. 
193,  20!i;  O.sborn  v.  Kistlfr,  35  Ohio  St.  99;  Taylor  v.  Glasor,  2  S.  &  R.  502;  Frovall 
V.  Fitcli,  5  Whart,  325;  Biory  v.  Haines.  5  Whart.  .563;  Hopkins  v.  Cuml)orland  R. 
Co.,  3  W.  A  H.  410;  Lorah  v.  Nissloy,  156  Pa.  320;  Rolph  v.  Gist,  4  McCord,  267; 
McKain  v.  Miller,  1  McMull,  313;  Rchikks  v.  lirackin,  4  Yorff.  528,  ncc.  See  also 
McRavcn  v.  McCuirc,  17  Mias.  34;    Hudson  v.  Poindcxtor,  42  Miss.  304. 


SECT.    l]  MMES    V.   PRESTON  321 

body  of  the  instrument,  how  easily  may  any  instrument  of  the  same 
kind  be  converted  into  one  very  different  from  it  ?  ^ 


EAMES  V.  PEESTON" 

Illinois  Supreme  Court,  1858 

[Reported  in  20  Illinois,  389] 

Caton,  C.  J.  This  was  an  action  of  assumpsit  brought  against 
Eames,  Burlingame  and  Gray,  upon  a  note  thus  executed,  "Eames, 
Gray  &  Co.  [  ],"  and  the  only  question  is,  whether  assumpsit 
can  be  maintained  on  this  note.  If  this  be  a  sealed  instrument, 
then  assumpsit  cannot  be  maintained  upon  it  (1  Chit.  PI.,  title  As- 
sumpsit, p.  99),  and  this  would  seem  to  settle  the  question,  for  this 
is  certainly  an  instrument  under  seal.  If  the  member  of  the  firm 
who  executed  the  note  had  authority  under  seal  to  add  the  seals  of 
all,  then  the  seal  attached  is  the  seal  of  all;  if  he  had  not,  then  it 
is  his  seal  only.  In  any  event  it  is,  as  to  him,  a  sealed  instrument. 
If,  as  to  the  others,  it  is  a  simple  instrument,  that  would  not  re- 
move his  seal.  If  one  party  executes  an  instrument  and  attaches 
his  seal,  and  others  afterwards  sign  it  silently  without  attaching 
seals,  they  are  presumed  to  adopt  the  seal  of  the  first,  and,  as  to 
all,  it  is  a  sealed  instrument.^     If,  however,  the  first  sign  without 

1  The  statement  of  the  case  has  been  abbreviated  and  a  portion  of  the  opinion,  a 
well  as  concurimg  opinions  of  Roane  and  Fleming,  JJ.,  omitted. 

The  doctrine  of  this  case  has  been  frequently  followed  in  Virginia,  and  is  applied 
where  the  seal  attached  to  the  instrument  is  an  actual  seal,  as  well  as  where  it  is  a 
scroll.  Bradley  Salt  Co.  v.  Norfolk  Importing  Co.,  95  Va.  461  and  cases  cited.  A 
similar  nile  prevails  in  a  few  other  states.  Lee  v.  Adkins,  Minor,  187;  Carter  v.  Penn. 
4  Ala.  140;  Moore  v.  Leseur,  18  Ala.  606;  Blackwell  v.  Hamilton,  47  Ala.  470;  Mc- 
Donald V.  Bear  River  Co.,  13  Cal.  220;  Bohannon  t.  Hough,  1  Miss.  461  (but  see 
McRaven  v.  McGuire,  17  Miss.  34);  Keller  v.  McHuffman,  15  W.  Va.  64,  85.  See 
also  Buckingham  v,  Orr,  6  Col.  587. 

In  several  other  states  a  recital  is  necessary  to  give  a  scroll  the  effect  of  a  seal,  but 
a  real  seal  is  effectual  without  recital:  Alt  v.  Stoker,  127  Mo.  466,  and  cases  cited; 
Newbold  v.  Lamb,  2  South.  (N.  J.)  616;  Corliss  v.  Van  Note,  1  Harr.  (N.  J.)  324; 
Flemming  v.  Powell,  2  Tex.  225  (compare  English  v.  Helms,  4  Tex.  228;  Muclderoy 
V.  Bethany,  23  Tex.  163).  See  also  Brown  v.  Jordhal,  32  Minn.  135;  Merritt  v.  Cor- 
nell, 1  E.  D.  Smith,  335. 

2  Biery  v.  Haines,  5  "WTiart.  563;  Hess's  Estate,  150  Pa.  346,  contra.  Where  the 
instrument  recited  that  the  parties  had  sealed  it,  the  presumption  was  held  appU- 
cable  in  Davis  v.  Burton,  4  111.  41;  McLean  v.  Wilson,  4  111.  50;  Trogdon  v.  Cleveland 
Stone  Co.,  53  lU.  App.  206;  Ryan  v.  Cooke,  152  lU.  302;  Tasker  v.  Bartlett,  5  Cush. 
359;  Lunsford  v.  La  Motte  Lead  Co.,  54  Mo.  426;  Burnett  v.  McCluey,  78  Mo.  676, 
688;  Pequawkett  Bridge  v.  Mathes,  7  N.  H.  230;  Tenney  v.  East  Warren  Lumber 
Co.,  43  N.  H.  343;  Bowman  v.  Robb,  6  Pa.  302.  See  also  Yarborough  v.  Monday,  3 
Dev.  420;  Hollis  v.  Pond,  7  Humph.  222;  LamMen  v.  Sharp,  9  Humph.  224.  But  see 
Stabler  v.  Cowman,  7  G.  &  J.  284;  State  v.  Humbird,  54  Md.  327,  contra.  In  Cooch 
V.  Goodman,  2  Q.  B.  580,  598,  Lord  Denman,  C.  J.,  said:  "It  is  true  that  one  piece 
of  wax  may  serve  as  a  seal  for  several  persons  if  each  of  them  impresses  it  himself,  or 
one  for  all,  by  proper  authority,  or  in  the  presence  of  all,  as  was  held  in  Ball  v.  Dun- 
sterville,  4  T.  R.  313,  following  Lord  Lovelace's  case,  5  B.  &  C.  355,  but  then  it  must 
appear  by  the  deed,  and  profess  to  be  the  seal  of  each." 

11 


322  SAUNDERS    V.    SAUNDERS  [CHAP.   II 

a  seal,  and  the  others  add  seals  to  their  names,  without  the  direc- 
tion or  consent  of  the  first,  then  he  cannot  be  presumed  to  adopt  their 
seals  as  his,  and  it  continues  as  to  him,  a  simple  instrument,  as  it 
was  when  he  first  executed  it.'^  Nor  would  this  prevent  it  from  being 
a  sealed  instrument  as  to  those  who  deliberately  attached  their  seals. 
As  to  one  of  the  makers  of  this  note,  it  was  a  sealed  instrument,  and 
assumpsit  could  not  be  maintained  upon  it. 

The  judgment  must  be  reversed.  Judgment  reversed. 


HANNAH  F.  SAUNDEES  v.  CHAKLES  E.  SAUNDERS 

Supreme  Judicial  Court  of  Massachusetts,   January  21,   1891- 

September  3,  1891 

[Reported  in  154  Massachusetts,  337] 

Morton,  J.  This  action  is  brought  by  the  plaintiff  upon  an  in- 
strument under  seal  to  which  she  is  not  a  party,  and  of  which  none 
of  the  consideration  moved  from  her.  The  instrument  is  signed  by 
Charles  E.  Saunders,  the  defendant,  and  is  between  him  and  George 
M.  Saunders,  who  together,  and  the  survivor  of  them,  were  entitled 
to  the  income  of  a  trust  fund.  The  consideration  is  one  dollar  paid 
by  said  George  M.  Saunders,  and  like  covenants  on  the  part  of  said 
George  with  said  Charles  to  those  contained  in  the  instrument  de- 
clared on.  The  covenants  or  agreements  in  the  instrument  relied 
on  are  as  follows :  "I,  the  said  Charles  F.  Saunders,  do  hereby  cove- 
nant and  agree  to  and  with  the  said  George  M.  Saunders,  and  to 
and  with  such  person  as  may  be  the  wife  of  said  George  M.  Saunders 
at  the  time  of  his  decease,  that  if  the  said  George  M.  shall  die  in 
my  lifetime,  leaving  a  widow  living,  I  will,  from  and  after  the  de- 
cease of  said  George  M.,  and  during  my  lifetime,  pay  over  to  such 
person  as  may  be  the  widow  of  said  George  M.,  one  third  of  the 
entire  income  aforesaid  to  which  I  may  be  entitled  as  such  survivor." 
The  plaintiff  is  the  widow  of  George,  and  it  is  clear  that,  so  far  as 
she  relies  upon  the  covenant  and  agreements  made  between  her  hus- 
band and  the  defendant  for  her  benefit,  they  will  not  support  this  ac- 
tion. It  is  well  settled  in  this  State,  in  regard  to  simple  contracts, 
that  "a  person  who  is  not  a  party  to  a  simple  contract,  and  from 
whom  no  consideration  moves,  cannot  sue  on  the  contract,  and  con- 
sequently that  a  promise  made  by  one  person  to  another,  for  the 
benefit  of  a  third  person  who  is  a  stranger  to  the  consideration,  will 
not  support  an  action  by  the  latter."  Exchange  Bank  v.  Rice,  107 
Mass.  37,  and  cases  cited.  Rogers  v.  Union  Stone  Co.,  130  Mass. 
TjSI  ;  New  England  Dredging  Co.  v.  Rockport  Granite  Co.,  149 
Mass.  381;  Marston  v.  Bigelow,  150  Mass.  45.     In  regard  to  con- 

'  Rankin  v.  Rolcr,  8  Grutt.  03,  ace. 


SECT.    l]  SAUNDERS    V.    SAUNDERS  323 

tracts  under  seal,  the  law  has  always  been  that  only  those  who  were 
parties  to  them  could  sue  upon  them.  Saunders  v.  Filley,  12  Pick. 
554;  Johnson  v.  Foster,  12  Met.  167;  ISTorthampton  v.  Elwell,  4 
Gray,  81;  Flynn  v.  North  American  Ins  Co.,  115  Mass.  449;  Flynn 
V.  Massachusetts  Benefit  Association,  152  Mass.  288.  The  case  of 
Felton  V.  Dickinson,  10  Mass.  287,  to  which  this  case  would  seem 
to  be  somewhat  analagous,  is  fully  explained  in  Marston  v.  Bigelow, 
uhi  supra,  and  is  authority  only  to  the  extent  there  indicated. 

It  is  suggested,  however,  that,  somewhat  after  the  analogy  fur- 
nished by  letters  of  credit,  the  plaintiff  may  avail  herself  of  so 
much  of  the  covenants  and  agreements  as  purports  to  be  made  "to 
and  with  such  person  as  may  be  the  wife  of  said  George  M.  Saunders 
at  the  time  of  his  decease;"  that  is,  that  this  covenant  amounts  to 
a  promise  on  the  part  of  the  defendant  to  whomsoever  may  be  the 
wife  of  George  M.  Saunders  at  his  death,  that  he  will  pay  her  an- 
nually thereafter  a  certain  sum  so  long  as  he  shall  live,  and  that 
the  plaintiff,  being  the  wife  of  said  George,  may  therefore  maintain 
an  action  upon  it.  But  it  is  to  be  observed  that  the  covenant  did 
not  purport  to  create  a  present  agreement  with  the  person  who  was 
the  wife  of  George  at  the  time  the  agreement  between  him  and  the 
defendant  was  executed;  neither  does  it  purport  to  be  a  continuing 
offer  or  promise  on  the  part  of  the  defendant,  as  in  the  case  of  a 
letter  of  credit  or  an  offer  of  reward,  that,  if  the  person  who  shall 
be  the  wife  of  George  at  the  time  of  his  decease  shall  do  certain 
things,  then  the  defendant  will  pay  her  a  certain  sum.  On  the  con- 
trary, it  was  an  attempt  to  create  a  covenant  to  arise  wholly  in  the 
future  between  the  defendant  and  a  party  who  at  the  time  was  un- 
ascertained, and  from  whom  no  consideration  was  to  move,  and  who 
was  not  in  any  way  privy  to  the  contract  between  the  defendant  and 
said  George.    We  do  not  think  this  can  be  done. 

The  question  whether  the  administrator  or  executor  of  the  hus- 
band of  the  plaintiff  may  not  maintain  an  action  on  the  agreement 
for  her  benefit,  or  whether  she  may  not  herself  bring  suit  in  the 
name  of  the  executor  or  administrator,  has  not  been  argued  to  us, 
and  we  have  not  therefore  considered  it.  For  these  reasons,  a  ma- 
jority of  the  Court  think  that,  according  to  the  agreement,  the  entry 
must  be,  Judgment  for  the  defendant. 


324  o'GRADY    v.   HOWE   &   ROGERS   CO.  [CHAP.   II 


JAMES    M.    E.    O'GEADY,    As    Executor,    etc.,   of    MARIA 

WHITELOCK,  Deceased,   Respondent,   v.   HOWE   &  ROGERS 

COMPANY   AND    CHARLES    M.    THOMS,    Appellants 

I^EW  Yoke  Supreme  Court,  Appellate  Division,  March  3,  1915 
{^Reported  in  166  New  York  Appellate  Division,  552] 

RoBsoN,  J.  This  was  a  suit  by  a  vendor  against  a  corporation 
and  its  agent  to  obtain  specific  performance  of  a  contract  to  convey 
real  estate.  A  written  option  was  signed  and  sealed  by  the  plaintiff 
and  by  Thorns,  who  was  acting  as  agent  for  the  Howe  &  Rogers  Co. 
(whose  name,  however,  did  not  appear  in  the  contract)  purporting  to 
give  an  option  to  Thoms.  Within  the  time  limited  in  the  option, 
Thoms  delivered  to  the  plaintiff  an  acceptance  thereof  in  writing, 
signed  by  him. 

The  first  objection  raised  by  appellant  Howe  &  Rogers  Company 
is  pointed  to  the  initial  proposition  that  the  contract  is  under 
seal,  and  that,  therefore,  even  though  Thoms  was  in  fact  act- 
ing as  the  agent  of  Howe  &  Rogers  Company,  under  the  es- 
tablished law  announced  in  many  decisions  no  person,  save 
the  parties  named  in  the  contract  and  who  actually  signed  it, 
can  sue  or  be  sued  thereon.  This  statement  of  the  law  is  unim- 
peachable, and  was  reasserted  in  the  recent  case  entitled  Case  v. 
Case  (203  IST.  Y.  263).  But  it  seems  to  me  that  the  contract  which 
plaintiff  seeks  to  enforce  in  this  action  is  not  under  seal.  True,  the 
preliminary  option  agreement  is  under  seal.  But  that  agreement 
standing  by  itself  gave  neither  party  a  right  to  enforce  it  as  a 
contract  to  sell  the  land.  No  obligation  to  accept  the  option  rested  on 
Thoms.  Something  more  must  be  done  by  him  before  any  contract 
of  sale  came  into  being.  That  was  an  acceptance  of  the  option  by 
Thoms  within  the  period  of  the  option.  This  he  did  by  the  written 
acceptance  above  adverted  to;  but  this  acceptance  was  not  under 
seal.  It  would  seem  to  follow  that  the  rule  of  law  above  stated  can- 
not apply  to  prevent  proof  of  the  fact  for  whom  Thoms  was  acting 
in  accepting  the  option.  It  is  the  acceptance,  and  not  the  sealed 
option,  that  must  be  considered  in  determining  whether  Thorn's 
agreement  to  purchase  was  a  contract  under  seal.^ 

'  Thf;  statement  of  facts  is  abbreviated  and  a  portion  of  the  opinion  omitted. 


SECT.   Il]  ROBERTS    V.    SECURITY    CO.   LTD.  325 

SECTION   II 

DELIVERY 

Feom  BUTLEE  and  BAKER'S  CASE 

King's  Bench,  1591 

{^Reported  in  3  Coke,  25  a,  26  &] 

If  a  makes  an  obligation  to  B  and  delivers  it  to  C  to  the  use  of 
B,  this  is  the  deed  of  A  presently;  but  if  C  offers  it  to  B,  there  B 
may  refuse  it  in  pais,  and  thereby  the  obligation  will  lose  its  force 
(but  perhaps  in  such  case  A  in  an  action  brought  on  this  obligation 
cannot  plead  non  est  factum,  because  it  was  once  his  deed). 


EGBERTS  V.   SECURITY   COMPANY,   LIMITED 

Court  of  Appeal,  1896 
[Reported  in  [1897]  1  Q.  B.  Ill] 

Appeal  by  the  defendants  from  the  judgment  of  a  Divisional 
Court  (Grantham  and  "Wright,  JJ.)  affirming  the  decision  of  the 
judge  of  the  Leeds  County  Court. 

The  action  was  brought  upon  a  policy  of  insurance  against  loss 
by  burglary  or  housebreaking. 

The  plaintiff  on  December  14,  1895,  signed  and  sent  to  the  defend- 
ants a  proposal  for  an  insurance  to  the  amount  of  167Z.  upon  furni- 
ture and  other  chattels  in  a  dwelling-house  against  loss  by  burglary 
or  housebreaking.  The  proposal,  which  was  made  upon  a  printed 
form,  stated  that  the  proposer  agreed  to  acept  a  policy  subject  to 
the  usual  conditions  prescribed  by  the  company  and  indorsed  on 
that  policy.  It  was  stated  by  the  form  that  the  policy  was  renew- 
able on  the  1st  of  the  month,  and  the  premium  for  the  odd  time 
over  twelve  months  was  to  be  added  to  the  first  year's  premium; 
and  that  no  insurance  would  be  considered  in  force  until  the  premium 
had  been  paid.  The  proposal  stated  that  the  annual  premium  was 
to  be  95.  %d.,  and  the  first  premium  95.  lid.,  2d.  being  the  addition 
in  respect  of  the  odd  time. 

On  December  18  a  document  called  a  protection-note  was  signed 
by  the  defendants'  agent  in  which  it  was  stated  that  the  plaintiff, 
having  made  a  proposal  to  the  company  for  insurance  against  loss 
arising  from  burglary  or  housebreaking  for  the  sum  of  167?.  on 
property  described  in  the  proposal,  and  having  paid  to  the  agent 
the  sum  of  £ (the  blank  not  being  filled  up),  was  thereby  de- 
clared to  be  provisionally  protected  against  that  risk  (subject  to  the 


326  ROBERTS    V.    SECURITY    CO.    LTD.  [CHAP.    II 

conditions  contained  iv-  and  indorsed  on  the  form  of  policy  used  by 
the  company)  for  seven  days  from  the  date  thereof,  or  until  the 
proposal  should  be  in  the  meantime  rejected.  The  i^rotection-note 
contained  a  note  that,  in  the  event  of  the  proposal  being  declined, 
the  deposit  paid  would  be  refunded  less  the  proportion  of  the  premium 
for  the  period  covered.  The  protection-note  was  sent  by  the  de- 
fendants' agent  to  the  plaintiff  in  a  letter  stating  that  a  policy  would 
be  sent  in  due  course.  ISTo  sum  of  money  ever  was  paid  by  way  of 
premium.  On  the  night  of  December  26,  or  early  in  the  morning 
of  December  27,  a  burglary  was  committed  on  the  plaintiif's  premises 
and  a  loss  of  some  of  the  property  alleged  by  the  plaintiff  to  be 
insured  was  thereby  occasioned.  Upon  December  27,  at  a  meeting 
of  directors  of  the  defendants'  company,  who  were  then  ignorant 
of  the  fact  that  the  loss  had  taken  place,  the  seal  of  the  company 
was  affixed  to  a  policy  of  insurance  in  conformity  with  the  pro- 
posal; and  the  policy  was  signed  by  two  of  the  directors  of  the  com- 
pany and  their  secretary.  The  policy  recited  that  the  plaintiff  had 
made  a  proposal  dated  December  14,  1895,  to  the  company  for  an 
assurance  of  the  property  thereinafter  described  for  the  sum  therein- 
after appearing,  and  had  paid  to  the  company  the  sum  called  in 
the  margin  thereof  the  first  premium,  being  the  premium  required 
by  the  company  for  the  assurance  of  the  said  property  from  noon 
of  December  14,  1895,  to  noon  of  January  1,  1897,  and  purported 
to  insure  the  property  described  accordingly.  In  the  margin  were 
notes  stating  that  95.  lid,  was  the  sum  paid  for  the  first  premium, 
that  the  renewal  date  was  January  1,  annually,  and  that  the  re- 
newal premium  was  9s.  9d.  It  was  provided  by  the  policy  that  no 
assurance  by  way  of  renewal  or  otherwise  should  be  held  to  be  af- 
fected until  the  premium  due  thereon  should  have  been  paid.  The 
policy  was  not  delivered  to  the  plaintiff,  but  remained  at  the  com- 
pany's office.  The  plaintiff  stated  in  evidence  that  he  had  never 
paid  the  premium,  because  he  had  never  been  asked  for  it.  The  de- 
fendants denied  liability  on  the  ground  that,  when  the  burglary  took 
place,  no  contract  for  insurance  had  been  concluded. 

Channel],  Q.  C,  and  G.  M.  Cohen,  for  the  defendants. 

Longstaffe,  for  the  plaintiff. 

The  county  court  judge  gave  judgment  for  the  plaintiff. 

Lord  Esher,  M.  R.  In  my  opinion  this  appeal  fails.  In  this 
case  there  was  a  proposal  for  insurance  which  was  accepted.  It 
does  not  appear  to  me  material  to  consider  what  would  have  been 
the  effect  of  the  proposal  and  the  acceptance  of  it,  if  the  matter  had 
rested  there.  The  transaction  had  gone  beyond  that  stage;  for  a 
policy  was  executed  under  the  seal  of  the  company  and  the  effect 
of  that  is  what  we  have  to  consider.  The  question  raised  is  whether 
an  insurance  was  effected  by  the  sealing  and  signing  of  the  policy, 
or  the  execution  of  the  policy  was  only  intended  to  be  conditional. 
I  do  not  see  any  evidence  of  a  conditional  delivery,  or  that  this  docu- 


SECT.    II  ]  ROBERTS    V.    SECURITY    CO.    LTD.  327 

ment  was  intended  not  to  be  a  policy  unless  certain  conditions  were 
fulfilled.  The  document  states  that  in  witness  thereof  the  company 
have  caused  their  common  seal  to  be  affixed,  and  that  the  under- 
signed, being  two  directors  and  the  secretary  of  the  company,  have 
thereunto  set  their  hands.  It  is  urged  that  the  document  was  still 
in  the  hands  of  the  company  or  of  their  officers  on  their  behalf. 
There  is  no  suggestion  that  it  was  delivered  to  any  one  as  an  escrow. 
If  it  was  in  the  hands  of  the  company  itself,  it  could  not  be  delivered 
as  an  escrow.  The  proper  inference  appears  to  me  to  be  that  the 
directors  simply  executed  the  policy,  and  the  fact  that  it  remained 
in  their  hands,  or  I  should  suppose  in  the  hands  of  their  secretary 
on  their  behalf,  does  not  seem  to  me  material.  The  company  might 
have  delivered  the  policy  to  some  one  to  hold  as  an  escrow,  but 
they  did  not  and  never  intended  to  do  so.  The  policy  was  in  my 
opinion  executed  by  the  company  and  was  not  executed  conditionally. 
Therefore  we  must  take  it  that  there  is  an  existing  policy,  and  all 
we  have  to  do  is  to  construe  it.  It  is  a  contract  to  insure  the  plain- 
tiff against  loss  of  the  property  insured  by  burglary  or  housebreaking 
from  December  14,  1895,  to  January  1,  1897,  and  it  recites  that  the 
assured  has  paid  the  premium  for  that  insurance.  It  was  said  that 
that  recital  was  incorrect,  and  that  the  premium  so  stated  to  have 
been  paid  never  was  in  fact  paid.  I  do  not  think  the  defendants  are 
for  the  present  purpose  at  liberty  to  show  that  in  contradiction  of 
the  terms  of  their  own  deed.  They  have  treated  the  premium  as 
paid,  and,  if  it  has  not  been  paid,  I  think  they  have  thereby  waived 
the  previous  payment  as  a  condition  of  the  existence  of  an  insurance. 
With  regard  to  the  alleged  custom  in  the  case  of  marine  insurance, 
which  has  been  referred  to,  it  is  rather  a  practice  than  a  custom 
properly  so  called.  It  is  not  confined  to  any  particular  place,  but 
is  a  general  practice  for  the  convenience  of  trade.  If,  as  I  think, 
the  company  have  by  the  terms  of  the  policy  which  they  have  exe- 
cuted waived  the  previous  payment  of  the  premium  as  a  condition 
of  the  insurance,  what  is  the  result  ?  It  appears  to  me  that  they  may 
claim  payment  of  the  premium  at  any  time,  or,  if  there  is  a  loss 
before  it  is  paid,  it  may  be  deducted  from  the  amount  payable  in 
respect  of  that  loss,  but  they  cannot,  after  they  have  executed  a 
deed  in  these  terms,  get  rid  of  liability  merely  on  the  ground  that 
the  premium  has  not  been  previously  paid.  For  these  reasons  I 
think  the  appeal  must  be  dismissed.^ 

*  Lopes,  L.  J.,  and  Rigbt,  L.  J.,  delivered  concurring  opinions.  The  decision 
follows  Xenos  v.  Wickham,  L.  R.  2  H.  L.  296.  In  that  case  the  House  of  Lords,  revers- 
ing the  decision  of  the  Exchequer  Chamber,  held  a  policy  of  insurance  had  become 
operative  though  still  in  the  possession  of  the  company.  The  judges  were  called  upon 
for  their  opinions  and  Mellor  and  Blackburn,  J.T.,  and  Pigott,  B.,  were  of  opinion  that 
the  policy  had  been  delivered:  Smith  and  Willes,  .IJ.,  were  of  a  contrary  opinion.  The 
Lord  Chancellor  (Chelmsford)  shared  the  opinion  of  the  minority  of  the  .ludges  and 
Lord  Cranworth  that  of  the  majority.  Doe  v.  Knight,  5  B.  &  C.  671;  Hall  v.  Palmer, 
3  Hare,  532;  Fletcher  v.  Fletcher,  4  Hare,  67:  Dillon  v.  Coffin,  4  M.  &  Cr.  647;  Exton 
V.  Scott,  6  Sim.  31;  .Jeffries  v.  Alexander,  8  H.  L.  C.  594;  Bonfield  v.  Hassell,  32  Beav. 
217,  ace.    Conf.  Cracknall  v.  Janson,  11  Ch.  D.  1. 


328  WALTHAM,   ANONYMOUS  [CHAP.   11 


MAEY  MEIGS  v.   MAKY  J.  DEXTER 

Supreme  Judicial  Court  of  Massachusetts,  October   18- 
November  23,  1898 

[Reported  in  172  Massachusetts,  217] 

Knowlton,  J.^  On  the  question  whether  there  was  a  delivery  of 
the  deed,  the  judge  instructed  the  jury  that  if  Hannah  Hall,  after 
signing  the  deed,  placed  it  upon  the  table,  or  placed  it  in  Captain 
Macomber's  hands  with  the  intention  that  it  should  become  effective 
and  operative,  then  there  was  a  good  delivery  of  the  deed.  The 
petitioner  excepted  to  this  instruction.  The  testimony  tended  to 
show  that  Captain  Macomber  was  merely  a  scrivener  before  whom 
the  deed  was  laid  upon  the  table  after  it  was  signed,  and  that  he 
went  away  and  left  it  there,  not  representing  the  grantee  in  any 
way. 

We  are  of  opinion  that  the  instruction  was  erroneous  in  omitting 
to  embody  the  requirement  that  there  should  be  an  acceptance  of 
the  deed  by  some  one  representing  the  grantee.  It  is  well  settled 
in  this  Commonwealth  that  the  delivery  of  a  deed  is  not  complete 
and  effectual  without  an  acceptance  by  the  grantee,  or  by  some 
one  authorized  to  represent  him,  or  who  assumes  to  represent  him, 
and  whose  act  of  acceptance  is  afterwards  ratified.  Hawkes  v.  Pike, 
105  Mass.  560;  Commonwealth  v.  Cutler,  153  Mass.  252;  Barnes  v. 
Barnes,  161  Mass.  381.^ 


SECTIOIT  III 
CONSIDERATION 


WALTHAM,  arguendo,  in  ANONYMOUS,  1385. 

[Reported  in  Bellewe,  111] 

In  debt  on  contract  the  plaintiff  shall  show  in  his  count  for  what 
pause  the  defendant  became  his  debtor.  Otherwise  in  debt  on  ob- 
ligation, for  the  obligation  is  contract  in  itself.^ 

'  A  portion  of  the  caso  is  omitted. 

*  Almost  !ill  of  the  numerous  casos  on  dolivory  of  scaled  instruments  have  arisen  in 
roKarrl  to  convfyancos,  and  the  subject  is  penorally  treated  in  connection  with  the 
law  f)f  conveyaneinK.  See  Gray's  cases  on  Property,  Vol.  III.  pp.  633-735;  Devlin 
on  Deeds,  5  200  d  xr/j. 

»  Also  reported  in  Bellewe.  .S2:  Fitz.  Ah.  Aiuiuitie,  pi.  64. 


SECT.    Ill]  SHARINGTON    V.    STROTTON  329 

BEOMLEY,  Arguendo,  in  SHAKINGTON  v.  STROTTON" 

King's  Bench,  1565 

[Reported  in  1  Plowden,  298,  308  a] 

And,  Sir,  by  the  law  of  this  land  there  are  two  ways  of  making 
contracts  or  agreements  for  lands  or  chatties.     The  one  is,  by  words, 
which  is  the  inferior  method;  the  other  is,  by  writing,  which  is  the 
superior.     And  because  words  are  oftentimes  spoken  by  men  un- 
advisedly and  without  deliberation,  the  law  has  provided  that  a  con- 
tract  by   words   shall   not   bind   without   consideration.     And   if  I 
promise  to  give  you  20Z.  to  make  your  sale  de  novo,  here  you  shall 
not  have  an  action  against  me  for  the  201.,  as  it  is  affirmed  in  the 
said  case  in  17  Ed.  4,  for  it  is  a  nude  pact,  et  ex  nudo  pacto  non 
oritur  actio.     And  the  reason  is,  because  it  is  by  words  which  pass 
from  men  lightly  and  inconsiderately,  but  where  the  agreement  is 
by  deed,  there  is  more  time  for  deliberation.    For  when  a  man  passes 
a  thing  by  deed,  first  there  is  the  determination  of  the  mind  to  do 
it,  and  upon  that  he  causes  it  to  be  written,  which  is  one  part  of 
deliberation,  and  afterwards  he  puts  his  seal  to  it,  which  is  another 
part  of  deliberation,  and  lastly  he  delivers  the  writing  as  his  deed, 
which  is  the  consummation  of  his  resolution;  and  by  the  delivery 
of  the  deed  from  him  that  makes  it  to  him  to  whom  it  is  made,  he 
gives  his  assent  to  part  with  the  thing  contained  in  the  deed  to  him 
to  whom  he  delivers  the  deed,  and  this  delivery  is  as  a  ceremony 
in  law,  signifying  fully  his  good-will  that  the  thing  in  the  deed  should 
pass  from  him  to  the  other.     So  that  there  is  great  deliberation 
used  in  the  making  of  deeds,  for  which  reason  they  are  received  as 
a  lien  final  to  the  party,  and  are  adjvidged  to  bind  the  party  without 
examining  upon  what  cause  or  consideration  they  were  made.     And 
therefore  in  the  case  put  in  17  Ed.  4,  put  it  thus,  that  I  by  deed 
promise  to  give  you  20Z.  to  make  your  sale  de  novo,  here  you  shall 
have  an  action  of  debt  upon  this  deed,  and  the  consideration  is  not 
examinable,  for  in  the  deed  there  is  a  sufficient  consideration,  viz. 
the  will  of  the  party  that  made  the  deed.    And  so  where  a  carpenter, 
by  parol  without  writing,  undertook  to  build  a  new  house,  and  for 
the  not  doing  of  it  the  party  in  11  H.  4,  brought  an  action  of  cove- 
nant against  the  carpenter,  there  it  does  not  appear  that  he  should 
have  anything  for  building  the  house,  and  it  was  adjudged  that  the 
plaintiff  should  take  nothing  by  his  writ :  but  if  it  had  been  by 
specialty,  it  would  have  been  otherwise;  and  so  it  is  there  held  by 
Thirning,  causa  qua  supra.     So  in  45  Ed.  3,  in  debt,  the  plaintiff 
counted  that  a  covenant  was  made  between  him  and  the  defendant, 
that  the  plaintiff  should  marry  the  defendant's  daughter,  and  that 
the  defendant  should  be  bound  to  him  in  100/.,  and  he  said  that  he 
had  married  his  daughter;  and  the  count  was  challenged,  because 
this  debt  is  demanded  upon  a  contract  touching  matrimony,  which 


330  KRELL    V.    CODMAN  [CHAP.    II 

ought  to  be  in  Court  Christian;  but  notwithstanding  this,  forasmuch 
as  he  demanded  a  debt  upon  a  deed,  whereby  it  was  become  a  lay- 
contract,  he  was  put  to  answer :  but  otherwise  it  would  have  been  if 
it  had  been  without  deed,  as  it  is  there  put;  and  14  Ed.  4,  and  also 
17  Ed.  4,  are,  that  if  it  be  without  deed  the  action  does  not  lie,  be- 
cause the  marriage,  which  is  the  consideration,  is  a  thing  spiritual : 
which  books  are  contrary  to  the  opinion  of  Thorp  in  the  said  case 
in  22  Ass.  fol.  305.  So  that  where  it  is  by  deed,  the  cause  or  con- 
sideration is  not  enquirable,  nor  is  it  to  be  weighed,  but  the  party 
ought  only  to  answer  to  the  deed,  and  if  he  confesses  it  to  be  his 
deed,  he  shall  be  bound,  for  every  deed  imports  in  itself  a  considera- 
tion, viz.,  the  will  of  him  that  made  it,  and  therefore  where  the 
agreement  is  by  deed,  it  shall  never  be  called  a  nudum  pactum. 
And  in  an  action  of  debt  upon  an  obligation,  the  consideration  upon 
which  the  party  made  the  deed  is  not  to  be  enquired,  for  it  is  suffi- 
cient to  say  that  it  was  his  will  to  make  the  deed.^ 


PAUL  K.  L.  E.  SHELL  and  Another  v.  EGBERT  CODMAl^ 

SuPEEME  Judicial  Court  of  Massachusetts,   November   12, 
13,  1890-October  24,  1891 

[Reported  in  154  Massachusetts,  454] 

Holmes,  J.  This  is  an  action  on  a  voluntary  covenant  in  an 
indenture  under  seal,  executed  by  the  defendant's  testatrix  in  Eng- 
land, that  her  executors,  within  six  months  after  her  death,  should 
pay  to  the  plaintiffs,  upon  certain  trusts,  the  sum  of  2,500Z.,  with 
interest  at  four  per  cent  from  the  day  of  her  death. 

It  is  agreed  that  by  the  law  of  England  such  a  covenant  consti- 
tutes a  debt  of  the  covenantor  legally  chargeable  upon  his  or  her 
estate,  ranking  after  debts  for  value,  but  before  legacies.  But  it 
is  contended  by  the  defendant  that  a  similar  instrument  executed 
here  would  be  void.  The  testatrix  died  domiciled  in  Massachusetts, 
and  the  only  question  is  whether  the  covenant  can  be  enforced  here. 
Tf  a  similar  covenant  made  here  would  be  enforced  in  our  courts, 
the  plaintiffs  are  entitled  to  recover,  and  in  the  view  which  we  take 
on  that  question  it  is  needless  to  examine  with  nicety  how  far  the 
case  can  be  governed  by  the  English  law  as  to  domestic  covenants, 
and  how  far  by  that  of  Massachusetts. 

In  our  opinion,  such  a  covenant  as  the  present  is  not  contrary  to 
the  policy  of  our  laws,  and  could  be  enforced  here  if  made  in  this 

*  "I  would  havn  one  casn  Hhowcd  by  mon  lournod  in  the  law,  whoro  there  is  a  deed, 
and  yet  thfrc  needs  a  eonsidoration;  as  for  parol,  the  law  adjiidRoth  it  too  Hsht  to 
give  action  without  consideration;  but  a  deed  ever  in  Inw  imports  a  consideration, 
because!  of  th*;  delibf.-rution  and  ceremony  in  the  confection  of  it."  Bacon  on  Uses, 
13  (about  1002). 


SECT.    Ill]  KRELL    V.    CODMAN  331 

State.  If  it  were  a  contract  upon  valuable  consideration,  there  is 
no  doubt  it  would  be  binding.  Parker  v.  Coburn,  10  Allen,  82.  "We 
presume  that,  in  the  absence  of  fraud,  oppression,  or  unconscion- 
ableness,  the  courts  would  not  inquire  into  the  amount  of  such  con- 
sideration. Parish  v.  Stone,  14  Pick.  198,  207.  This  being  so,  con- 
sideration is  as  much  a  form  as  a  seal.  It  would  be  anomalous  to 
say  that  a  covenant  in  all  other  respects  unquestionably  valid  and 
binding  (Comstock  v.  Son,  154  Mass.  389,  and  Mather  v.  Corliss^ 
103  Mass.  568,  571)  was  void  as  contravening  the  policy  of  our 
.statute  of  wills,  but  that  a  parol  contract  to  do  the  same  thing  in 
consideration  of  a  bushel  of  wheat  was  good.  So,  again,  until  lately 
an  oral  contract  founded  on  a  sufficient  consideration  to  make  a 
certain  provision  by  will  for  a  particular  person  was  valid.  Wel- 
lington V.  Apthorp,  145  Mass.  69.  Now,  by  statute,  no  agreement 
of  that  sort  shall  be  binding  unless  agreement  is  in  writing,  signed 
by  the  party  Avhose  executor  is  sought  to  be  charged,  or  by  an  author- 
ized agent.  St.  1888,  c.  372.  Again,  it  would  be  going  a  good  way 
to  say  by  construction  that  a  covenant  did  not  satisfy  this  statute. 

The  truth  is,  that  the  policy  of  the  law  requiring  three  witnesses 
to  a  will  has  little  application  to  a  contract.  A  will  is  an  ambula- 
tory instrument,  the  contents  of  which  are  not  necessarily  com- 
municated to  any  one  before  the  testator's  death.  It  is  this  fact 
which  makes  witnesses  peculiarly  necessary  to  establish  that  the 
document  offered  for  probate  was  executed  by  the  testator  as  a  final 
disposition  of  his  property.  But  a  contract  which  is  put  into  the 
hands  of  the  adverse  party,  and  from  which  the  contractor  cannot 
withdraw,  stands  differently.  See  Perry  v.  Cross,  132  Mass.  454, 
456,  457.  The  moment  it  is  admitted  that  some  contracts  which 
are  to  be  performed  after  the  testator's  death  are  valid  without  three 
witnesses,  a  distinction  based  on  the  presence  or  absence  of  a  valu- 
able consideration  becomes  impossible  with  reference  to  the  objection 
which  we  are  considering.  A  formal  instrument  like  the  present, 
drawn  up  by  lawyers  and  executed  in  the  most  solemn  form  known 
to  the  law,  is  less  likely  to  be  a  vehicle  for  fraud  than  a  parol  con- 
tract based  on  a  technical  detriment  to  the  promisee.  Of  course, 
we  are  not  now  speaking  of  the  rank  of  such  contracts  inter  sese. 
Stone  V.  Gerrish,  1  Allen,  175,  cited  by  the  defendant,  contains  some 
ambiguous  expressions,  but  was  decided  on  the  ground  that  the  in- 
strument did  not  purport  to  be  and  was  not  a  contract.  Cover  v. 
Stem,  67  Md.  449,  was  to  like  effect.  The  present  instrument  in- 
disputably is  a  contract.  It  was  drawn  in  English  form  by  English 
lawyers,  and  must  be  construed  by  English  law.  So  construed,  it 
created  a  debt  on  a  contingency  from  the  covenantor  herself,  which 
if  she  had  gone  into  bankruptcy  would  have  been  provable  against 
her.  Ex  parte  Tindal,  8  Bing.  402 ;  s.  c.  1  D.  &  Ch.  291,  and  Mont. 
375,  462;  Robson,  Bankruptcy  (5th  ed.),  274.  The  cases  of  Parish 
V.  Stone,  14  Pick.  198,  and  Warren  v.  Durfee,  126  Mass.  338,  were 


332  KRELL    V,    CODMAN  [CHAP.   II 

actions  on  promissory  notes,  and  were  decided  on  the  ground  of  a 
total  or  partial  want  of  consideration. 

There  is  no  question  here  of  any  attempt  to  evade  or  defeat  rights 
of  third  persons,  which  would  have  been  paramount  had  the  cove- 
nantor left  the  sum  in  question  as  a  legacy  by  will.  There  is  no 
ground  for  suggesting  an  intent  to  evade  the  provisions  of  our  law 
regulating  the  execution  of  last  wills,  —  if  such  intent  could  be 
material  when  an  otherwise  binding  contract  was  made.  See  Stone 
■V.  Hackett,  12  Gray,  227,  232,  233.  There  was  simply  an  intent 
to  make  a  more  binding  and  irrevocable  provision  than  a  legacy 
could  be,  and  we  see  no  reason  why  it  should  not  succeed. 

Judgment  for  the  plaintiffs} 

'  In  many  States  the  distinction  between  sealed  and  unsealed  written  contracts  ia 
abolished.' 

In  most  of  these  States  it  is  also  enacted  that  any  written  contract  shall  be  pre- 
sumed to  have  been  made  for  suflBcient  consideration;  but  if  lack  of  consideration  is 
aflBrmatively  proved  the  contract  is  invalid. 

In  other  States  it  is  enacted  only  that  sealed  contracts  shall  be  presumed  in  the 
absence  of  contrary  evidence  to  have  been  made  for  sufficient  consideration,  and  in 
such  States  sealed  contracts  differ  from  ordinary  written  contracts  to  this  extent. 


CHAPTER  III 

PARTIES   AFFECTED   BY   CONTRACTS 


SECTION"    I 
CONTRACTS  FOR   THE   BENEFIT   OF  THIRD    PERSONS 


BOUEN'E  V.  MASON"  and  Another 

In  the  King's  Bench,  Hilary  Term,  1669 

{Reported  in  1  Ventris,  6] 

In  an  assumpsit,  the  plaintiff  declares,  that,  whereas  one  Parrie 
was  indebted  to  the  plaintiff  and  defendants  in  two  several  sums  of 
money,  and  that  a  stranger  was  indebted  in  another  sum  to  Parrie; 
that  there  being  a  communication  between  them,  the  defendants,  in 
consideration  that  Parrie  would  permit  them  to  sue,  in  his  name, 
the  stranger,  for  the  sum  due  to  hirn,  promised  that  they  would  pay 
the  sum  which  Parrie  owed  to  the  plaintiff;  and  alleged  that  Parrie 
permitted  them  to  sue,  and  that  they  recovered.  After  non-assump- 
sit pleaded,  and  a  verdict  for  the  plaintiff,  it  was  moved  in  arrest 
of  judgment  that  the  plaintiff  could  not  bring  his  action,  for  he 
was  a  stranger  to  the  consideration. 

But  in  maintenance  thereof,  a  judgment  was  cited  in  1658,  be- 
tween Sprat  and  Agar,  in  the  King's  Bench,  where  one  promised 
to  the  father,  in  consideration  that  he  would  give  his  daughter  in 
marriage  with  his  son,  he  would  settle  so  much  land.  After  the 
marriage  the  son  brought  the  action;  and  it  was  adjudged  maintain- 
able. And  another  case  was  cited  of  a  promise  to  a  physician,  that 
if  he  did  such  a  cure  he  would  give  such  a  sum  of  money  to  him- 
self and  another  to  his  daughter;  and  it  was  resolved  the  daughter 
might  bring  an  assumpsit.  Which  cases  the  court  agreed :  for  in 
the  one  case  the  parties  that  brought  the  assumpsit  did  the  meri- 
torious act,  though  the  promise  was  made  to  another;  and  in  the 
other  case,  the  nearness  of  the  relation  gives  the  daughter  the  bene- 
fit of  the  consideration  performed  by  her  father;  but  here  the  plain- 
tiff did  nothing  of  trouble  to  himself  or  benefit  to  the  defendant, 
but  is  a  mere  stranger  to  the  consideration ;  wherefore  it  was  adjudged 
quod  nil  capiat  per  hillam. 


334  DUNLOP   TYRE    CO.    V.    SELFRIDGE    &    CO.        [CHAP.    Ill 

DUNLOP  PNEUMATIC  TYRE  COMPANY,  Ltd.  Appellants,  v, 
SELFRIDGE  &  COMPANY,  Ltd.  Respondents 

In  the  House  of  Lokds,  April  26,  1915 

[Reported  in  [1915]  Appeal  Cases,  847] 

The  appellant,  a  manufacturer  of  motor  tyres  and  accessories, 
contracted  with  Messrs,  A.  J.  Dew  &  Co.,  dealers  in  such  goods,  to 
allow  the  latter  on  goods  sold  to  them  discounts  from  list  prices,  but 
on  condition  that  on  making  any  resale  they  should  require  the  sub- 
purchaser to  contract  to  maintain  list  prices.  A  form  was  provided 
for  such  sub-purchasers  to  sign,  by  which  the  sub-purchaser  in  terms 
agreed  to  pay  to  the  appellant  the  sum  of  £5  as  liquidated  damages 
for  every  tyre  cover  or  tube  sold  in  breach  of  his  agreement. 

Messrs.  Dew  &  Co.  sold  to  the  respondent  certain  goods  of  the 
appellant's  manufacture,  and  the  respondent  signed  the  agreement 
prescribed  for  sub-purchasers.  Subsequently  the  respondent  violated 
the  agreement  it  had  made  with  Dew  &  Company,  and  the  appellant 
began  this  action,  and  was  given  judgment  by  Phillimore,  J.  The 
Court  of  Appeal  reversed  his  decision,  and  this  appeal  was  thereupon 
taken. 

Lord  Dunedin.  My  Lords,  I  confess  that  this  case  is  to  my  mind 
apt  to  nip  any  budding  affection  which  one  might  have  had  for  the 
doctrine  of  consideration.  For  the  effect  of  that  doctrine  in  the 
present  case  is  to  make  it  possible  for  a  person  to  snap  his  fingers 
at  a  bargain  deliberately  made,  a  bargain  not  in  itself  unfair,  and 
which  the  person  seeking  to  enforce  it  has  a  legitimate  interest  to 
enforce.  Notwithstanding  these  considerations  I  cannot  say  that 
I  have  ever  had  any  doubt  that  the  judgment  of  the  Court  of  Appeal 
was  right. 

My  Lords,  I  am  content  to  adopt  from  a  work  of  Sir  Frederick 
Pollock,  to  which  I  have  often  been  under  obligation,  the  following 
words  as  to  consideration :  "An  act  or  forbearance  of  one  party,  or 
the  promise  thereof,  is  the  price  for  which  the  promise  of  the  other 
is  bought,  and  the  promise  thus  given  for  value  is  enforceable.'' 
(Pollock  on  Contracts,  8th  ed.,  p.  175.) 

Now  the  agreement  sued  on  is  an  agreement  which  on  the  face 
of  it  is  an  agreement  between  Dew  and  Selfridge.  But  speaking 
for  myself,  I  should  have  no  difficulty  in  the  circumstances  of  this 
case  in  holding  it  proved  that  the  agreement  was  truly  made  by 
Dew  as  ag(!nt  for  Dunlop,  or  in  other  words  that  Dunlop  was  the 
undisclosed  principal,  and  as  such  can  sue  on  the  agreement.  None 
the  less,  in  order  to  enforce  it  he  must  show  consideration,  as  above 
defined,  moving  from  Dunlop  to  Selfridge. 

In  the  circumstances,  how  can  he  do  so?  The  agreement  in  ques- 
tion ifl  not  an  agreement  for  sale.  It  is  only  collateral  to  an  agree- 
ment for  sale,  but  that  agreement  for  sale  is  an  agreement  entirely 


SECT.   I]  DUTTON    V.    POOLE  335 

between  Dew  and  Selfridge.  The  tyres,  the  property  in  which  upon 
the  bargain  is  transferred  to  Selfridge,  were  the  property  of  Dew, 
not  of  Dunlop,  for  Dew  under  his  agreement  with  Dunlop  held  these 
tyres  as  proprietor,  and  not  as  agent.  What  then  did  Dunlop  do, 
or  forbear  to  do,  in  a  question  with  Selfridge?  The  answer  must 
be,  nothing.  He  did  not  do  anything,  for  Dew,  having  the  right  of 
property  in  the  tyres,  could  give  a  good  title  to  any  one  he  liked, 
subject,  it  might  be,  to  an  action  of  damages  at  the  instance  of  Dun- 
lop for  breach  of  contract;  which  action,  however,  could  never  create 
a  vitium  reals  in  the  property  of  the  tyres.  He  did  not  forbear  in 
anything,  for- he  had  no  action  against  Dew  which  he  gave  up,  be- 
cause Dew  had  fulfilled  his  contract  with  Dunlop  in  obtaining,  on 
the  occasion  of  the  sale,  a  contract  from  Selfridge  in  the  terms  pre- 
scribed. 

To  my  mind,  this  ends  the  case.  That  there  are  methods  of  fram- 
ing a  contract  which  will  cause  persons  in  the  position  of  Selfridge 
to  become  bound,  I  do  not  doubt.  But  that  has  not  been  done  in 
this  instance  and  as  Dunlop's  advisers  must  have  known  of  the  law 
of  consideration,  it  is  their  affair  that  they  have  not  so  drawn  the 
contract. 

I  think  the  appeal  should  be  dismissed.^ 


DUTTON  AND  Wife  v.  POOLE 

In  the  King's  Bench,  Michaelmas  Tekm,  1677 

[Reported  in  2  Levinz,  210] 

Assumpsit,  and  declares  that,  the  father  of  the  plaintiff's  wife 
being  seised  of  a  wood,  which  he  intended  to  fell  to  raise 
portions  for  younger  children,  the  defendant,  being  his  heir,  in 
consideration  the  father  would  forbear  to  fell  it  at  his  request, 
promised  the  father  to  pay  his  daughter,  now  the  plaintiff's  wife, 
lOOOZ,  and  avers  that  the  father  at  his  request  forbore;  but  the 
defendant  had  not  paid  the  1000?.  After  verdict  for  the  plain- 
tiff upon  non-assumpsit,  it  was  moved  in  arrest  of  judgment, 
that  the  action  ought  not  to  be  brought  by  the  daughter,  but 
by  the  father;  or,  if  the  father  be  dead,  by  his  executors;  for  the 
promise  was  made  to  the  father,  and  the  daughter  is  neither  privy 
nor  interested  in  the  consideration,  nothing  being  due  to  her :  also 
the  father,  notwithstanding  this  agreement  with  the  son,  might  have 
cut  down  the  wood,  and  then  there  was  no  remedy  for  the  son,  nor 
could  the  daughter  have  released  the  promise,  and  therefore  she  can- 
not have  an  action  against  him  for  not  performing  the  promise.    .    .    . 

^  Viscount  Haldane,  L.  C,  Lord  Atkinson,  Lord  Parker  of  Waddington,  Lord 
Sumner  and  Lord  Parmoor,  delivered  concurring  opinions. 


336  TWEDDLE    V.    ATKINSON  [CHAP.    Ill 

On  the  other  side  it  was  said,  if  a  man  deliver  goods  or  money  to 
A.  to  deliver  or  pay  to  B.,  B,  may  have  an  action,  because  he  is  to 
have  the  benefit  of  the  bailment;  so  here  the  daughter  is  to  have 
the  benefit  oi  the  promise :  so  if  a  man  should  say,  Give  me  a  horse, 
I  will  give  your  son  10/.^  the  son  may  bring  the  action,  because  the 
gift  was  upon  consideration  of  a  profit  to  the  son,  and  the  father  is 
obliged  by  natural  affection  to  provide  for  his  children;  for  which 
cause,  affection  to  children  is  sufficient  to  raise  a  use  to  them  out 
of  the  father's  estate;  and  therefore  the  daughter  had  an  interest 
in  the  consideration  and  in  the  promise;  and  the  son  had  a  benefit 
by  this  agreement,  for  by  this  means  he  hath  the  wood,  and  the 
daughter  is  without  a  portion,  which  otherwise  in  all  probability 
the  son  would  have  been  left  to  pay,  if  the  wood  had  not  been  cut 
down,  nor  this  agreement  between  him  and  his  father.  .  .  .  Upon 
the  first  argument,  Wilde  and  Jones,  Justices,  seemed  to  think  that 
the  action  ought  to  be  brought  by  the  father  and  his  executors, 
though  for  the  benefit  of  the  daughter,  and  not  by  the  daughter, 
being  not  privy  to  the  promise  nor  consideration.  Twysden  and 
Rainsford  seemed  contra;  and  afterwards,  two  new  judges  being 
made,  scil.,  Scroggs,  Chief  Justice,  in  lieu  of  Eainsford,  and  Dolben, 
in  lieu  of  Twysden,  the  case  was  argued  again  upon  the  reasons 
aforesaid;  and  now  Scroggs,  Chief  Justice,  said,  that  there  was  such 
apparent  consideration  of  affection  from  the  father  to  his  children, 
for  whom  nature  obliges  him  to  provide,  that  the  consideration  and 
promise  to  the  father  may  well  extend  to  the  children.  .  .  .  Dol- 
ben, Justice,  concurred  with  him  that  the  daughter  might  bring  the 
action;  Jones  and  Wylde  hcesitahant.  But  next  day  they  also  agreed 
to  the  opinion  of  the  Chief  Justice  and  Dolben;  and  so  judgment 
was  given  for  the  plaintiff,  for  the  son  hath  the  benefit  by  having 
of  the  wood,  and  the  daughter  hath  lost  her  portion  by  this  means. 
.  .  .  And  nota,  upon  this  judgment  error  was  immediately  brought ; 
and  Trin.,  31  Car.  2,  it  was  affirmed  in  the  Exchequer  Chamber. 


TWEDDLE  V.  ATKINSON,  Executor  of  GUY,  Deceased 

In  the  Queen's  Bench,  June  7,   1861 

[Reported  in  1  Best  &  Smith,  393] 

The  declaration  stated  that  the  plaintiff  was  the  son  of  John 
Twcddlc,  deceased  and  before  the  making  of  the  agreement  hereafter 
mentioned,  married  the  daughter  of  William  Guy,  deceased;  and 
befon;  tlio  marriag(!  the  parents  of  the  parties  to  the  marriage  orally 
promised  to  give;  the  plaintiff  a  marriage  portion;  and  after  the 
marriage  in  order  to  give  effect  to  their  promises  the  parents  en- 
tered into  the  following  written  agreement  for  the  plaintiff's  benefit: 


SECT.    l]  TWEDDLE    V.    ATKINSON  337 

High  Coniscliffe,  July  11,  1855. 
Memorandum  of  an  agreement  made  this  day  between  William  Guy,  of,  &c.,  of 
the  one  part,  and  John  Tweddle,  of,  &c.,  of  the  other  part.  Whereas  it  is  mutually 
agreed  that  the  said  WilUam  Guy  shall  and  will  pay  the  sum  of  200L  to  William 
Tweddle,  his  son-in-law;  and  the  said  John  Tweddle,  father  to  the  aforesaid  William 
Tweddle,  shall  and  will  pay  the  sum  of  lOOZ.  to  the  said  William  Tweddle,  each  and 
severally  the  said  sums  on  or  before  the  21st  day  of  August,  1855.  And  it  is  hereby 
further  agreed  by  the  afdesaid  Vv'illiam  Guy  and  the  said  John  Tweddle  that  the 
said  William  Tweddle  has  full  power  to  sue  the  said  parties  in  any  court  of  law  or 
equity  for  the  aforesaid  sum,  hereby  promised  and  specified. 

The  declaration  further  alleged  that  afterwards  and  before  this 
suit,  the  plaintiff  and  his  said  wife,  who  is  still  living,  ratified  and 
assented  to  the  said  agreement,  yet  neither  the  said  William  Guy  nor 
his  executor  has  paid  the  promised  sum  of  200Z. 

Demurrer  and  joinder  therein. 

Edward  James,  for  the  defendant. 

Mellish,  for  the  plaintiff. 

Crompton,  J.  It  is  admitted  that  the  plaintiff  cannot  suceed  un- 
less this  case  is  an  exception  to  the  modern  and  well-established 
doctrine  of  the  action  of  assumpsit.  At  the  time  when  the  cases 
which  have  been  cited  were  decided  the  action  of  assumpsit  was 
treated  as  an  action  of  trespass  upon  the  case,  and  therefore  in  the 
nature  of  a  tort;  and  the  law  was  not  settled,  as  it  now  is,  that  nat- 
ural love  and  affection  is  not  a  sufficient  consideration  for  a  promise 
upon  which  an  action  may  be  maintained;  nor  was  it  settled  that 
the  promise  cannot  bring  an  action  unless  the  consideration  for  the 
promise  moved  from  him.  The  modern  cases  have,  in  effect,  over- 
ruled the  old  decisions;  they  shoAv  that  the  consideration  must  move 
from  the  party  entitled  to  sue  upon  the  contract.  It  would  be  a 
monstrous  proposition  to  say  that  a  person  was  a  party  to  the  con- 
tract for  the  purpose  of  suing  upon  it  for  his  own  advantage,  and 
not  a  party  to  it  for  the  purpose  of  being  sued.  It  is  said  that  the 
father  in  the  present  case  was  agent  for  the  son  in  making  the  con- 
tract, but  that  argument  ought  also  to  make  the  son  liable  upon  it. 
I  am  prepared  to  overrule  the  old  decisions,  and  to  hold  that,  by 
reason  of  the  principles  which  now  govern  the  action  of  assumpsit, 
the  present  action  is  not  maintainable. 

Blackburn,  J.  The  earlier  part  of  the  declaration  shows  a  con- 
tract which  might  be  sued  on,  except  for  the  enactment  in  sect.  4 
of  the  Statute  of  Frauds,  29  Car.  2,  c.  3.  The  declaration  then  sets 
out  a  new  contract,  and  the  only  point  is  whether,  that  contract 
being  for  the  benefit  of  the  children,  they  can  sue  upon  it.  Mr, 
Mellish  admits  that  in  general  no  action  can  be  maintained  upon  a 
promise,  unless  the  consideration  moves  from  the  party  to  whom 
it  is  made.  But  he  says  that  there  is  an  exception;  namely,  that 
when  the  consideration  moves  from  a  father,  and  the  contract  is  for 
the  benefit  of  his  son,  the  natural  love  and  affection  between  the 
father  and  son  gives  the  son  the  right  to  sue  as  if  the  consideration 
had  proceeded  from  himself.     And  Button  and  Wife  v.  Poole  was 


338  NATIONAL   BANK    V.    GRAND   LODGE  [CHAP.   Ill 

cited  for  this.  We  cannot  overrule  a  decision  of  the  Exchequer 
Chamber;  but  there  is  a  distinct  ground  on  which  that  one  cannot 
be  supported.  The  cases  upon  stat.  27  El.  c.  4,  which  have  decided 
that,  by  sect.  2,  voluntary  gifts  by  settlement  after  marriage  are 
void  against  subsequent  purchasers  for  value,  and  are  not  saved  by 
sect.  4,  show  that  natural  love  and  affection  are  not  a  sufficient  con- 
sideration whereon  an  action  of  assumpsit  may  be  founded. 

Judgment  for  the  defendant.^ 


NATION"AL  BA:NK  v.  grand  LODGE 

Supreme  Court  of  the  United  States,  October  Term,  1878 
[Reported  in  98  United  States,  123] 

Error  to  the  Circuit  Court  of  the  United  States  for  the  Eastern 
District  of  Missouri. 

This  is  an  action  by  the  Second  National  Bank  of  St.  Louis,  Mis- 
souri, against  the  Grand  Lodge  of  Missouri  of  Free  and  Accepted 
Ancient  Masons,  to  compel  the  payment  of  certain  coupons  for- 
merly attached  to  bonds  issued  in  June,  1869,  by  the  Masonic  Hall 
Association,  a  corporation  existing  under  the  laws  of  the  State  of 
Missouri,  in  relation  to  which  bonds  the  Grand  Lodge,  Oct.  14,  1869, 
adopted  the  following  resolution :  — 

"Resolved,  That  this  Grand  Lodge  assume  the  payment  of  the 
two  hundred  thousand  dollars  bonds,  issued  by  the  Masonic  Hall 
Association,  provided  that  stock  is  issued  to  the  Grand  Lodge  by 
said  association  to  the  amount  of  said  assumption  of  payment  by  this 
Grand  Lodge,  as  the  said  bonds  are  paid." 

The  court  below  instructed  the  jury,  that,  independently  of  the 
question  of  the  power  of  the  Grand  Lodge  to  pass  the  resolution,  it 
was  no  foundation  for  the  present  action,  and  directed  a  verdict  for 
the  defendant. 

The  jury  returned  a  verdict  in  accordance  with  the  direction  of 
the  court;  and  judgment  having  been  entered  thereon,  the  plaintiff 
sued  out  this  writ  of  error. 

Mr.  John  C.  Orrick,  for  the  plaintiff  in  error. 

Mr.  John  D.  8.  Dry  den,  contra. 

Mr.  Justice  Strong  delivered  the  opinion  of  the  court:  — 

It  is  necessary  to  consider  the  sev(a\'il  assignments  of  error  in  de- 
tail, for  there  is  an  insurmountable  difficulty  in  the  way  of  the  plain- 
tiff's recovery.  The  resolution  of  the  Grand  Lodge  was  but  a  propo- 
sition made  to  the  Masonic  Hall  Association,  and,  when  accepted, 
the  resolution  and  acceptance  constituted  at  most  only  an  executory 
contract  inler  partes.    It  was  a  contract  made  for  the  benefit  of  the 

*  The  statement  of  facts  u  abbreviated  and  the  conourring  opinion  of  Wightman, 
J.,  omitted. 


SECT.    l]  NATIONAL   BANK    V.    GRAND   LODGE  339 

association  and  of  the  Grand  Lodge,  —  made  that  the  latter  might 
acquire  the  ownership  of  stock  of  the  former,  and  that  the  former 
might  obtain  relief  from  its  liabilities.  The  holders  of  the  bonds 
were  not  parties  to  it,  and  there  was  no  privity  betweenethem  and  the 
lodge.  They  may  have  had  an  indirect  interest  ine»-'iie  performance 
of  the  undertakings  of  the  parties,  as  they  wouW  have  in  an  agree- 
ment by  which  the  lodge  should  undertakc-ta  lend  money  to  the 
association,  or  contract  to  buy  its  stock  to  enable  it  to  pay  its  debts; 
but  that  is  a  very  different  thing  from  the  privity  necessary  to 
enable  them  to  enforce  the  contract  by  suits  in  their  own  names. 
No  doubt  the  general  rule  is  that  such  a  privity  must  exist.  But 
there  are  confessedly  many  exceptions  to  it.  One  of  them,  and  by 
far  the  most  frequent  one,  is  the  case  where,  under  a  contract  be- 
tween two  persons,  assets  have  come  to  the  promisor's  hands  or 
under  his  control  which  in  equity  belong  to  a  third  person.  In  such 
a  case  it  is  held  that  the  third  person  may  sue  in  his  own  name. 
But  then  the  suit  is  founded  rather  on  the  implied  undertaking  the 
law  raises  from  the  possession  of  the  assets,  than  on  the  exj^ress 
promise.  Another  exception  is  where  the  plaintiff  is  the  benefi- 
ciary solely  interested  in  the  promise,  as  where  one  person  con- 
tracts with  another  to  pay  money  or  deliver  some  valuable  thing 
to  a  third.  But  where  a  debt  already  exists  from  one  person  to 
another,  a  promise  by  a  third  person  to  pay  such  debt  being  primarily 
for  the  benefit  of  the  original  debtor,  and  to  relieve  him  from  lia- 
bility to  pay  it  (there  being  no  novation),  he  has  a  right  of  action 
against  the  promisor  for  his  own  indemnity;  and  if  the  original 
creditor  can  also  sue,  the  promisor  would  be  liable  to  two  separate 
actions,  and  therefore  the  rule  is  that  the  original  creditor  cannot 
sue.  His  case  is  not  an  exception  from  the  general  rule  that  privity 
of  contract  is  required.  There  are  some  other  exceptions  recognized, 
but  they  are  unimportant  now.  The  plaintiff's  case  is  within  none 
of  them.  ISTor  is  he  sole  beneficiary  of  the  contract  between  the 
association  and  the  Grand  Lodge.  The  contract  was  made,  as  we 
have  said,  for  the  benefit  of  the  association,  and  if  enforceable  at 
all,  is  enforceable  by  it.  That  the  several  bondholders  of  the  asso- 
ciation are  not  in  a  situation  to  sue  upon  it  is  apparent  on  its  face. 
Even  as  between  the  association  and  the  Grand  Lodge,  the  latter  was 
not  bound  to  pay  anything,  except  so  far  as  stock  of  the  former  was 
delivered  or  tendered  to  it.  The  promise  to  pay  and  the  promise 
to  deliver  the  stock  were  not  Independent  of  each  other.  They  were 
concurrent  and  dependent.  Of  this  there  can  be  no  doubt.  The 
resolution  of  the  lodge  was  to  assume  the  payment  of  the  two  hun- 
dred thousand  dollars  bonds,  issued  by  the  association,  "Provided, 
that  stock  Is  issued  to  the  Grand  Lodge  by  said  association  to  the 
amount  of  said  assumption,"  .  .  .  "as  said  bonds  are  paid."  Cer- 
tainly the  obligation  of  the  lodge  was  made  contingent  upon  the 
issue  of  the  stock,  and  the  consideration  for  payment  of  the  debt 


340  BORDEN    V.    BOARDMAN  [CHAP.    Ill 

to  the  bondliolders  was  the  receipt  of  the  stock.  But  the  bondholders 
can  neither  deliver  it  nor  tender  it;  nor  can  they  compel  the  asso- 
ciation to  deliver  it.  If  they  can  sue  upon  the  contract,  and  en- 
force paymb-at  by  the  Grand  Lodge  of  the  bonds,  the  contract  is 
wholly  changes^;' and  the  lodge  is  compelled  to  pay  whether  it  gets 
the  stock  or  not.^  To  this  it  cannot  be  presumed  the  lodge  would 
ever   have   agreed,  "i  h<;..  Judgment   affirmed.^ 


CLARA  H.  BORDEN  v.   JOHN  W.  BOARDMAN 

Supreme  Judicial  Court  of  Massachusetts,  October  24- 
November  25,  1892 

[Reported  in  157  Massachusetts,  410] 

Contract.  Trial  in  the  Superior  Court,  before  Braley,  J.,  who 
reported  the  case  for  the  determination  of  this  court,  in  substance 
as  follows  : 

On  July  24,  1890,  Daniel  J.  Collins,  a  contractor,  made  a  contract 
in  writing  with  the  defendant  to  build  him  a  house  in  New  Bedford, 
for  the  sum  of  twenty-six  hundred  and  fifty  dollars,  payable  one 
half  when  the  house  was  ready  for  plastering,   the  balance  when 
finished.     The  defendant  advanced  to  Collins  two  hundred  dollars 
before  the  first  payment  was  due,  taking  his  receipt  therefor.     Dur- 
ing the  progress  of  the  work,  and  before  the  first  payment  became 
due  according  to  the  terms  of  the  contract,  the  building  was  blown 
off  the  foundation.    Collins  employed  the  plaintiffs,  who  were  build- 
ing movers,  to  put  the  building  back,  under  an  agreement  that  it 
should  not  cost  more  than  one  hundred  and  fifty  dollars;  the  plain- 
tiffs put  the  building  back,  finishing  the  moving  a  month  or  six 
weeks  prior  to  the  first  payment.     Collins  then  proceeded  with  the 
work,  and  got  the  building  ready  to  plaster.     When  the  time  for 
the  first  payment  arrived  the  defendant  told  Collins  he  would  like 
to  have  all  persons  who  had  lienable  bills  against  the  house  present 
to  see  that  they  were  paid.     The  plaintiffs  were  not  present,  so 
the  defendant  asked  Collins  how  much  was  due  them,  and  was  told 
one  hundred   and   fifty   dollars.     The  defendant   thereupon,   at  the 
request  and  with  the  consent  of  Collins,  reserved  two  hundred  dollars 
for  the  plaintiffs,  saying  he  would  hold  this  money  to  pay  them  with, 
and  would  pay  them  himself.    Collins  thereupon  gave  the  defendant 
a  receipt  for  eleven  hundred  and  tAventy-five  dollars,  as  first  payment 
on  the  house.    Neither  Collins  nor  the  defendant  informed  the  plain- 
tiffs of  the  holding  of  this  money;  but  in  consequence  of  what  a 
third    person    told    Manchester,    one    of    the   plaintiffs,    Manchester 
called  upon  the  defendant,  and  said  to  him,  "I  understand  that  you 
are  bolding  my  money  for  me  for  moving  that  building  back.     Is 
*  The  opinion  is  slightly  abbreviated. 


SECT.    l]  BORDEN    V.   BOARDMAN  341 

that  so?"  Boardman  replied  that  it  was.  Manchester  then  said,  "I 
am  glad  that  you  have  got  it  and  will  pay  it."  Boardman  said,  "I 
don't  know  as  I  will  now;  I  have  been  advised  not  to."  No  other 
interview  was  had  between  the  plaintiffs  and  the  defendant. 

The  defendant  claimed  that,  upon  this  evidence,  the  action  could 
not  be  maintained,  and  offered  to  show,  in  bar  of  the  action,  that, 
a  day  or  so  after  the  time  of  the  first  payment,  Collins  abandoned 
and  broke  his  said  contract,  and  the  defendant  was  obliged  to  finish 
the  building  at  a  loss,  and  that  at  the  time  of  refusing  to  pay  Man- 
chester, he,  Manchester,  was  told  by  the  defendant  that  Collins  had 
broken  his  contract;  and  that  on  December  9,  1890,  after  refusal 
to  pay  them  by  the  defendant,  the  plaintiffs  commenced  an  action 
against  said  Collins  for  the  recovery  of  the  claim  now  in  suit.  The 
evidence  was  excluded.  The  judge  directed  a  verdict  for  the  plain- 
tiffs for  one  hundred  and  fifty  dollars,  and  interest  from  the  date 
of  the  writ.  If  the  ruling  was  right,  then  judgment  was  to  be  en- 
tered on  the  verdict;  otherwise,  judgment  for  the  defendant. 

F.  A.  Milliken,  for  the  defendant. 

E.  L.  Barney,  for  the  plaintiffs. 

MoKTON,  J.  The  evidence  offered  in  bar  was  rightly  excluded. 
The  subsequent  failure  of  Collins  to  perform  his  contract  would  not 
release  the  defendant  from  the  obligation,  if  any,  which  he  had  as- 
sumed to  the  plaintiffs,  in  the  absence  of  any  agreement,  express  or 
implied,  that  the  money  was  to  be  paid  to  the  plaintiffs  only  in  case 
Collins  fulfilled  his  contract.  Cook  v.  Wolfendale,  105  Mass.  401. 
There  was  no  evidence  of  such  an  agreement. 

The  other  question  is  more  difficult.  The  case  does  not  present 
a  question  of  novation ;  for  there  was  no  agreement  among  the  plain- 
tiffs, Collins,  and  the  defendant  that  the  defendant  should  pay  to 
the  plaintiffs,  out  of  the  money  In  his  hands  and  due  to  Collins, 
a  specific  sum,  and  that  thenceforward  the  defendant  should  be  re- 
leased from  all  liability  for  it  to  Collins,  and  should  be  liable  for 
it  to  the  plaintiffs.  ISTeither  was  there  any  agreement  between  the 
plaintiffs  and  the  defendant  that  the  latter  would  pay  the  money 
to  them.  The  conversation  between  one  of  the  plaintiffs  and  the 
defendant  cannot  be  construed  as  affording  evidence  of  such  an  agree- 
ment. Coupled  with  the  defendant's  admission  that  he  was  holding 
money  for  the  plaintiffs  was  his  repudiation  of  any  liability  to  the 
painstaking  opinion  by  the  late  Chief  Justice  Savage,  in  which 
table  assignment  of  the  amount  in  suit  from  Collins  to  the  plaintiffs. 
There  was  no  order  or  transfer  given  by  him  to  them;  nor  was  any 
notice  of  the  arrangement  between  him  and  the  defendant  given 
by  him  to  the  plaintiffs.  Lazarus  v.  Swan,  147  Mass.  330.  The 
case  upon  this  branch,  therefore,  reduced  to  its  simplest  form,  is  one 
of  an  agreement  between  two  parties,  upon  sufficient  consideration 
it  may  be  between  them,  that  one  will  pay,  out  of  funds  in  his  hands 
belonging  to  the  other,  a  specific  sum  to  a  third  person,  who  is  not 


342  LAWRENCE    V.    FOX  [CHAP.   Ill 

a  party  to  the  agreement,  and  from  whom  no  consideration  moves. 
It  is  well  settled  in  this  State  that  no  action  lies  in  such  a  case  in 
favor  of  such  third  party  to  recover  the  money  so  held  of  the  party 
holding  it.  Exchange  Bank  v.  Eice,  107  Mass.  37,  and  cases  cited; 
Eogers  v.  Union  Stone  Co.,  130  Mass.  581 ;  New  England  Dredging 
Co.  V.  Rockport  Granite  Co.,  149  Mass.  381;  Marston  v.  Bigelow, 
150  Mass.  45 ;  Saunders  v.  Saunders,  154  Mass.  337.  Certain  ex- 
ceptions which  were  supposed  to  exist  have  either  been  shown  not 
to  exist,  or  have  been  confined  within  narrower  limits.  Exchange 
Bank  v.  Rice,  and  Marston  v.  Bigelow,  ubi  supra. 

We  have  assumed  that  the  sum  which  the  defendant  agreed  with 
Collins  to  pay  the  plaintiffs  was  specific.  But  it  is  to  be  observed 
that  the  agreement  between  the  plaintiffs  and  Collins  was  that  it 
should  not  cost  more  than  one  hundred  and  fifty  dollars  to  put  the 
building  back.  Collins  told  the  defendant  that  that  sum  was  due 
to  the  plaintiffs.  The  defendant  reserved  two  hundred  dollars.  It 
may  well  be  doubted,  therefore,  whether  the  defendant  had  in  his 
hands  a  specific  sum  to  be  paid  to  the  plaintiffs,  or  whether  he  agreed 
with  Collins  to  hold  and  pay  the  plaintiffs  a  specific  sum.  If  the 
sum  was  not  specific,  the  plaintiffs  do  not  claim,  as  we  understand 
them,  that  they  can  recover.  Judgment  for  the  defendant. 


LAWRENCE  V.  EOX 

New  York  Court  of  Appeals  December,   1859 

[Reported  in  20  New  York,  268] 

Appeal  from  the  Superior  Court  of  the  City  of  Buffalo.  On  the 
trial  before  Mr.  Justice  Masten  it  appeared  by  the  evidence  of  a  by- 
stander that  one  Holly,  in  November,  1857,  at  the  request  of  the 
defendant,  loaned  and  advanced  to  him  $300,  stating  at  the  time 
that  he  owed  that  sum  to  the  plaintiff  for  money  borrowed  of  him, 
and  had  agreed  to  pay  it  to  him  the  then  next  day;  that  the  de- 
fendant in  consideration  thereof,  at  the  time  of  receiving  the  money, 
promised  to  pay  it  to  the  plaintiff  the  then  next  day.  Upon  this 
state  of  facts  the  defendant  moved  for  a  nonsuit,  upon  three  several 
grounds,  viz. :  that  there  was  no  proof  tending  to  show  that  Holly 
was  indebted  to  the  plaintiff;  that  the  agreement  by  the  defendant 
with  Holly  to  pay  the  plaintiff  was  void  for  want  of  consideration; 
and  that  there  was  no  privity  between  the  plaintiff  and  defendant. 
The  court  overruled  the  motion,  and  the  counsel  for  the  defendant 
excey>t<'d.  Thf;  cause  was  tli(!n  submitted  to  the  jury,  and  they  found 
a  verdict  for  the  plaintiff  for  the  amount  of  tlie  loan  and  interest, 
$344.P)6,  upon  which  judgment  was  entered;  from  which  the  de- 
fendant appealed  to  the  Superior  Court,  at  General  Term,  where  the 


SECT.    l]  LAWRENCE    V.    FOX  343 

judgment  was  affirmed,  and  the  defendant  appealed  to  this  court. 
The  cause  was  submitted  on  printed  arguments. 

/.  S.  Torrance,  for  the  appellant. 

E.  P.   Chapin,  for  the  plaintiff. 

H.  Gray,  J.  The  first  objection  raised  on  the  trial  amounts  to 
this :  That  the  evidence  of  the  person  present  who  heard  the  declara- 
tions of  Holly  giving  directions  as  to  the  payment  of  the  money  he 
was  then  advancing  to  the  defendant  was  mere  hearsay,  and  there- 
fore not  competent.  Had  the  plaintiff  sued  Holly  for  this  sum  of 
money  no  objection  to  the  competency  of  this  evidence  would  have 
been  thought  of;  and  if  the  defendant  had  performed  his  promise 
by  paying  the  sum  loaned  to  him  to  the  plaintiff,  and  Holly  had 
afterwards  sued  him  for  its  recovery,  and  this  evidence  had  been 
offered  by  the  defendant,  it  would  doubtless  have  been  received  with- 
out an  objection  from  any  source.  All  the  defendant  had  the  right 
to  demand  in  this  case  was  evidence  which,  as  between  Holly  and 
the  plaintiff,  was  competent  to  establish  the  relation  between  them 
of  debtor  and  creditor.  For  that  purpose  the  evidence  was  clearly 
competent;  it  covered  the  whole  ground,  and  warranted  the  verdict 
of  the  jury.  But  it  is  claimed  that  notwithstanding  this  promise 
was  established  by  competent  evidence,  it  was  void  for  the  want  of 
consideration.  It  is  now  more  than  a  quarter  of  a  century  since 
it  was  settled  by  the  Supreme  Court  of  this  State  —  in  an  able  and 
painstaking  opinion  by  the  late  Chief  Justice  Savage,  in  which 
the  authorities  were  fully  examined  and  carefully  analyzed  —  that 
a  promise  in  all  material  respects  like  the  one  under  consideration 
was  valid ;  and  the  judgment  of  that  court  was  unanimously  affirmed 
by  the  Court  for  the  Correction  of  Errors  (Farley  v.  Cleaveland, 
4  Cow.  432;  same  case  in  error,  9  id.  639).  In  that  case  one  Moon 
owed  Farley  and  sold  to  Cleaveland  a  quantity  of  hay,  in  considera- 
tion of  which  Cleaveland  promised  to  pay  Moon's  debt  to  Farley; 
and  the  decision  in  favor  of  Farley's  right  to  recover  was  placed 
upon  the  ground  that  the  hay  received  by  Cleaveland  from  Moon 
was  a  valid  consideration  for  Cleaveland's  promise  to  pay  Farley, 
and  that  the  subsisting  liability  of  Moon  to  pay  Farley  was  no  ob- 
jection to  the  recovery.  The  fact  that  the  money  advanced  by  Holly 
to  the  defendant  was  a  loan  to  him  for  a  day,  and  that  it  thereby 
became  the  property  of  the  defendant,  seemed  to  impress  the  de- 
fendant's counsel  with  the  idea  that  because  the  defendant's  promise 
was  not  a  trust  fund  placed  by  the  plaintiff  in  the  defendant's  hands, 
out  of  which  he  was  to  realize  money  as  from  the  sale  of  a  chattel 
or  the  collection  of  a  debt,  the  promise,  although  made  for  the  bene- 
fit of  the  plaintiff,  could  not  enure  to  his  benefit.  The  hay  which 
Moon  delivered  to  Cleaveland  was  not  to  be  paid  to  Farley,  but  the 
debt  incurred  by  Cleaveland  for  the  purchase  of  the  hay,  like  the  debt 
incurred  by  the  defendant  for  money  borrowed,  was  what  was  to  be 
paid.     That  case  has  been  often  referred  to  by  the  courts  of  this 


344  LAWRENCE    V.    FOX  [CHAP.   Ill 

State,  and  has  never  been  doubted  as  sound  authority  for  the  prin- 
ciple upheld  by  it.  Barker  v.  Bucklin,  2  Denio,  45;  Hudson  Canal 
Company  v.  The  Westchester  Bank,  4  id,  97.  It  puts  to  rest  the  ob- 
jection that  the  defendant's  promise  was  void  for  want  of  considera- 
tion. The  report  of  that  case  shows  that  the  promise  was  not  only 
made  to  Moon,  but  to  the  plaintiff  Farley.  In  this  case  the  promise 
was  made  to  Holly,  and  not  expressly  to  the  plaintiff;  and  this  dif- 
ference between  the  two  cases  presents  the  question,  raised  by  the  de- 
fendant's objection,  as  to  the  want  of  privity  between  the  plaintiff  and 
defendant.  As  early  as  1806  it  was  announced  by  the  Supreme  Court 
of  this  State,  upon  what  was  then  regarded  as  the  settled  law  of  Eng- 
land, "that  where  one  person  makes  a  promise  to  another  for  the 
benefit  of  a  third  person,  that  third  person  may  maintain  an  action 
upon  it."  Schermerhorn  v.  Vanderheyden,  1  John.  E,.  140,  has  often 
been  reasserted  by  our  courts  and  never  departed  from.  The  case 
of  Seaman  v.  White  has  occasionally  been  referred  to  (but  not  by 
the  courts)  not  only  as  having  some  bearing  upon  the  question  now 
under  consideration,  but  as  involving  in  doubt  the  soundness  of  the 
proposition  stated  in  Schermerhorn  v.  Vanderheyden.  In  that  case 
one  Hill,  on  the  17th  of  August,  1835,  made  his  note  and  procured 
it  to  be  indorsed  by  Seaman  and  discounted  by  the  Phoenix  Bank, 
Before  the  note  matured,  and  while  it  was  owned  by  the  Phcenix 
Bank,  Hill  placed  in  the  hands  of  the  defendant  Whitney  his  draft 
accepted  by  a  third  party,  which  the  defendant  indorsed,  and  on  the 
7th  of  October,  1835,  got  discounted  and  placed  the  avails  in  the 
hands  of  an  agent  with  which  to  take  up  Hill's  note ;  the  note  became 
due,  Whitney  withdrew  the  avails  of  the  draft  from  the  hands  of 
his  agent  and  appropriated  it  to  a  debt  due  him  from  Hill,  and 
Seaman  paid  the  note  indorsed  by  him  and  brought  his  suit  against 
Whitney.  Upon  this  state  of  facts  appearing,  it  was  held  that  Sea- 
man could  not  recover :  first,  for  the  reason  that  no  promise  had 
been  made  by  Whitney  to  pay;  and  second,  if  a  promise  could  be 
implied  from  the  facts  that  Hill's  accepted  draft,  with  which  to  raise 
the  means  to  pay  the  note,  had  been  placed  by  Hill  in  the  hands 
of  Whitney,  the  promise  would  not  be  to  Seaman,  but  to  the  Phoenix 
Bank,  who  then  owned  the  note;  although,  in  the  course  of  the 
opinion  of  the  court,  it  was  stated  that,  in  all  cases  the  principle  of 
which  was  sought  to  be  applied  to  that  case,  the  fund  had  been  ap- 
propriated by  an  express  undertaking  of  the  defendant  with  the 
creditor.  But  before  concluding  the  opinion  of  the  court  in  this 
case,  the  learned  judge  who  dclivorod  it  conceded  that  an  undertaking 
to  pay  the  creditor  may  be  implied  from  an  arrangement  to  that 
effect  between  the  defendant  and  the  debtor.  This  question  was 
subsequently,  and  in  a  case  quite  recent,  again  the  subject  of  consid- 
eration l)y  tlu!  Supreme  Court,  Avhen  it  was  held  that  in  declaring 
upon  a  promise,  made  to  tbe  debtor  by  a  third  party  to  pay  the 
creditor  of  the  debtor,  founded  upon  a  consideration  advanced  by 


SECT.   l]  LAWRENCE    V.    FOX  345 

the  debtor,  it  was  unnecessary  to  aver  a  promise  to  the  creditor;  for 
the  reason  that  upon  proof  of  a  promise  made  to  the  debtor  to  pay 
the  creditor  a  promise  to  the  creditor  would  be  implied.  And  in 
support  of  this  proposition,  in  no  respect  distinguishable  from  the 
one  now  under  consideration,  the  case  of  Schermerhorn  v.  Vander- 
heyden,  with  many  intermediate  cases  in  our  courts,  were  cited,  in 
which  the  doctrine  of  that  case  was  not  only  approved  but  affirmed. 
The  Delaware  and  Hudson  Canal  Company  v.  The  Westchester 
County  Bank,  4  Denio,  97.  The  same  principle  is  adjudged  in 
several  cases  in  Massachusetts.  I  will  refer  to  but  few  of  them,  — 
Arnold  v.  Lyman,  17  Mass.  400;  Hall  v.  Marston,  id.  575;  Brewer 
V.  Dyer,  7  Cush.  337,  340.  In  Hall  v.  Marston  the  court  say:  "It 
seems  to  have  been  well  settled  that,  if  A.  promises  B.  for  a  favor- 
able consideration  to  pay  C,  the  latter  may  maintain  assumpsit  for 
the  money;"  and  in  Brewer  v.  Dyer  the  recovery  was  upheld,  as 
the  court  said,  "upon  the  principle  of  law  long  recognized  and  clearly 
established,  that  when  one  person,  for  a  valuable  consideration,  en- 
gages with  another,  by  a  simple  contract,  to  do  some  act  for  the 
benefit  of  a  third,  the  latter,  who  would  enjoy  the  benefit  of  the  act, 
may  maintain  an  action  for  the  breach  of  such  engagement;  that 
it  does  not  rest  upon  the  ground  of  any  actual  or  supposed  relation- 
ship between  the  parties  as  some  of  the  earlier  cases  would  seem  to 
indicate,  but  upon  the  broader  and  more  satisfactory  basis  that  the 
law  operating  on  the  act  of  the  parties  creates  the  duty,  establishes 
a  privity,  and  implies  the  promise  and  obligation  on  which  the  ac- 
tion is  founded."  There  is  a  more  recent  case  decided  by  the  same 
court,  to  which  the  defendant  has  referred  and  claims  that  it  at 
least  impairs  the  force  of  the  former  cases  as  authority.  It  is  the 
case  of  Mellen  v.  Whipple,  1  Gray,  317.  In  that  case  one  Rollins 
made  his  note  for  $500,  payable  to  Ellis  and  Mayo,  or  order,  and 
to  secure  its  payment  mortgaged  to  the  payees  a  certain  lot  of  ground, 
and  then  sold  and  conveyed  the  mortgaged  premises  to  the  defendant 
by  deed,  in  which  it  was  stated  that  the  "granted  premises  were  sub- 
ject to  a  mortgage  for  $500,  which  mortgage,  with  the  note  for  which 
it  was  given,  the  said  Whipple  is  to  assume  and  cancel."  The  deed 
thus  made  was  accepted  by  Whipple,  the  mortgage  was  afterwards 
duly  assigned,  and  the  note  indorsed  by  Ellis  and  Mayo  to  the  plain- 
tiff's intestate.  After  Whipple  received  the  deed  he  paid  to  the 
mortgagees  and  their  assigns  the  interest  upon  the  mortgage  and 
note  for  a  time,  and  upon  refusing  to  continue  his  payments  was 
sued  by  the  plaintiff  as  administratrix  of  the  assignee  of  the  mortgage 
and  note.  The  court  held  that  the  stipulation  in  the  deed  that 
Whipple  should  pay  the  mortgage  and  note  was  a  matter  exclusively 
between  the  two  parties  to  the  deed;  that  the  sale  by  Rollins  of  the 
equity  of  redemption  did  not  lessen  the  plaintiff's  security;  and  that 
as  nothing  had  been  put  into  the  defendant's  hands  for  the  purpose 
of  meeting  the  plaintiff's  claim  on  Rollins,  there  was  no  considera- 


346  LAWRENCE    V.   FOX  [CHAP.    Ill 

tion  to  support  an  express  promise,  much  less  an  implied  one,  that 
"Whipple  should  pay  Mellen  the  amount  of  the  note.  This  is  all 
that  was  decided  in  that  case,  and  the  substance  of  the  reasons  as- 
signed for  the  decision;  and  whether  the  case  was  rightly  disposed 
of  or  not,  it  has  not  in  its  facts  any  analogy  to  the  case  before  us, 
nor  do  the  reasons  assigned  for  the  decision  bear  in  any  degree  upon 
the  question  we  are  now  considering.  But  it  is  urged  that  because 
the  defendant  was  not  in  any  sense  a  trustee  of  the  property  of 
Holly  for  the  benefit  of  the  plaintiff,  the  law  will  not  imply  a 
promise.  I  agree  that  many  of  the  cases  where  a  promise  was  im- 
plied were  cases  of  trusts,  created  for  the  benefit  of  the  promisor. 
The  case  of  Eelton  v.  Dickinson,  10  Mass.  287,  290,  and  others  that 
might  be  cited,  are  of  that  class;  but  concede  them  all  to  have  been 
cases  of  trusts,  and  it  proves  nothing  against  the  application  of  the 
rule  to  this  case.  The  duty  of  the  trustee  to  pay  the  cestuis  que 
trust,  according  to  the  terms  of  the  trust,  implies  his  promise  to  the 
latter  to  do  so.  In  this  case  the  defendant,  upon  ample  consideration 
received  from  Holly,  promised  Holly  to  pay  his  debt  to  the  plaintiff; 
the  consideration  received  and  the  promise  to  Holly  made  it  as 
plainly  his  duty  to  pay  the  plaintiff  as  if  the  money  had  been  re- 
mitted to  him  for  that  purpose,  and  as  well  implied  a  promise  to  do 
so  as  if  he  had  been  made  a  trustee  of  property  to  be  converted  into 
cash  with  which  to  pay.  The  fact  that  a  breach  of  the  duty  im- 
posed in  the  one  case  may  be  visited,  and  justly,  with  more  serious 
consequences  than  in  the  other,  by  no  means  disproves  the  payment 
to  be  a  duty  in  both.  The  principle  illustrated  by  the  example  so 
frequently  quoted  (M'hich  concisely  states  the  case  in  hand)  "that 
a  promise  made  to  one  for  the  benefit  of  another,  he  for  whose  bene- 
fit it  is  made  may  bring  an  action  for  its  breach,"  has  been  applied 
to  trust  cases,  not  because  it  was  exclusively  applicable  to  those 
cases,  but  because  it  was  a  principle  of  law,  and  as  such  applicable 
to  those  cases.  It  was  also  insisted  that  Holly  could  have  discharged 
the  defendant  from  his  promise,  though  it  was  intended  by  both 
parties  for  the  benefit  of  the  plaintiff,  and  therefore  the  plaintiff 
was  not  entitled  to  maintain  this  suit  for  the  recovery  of  a  demand 
over  which  he  had  no  control.  It  is  enough  that  the  plaintiff  did 
not  release  the  defendant  from  his  promise,  and  whether  he  could 
or  not  is  a  question  not  now  necessarily  involved;  but  if  it  was,  I 
think  it  would  be  found  difficult  to  maintain  the  right  of  Holly  to 
discharge  a  judgment  recovered  by  the  plaintiff  upon  confession  or 
otherwise,  for  the  breach  of  the  defendant's  promise;  and  if  he  could 
not,  how  could  he  discharge  the  suit  before  judgment,  or  the  promise 
before  suit,  made  as  it  was  for  the  plaintiff's  benefit,  and  in  accord- 
ance with  l(!ga]  presumption  accepted  by  him  (Eerly  v.  Taylor,  5 
Hill,  577-584,  rt  acq.),  until  his  dissent  Avas  shown?  The  cases  cited, 
and  especially  that  of  Farley  v.  Cleaveland,  establish  the  validity  of 
a  j)arol  j)romise;  it  stands  then  upon  the  footing  of  a  written  one. 


SECT.   l]  GIFFORD    V.    CORRIGAN  347 

Suppose  the  defendant  had  given  his  note,  in  which,  for  value  re- 
ceived of  Holly,  he  had  promised  to  pay  the  plaintiff,  and  the  plain- 
tiff had  acepted  the  promise,  retaining  Holly's  liability.  Very  clearly 
Holly  could  not  have  discharged  that  promise,  be  the  right  to  re- 
lease the  defendant  as  it  may.  No  one  can  doubt  that  he  owes  the 
sum  of  money  demanded  of  him,  or  that  in  accordance  with  his 
promise  it  was  his  duty  to  have  paid  it  to  the  plaintiff;  nor  can  it 
be  doubted  that  whatever  may  be  the  diversity  of  opinion  elsewhere, 
the  adjudications  in  this  State,  from  a  very  early  period,  approved 
by  experience,  have  established  the  defendant's  liability;  if,  there- 
fore, it  could  be  shown  that  a  more  strict  and  technically  accurate 
application  of  the  rules  applied  would  lead  to  a  different  result 
(which  I  by  no  means  concede),  the  effort  should  not  be  made  in 
the  face  of  manifest  justice. 

The  judgment  should  be  affirmed. 

Johnson,  C.  J.,  Denio,  Selden,  Allen,  and  Strong,  JJ.,  con- 
curred. Johnson,  C.  J.,  and  Denio,  J,,  were  of  opinion  that  the 
promise  was  to  be  regarded  as  made  to  the  plaintiff  through  the 
medium  of  his  agent,  whose  action  he  could  ratify  when  it  came  to 
his  knowledge,  though  taken  without  his  being  privy  thereto. 

CoMSTOCK,  J.,  gave  a  dissenting  opinion,  Geover,  J.,  also  dis- 
sented. Judgment  affirmed. 


SILAS  D,  GIFFOKD,  as  Receiver,  etc..  Respondent,  v. 
MICHAEL  AUGUSTINE   CORRIGAN,   etc.,  Appellant 

New  York  Court  of  Appeals,  October  16-November  26,  1889 

{Reported  in  111  New  YorTc,  257] 

Appeal  by  defendant  Corrigan,  as  executor  of  Cardinal  McCloskey, 
from  a  judgment  for  plaintiff  affirming  ajudgment  by  the  trial  Court. 

This  action  was  brought  to  foreclose  a  mortgage  executed  by  de- 
fendant. The  Father  Matthew  Temperance  Society.  Defendant 
Corrigan,  as  executor,  was  sought  to  be  charged  for  any  deficiency 
on  sale  upon  a  covenant  in  a  deed  of  the  mortgaged  premises  exe- 
cuted to  his  testator  by  John  McEvoy,  by  the  terms  of  which  the 
grantee  assumed  and  agreed  to  pay  the  mortgage. 

The  facts,  so  far  as  material  to  the  questions  discussed,  are  stated 
in  the  opinion. 

Edivard  C.  Boardman,  for  appellant. 

Ralph  E.  Prime,  for  respondents. 

Finch,  J.  On  a  previous  appeal  we  determined  in  this  case  that 
the  record  of  the  deed  to  the  defendant's  testator,  McCloskey,  by 
which  the  grantee  assumed  the  payment  of  plaintiff's  mortgage,  was 
not,  under  the  circumstances,  sufficient  proof  of  the  delivery  and 
acceptance  of  the  deed.    As  the  case  now  stands  the  effect  of  that 


348  GIFFORD    V.    CORRIGAN  [CHAP.   Ill 

record  is  fortified  by  direct  proof  of  the  delivery  and  strong  circum- 
stantial evidence  of  the  acceptance.  Both  facts  are  now  explicitly 
found  by  the  trial  court,  but  the  appellant  again  denies  the  sufiiciency 
of  the  proof. 

The  mortgage  was  executed  in  1869.  The  land  which  it  covered 
was  sold  and  conveyed  to  McEvoy  in  1870.  McEvoy  was  a  parish 
priest,  and  held  the  title  until  1878,  when  he  conveyed  to  McCloskey, 
the  defendant's  testator,  who  in  and  by  the  deed  assumed  the  pay- 
ment of  the  outstanding  mortgage.  Two  things  occurred  the  next 
year:  McCloskey  was  informed  by  letter  that  upon  the  premises 
owned  by  him,  describing  those  conveyed  by  McEvoy,  there  was 
a  mortgage  to  Masterton,  payment  of  which  was  requested,  and  a 
few  days  after,  in  a  personal  interview  with  the  attorney  acting  for 
the  mortgagee,  was  told  of  the  deed  and  its  record,  and  the  assump- 
tion clause  was  read  to  him  and  his  liability  under  it  asserted.  Mc- 
Closkey answered  that  he  would  communicate  with  Father  Keogh; 
that  he  had  referred  the  matter  to  him,  and  that  the  witness  would 
hear  from  Keogh.  The  latter  was  the  successor  of  McEvoy  as  parish 
priest,  and  owed  his  appointment  to  the  cardinal.  The  second  thing 
was  that  the  account  for  the  rents  of  the  property  collected  by  Keogh 
were  by  him  returned  once  a  year  to  the  chancery  office  which  man- 
aged the  cardinal's  business  affairs  relating  to  the  church.  Within 
one  year,  therefore,  after  the  record  of  the  deed  McCloskey  knew 
all  about  it,  and  instead  of  repudiating  it  and  refusing  acceptance, 
simply  referred  the  creditor  to  the  parish  priest  who  began  a  uni- 
form system  of  collecting  the  rents  of  the  property  and  returning 
the  facts  to  the  cardinal's  business  office,  which  was  their  proper 
repository.  Keogh  not  only  remained  in  possession  under  McCloskey, 
but  insured  the  premises  in  the  name  of  the  cardinal.  For  some 
time  after  its  record  the  deed  remained  in  the  custody  of  McEvoy, 
but  as  early  as  1882  he  delivered  it  to  O'Connor,  who  was  a  clerk 
in  the  chancery  office.  The  superintendent  of  that  office  was  Pres- 
ton. He  is  called  in  the  record  vicnr-goneral  and  chancellor  and 
monseigneur.  Whatever  his  ecclesiastical  title,  his  own  evidence 
shows  that  he  was  merely  a  subordinate  or  secretary  of  the  cardinal, 
with  no  authority  of  his  own,  and  depended  wholly  upon  the  direc- 
tions of  his  superior,  either  general  or  specific.  His  attention  was 
called  to  the  deed  after  its  delivery  at  the  chancery  office  by  O'Connor, 
who  delivered  it.  Preston  says  that  the  next  time  he  saw  Koogh 
he  "positively  forbade  him  to  have  anything  to  do  with  that  hall 
or  to  accept  any  rent  for  it."  This  is  said  to  have  occurred  in  1882. 
It  does  not  appear  that  Preston  had  any  anthority  from  the  cardinal 
to  issue  this  order  to  Keogh,  or  any  general  direction  which  covered 
it.  It  is  certain  that  Keogh  did  not  obey  it,  for  he  continued  to 
collect  the  rents  and  report  them  as  part  of  his  parish  accounts  to 
thf!  chancery  office.  Preson  was  either  ignorant  of  the  current  trans- 
actions which  it  was  his  duty  to  supervise,  or  he  had  withdrawn  his 


SECT.   l]  GIFFORD    V.    CORRIGAN  349 

command,  or  the  parish  priest  was  deliberately  defying  his  superiors 
and  they  were  patiently  submitting  to  it.  At  all  events,  the  deed 
rested  in  the  chancery  office,  the  priest  kept  possession  of  the  prop- 
erty, and  accounted  for  its  rents  to  McCloskey;  no  offer  of  a  re- 
conveyance has  been  made,  and  the  record  is  searched  in  vain  for 
any  word  or  act  of  refusal  or  repudiation  by  McCloskey.  On  such 
a  state  of  facts  the  finding  of  the  Special  Term  that  there  was  a 
delivery  and  acceptance  may  easily  stand,  and  must  conclude  us  on 
this  appeal. 

But  another  circumstance  introduces  an  additional  defence  and 
raises  a  further  question.  Just  after  the  issue  of  a  summons  in  this 
action  and  the  filing  of  a  lis  pendens,  the  executor  of  McEvoy  for- 
mally released  McCloskey  from  his  covenant,  and  the  latter  pleads 
that  release.  It  asserts  that  the  deed  was  never  delivered,  which  is 
found  to  be  an  untruth;  that  the  assumption  clause  was  inserted 
by  mistake  and  inadvertence,  of  which  there  is  not  a  particle  of 
proof;  and  then  in  further  consideration  of  $1  formally  releases  the 
cardinal  from  his  covenant.  This  release  was  executed  after  the 
knowledge  of  the  deed  of  McCloskey  and  the  covenant  contained 
in  it  had  reached  the  mortgagee;  after  the  latter  had  accepted  and 
adopted  it  as  made  for  his  benefit  and  communicated  that  fact  to 
the  debtor  by  a  formal  demand  of  payment ;  after  the  mortgagee  had, 
for  three  years,  permitted  the  grantee  to  absorb  and  appropriate 
the  rents  and  profits  in  reliance  upon  the  covenant ;  and  after  he  had 
commenced  an  action  for  foreclosure  by  the  issue  of  a  summons  and 
filing  of  a  lis  pendens,  at  a  moment  when  the  executor  who  released 
was  aware  that  trouble  was  approaching,  but  before  McCloskey  was 
actually  served  or  had  appeared  in  the  action. 

Is  this  release  thus  executed  a  defence  to  this  action?  I  shall  not 
undertake  to  decide,  if,  indeed,  the  question  is  open  (Knickerbocker 
Life  Ins.  Co.  v.  Nelson,  78  N.  Y.  137;  Comley  v.  Dazian,  114  id. 
161,  167),  whether  in  the  interval  between  the  making  of  the  con- 
tract and  the  acceptance  and  adoption  of  it  by  the  mortgagee  it  was 
or  was  not  revocable  without  his  assent.  However  that  may  be,  the 
only  inquiry  now  presented  is,  whether  it  is  so  revocable  after  it 
has  come  to  the  knowledge  of  the  creditor,  and  he  has  assented  to 
it  and  adopted  it  as  a  security  for  his  own  benefit.  My  judgment 
leads  me  to  answer  that  question  in  the  negative. 

Of  course  it  is  difficult,  if  not  impossible,  to  reason  about  it  with- 
out recurring  to  Lawrence  v.  Fox  (20  N.  Y.  268),  and  ascertaining 
the  principle  upon  which  its  doctrine  is  founded.  That  is  a  difficult 
task,  especially  for  one  whose  doubts  are  only  dissipated  by  its  au- 
thority, and  becomes  more  difficult  when  the  number  and  variety 
of  its  alleged  foundations  are  considered.  But  whichever  of  them 
may  ultimately  prevail,  I  am  convinced  that  they  all  involve,  as  a 
logical  consequence,  the  irrevocable  character  of  the  contract  after 
the  creditor  has  accepted  and  adopted  it,  and  in  some  manner  acted 


350  GIFFORD    V.    CORRIGAN  [CHAP.    Ill 

upon  it.  The  prevailing  opinion  in  that  case  rested  the  creditor's 
right  upon  the  broad  proposition  that  the  promise  was  made  for 
his  benefit,  and,  therefore,  he  might  sue  upon  it,  although  privy 
neither  to  the  contract  nor  its  consideration.  That  view  of  it  nec- 
essarily involves  an  acquisition  at  some  moment  of  time  of  the  right 
of  action  which  he  is  permitted  to  enforce.  If  it  be  possible  to  say 
that  he  does  not  acquire  it  at  the  moment  when  the  promise  for  his 
benefit  is  made,  it  must  be  that  he  obtains  it  when  it  has  come  to 
his  knowledge  and  he  has  assented  to  and  acted  upon  it.  For  he  may 
sue;  that  is  decided  and  conceded.  If  he  may  sue,  he  must,  at  that 
moment,  have  a  vested  right  of  action.  If  it  was  not  obtained  earlier 
it  must  have  vested  in  him  at  the  moment  when  his  action  was  com- 
menced, so  that  the  right  and  the  remedy  were  born  at  the  same 
instant.  But  there  is  no  especial  magic  in  a  lawsuit.  If  it  serves 
for  the  first  time  to  originate  the  right  which  it  seeks  to  enforce, 
it  can  only  be  because  the  act  of  bringing  it  shows  unequivocally 
that  the  promise  of  the  grantee  has  come  to  the  knowledge  of  the 
plaintiff,  that  the  latter  has  accepted  and  adopted  it,  that  he  intends 
to  enforce  it  for  his  own  benefit,  and  gives  notice  of  that  intention 
to  the  adversary.  From  that  moment  he  must  be  assumed  to  act 
or  omit  to  act  in  reliance  upon  it.  But  if  all  these  things  occur  be- 
fore a  suit  commenced,  why  do  they  not  equally  vest  the  right  of 
action  in  the  assignee?  What  more  does  the  mere  lawsuit  accom- 
plish? And  so  the  contract  between  grantor  and  grantee,  if  re- 
vocable earlier,  ceases  to  be  so  when  by  his  assent  to  it  and  adoption 
of  it  the  creditor  brings  himself  into  privity  with  it  and  elects  to 
avail  himself  of  it,  and  must  be  assumed  to  have  governed  his  con- 
duct accordingly.     I  see  no  escape  from  that  conclusion. 

But  two  of  the  judges  who  concurred  in  the  decision  of  Lawrence 
V.  Fox  stood  upon  a  different  proposition.  They  held  that  the 
mortgagor  granting  the  land  accepted  the  grantee's  covenant  as 
agent  of  the  mortgagee,  who  might  ratify  the  act  with  the  same 
effect  as  if  he  had  originally  nuthorizcd  it.  While  T  think  the  idea 
of  such  an  agency  is  a  legal  ficton,  ha^ang  no  warrant  in  the  facts, 
yet  the  same  result  as  to  the  power  of  revocation  follows.  While 
the  agency  remained  unauthorized  it  migbt  bo  possible  to  change  the 
transaction,  but  after  the  ratification  the  promise  necessarily  be- 
comes one  made  to  the  mortgagee,  through  his  agent,  the  mortgagor, 
acting  lawfully  in  his  behalf,  and  from  that  moment  cannot  be  al- 
tered or  released  without  his  sanction  and  consent. 

But  another  basis  for  the  action  has  been  asserted,  applicable, 
however,  only  to  cases  like  the  present,  where,  on  foreclosure  of  the 
mortgage,  its  owner  seeks  a  judgment  for  a  deficiency  against  the 
new  covenantor.  In  Burr  v.  Beers,  24  IST.  Y.  179,  and  again  in 
Garnsey  v.  Tiogers,  47  N".  Y.  242,  it  was  pointed  out  that  the  lia- 
bility of  the  grantee  to  the  mortgagee  rested  upon  the  equitable  right 
of  subrogation,  and  had  been  recognized  and  enforced  long  before 


SECT.    l]  GIFFORD    V.    CORRIGAN  351 

Lawrence  v.  Fox  made  its  appearance.     It  was  held  that  where  the 
mortgagor  acquired  a  new  security  for  his  indemnity  against  the 
debt  which  he  owed  to  the  mortgagee,  the  latter  might,  in  equity, 
be  subrogated  to  the  right  of  his  debtor,  and,  under  the  statute  per- 
mitting any  person  liable  for  the  mortgage  debt  to  be  made  defendant 
and  charged  with  a  deficiency  in  the  foreclosure,  the  new  covenant 
became  available  to  the  mortgagee.     It  was  so  held  in  Halsey  v. 
Eeed,  9  Paige,  446,  and  the  right  of  the  mortgagee  was  put  upon 
the  equity  of  the  statute.     That,  if  a   sound  proposition,  was   all 
very  well  so  long  as  there  was  supposed  to  be  no  equivalent  remedy 
at  law,  but  after  the  decision  of  Lawrence  v.  Fox  that  remedy  ex- 
isted.    And  so  in  Thorp  v.  Keokuk  Coal  Company,  48  N.  Y.  258, 
the  court  said  that  it  saw  no  reason  for  invoking  the  doctrine  of 
equitable  subrogation,  or  resting  upon  it  in  such  a  case.     When  the 
law  has  absorbed,  in  a  broader  equity,  the  narrow  one  enforced  in 
chancery,  the  form  and  measure  of  the  latter  ceases  to  be  of  conse- 
quence.    One  does  not  seek  to  trace  the  river  after  it  has  lost  itself 
in  the  lake.    And  so  I  think  the  suggestion  is  well  founded.    But  if 
I  am  wrong  about  that,  as,  perhaps,  I  may  prove  to  be,  and  the  right 
of  the  present  plaintiff  against  the  cardinal's  estate  does  stand  upon 
the  doctrine  of  equitable  subrogation,  still  I  think  the  same  result 
follows.    When  does  that  equitable  right  arise  and  become  vested  in 
the  creditor?     It  would  seem  that  it  must  be  when  the  situation  is 
created  out  of  which  the  equity  is  born.    If  it  be  possible  to  adjourn 
it  to  a  later  period,  it  must  certainly  attach  when  the  creditor  as- 
serts his  right  to  it  and  notifies  the  other  party  of  his  intention  to 
rely  upon  it.    As  a  right,  founded  upon  the  equity  of  the  statute,  it 
must  have  came  into  being  before  the  foreclosure  suit  was  commenced ; 
for  the  permission  reads,  "any  person  who  is  liable  to  the  plaintiff 
for  the  payment  of  the  debt  secured  by  the  mortgage  may  be  made 
a  defendant  in  the  action."     His  liability  must  precede  the  com- 
mencement of  the  action.     It  must  exist  as  a  condition  of  his  being 
sued  at  all;   and  so,  assuming  that  this  action  can  be  maintained 
against  him  upon  his  promise,  the  right  of  action  must  have  arisen 
at  once  upon  the  delivery  of  the  deed,  or,  at  the  latest,  when  the 
promise  came  to  the  knowledge  of  the  creditor,  and  he  assented  to 
and  adopted  it. 

I  have  been  quite  favorably  impressed  with  a  fourth  suggestion 
respecting  the  basis  of  these  rights  of  action  which  appears  in  the 
opinion  of  Andrews,  J.,  rendered  when  this  case  was  before  us  on 
a  previous  appeal.  "After  all,"  he  says,  "does  not  the  direct  right 
of  action  rest  upon  the  equity  of  the  transaction?"  If  we  discard 
the  fictitious  theory  of  an  agency,  what  remains  is  the  equitable 
right  of  subrogation  swallowed  up  in  the  greater  equity  of  the 
legal  right  founded  on  the  theory  of  a  promise  made  for  the  benefit 
of  the  creditor.  It  is  no  new  thing  for  the  law  to  borrow  weapons 
from  the  arsenal  of  equity.    The  action  for  money  had  and  received 


352  SEAVER    V.    RANSOM  [CHAP.    Ill 

is  a  familiar  illustration.  May  we  not  deem  this  another  ?  If  we  do, 
and  the  door  is  thus  opened  wide  to  equitable  considerations,  I  am 
quite  sure  it  will  follow  that  while  no  right  of  the  mortgagee  is 
invaded  by  a  change  of  the  contract  before  it  is  brought  to  his 
knowledge,  and  he  has  assented  to  it  and  acted  upon  it,  yet  to  per- 
mit a  change  thereafter,  while  the  creditor  is  relying  upon  it,  would 
be  grossly  inequitable  and  practically  destroy  the  right  which  has 
maintained  itself  after  so  long  a  struggle. 

It  seems  to  me,  therefore,  that  however  we  may  reasonably  differ 
as  to  the  doctrine  underlying  the  plaintiff's  right  of  action,  yet  all 
the  roads  lead  to  the  one  result  that  upon  the  facts  of  this  case  the 
release  to  McCloskey  was  wholly  ineffectual. 

The  judgment  should  be  affirmed,  with  costs. 

All  concur  except  Danfokth  and  Peckham,  JJ.,  dissenting. 

Judgment  affirmed} 


MARION  E.  SEAVER,  Respondent,  v.  MATT  C.  RANSOM, 
ET  AL.,  AS  Executors 

New  York  Court  of  Appeals,  June  12,  1918-October  1,  1918 

[Reported  in  224  New  YorJc,  233] 

Pound,  J.  Judge  Beman  and  his  wife  were  advanced  in  years. 
Mrs  Beman  was  about  to  die.  She  had  a  small  estate  consisting  of 
a  house  and  lot  in  Malone  and  little  else.  Judge  Beman  drew  his 
wife's  will  according  to  her  instructions.  It  gave  $1,000  to  plaintiff, 
$500  to  one  sister,  plaintiff's  mother,  and  $100  each  to  another  sister 
and  her  son,  the  use  of  the  house  to  her  husband  for  life,  remainder 
to  the  American  Society  for  the  Prevention  of  Cruelty  to  Animals, 
She  named  her  husband  as  residuary  legatee  and  executor.  Plain- 
tiff was  her  niece,  thirty-four  years  old,  in  ill  health,  sometimes 
a  member  of  the  Beman  household.  When  the  will  was  read  to 
Mrs.  Beman  she  said  that  it  was  not  as  she  wanted  it;  she  wanted 
to  leave  the  house  to  plaintiff.  She  had  no  other  objection  to  the 
will,  but  her  strength  was  waning  and  although  the  judge  offered 
to  write  another  will  for  her,  she  said  she  was  afraid  she  would  not 
hold  out  long  enough  to  enable  her  to  sign  it.  So  the  judge  said 
if  she  would  sign  the  will  he  would  leave  plaintiff  enough  in  his 
will  to  make  up  the  difference.     He  avouched  the  promise  by  his 

»  In  Forbes  v.  Thorpe,  200  Mass.  570,  582,  in  speaking  of  a  contract  by  which  a 
firm  on  conveyinq;  its  property  to  a  cori)oration  ol)tainod  a  contract  from  the  latter 
by  which  the  cf)rporation  assumed  and  apreed  to  pay  the  firm  debts,  the  court  said: 
"The  contract  beinK  marlo  by  the  firm  for  the  benefit  of  their  creditors,  the  latter  may 
enforce  in  enwity  the  rinhtH  of  the  copartners  to  compel  the  corporation  to  perform 
its  aRreemcnt  in  this  regard.  This  is  a  prorterty  ri^lit  not  sul)ject  to  attachment 
which  cm  be  reached  in  (Kiuity  and  made  availalile  for  the  benefit  of  the  creditor." 
Bee  also  Keller  v.  Ashford,  133  U.  S.  610;  Mcllvane  v.  Big  Stony  Lumber  Co.,  105  Va. 
613. 


SECT.   l]  SEAVER    V.   RANSOM  353 

uplifted  hand  with  all  solemnity  and  his  wife  then  executed  the 
will.  When  he  came  to  die  it  was  found  that  his  will  made  no  pro- 
vision for  the  plaintiff. 

This  action  was  brought  and  plaintiff  recovered  judgment  in  the 
trial  court  on  the  theory  that  Beman  had  obtained  property  from 
his  wife  and  induced  her  to  execute  the  will  in  the  form  prepared 
by  him  by  his  promise  to  give  plaintiff  $6,000,  the  value  of  the 
house,  and  that  thereby  equity  impressed  his  property  with  a  trust 
in  favor  of  plaintiff.  Where  a  legatee  promises  the  testator  that  he 
will  use  property  given  him  by  the  will  for  a  particular  purpose,  a 
trust  arises.  (O'Hara  v.  Dudley,  95  JST.  Y.  403;  Trustees  of  Amherst 
College  V.  Eitch,  151  N.  Y.  282;  Ahrens  v.  Jones,  169  N.  Y.  555.) 
Beman  received  nothing  under  his  wife's  will  but  the  use  of  the 
house  in  Malone  for  life.  Equity  compels  the  application  of  prop- 
erty thus  obtained  to  the  purpose  of  the  testator,  but  equity  cannot 
so  impress  a  trust  except  on  property  obtained  by  the  promise. 
Beman  was  bound  by  his  promise,  but  no  property  was  bound  by 
it;  no  trust  in  plaintiff's  favor  can  be  spelled  out. 

An  action  on  the  contract  for  damages  or  to  make  the  executors 
trustees  for  performance  stands  on  different  ground.  (Farmers 
Loan  &  Trust  Co.  v.  Mortimer,  219  K  Y.  290,  294,  295.)  The  Ap- 
pellate Division  properly  passed  to  the  consideration  of  the  question 
whether  the  judgment  could  stand  upon  the  promise  made  to  the 
wife,  upon  a  valid  consideration,  for  the  sole  benefit  of  plaintiff. 
The  judgment  of  the  trial  court  was  affirmed  by  a  return  to  the 
general  doctrine  laid  down  in  the  great  case  of  Lawrence  v.  Tox 
(20  N.  Y.  268)  w^hich  has  since  been  limited  as  herein  indicated. 

Contracts  for  the  benefit  of  third  persons  have  been  the  prolific 
source  of  judicial  and  academic  discussion.  (Williston,  Contracts 
for  the  Benefit  of  a  Third  Person,  15  Harvard  Law  Review,  767; 
Corbin,  Contracts  for  the  Benefit  of  Third  Persons,  27  Yale  Law 
Beview,  1008.)  The  general  rule,  both  in  law  and  equity  (Phalen 
V.  U.  S.  Trust  Co.,  186  N.  Y.  178,  186),  was  that  privity  between  a 
plaintiff  and  a  defendant  is  necessary  to  the  maintenance  of  an 
action  on  the  contract.  The  consideration  must  be  furnished  by 
the  party  to  whom  the  promise  was  made.  The  contract  cannot  be 
enforced  against  the  third  party  and,  therefore,  it  cannot  be  en- 
forced by  him.  On  the  other  hand,  the  right  of  the  beneficiary  to 
sue  on  a  contract  made  expressly  for  his  benefit  has  been  fully  recog- 
nized in  many  American  jurisdictions,  either  by  judicial  decision 
or  by  legislation,  and  is  said  to  be  "the  prevailing  rule  in  this 
country."  (Hendrick  v.  Lindsay,  93  U.  S.  143;  Lehow  v.  Simonton, 
3  Col.  346.)  It  has  been  said  that  "the  establishment  of  this  doc- 
trine has  been  gradual,  and  is  a  victory  of  practical  utility  over 
theory,  of  equity  over  technical  subtlety."  (Brantly  on  Contracts 
[2d  ed.],  p.  253.)  The  reasons  for  this  view  are  that  it  is  just  and 
practical  to  permit  the  person  for  whose  benefit  the  contract  is  made 
12 


354  SEAVER    V.   RANSOM  [CHAP.    Ill 

to  enforce  it  against  one  whose  duty  it  is  to  pay.  Other  jurisdictions 
still  adhere  to  the  present  English  rule  (7  Halsbury's  Laws  of  Eng- 
land, 342,  343;  Jenks'  Digest  of  English  Civil  Law,  §  229)  that  a 
contract  cannot  be  enforced  by  or  against  a  person  who  is  not  a 
party.  (Exchange  Bank  v.  Eice,  107  Mass.  37;  but  see,  also,  Eorbes 
V.  Thorpe,  209  Mass.  570;  Gardner  v.  Denison,  217  Mass.  492.)  In 
New  York  the  right  of  the  beneficiary  to  sue  on  contracts  made  for 
his  benefit  is  not  clearly  or  simply  defined.  It  is  at  present  confined, 
first,  to  cases  where  there  is  a  pecuniary  obligation  running  from 
the  promisee  to  the  beneficiary;  "a.  legal  right  founded  upon  some 
obligation  of  the  promisee  in  the  third  party  to  adopt  and  claim  the 
promise  as  made  for  his  benefit."  (Farley  v.  Cleveland,  4  Cow. 
432;  Lawrence  v.  Fox,  supra;  Garnsey  v.  Rogers,  47  N.  Y.  233; 
Vrooman  v.  Turner,  69  N.  Y.  280;  Lorillard  v.  Clyde,  122  N.  Y. 
498;  Durnherr  v.  Eau,  135  N.  Y.  219;  Townsend  v.  Rackham,  143 
K  Y.  516;  Sullivan  c.  Sullivan,  161  N".  Y.  554.)  Secondly,  to 
cases  where  the  contract  is  made  for  the  benefit  of  the  wife  (Bu- 
chanan V.  Tilden,  158  K  Y.  109;  Bouton  v.  Welch,  170  F.  Y.  5540), 
affianced  wife  (De  Cicco  v.  Schweizer,  221  N^.  Y.  431),  or  child 
(Todd  V.  Weber,  95  K  Y.  181,  193;  Matter  of  E:idd,  188  K  Y. 
274)  of  a  party  to  the  contract.  The  close  relationship  cases  go 
back  to  the  early  King's  Bench  case  (1677),  long  since  repudiated 
in  England,  of  Dutton  v.  Poole  (2  Lev.  210;  s.  c,  1  Yentris,  318, 
332).  (Schermerhorn  v.  Vanderheyden,  1  Johns.  139.)  The  natural 
and  moral  duty  of  the  husband  or  parent  to  provide  for  the  future 
of  wife  or  child  sustains  the  action  on  the  contract  made  for  their 
benefit.  "This  is  the  farthest  the  cases  in  this  state  have  gone,"  says 
Cullen,  J.,  in  the  marriage  settlement  case  of  Borland  v.  Welch 
(162  IsT.  Y.  104,  110.) 

The  right  of  the  third  party  is  also  upheld  in,  thirdly,  the  public 
contract  cases  (Little  v.  Banks,  85  'N.  Y.  258;  Pond  v.  New  Ro- 
chelle  Water  Co.,  183  N.  Y.  330;  Smyth  v.  City  of  New  York, 
203  N.  Y.  106;  Farnsworth  r.  Boro  Oil  &  Gas  Co.,  216  N.  Y.  40, 
48;  Rigney  v.  N.  Y.  C.  &  H.  R.  R.  R.  Co.,  217  N.  Y.  31;  Matter 
of  International  Ry.  Co.  v.  Rann,  224  N.  Y.  83;  cf.  German  Alli- 
ance Ins.  Co.  V.  Home  Water  Supply  Co.,  226  U.  S.  220)  where  the 
municipality  seeks  to  protect  its  inhabitants  by  covenants  for  their 
benefit  and,  fourthly,  the  cases  where,  at  the  request  of  a  party  to 
the  contract,  the  promise  runs  directly  to  the  beneficiary,  although 
he  does  not  furnish  the  consideration.  (Rector,  etc.,  v.  Teed  120 
N.  Y.  583;  F.  N.  Bank  of  Sing  Sing  v.  Chalmers,  144  N.  Y.  432, 
439;  Hamilton  v.  Hamilton,  127  App.  Div.  871,  875.)  It  mny  be 
safely  said  that  a  general  rule  sustaining  recovery  at  the  suit  of 
the  tliird  party  would  include  but  few  classes  of  cases  not  included 
in  these  groups,  either  categorically  or  in  principle. 

The  desire  of  the  childless  aunt  to  make  provision  for  a  beloved 
and  favorite  niece  differs  imperceptibly  in  law  or  in  equity  from 


SECT.    l]  SEAVER    V.   RANSOM  355 

the  moral  duty  of  the  parent  to  make  testamentary  provision  for  a 
child.  The  contract  was  made  for  the  plaintiff's  benefit.  She  alone 
is  substantially  damaged  by  its  breach.  The  representatives  of  the 
vrife's  estate  have  no  interest  in  enforcing  it  specifically.  It  is  said 
in  Buchanan  v.  Tilden  that  the  common  law  imposes  moral  and  legal 
obligations  upon  the  husband  and  the  parent  not  measured  by  the 
necessaries  of  life.  It  was,  however,  the  love  and  affection  or  the 
moral  sense  of  the  husband  and  the  parent  that  imposed  such  obli- 
gations in  the  cases  cited  rather  than  any  common-law  duty  of  hus- 
band and  parent  to  wife  and  child.  If  plaintiff  had  been  a  child 
of  Mrs.  Beman,  legal  obligation  would  have  required  no  testamentary 
provision  for  her,  yet  the  child  would  have  enforced  a  covenant  in 
her  favor  identical  with  the  covenant  of  Judge  Beman  in  this  case. 
(De  Cicco  V.  Schweizer,  supra.)  The  constraining  power  of  con- 
science is  not  regulated  by  the  degree  of  relationship  alone.  The 
dependent  or  faithful  niece  may  have  a  stronger  claim  than  the 
afiluent  or  unworthy  son.  ISTo  sensible  theory  of  moral  obligation 
denies  arbitrarily  to  the  former  what  would  be  conceded  to  the  latter. 
We  might  consistently  either  refuse  or  allow  the  claim  of  both,  but 
I  cannot  reconcile  a  decision  in  favor  of  the  wife  in  Buchanan  v. 
Tilden  based  on  the  moral  obligations  arising  out  of  near  relation- 
ship with  a  decision  against  the  niece  here  on  the  ground  that  the 
relationship  is  too  remote  for  equity's  ken.  No  controlling  authority 
depends  upon  so  resolute  a  rule.  In  Sullivan  v.  Sullivan  (supra) 
the  grandniece  lost  in  a  litigation  with  the  aunt's  estate  founded  on 
a  certificate  of  deposit  payable  to  the  aunt  "or  in  case  of  her  death 
to  her  niece,"  but  what  was  said  in  that  case  of  the  relations  of 
plaintiff's  intestate  and  defendant  does  not  control  here,  any  more 
than  what  was  said  in  Durnherr  v.  Rau  (supra)  on  the  relation  of 
husband  and  wife,  and  the  inadequacy  of  mere  moral  duty,  as  dis- 
tinguished from  legal  or  equitable  obligation,  controlled  the  decision 
in  Buchanan  v.  Tilden.  Borland  v.  "Welch  (supra)  deals  only  with 
the  rights  of  volunteers  under  a  marriage  settlement  not  made  for 
the  benefit  of  collaterals. 

Kellogg,  P.  J.,  writing  for  the  court  below  well  said:  "The  doc- 
trine of  Lawrence  v.  Fox  is  progressive,  not  retrograde.  The  course 
of  the  late  decisions  is  to  enlarge,  not  to  limit  the  effect  of  that 
case."  The  court  in  that  leading  case  attempted  to  adopt  the  gen- 
eral doctrine  that  any  third  person,  for  whose  direct  benefit  a  contract 
was  intended,  would  sue  on  it.  The  head  note  thus  states  the  rule. 
Finch,  J.,  in  Gilford  v.  Corrigan  (117  N.  Y.  257,  262)  says  that 
the  case  rests  upon  that  broad  proposition;  Edward  T.  Bartlett, 
J.,  in  Pond  V.  New  Rochelle  Water  Co.  (183  N.  Y.  330,  337)  calls 
it  "the  general  principle;"  but  Vrooman  v.  Turner  (supra)  con- 
fined its  application  to  the  facts  on  which  it  was  decided.  "In  every 
case  in  which  an  action  has  been  sustained,"  says  Allen,  J.,  "there 
has  been  a  debt  or  duty  owing  by  the  promisee  to  the  party  claiming 


356  SEAVER    V.   RANSOM  [CHAP.    Ill 

to  use  upon  the  promise."  (69  N.  Y.  285.)  As  late  as  Townsend  v. 
Eackliam  (143  N.  Y.  516,  523)  we  find  Peckham,  J.,  saying  that 
"to  maintain  the  action  by  the  third  person  there  must  be  this  lia- 
bility to  him  on  the  part  of  the  promisee."  Buchanan  v.  Tilden 
went  further  than  any  case  since  Lawrence  v.  Fox  in  a  desire  to 
do  justice  rather  than  to  apply  with  technical  accuracy  strict  rules 
calling  for  a  legal  or  equitable  obligation.  In  Embler  v.  Hartford 
Steam  Boiler  Inspection  &  Ins.  Co.  (158  N".  Y.  431)  it  may  at  least 
be  said  that  a  majority  of  the  court  did  not  avail  themselves  of  the 
opportunity  to  concur  with  the  views  expressed  by  Gray,  J.,  —  who 
wrote  the  dissenting  opinion  in  Buchanan  v.  Tilden,  —  to  the  effect 
that  an  employee  could  not  maintain  an  action  on  an  insurance 
policy  issued  to  the  employer,  which  covered  injuries  to  employees. 

In  Wright  v.  Glen  Telephone  Co.  (48  Misc.  Eep.  192,  195)  the 
learned  presiding  justice  who  wrote  the  opinion  in  this  case  said,  at 
Trial  Term :  "The  right  of  a  third  person  to  recover  upon  a  contract 
made  by  other  parties  for  his  benefit  must  rest  upon  the  peculiar 
circumstances  of  each  case  rather  than  upon  the  law  of  some  other 
case."  "The  case  at  bar  is  decided  upon  its  peculiar  facts."  (Ed- 
ward T.  Bartlett,  J.,  in  Buchanan  v.  Tilden.)  But,  on  principle, 
a  sound  conclusion  may  be  reached.  If  Mrs.  Beman  had  left  her 
husband  the  house  on  condition  that  he  pay  the  plaintiff  $6,000  and 
he  had  accepted  the  devise,  he  would  have  become  personally  liable 
to  pay  the  legacy  and  plaintiff  could  have  recovered  in  an  action 
at  law  against  him,  whatever  the  value  of  the  house.  (Gridley  v. 
Gridley,  24  N.  Y.  130;  Brown  v.  Knapp,  79  K  Y.  136,  143;  Dinan 
V.  Coneys,  143  N.  Y.  544,  547;  Blackmore  v.  White,  [1899]  1  Q. 
B.  293,  304.)  That  would  be  because  the  testatrix  had  in  substance 
bequeathed  the  promise  to  plaintiff  and  not  because  close  relation- 
ship or  moral  obligation  sustained  the  contract.  The  distinction 
between  an  implied  promise  to  a  testator  for  the  benefit  of  a  third 
party  to  pay  a  legacy  and  an  unqualified  promise  on  a  valuable  con- 
sideration to  make  provision  for  the  third  party  by  will  is  dis- 
cernible but  not  obvious.  The  tendency  of  American  authority  is 
to  sustain  the  gift  in  all  such  cases  and  to  permit  the  donee-benefi- 
ciary to  recover  on  the  contract.  (Matter  of  Edmundson's  Estate, 
259,  Pa.  429,  103  Atl.  Rep.  277.)  The  equities  are  with  the  plaintiff 
and  they  may  be  enforced  in  this  action,  whether  it  be  regarded  as 
an  action  for  damages  or  an  action  for  specific  performance  to  con- 
vert the  defendants  into  trustees  for  plaintiff's  benefit  under  the 
agreement. 

The  judgment  should  be  affirmed,  with  costs. 

HoffAN,  Cahdozo  and  Crane,  JJ.,  concur;  Hiscock,  Ch.  J.,  Collin 
and  Anuukwh,  JJ.,  dissent.  Judgment  affirmed. 


SECT.    l]  GARDNER    V.   DENISON  357 

EDWAED  G.  GAKDNEE  v.  AETHUR  W.  DENISO^-, 

Administkatoe 

Supreme  Judicial  Couet  of  Massachusetts,  January  20,  1914- 

May  20,  1914 

[Reported  in  217  Massachusetts,  492] 

EuGG,  C.  J.  The  facts  upon  which  the  plaintiff  seeks  to  recover 
are  these :  His  father,  who  was  on  friendly  terms  with  the  defendant's 
testator,  Edward  Gerrish,  told  the  latter,  in  JSTovember,  1900,  that 
the  birth  of  a  child  was  expected  in  his  family.  Gerrish,  after 
several  interviews,  promised  that  if  a  boy  should  be  born  and  named 
for  him,  Edward  Gerrish  Gardner,  he  would  make  some  provision 
for  the  child.  When  the  child  was  born,  on  January  1,  1901,  he  was 
named  for  the  defendant's  testator.  On  January  23,  1901,  the  plain- 
tiff's father,  at  the  request  of  Gerrish,  wrote  at  the  latter's  dictation 
the  following:  "Jan.  23,  —  1901.  I,  Edward  Gerrish,  promise  to 
place  in  trust  for  Joseph  A.  Gardner's  youngest  son  born  Jan  1  — 
1901,  $10,000  for  naming  said  son  after  me,  Edward  Gerrish  Gard- 
ner," 'No  specific  sum  of  money  had  been  mentioned  before,  Gerrish 
then  signed  the  paper  in  the  presence  of  the  plaintiff's  father,  who 
since  has  had  the  possession  and  control  of  it,  Gerrish  later  lived  in 
the  family  of  the  plaintiff's  father  and  showed  special  attention  to 
the  child,  bestowing  many  gifts  upon  him  and  constantly  referring 
to  him  as  "my  boy."  He  died  in  1906,  leaving  an  estate  of  more 
than  $200,000,  never  having  made  any  provision  for  the  benefit  of 
the  plaintiff. 

The  privilege  of  naming  a  child  is  a  valid  consideration  for  a 
promise  to  pay  money.  The  child  has  a  direct  and  immediate  in- 
terest in  his  name  and  is  more  affected  by  it  than  any  one  else.  He 
loses  the  opportunity  of  receiving  a  more  advantageous  name,  and 
is  compelled  to  bear  whatever  detriment  may  flow  from  the  name 
imposed  upon  him.  The  consideration  moves  in  part  from  the  child, 
although  he  is  not  in  a  position  personally  to  yield  an  assent  to  the 
promise  at  the  time  it  is  made.  It  is  a  general  rule  that  one  who 
is  not  a  party  to  a  contract  cannot  bring  an  action  on  it  even  though 
it  be  made  for  his  benefit.  But  the  circumstances  of  the  parties 
respecting  the  naming  of  a  child  are  so  peculiar,  the  nearness  of  the 
relation  so  great,  and  the  obligation  resting  on  the  father  and  mother 
so  important,  and  the  consequences  to  the  child  so  vital,  that  the 
inference  may  be  drawn  that  the  father  is  acting  in  the  interests  of 
and  as  agent  for  the  son  in  making  any  contract  as  to  giving  him 
a  name.  Felton  ik  Dickinson,  10  Mass.  287,  as  interpreted  by  Mars- 
ton  V.  Bigelow,  150  Mass.  45,  53.  It  was  said  in  Eaton  t'.  Libbey, 
165  Mass.  218,  at  page  220,  respecting  the  naming  of  a  child,  "The 
right  of  the  parents  is  one  which  they  have  as  the  natural  guardians 
of  the  child,  and  they  may  be  presumed  to  act  in  the  matter  of  its 


358  HARTMAN    V.    PISTORIUS  [CHAP.    Ill 

interest.  If,  for  exercising  the  right  in  a  particular  manner,  they 
receive  a  reward  which  they  recognize  and  treat  as  belonging  to  the 
child,  it  should  be  considered  as  its  property,  even  if  the  parents 
could  have  kept  the  reward  as  their  own." 

This  action  is  brought  in  the  name  of  the  son  by  his  father  as 
next  friend.  That  is  a  relinquishment  of  the  father's  personal  rights, 
as  far  as  they  ever  might  have  been  antagonistic  to  the  son,  and  is 
equivalent  to  an  assertion  that  whatever  he  did  was  done  as  agent 
for  the  son.  The  writing,  signed  by  Gerrish,  while  inartificially 
expressed,  in  substance  is  a  declaration  by  the  defendant's  testator 
that  he  acknowledges  himself  indebted  in  the  sum  of  $10,000  for 
the  privilege  granted  him  of  having  the  plaintiff  bear  his  name. 
The  words  "in  trust  for,"  in  the  absence  of  any  definition  of  the 
terms  of  any  trust,  may  be  treated  as  meaning  nothing  more  than 
the  expression  of  a  general  purpose  that  the  promise  was  for  the 
benefit  of  the  plaintiff.  JNTo  promisee  being  named  in  the  instrument, 
all  the  attendant  conditions  may  be  examined  for  the  purpose  of 
determining  to  whom  in  fact  the  promise  to  pay  was  made.  Such 
resort  to  extrinsic  circumstances  is  not  for  the  purpose  of  changing 
the  writing,  but  of  applying  it  to  its  proper  object.  Way  v.  Greer, 
196  Mass.  237.  Willett  v.  Smith,  214  Mass.  494,  497,  and  cases 
cited.  Under  all  the  circumstances  we  are  of  opinion  that  the  plain- 
tiff was  entitled  to  go  to  the  jury.  Exceptions  sustained. 


JOHN  HAETMAIT,  Defendant  in  Error,  v.  F.  H.  PISTOKIUS 

ET  AL.,  Plaintiffs  in  Error 

Illinois  Supreme  Court,  February  25,  1911 

[Reported  in  248  Illinois,  568] 

Caetwright,  J.  This  was  a  petition  for  certiorari  to  review  a 
decree  in  favor  of  the  defendant  in  error  on  a  bill  filed  by  him  to 
foreclose  a  mortgage.  On  October  15,  1907,  Brown  &  Osby  en- 
tered into  a  written  contract  with  F.  H.  Pistorius  and  C.  W.  Pis- 
torius,  plaintiffs  in  error,  by  which  Brown  &  Osby  agreed  to  pay  to 
them  $350,  and  to  convey  to  them  all  right,  title  aud  interest  in 
certain  standing  timber,  subject  to  a  mortgage  of  $1500,  held  by 
tbo  defendant  in  error,  which  the  plaintiffs  in  error  agreed  to  pay. 
The  plaintiffs  in  error  on  their  part  agreed  to  convey  to  Brown  & 
Osby,  eighty  acres  of  land  in  Perry  County  (reserving,  however,  the 
timber  thereon),  subject  to  a  mortgage  of  $1600,  which  was  to  be 
assunif'd  by  Brown  &  Osby.  Nothing  was  done  in  pursuance  of 
the  agreement  except  that  an  affidavit  of  a  former  owner  of  Brown 
&'  O-sby's  land  was  procured,  to  the  effect  that  he  had  made  no  trans- 
fers or  conveyances  of  the  timber  except  to  their  grantor  and  that 
there  were  no  outstanding  unsatisfied  judgments  against  him. 


SECT.   l]  HARTMAN    V.    PISTORIUS  359 

On  December  14,  1907,  the  contract  between  Brown  &  Osby  and 
plaintiffs  in  error  was  abandoned  by  mutual  consent,  and  they  en- 
tered into  a  second  agreement,  written  across  the  face  of  the  copy 
of  the  original  agreement,  by  which  such  original  agreement  was 
satisfied  and  discharged  in  consideration  of  $50  paid  by  Brown  & 
Osby  to  plaintiffs  in  error  and  the  delivery  of  a  quit-claim  deed  of 
the  eighty  acres  in  Perry  county  by  the  plaintiffs  in  error  to.  Brown 
&  Osby. 

Where  one  person  makes  a  promise  to  another,  based  upon  a 
valid  consideration,  for  the  benefit  of  a  third  person,  such  third 
person  may  maintain  an  action  on  the  contract,  and  by  virtue  of 
that  rule  the  purchaser  of  mortgaged  premises  who  assumes  the 
mortgage  indebtedness  as  a  part  of  the  consideration  for  the  convey- 
ance to  him  becomes  personally  liable  for  such  indebtedness  and 
cannot  defeat  the  mortgagee's  right  to  hold  him  responsible  by  pro- 
curing a  release  from  the  mortgagor.  (Dean  v.  Walker,  107  111. 
540;  Bay  v.  Williams,  112  id.  91;  Ingram  v.  Ingram,  172  id.  287; 
Webster  v.  Fleming,  178  id.  140;  Harts  v.  Emery,  184  id.  560.) 
These  rules,  however,  cannot  be  applied  to  this  case,  for  the  reason 
that  the  plaintiffs  in  error  never  acquired  title  to  the  mortgaged 
property  nor  received  or  accepted  a  conveyance  of  it.  There  was 
a  contract  providing  for  a  payment  of  $350  and  conveyance  of  the 
timber  in  consideration  of  a  conveyance  of  eighty  acres  of  land,  and 
if  the  contract  had  been  executed  and  the  considerations  had  passed 
the  plaintiffs  in  error  would  have  become  liable  for  the  mortgage 
debt,  but  the  contract  remained  wholly  executory  and  was  canceled 
by  mutual  agreement. 

The  substance  of  the  argument  in  support  of  the  decree  is  that 
there  was  an  agreement,  which,  if  executed,  would  have  been  a  bene- 
fit to  defendant  in  error;  that  plaintiffs  in  error  could  have  had 
the  timber,  if  they  wanted  it,  by  complying  with  the  contract;  that 
it  was  their  fault  if  they  did  not  get  the  timber  and  they  ought  not 
to  be  allowed  to  take  advantage  of  their  own  wrong  in  not  acquiring 
it,  and  that,  having  had  an  opportunity  of  acquiring  the  timber, 
they  ought  not  to  have  the  benefit  of  their  own  voluntary  act  in 
abandoning  or  waiving  their  right.  The  argument  is  quite  novel 
and  does  not  appear  to  us  to  be  sound.  It  is  true  that  plaintiffs  in 
error  would  have  obtained  title  to  the  timber  if  Brown  &  Osby  had 
paid  the  $350  and  made  a  conveyance  of  it,  which  Brown  &  Osby 
had  agreed  to  do  if  plaintiffs  in  error  conveyed  their  Perry  county 
land  and  both  parties  furnished  merchantable  titles,  but  the  parties 
were  as  free  to  cancel  and  abandon  the  contract  as  they  had  been  to 
enter  into  it.  The  defendant  in  error  did  not  change  his  position  in 
any  particular  and  did  not  even  notify  either  party  of  his  willingness 
that  the  contract  should  be  carried  out.  The  plaintiffs  in  error  did 
not  agree  to  pay  the  mortgage  debt  in  consideration  of  the  making 
of  the  contract  or  the  promise  of  Brown  &  Osby  to  make  a  convey- 


360  HARTAIAN    V.    PISTORIUS  [CHAP.    Ill 

ance,  but  the  true  consideration  was  the  timber  to  be  conveyed  by 
a  merchantable  title  and  the  cash  payment.  The  parties  were  not 
bargaining  for  promises  but  for  conveyances.  (Tyler  v.  Young,  2 
Scam.  444;  Mason  v.  Wait,  4  id.  127;  Davis  v.  McVickers,  11  111. 
327;  Thompson  v.  Shoemaker,  68  id.  256.)  The  plaintiffs  in  error 
were  under  no  greater  obligation  to  pay  the  mortgage  debt  than  any 
other  person  would  have  been  who  had  an  option  on  the  timber  sub- 
ject to  the  assumption  of  the  mortgage  debt.^ 

*  The  statement  of  facts  in  the  opmion  is  abbreviated,  and  a  portion  of  the  opinion 
omitted. 

In  many  cases,  it  is  laid  down  broadly  that  after  the  creditor  or  beneficiary  has  been 
notified  of  the  contract  rescission  is  no  longer  possible,  and  that  prior  thereto  it  is 
permissible.  See  2  Williston,  Contracts,  §  396  b.  What  is  required  in  the  way  of 
assent  or  acting  upon  the  promise  is  not  defined.  Doubtless  in  many  jurisdictions  if 
the  third  person  had  knowledge  of  the  promise  and  made  no  objection  he  would  be 
regarded  as  assenting.  But  in  Crowell  v.  Currier,  27  N.  J.  Eq.  152  (s.  c.  on  appeal 
sub.  nom.  Crowell  v.  Hospital,  27  N.  J.  Eq.  650),  it  was  held  that  rescission  was  per- 
missible because  the  third  party  had  not  altered  his  position,  the  court  apparently 
requiring  something  like  an  estoppel  to  prevent  a  rescission ;  and  in  Wood  v.  Moriarty, 
16  R.  I.  201,  a  release  by  the  promisee  was  held  effectual,  though  the  creditors  had 
made  a  demand  upon  the  promisor  for  the  money,  because  the  creditors  "  did  not  do 
or  say  anything  inconsistent  with  their  continuing  to  look  to  T  (the  original  debtor) 
for  the  debt." 

In  a  few  cases,  it  has  been  held  that  though  there  has  been  no  expression  of  assent 
by  the  third  person  no  effective  rescission  or  release  can  be  made.  Starbird  v.  Cran- 
ston, 24  Col.  20;  Bay  v.  Williams,  112  111.  91;  Cobb  v.  Heron,  78  111.  App.  654,  180 
111.  49;  Henderson  v.  McDonald,  84  Ind.  149;  Waterman  v.  Morgan,  114  Ind.  237; 
Rogers  v.  Gosnell,  58.  587;  Thompson  v.  Gordon,  3  Strobh.  196.  See  also  Knowles 
V.  Erwin,  43  Hun,  150  affd.  124  N.  Y.  623. 

The  almost  universal  doctrine  that  the  beneficiary  of  a  life  insurance  policy  acquires 
a  vested  right  of  which  he  cannot  be  deprived  subsequently  is  in  accord.  The  numer- 
ous cases  are  collected  in  3  Am.  &  Eng.  Encyc.  (2d  ed.),  980. 

In  Trustees  v.  Anderson,  30  N.  J.  Eq.  365,  368,  the  Court  say,  "That  the  releases 
were  executed  and  delivered  merely  in  view  of  this  suit,  and  for  the  purpose  of  pre- 
venting the  complainants  from  having  recourse  in  equity  to  Youngs,  is  proved,  and, 
indeed,  is  admitted.  That  the  grantor  may,  before  suit  brought  against  his  grantee 
by  the  mortgagee  to  obtain  the  benefit  of  such  a  covenant  of  assumption,  release  or 
discharge  it,  and  so  prevent  the  mortgagee  from  obtaining  any  benefit  of  it,  is  estab- 
ished.  Crowell  v.  Hospital  of  St.  Barnabas.  12  C.E.  Or.  650.  But  the  act  of  release 
or  discharge,  to  be  effectual,  must  be  done  bona  fide,  and  not  merely  for  the  purpose 
of  thwarting  the  mortgagee  and  depri\ang  him  of  an  equity  to  which  he  is  entitled. 
Where  a  person,  in  consideration  of  a  debt  duo  from  him,  agrees  with  his  creditor 
that  he  will,  in  discharge  of  it,  pay  the  amount  to  the  creditor  of  the  latter,  in  dis- 
charge or  on  account  of  a  debt  due  from  the  latter  to  him,  though  the  agreement  may 
be  bona  fide  rescinded  by  the  parties  to  it  for  considerations  or  reasons  satisfactory  to 
themselves,  and  without  accoimt  or  lialiUity  to  the  creditor  who  is  not  a  party  to  it 
yet,  if  the  promisee  be  insolvent,  and  the  rescission  be  merely  a  forgiving  of  the  debt 
for  the  mere  purpose  of  defrauding  the  creditor  of  the  promisee,  or  protecting  the 
promisor  against  his  liability,  the  rescission  will  not  avail  in  equity."  See  also  Youngs 
V.  Trustees,  31  N.  J.  Eq.  290;   Willard  v.  Worsham,  76  Va.  392. 


SECT.   l]  BOHANAN    V.   POPE  361 

JON'ES  A.  BOHANAN  v.  S.  W.  POPE,  et  al. 

Supreme  Judicial  Coukt  of  Maine,  1856 

[Reported  in  42  Maine,  93] 

On  facts  agreed  from  Nisi  Prius. 

This  was  an  action  of  assumpsit  brought  upon  a  contract.  The 
general  issue  was  pleaded  and  joined,  with  a  brief  statement,  setting 
forth  that  the  plaintiff  had  been  paid  for  the  labor  named  in  his 
writ  by  one  Henry  P.  Whitney,  or  by  reason  of  the  judgment  here- 
inafter mentioned,  for  whom  he  worked,  and  that  said  plaintiff  re- 
covered judgment  against  said  "Whitney  in  a  suit  for  the  same  labor,, 
and  enforced  his  lien  for  said  labor  upon  the  logs  he  worked  upon,. 
by  a  sale  of  the  same  by  D.  G.  Wilson,  deputy  sheriff,  on  the  exe- 
cution, at  public  auction. 

It  was  agreed  that  the  plaintiff  was  hired  by  Henry  P.  Whitney 
and  worked  upon  said  logs  in  hauling  and  cutting  them.  That  be- 
fore hiring  him,  Whitney  showed  him  said  contract,  and  plaintiff 
read  it,  and  Whitney  told  him  he  had  no  other  way  of  paying  except 
through  the  contract;  that  there  was  due  from  Whitney  to  plaintiff 
for  his  labor  $50.85,  for  which  Whitney  gave  plaintiff  an  order  on 
defendants;  that  plaintiff  presented  the  order  soon  after  to  defend- 
ants, who  refused  to  accept  or  pay  it,  and  said  order  has  never 
since  been  paid,  unless  by  reason  of  a  sale  of  said  logs  upon  execu- 
tion. Whitney  put  a  four-ox  team  into  the  woods,  and  hauled  logs 
in  accordance  with  the  contract.  He  did  not  drive  the  logs,  but  the 
defendants  drove  them  and  charged  Whitney  for  the  same  in  ac- 
count. There  has  been  no  settlement  between  Whitney  and  defend- 
ants for  the  operation.  Defendants  have  an  account  against  Whitney 
for  supplies,  etc.,  under  said  contract,  amounting  to  $1160.29,  and 
a  credit  of  $1020.73  in  his  favor,  and  there  was  a  balance  of  account 
against  Whitney  at  the  date  of  the  writ. 

On  May  22,  1853,  plaintiff  sued  said  Whitney  for  said  sum  of 
$50.85,  claiming  a  lien  for  labor  on  the  logs  marked  five  notches  and 
a  cross,  on  which  writ,  the  said  mark  of  logs  then  in  the  boom, 
were  attached  May  27,  1853 ;  the  action  was  defaulted  October  term, 
1853;  and  the  execution  duly  issued,  was  seasonably  put  into  the 
hands  of  D.  G.  Wilson,  a  deputy  sheriff,  who  seized  the  said  mark 
of  logs,  and  duly  advertised  and  sold  the  same  at  public  auction, 
Nov.  3,  1853,  for  the  sum  of  five  dollars,  to  one  Polsom,  and  dis- 
charged upon  said  execution  the  sum  of  ninety-six  cents,  and  returned 
the  execution  satisfied  for  that  amount  and  no  more.  And  the  same 
has  never  been  satisfied  or  paid,  except  so  far  as  may  be  by  said  sale 
of  logs. 

If,  upon  the  above  statement  of  facts,  the  full  Court  should  be 
of  opinion  that  the  plaintiff  can  maintain  his  action,  the  defendants 
are  to  be  defaulted;  otherwise,  the  plaintiff  is  to  become  nonsuit. 


362  BOH  AN  AN    V.    POPE  [CHAP.    Ill 

George  W.  Dyer,  for  plaintiff. 

George  Walker,  for  defendants. 

May,  J.  It  is  undoubtedly  true,  as  a  general  proposition,  that 
no  action  can  be  maintained  upon  a  contract,  except  by  some  per- 
son who  is  a  party  to  it.  But  this  rule  of  law,  like  most  others,  has 
its  exceptions;  as,  for  instance,  where  money  has  been  paid  by  one  ^ 
party,  to  a  second,  for  the  benefit  of  a  third,  in  which  case  the  latter 
may  maintain  an  action  against  the  first  for  the  money.  So,  too, 
where  a  party  for  a  valuable  consideration  stipulates  with  another, 
by  simple  contract,  to  pay  money  or  do  some  act  for  the  benefit  of 
a  third  person,  the  latter,  for  whose  benefit  the  promise  is  made, 
if  there  be  no  other  objection  to  his  recovery  than  a  want  of  privity 
between  the  parties,  may  maintain  an  action  for  a  breach  of  such 
engagement.  This  principle  of  law  is  now  well  established  both  in 
this  State  and  Massachusetts.  Hinckley  £  al.  v.  Fowler,  15  Maine, 
285;  Felton  v.  Dickinson,  10  Mass.  287;  Arnold  &  al.  v.  Lyman, 
17  Mass.  400;  Hall  v.  Marston,  17  Mass.  575;  Carnegie  v.  Morrison, 
2  Met.  381;  and  Brewer  v.  Dyer,  7  Cush.  337. 

In  this  last  case,  it  is  said  by  Bigelow,  J.,  as  the  opinion  of  the 
full  Court,  that  the  rule  "does  not  rest  upon  the  ground  of  any 
actual  or  supposed  relationship  between  the  parties,  as  some  of  the 
earlier  cases  would  seem  to  indicate;  nor  upon  the  reason,  that  the 
defendant  by  entering  into  such  an  agreement,  has  impliedly  made 
himself  the  agent  of  the  plaintiff;  but  upon  the  broader  and  more 
satisfactory  basis,  that  the  law,  operating  upon  the  act  of  the  parties, 
creates  the  duty,  establishes  the  privity,  and  implies  the  promise  and 
obligation,  on  which  the  action  is  founded." 

But  while  the  law  does  this  in  favor  of  a  third  person,  beneficially 
interested  in  the  contract,  it  does  not  confine  such  person  to  the 
remedy  which  it  so  provides;  he  may,  as  the  authority  last  cited 
shows,  if  he  choose,  disregard  it  and  seek  his  remedy  directly  against 
the  party  with  whom  his  contract  primarily  exists.  But  if  he  does 
80,  then  such  party  may  recover  against  the  party  contracting  with 
him,  in  the  same  manner  as  if  the  stipulation  in  the  contract  had 
been  made  directly  with  him  and  not  for  the  benefit  of  a  third  per- 
son. The  two  remedies  are  not  concurrent  but  elective,  and  an  elec- 
tion of  the  latter  implies  an  abandonment  of  the  former. 

Applying  these  principles  to  the  facts  in  the  present  case,  it  ap- 
pears that  the  plaintiff,  he  being  one  of  "the  hired  men"  whom  the 
defendant  by  the  terms  of  his  contract  with  Whitney  was  to  pay, 
might,  if  he  had  chosen  so  to  do,  have  brought  his  action  in  the  first 
instance  against  the  defendant,  relying  upon  the  beneficial  interest 
secured  to  him  in  said  contract;  or,  disregarding  this  remedy,  he 
might  have  elected  to  rely  upon  the  original  undertaking  of  "Whitney, 
and  therefore  have  proceeded  against  him.  The  facts  show  that  he 
elected  the  latter  mode,  and  having  done  so,  he  must  be  regarded  as 
having   thereby   consent(!d    that    Whitney    should    be    at    liberty    to 


SECT.    l]  ARNOLD    V.    NICHOLS  363 

avail  himself  of  the  funds,  which  he  had  set  apart  in  the  contract 
for  the  payment  of  the  plaintiff  (if  any  such  there  were),  in  order 
that  he  might  be  able  by  means  of  such  funds,  if  necessary,  to  satisfy 
such  judgment  as  the  plaintiff  might  recover  against  him.  By  such 
election  the  plaintiff  relinquished  all  claim  upon  the  particular  funds 
appropriated  for  his  benefit  and  gave  to  Whitney  the  control  and 
disposition  thereof. 

This  defence,  avoiding  and  repelling,  as  it  does,  the  promise  de- 
clared on,  may  properly  be  shown  under  the  general  issue.  Gould's 
Pleading  c.  6,  §§  47,  48.  Plaintiff  nonsuit} 

Tenney,  C.  J.,  and  Hatha  way,  Appleton,  and  Goodenow,  JJ,, 
concurred. 


JOHl^  H.  ARNOLD  et  al.,  Exes.,  etc..  Appellants,  v.  CHAELES 
H.  iSriCHOLS,  Impleaded,  etc.,  Kespondekt 

'New  York  Court  of  Appeals,  January  24r-February  1,  1876 

[Reported  in  64  New  York,  117] 

Earl,  J.  For  some  years  prior  to  the  15th  day  of  August,  1867, 
the  defendant  Bowmen  had  been  engaged  in  the  city  of  New  York  in 
the  business  of  importing  and  dealing  in  fancy  goods,  and  on  that 
day  the  plaintiff's  testator,  Hinman,  loaned  to  him  to  be  used  in 
his  business  the  sum  of  $2,000.  Bowen  continued  in  business  alone 
until  January,  1868,  when  he  formed  a  copartnership  with  the  de- 
fendant Nichols,  and  Bowen  and  Nichols,  under  the  firm  name  of 
J.  M.  Bowen  &  Co.,  continued  to  carry  on  the  business  until  May, 
1869,  when  they  dissolved.  At  the  time  of  the  formation  of  the 
copartnership,  Bowen  transferred  his  individual  business  assets  to 
the  firm  of  J.  M.  Bowen  &  Co.,  and  in  consideration  thereof,  the 
firm  assumed  and  agreed  to  pay  certain  specified  debts  of  Bowen, 
among  which  was  Hinman's  debt  for  the  money  loaned  as  above 
stated.  It  was  expected  at  the  time  that  the  assets  would  exceed  the 
debts  assumed  by  the  firm  by  at  least  $30,000;  and  this  excess  of 
$30,000  was  to  be  credited  to  Bowen  on  the  books  of  the  firm  as  his 
share  of  capital  to  be  distributed.  The  assets  were  not  as  large  as 
expected,  but  were  shown  to  be  more  than  sufficient  to  pay  all  the 
debts  assumed.  They  were  first  to  be  used  to  pay  the  debts,  and  the 
balance  whatever  it  might  be,  was  to  be  credited  to  Bowen. 

Bowen  transferred  to  the  firm  the  assets  to  which  his  creditors 
had  the  right  to  look  for  the  payment  of  their  claims,  and  hence 
the  promise  of  the  firm  to  pay  such  claims  must  be  deemed  to  have 

^  Henry  v.  Murphy,  54  Ala.  246;  Hall  v.  Alford  49  S.  W.  Rep.  444  (Ky.);  Brewer 
V.  Dyer,  7  Cush.  339;  Warren  v.  Batchelder,  16  N.  H.  580;  Wood  v.  Moriarty,  15  R.  I. 
518,  522;  Phenix  Iron  Foundry  r.  Lockwood,  21  R.  I.  556,  a/-/;.;  United  States  v. 
Illinois  Surety  Co.  141  C.  C.  A.  409;  Hopkins  v.  Wamer,  109  Cal.  133;  Stanton  v. 
Kenrick,  135  Ind.  382,  389;  Stephany  v.  More,  82  N.  J.  L.  186;  Poe  v.  Dixon.  60 
Ohio  St.  124,  129;    Feldman  v.  McGuire.  contra. 


364  ARNOLD    V.    NICHOLS  [CHAP.    Ill 

been  made  for  their  benefit.  It  was  not  made  to  exonerate  Bowen 
from  the  payment  of  his  debts,  and  not  primarily  nor  directly  for  his 
benefit,  as  his  property  was  to  be  taken  to  pay  the  debts,  and  he 
was  still  to  remain  liable  as  one  of  the  principals  to  pay  them.  This 
case  is,  therefore,  unlike  the  case  of  Merrill  v.  Green,  55  N".  Y.  270, 
and  the  action  is  maintainable  upon  the  princij)les  laid  down  in  the 
case  of  Lawrence  v.  Fox,  20  IN".  Y.  268,  and  also  recognized  in  Burr 
V.  Beers,  24  N".  Y.  178 ;  Thorp  v.  Keokuk  Coal  Company,  48  N.  Y. 
253,  and  Claflin  v.  Ostrom,  54  ]^.  Y.  581.  Hinman  had  the  right 
to  adopt  the  promise  made  expressly  for  his  benefit. 

The  defendant  HSTichols  alleged  in  his  answer  that  he  was  induced 
to  enter  into  the  alleged  agreement  by  the  fraud  of  Bowen,  but  he 
did  not  allege  that  he  had  rescinded  the  agreement  on  that  account, 
or  that  he  had  ever  suffered  any  damage  on  account  thereof.  Upon 
the  trial  he  offered  to  prove  that  he  was  induced  to  enter  into  the 
agreement  by  fraud,  and  the  Court  excluded  the  evidence.  This 
ruling  was  right.  When  Nichols  discovered  that  he  had  been  de- 
frauded into  making  the  agreement,  he  could  have  repudiated  the 
agreement  on  that  ground,  given  up  his  interest  in  the  assets  trans- 
ferred to  the  firm  and  placed  them  again  in  the  hands  of  Bowen. 
A  creditor  could  not  adopt  the  agreement  which  Bowen  had  made 
for  his  benefit,  without  taking  it  subject  to  any  infirmity  which  at- 
tached to  it,  and  subject  to  any  assault  which  JSTichols  could  make 
upon  its  validity.^  But  Nichols  could  not  retain  the  fruits  of  the 
agreement  and  refuse  on  account  of  fraud  to  bear  its  burdens.  Again, 
fraud  could,  in  no  aspect  of  the  case,  furnish  a  total  or  partial  de- 
fence to  the  action,  as  the  firm  had  more  than  sufficient  assets  trans- 
ferred to  it  by  Bowen,  to  pay  all  the  debts  assumed.  Hence  there 
was  no  fraud  affecting  Hinman's  claim  or  right  of  recovery. 

1  Green  v.  Turner,  80  Fed.  Rep.  41;  86  Fed.  Rep.  837;  Benedict  v.  Hunt,  32  la. 
27;  Maxficld  v.  Schwartz,  45  Minn.  150;  Ellis  v.  Harrison,  104  Mo.  270,  278;  Saunders 
V.  McClintock,  46  Mo.  App.  216;  American  Nat.  Bank  v.  Block,  68  Mo.  App.  335; 
Wise  V.  Fuller,  29  N.  J.  Eq.  257;  Moore  v.  Ryder,  65  N.  Y.  438;  Trimble  v.  Strother, 
25  Ohio  St.  378;  Osborne  v.  Cabell,  77  Va.  462,  ace.  But  see  Fitzgerald  v.  Barker,  96 
Mo.  601;    Klein  v.  Isaacs,  8  Mo.  App.  568. 

Similarly  mistake  of  the  contracting  parties  is  a  defence  against  the  third  person. 
Episcopal  Mission  v.  Brown,  158  U.  S.  222;  Jones  v.  Higgins,  80  Ky.  409;  Bogart  v. 
Phillips,  112  Mich.  607;  Rogers  v.  Castle,  51  Minn.  428;  Gold  v.  Ogden,  61  Minn.  88; 
Bull  V.  Titsworth,  29  N.  J.  Eq.  73;  Stevens  Inst.  v.  Sheridan,  30  N.  J.  Eq.  23;  O'Neill 
V.  Clark,  33  N.  J.  Eq.  444;  Green  v.  Stone,  54  N.  J.  Eq.  387;  Crow  v.  Lewis,  95  N.  Y. 
423-  Wheat  v.  Rice,  97  N.  Y.  296,  or  failure  of  consideration.  Clay  v.  Woodrum,  46 
Kan.  116;  Amonett  v.  Montague,  75  Mo.  43;  Judson  v.  Dada,  79  N.  Y.  373,  379; 
DunninK  v.  I^avitt,  85  N.  Y.  30;  Crow  ».  Lewis,  95  N.  Y.  423;  Gifford  v.  Father 
Matthew  Soc,  104  N.  Y.  139;  Osborne  v.  CaV)ol],  77  Va.  462.  But  see  Hayden  v. 
Snow,  9  Biss.  511;  14  Fed.  Rep.  70;  b.  c.  suI>  nom.;  Hayden  v.  Devery,  3  Fed.  Rep. 
782;   Bloofl  v.  Crcvt  Levick  Co.,  177  Pa.  606. 

Non-performance  of  his  promise  by  th(!  promisee  was  held  a  defence  to  an  action 
by  the  third  prrson  in  Episcopal  Mission  v.  Brown,  158  U.  S.  222;  Pugh  v.  Barnes, 
108  Ala.  167;  Stuyvesant  v.  Western  Mortgage  Co.,f22  Col.  28,  .33;  Miller  v.  Hughes, 
95  Ta.  223;  Diuiiiing  n.  Le.avitt,  85  N.  Y.  30.  See  also  Willard  v.  Wood,  164  U.  S. 
502.  521 ;  Loeb  v.  Willis,  100  N.  Y.  231.  But  see  apparently,  contra.  Cress  v.  Blodgott, 
64  Mo.  449;  Commercial  Bank  v.  Wood,  7  W.  &  S.  89;  Blood  v.  Crew  Levick  Co., 
177  Pa.  006;    Fulmer  v.  Wightman,  87  Wis.  573. 


SECT.  II]  Allen's  case  365 

The  charge  of  the  judge  at  the  trial  was  free  from  any  just  criti- 
cism. It  was,  that  if  the  jury  found  that  there  was  an  agreement 
between  Bowen  and  Nichols  in  entering  into  copartnership,  that 
J.  M.  Bowen  &  Co.,  the  new  firm,  should  take  the  business  assets  of 
Bowen,  and  in  consideration  thereof  pay  the  specified  liabilities  of 
Bowen,  the  plaintiffs  were  entitled  to  recover,  and  that  if  they  found 
there  was  not  such  an  agreement,  they  were  not  entitled  to  recover. 
This  charge  fairly  covered  the  law  of  the  case. 

We  have  considered  the  other  exceptions  to  which  our  attention 
was  called  upon  the  argument,  and  they  are  so  clearly  without  foun- 
dation as  to  require  no  particular  notice. 

The  order  of  the  General  Term  must  be  reversed,  and  the  judg- 
ment entered  upon  the  verdict  affirmed,  with  costs. 

All  concur.  Order  reversed  and  judgment  accordingly. 


SECTION"    II 
ASSIGNMENT   OF   CONTRACTS 


MOWSE  V.  EDNEY 

In  the  Queen's  Bench,  Eastee  Teem,  1600 

{^Reported  in  Rolle's  Abridgment,  20  placitum,  12] 

If  a  is  indebted  to  B  by  bill  and  B  indebted  to  C,  and  B  in  pay- 
ment of  his  debt  to  C  assigns  A's  bill  to  him,  and  before  the  day  for 
the  payment  of  the  money  A  comes  to  C  and  promises  him  that  if 
he  will  forbear  to  enforce  the  payment  of  the  money  then  he,  A, 
will  pay  him ;  upon  which  C  forbears.  Still  there  is  no  consideration 
to  maintain  any  action  on  this  promise,  because  notwithstanding  the 
assignment  of  the  bill,  still  the  property  of  the  debt  remains  always 
in  the  assignor. 


ALLEN'S  CASE,  1584 

{^Reported  in  Owen,  113] 

A  scire  facias  issued  out  in  the  name  of  the  Queen  to  shew  cause 
why  execution  of  a  debt  which  is  come  to  the  Queen  by  the  attainder 
of  J.  S.  should  not  be  had.  The  defendant  pleaded  that  the  Queen 
had  granted  over  this  debt  by  the  name  of  a  debt  which  came  to  her 
by  the  attainder  of  J.  S.  and  all  actions  and  demands,  etc.,  upon 
which  the  plaintiff  demurred.  And  the  question  was,  if  the  patentee 
might  sue  for  this  in  the  name  of  the  Queen,  without  speciall  words. 


366  BACKWELL    V.    LITCOTT  [CHAP.    Ill 

And  two  precedents  were  cited  that  lie  may,  1  Pasch.,  30  Eliz.  rot. 
191,  in  the  Exchequer,  where  Greene,  to  whom  a  debt  was  due,  was 
attainted,  and  the  Queen  granted  over  this  debt,  and  all  actions  and 
demands,  and  a  scire  facias  was  sued  for  him  in  the  name  of  the 
Queen,  also  in  the  32  Eliz.  rot.  219. 

Mabb  of  London  was  indebted  by  bond,  and  the  debt  came  to  the 
Queen  by  the  attainder,  and  she  granted  it  to  Bones,  and  all  actions 
and  demands,  and  a  scire  facias  was  issued  out  in  the  name  of  the 
Queen.  And  the  principal  case  was  adjourned.  But  the  patentee 
had  expressed  words  to  sue  in  the  name  of  the  Queen,  although  it 
was  not  so  pleaded,^ 


HAEYEY  V.  BATEMA^,  1596 

l^Beported  in  Noy,  52] 

If  a  man  assign  an  obligation  to  another  for  a  precedent  debt 
due  by  him  to  the  assignee,  there,  that  is  not  maintenance;  but  if  he 
assign  it  for  a  consideration  then  given  by  way  of  contract,  that  is 
maintenance.^ 


BACKWELL  v.  LITCOTT 

In  the  King's  Bench,  Hilary  Term,  1669 

^Reported  in  2  Kelle,  331] 

NoTA,  On  motion  of  Jones  to  stay  a  trial  of  bankruptsie  of  one 
Colonell,  it  was  said,  that  if  J.  be  obliged  to  J.  S.  and  he  before 
bankrupsie  assign  the  bond,  this  is  liable  to  after-bankrupsie  of  J.  S. 
being  onely  suable  in  his  name,  per  Keeling  and  Twisden. 

'  "Whore  a  bond  is  assiRned  over  with  a  letter  of  attorney  therein  to  sue,  and  a 
covenant  not  to  revoke,  Vnit  that  Xho.  money  shall  come  to  the  use  of  the  assignee, 
although  the  obligee  be  dead,  yet  the  court  will  not  stay  proceedings  in  a  suit  upon 
the  bond  in  the  obligee's  administrator's  name,  though  prosecuted  without  his  con- 
sent; for  that  those  assignments  to  receive  the  money  to  the  assignee's  own  use,  with 
covenants  not  to  revoke,  and  also  with  a  letter  of  attorney  in  them,  althoiigh  they  do 
not  v»!st  an  interest,  yet  have;  so  far  prevailed  in  all  courts,  that  the  grantee  hath  such 
an  interest  that  he  may  sue  in  the  name  of  the  party,  his  executors  or  administrators." 
Lilly's  Practical  Register,  48  (1710). 

'  See  for  further  early  authorities  on  the  assignment  of  choses  in  action,  3  Harv.  L. 
Rev.  .'i.'iO,  by  Professor  Ames. 


SECT.    Il]  ROW    V.    DAWSON  367 

CROUCH  V.  MAETIN  &  HAERIS,  et  al 

In  Chancery,  Michaelmas  Term,  1707 

{^Reported  in  2  Vernon,  595] 

The  plaintiff  lent  iVrthur  Harris,  late  husband  of  the  defendant, 
100^.  on  Bottom-Iihea ;  and  as  a  farther  security  assigned  to  the 
plaintiff  the  wages  that  would  become  due  to  him  in  the  voyage  to 
the  Indies,  as  chirurgeon  of  the  ship  at  4?,  10s,  per  month;  the  ship 
returned  safe  to  London,  and  145Z.  became  due  on  the  Bottom-Rhea 
bond.  Arthur  Harris  died  in  the  voyage;  the  defendant,  his  widow, 
took  out  administration;  and  there  being  a  bond  given  by  her  hus- 
band on  her  marriage  to  leave  her  400/.  if  she  survived  him,  she 
confessed  judgment  thereon,  and  insisted  that  judgment  ought  to  be 
first  paid,  and  the  wages  due  to  the  husband  applied  to  that  purpose. 

Per  cur.  Seamen's  wages  are  assignable,  and  the  assignment  spe- 
cifically binds  the  wages;  and  in  truth  the  advancing  the  lOOL  on 
the  credit  of  the  wages  is,  as  it  were,  paying  the  wages  beforehand; 
and  the  seaman  or  his  widow  must  not  have  his  wages  twice. 

It  is  a  chose  en  action,  being  due  by  contract,  although  the  service 
not  then  done,  and  a  chose  en  action  is  assignable  in  equity  upon 
a  consideration  paid. 


ROW  V.  DAWSOK 
In  Chancery,  November  27,  1749 
[^Reported  in  1  Vesey,  Senior,  331] 

ToNSON  and  Cowdery  lent  money  to  Gibson,  who  made  a  draft 
on  Swinburn,  the  deputy  of  Horace  Walpole,  viz.  "Out  of  the 
money  due  from  Horace  Walpole  out  of  the  Exchequer,  and  what 
will  be  due  at  Michaelmas  pay  to  Tonson  400?.,  and  to  Cowdery 
200Z.  value  received." 

Gibson  became  bankrupt:  and  the  question  was,  whether  the  de- 
fendants Tonson  and  the  executors  of  Cowdery  were  first  entitled  by 
a  specific  lien  upon  this  sum  due  to  the  estate  of  Gibson  or  whether 
the  plaintiffs,  the  assignees  under  the  commission,  are  entitled  to 
have  the  whole  sum  paid  to  them;  it  being  insisted  for  them,  that 
this  draft  was  in  the  nature  of  a  bill  of  exchange,  and  that  the  prop- 
erty was  not  divested  out  of  the  bankrupt  at  the  time  of  the  bank- 
ruptcy in  law  or  equity. 

Lord  Chancellor.  At  first  I  a  little  doubted  about  my  own 
jurisdiction :  and  whether  the  plaintiffs  ought  not  to  have  gone  into 
the  Exchequer,  as  being  a  court  of  revenue;  for  this  is  not  a  per- 
sonal credit  given  to,  or  demand  upon  the  officer,  but  to  be  paid  out 
of  that  money  issued  out  of  the  Exchequer  to  the  officer;  and  this 


368  ROW   V.   DAWSON  [chap.   Ill 

is  on  warrant,  to  be  paid  out  of  the  revenue  of  the  crown 
for  public  services.  But  there  is  something  in  the  present  case  de- 
livering it  from  that;  the  officer  admits,  he  has  received  a  sum  of 
money  applicable  to  this  demand,  which  brings  it  to  the  old  case  of 
a  liberate,  which  a  person  has  under  the  great  seal  for  the  payment 
of  money;  upon  admission  that  the  officer  had  money  in  his  hands 
applicable  to  the  payment,  and  proof  thereof,  that  would  give  courts 
of  law  a  jurisdiction,  so  that  an  action  of  debt  might  be  maintained 
on  the  liberate. 

This  demand,  and  the  instrument  under  which  the  defendants 
claim,  is  not  a  bill  of  exchange,  but  a  draft;  not  to  pay  generally, 
but  out  of  his  particular  fund,  which  creates  no  personal  demand; 
therefore  not  a  draft  on  personal  credit  to  go  in  the  common  course 
of  negotiation,  which  is  necessary  to  bills  of  exchange,  by  draft  on 
the  general  credit  of  the  person  drawing,  the  drawee,  and  the  in- 
dorser,  without  reference  to  any  particular  fund.  The  first  case  of 
which  kind,  I  remember  to  have  been  determined  in  B.  R.  not  to  be 
a  bill  of  exchange,  was  a  draft  by  an  officer  on  the  agent  of  his  regi- 
ment to  be  paid  out  of  his  growing  subsistence.  Then  what  is  it, 
for  it  must  amount  to  something?  It  is  an  agreement  for  valuable 
consideration  beforehand  to  lend  money  on  the  faith  of  being  satis- 
fied out  of  this  fund;  which  makes  it  a  very  strong  case.  If  this  is 
not  a  bill  of  exchange,  nor  a  proceeding  on  the  personal  credit  of 
Swinburn  or  Gibson,  it  is  a  credit  on  this  fund,  and  must  amount 
to  an  assignment  of  so  much  of  the  debt;  and  though  the  law  does 
not  admit  an  assignment  of  a  chose  in  action,  this  Court  does;  and 
any  words  will  do;  no  particular  words  being  necessary  thereto.  In 
the  case  of  a  bond  it  may  be  assigned  in  equity  for  valuable  con- 
sideration, and  good  although  no  special  form  used.  Suppose  an 
obligee  receives  the  money  on  the  bond,  and  there  is  wrote  on  the 
back  of  it  "Whereas  I  have  received  the  principal  and  interest  from 
such  a  one,  do  you  the  obligor  pay  the  money  to  him;"  this  is  just 
that  case;  only  it  is  not  a  debt  arising  from  specialty:  therefore 
like  an  assignment  of  rent  by  direction  to  a  tenant  or  steward  to 
pay  so  much  of  a  year's  rent  to  a  third  person.  The  case  of  Ryal 
V.  Rowles,  post,  now  under  the  consideration  of  the  Court,  occurred 
to  me.  There  the  assignment  of  debts,  of  Avhich  no  possession,  came 
in  question;  but  those  are  debts  depending  on  partnership,  and  men- 
tioned th(!re  how  far  the  assignment  of  a  bond  should  be  supported 
against  the  assignees  under  the  commission:  and  it  is  clear,  that 
they  have  been  supported  where  the  bond  has  been  delivered  over; 
but  if  not,  some  doubt  has  been,  whether  it  should  be  supported  on 
the  foot  of  the  clause  in  the  statute,  J.  1.  But  this  is  clear  of  that 
doubt,  bfcause  tliis  was  a  debt  to  Gibson  without  any  specialty.  This 
draft,  which  amounts  to  an  assignment,  is  deposited  with  the  officer 
Swinburn,  and  therefore  is  attached  immediately  upon  it:  so  that 
Swinburn  could  not  have  paid  this  money  to  Gibson,  supposing  he 


SECT.    II ]  WINCH    V.    KELEY  369 

had  not  been  bankrupt,  without  making  himself  liable  to  the  de- 
fendants; because  he  would  have  paid  it  with  full  notice  of  this 
assignment,  for  valuable  consideration.^ 


WIITCH  V.  KELEY 
In  the  King's  Bench,  Hilary  Teem,  1787 
[Reported  in  1  Term  Reports,  619] 

Indebitatus  assumpsit  for  work  and  labor,  money  paid,  laid  out, 
and  expended,  money  lent,  and  on  an  account  stated. 

The  defendant  pleaded.  That  after  the  day  of  making  the  prom- 
ises, etc.,  the  plaintiff  became  a  bankrupt,  etc.,  and  that  his  com- 
missioners assigned  over  his  effects  to  the  assignees,  etc.,  by  virtue  of 
which  he  the  defendant  is  chargeable  to  pay  the  sums  of  money  men- 
tioned in  the  declaration  to  the  assignees,  etc. 

The  replication  admitted  the  matters  contained  in  the  plea  to  be 
true;  and  as  to  all  the  promises  in  the  declaration  mentioned,  and 
all  the  sums  therein  contained,  except  as  to  73Z.  12s.  9c?.  parcel, 
etc.,  the  plaintiff  acknowledged  that  he  would  not  further  prosecute. 
Then  the  replication  stated  that  as  to  the  above  seen  the  plaintiff 
had  made  an  assignment  of  his  claim  thereto  to  one  Searle  in  satis- 
faction of  or  security  for  a  valid  debt  and  that  this  action  was  prose- 
cuted for  and  on  behalf  of  the  said  Searle. 

To  this  replication  the  defendant  demurred. 

AsHURST,  J.  The  cases  which  have  been  cited  by  the  plaintiff's 
counsel  go  a  great  way  in  determining  this  question.  It  is  true  that 
formerly  the  courts  of  law  did  not  take  notice  of  an  equity  or  a 
trust;  for  trusts  are  within  the  original  jurisdiction  of  a  court  of 
equity :  but  of  late  years,  it  has  been  found  productive  of  great  ex- 
pense to  send  the  parties  to  the  other  side  of  the  Hall;  wherever 
this  Court  have  seen  that  the  justice  of  the  case  has  been  clearly  with 
the  plaintiff,  they  have  not  turned  him  round  upon  this  objection. 
Then  if  this  Court  will  take  notice  of  a  trust  why  should  they  not 
of  an  equity?  It  is  certainly  true  that  a  chose  in  action  cannot 
strictly  be  assigned :  but  this  Court  will  take  notice  of  a  trust,  and 
consider  who  is  beneficially  interested,  as  in  Bottomley  v.  Brooke, 
where  the  Court  suffered  the  defendant  to  set  off  a  debt  due  from 
Mrs.  Chancellor  in  the  same  manner  as  if  the  action  had  been  brought 
by  her.  The  only  difference  between  that  case  and  this  is,  that  there 
the  plaintiff  himself  was  not  originally  interested  in  the  debt,  but 
this  plaintiff  was :  but  that  does  not  make  any  essential  difference ; 

1  See  also  Squib  v.  Wyn,  1  P.  Wms.  378:  Chandos  c.  Talbot,  2  P.  Wms.  601,  607; 
Carteret  v.  Paschal,  3  P.  Wms.  197;  Tourville  v.  Naish,  3  P.  Wms.  307;  Ex  parte  Byas, 
1  Atk.  124;  Brown  v.  Roger  Williams,  1  Atk.  160;  Unwin  v.  Oliver,  1  Burr.  481;  Sul- 
livan V.  Visconti,  68  N.  L.  J.  543. 


370  DEERING    V.    FARRINGTON  [CHAP.    Ill 

because  if  it  be  once  established  that  this  Court  will  take  notice  of 
trusts,  it  is  immaterial  whether  the  person  who  sues  were  originally 
a  trustee  or  afterwards  becomes  so.  jSTor  is  it  material  at  what  time 
they  became  a  trustee;  for  whether  he  became  such  by  the  assign- 
ment, or  was  so  originally,  it  is  sufficient  to  say  that  he  is  a  trustee 
now,  and  as  such  has  a  right  to  maintain  this  action.  If  this  had 
been  a  fraudulent  assignment,  it  would  have  raised  a  different  ques- 
tion: but  on  these  pleadings  it  must  be  taken  to  have  been  assigned 
for  a  valuable  consideration.  The  case  of  Webster  and  Scales  is  in 
point;  and  on  the  authority  of  that  and  on  the  other  cases  cited,  I 
am  of  opinion  that  the  plaintiff  may  recover.^ 


DEEEIN^G  V:  FAKEINGTON 

In  the  King's  Bench,  Eastek  Term,  1674 

[Reported  in  1  Modern,  113] 

An  action  of  covenant,  declaring  upon  a  deed  by  which  the  de- 
fendant assignavit  et  transposuit  all  the  money  that  should  be  al- 
lowed by  any  order  of  a  foreign  State  to  come  to  him  in  lieu  of  his 
share  in  a  ship. 

Tompson  moved,  that  an  action  of  covenant  would  not  lie,  for  it 
was  neither  an  express  nor  an  implied  covenant.     1  Leon.  179. 

Hale,  C  J.  You  should  rather  have  applied  yourself  to  this,  viz. : 
"Whether  it  would  not  be  a  good  covenant  against  the  party?  As 
if  a  man  doth  demise,  that  is  an  implied  covenant;  but  if  there  be 
a  particular  express  covenant,  that  he  shall  quietly  enjoy  against 
all  claiming  under  him,  that  restrains  the  general  implied  covenant; 
but  it  is  a  good  covenant  against  the  party  himself.  If  I  make  a 
lease  for  years  reserving  rent  to  a  stranger,  an  action  of  covenant 
will  lie  by  the  party  to  pay  the  rent  to  the  stranger.  Then  it  was 
said,  it  was  an  assignment  for  maintenance. 

Hale,  C.  J.     That  ought  to  have  been  averred. 

Then  it  was  further  said.  That  an  assignment  transferring  when 
it  cannot  transfer,  signifies  nothing.  —  Hale,  C.  J.  But  it  is  a 
covenant,  and  then  it  is  all  one  as  if  he  had  covenanted  that  he  should 
have  Jill  the  money  that  he  should  recover  for  his  loss  in  such  a  ship. 
— TwisnEN,  J.,  seemed  to  doubt. — But  judgment.^ 

1  The  Htatcmont  of  tho  plffirlinRs  is  abbroviatprl ,  and  .1  concurring  opinion  of  Buller, 
J.  omitt/id. 

'  In  ft  rnpr)rt,  of  the  same  casn  in  3  Kcb.  304,  T.ord  Halo  is  reported  as  saying: 
"Thoneh  aiwiKii.  fv-X  over  and  transpose,  do  not  amount  to  covenant  against  an  eign 
title,  yt  aRiiinst  tlie  covenantor  himself  it  will  anioiint  to  a  covenant,  as  a  covenant 
aKuinHt  all  claimiriK  liy  and  under  nie  .  .  .  and  this  is  no  maintcTiance  unless  it  be 
8p«cially  awarded  to  be  so  within  the  stjitute,  for  it  doth  not  transfer  the  duty,  but 
is  a  contract  to  tranafer  the  benefit,  as  covenant  to  trauafer.'' 


SECT.    Il]  HARDING    V.    HARDING  371 

HARDING  V.  HARDING  and  Another 

In  the  Queen's  Bench  Division,  July  13,  15,  1886 

[Reported  in  17  Queens  Bench  Division,  442] 

Appeal  from  the  judgment  of  the  judge  of  the  county  court  of 
Loughborough. 

The  facts  were  as  follows :  — 

The  defendants  were  the  executors  of  James  Harding,  and  one 
of  the  residuary  legatees  under  James  Harding's  will  was  George 
Harding,  the  father  of  the  plaintiff.  George  Harding  lived  in  Aus- 
tralia, and  the  defendants,  after  realizing  the  estate,  sent  him  an 
account  headed,  "Estate  of  the  late  James  Harding,  deceased,  in  ac- 
count with  George  Harding,"  in  which,  after  crediting  him  with  his 
share  of  the  estate  and  debiting  him  with  sums  of  money  paid  to 
him  on  account,  a  balance  of  281.  19s.  ^d.  was  shown  to  be  due  to 
him  from  the  estate.  George  Harding  received  the  account,  and  on 
the  4th  of  September,  1884,  wrote  at  the  foot  of  it  words  which, 
so  far  as  is  material  to  the  present  case,  were  as  follows :  "I  hereby 
instruct  the  trustees  in  power  to  pay  to  my  daughter,  Laura  Harding, 
the  balance  shown  in  the  above  statement,  less  the  ten  pounds  re- 
ceived by  me  in  Australia.     George  Harding,  Sydney." 

The  account,  with  this  writing  at  the  foot  of  it,  was  sent  home 
by  George  Harding  to  his  daughter  Laura,  the  plaintiff,  who  kept 
it  for  some  time,  but  in  the  month  of  October,  1885,  communicated 
it  to  the  defendants.  At  that  time  George  Harding  could  not  be, 
nor  has  he  since  been,  heard  of,  and  the  defendants  wrote  two  letters 
to  the  plaintiff's  solicitors,  the  effect  of  which  was  that  they  would 
comply  with  the  direction  as  to  the  payment  of  the  money  if  they 
were  satisfied  that  the  plaintiff  could  give  them  a  proper  receipt. 
Eventually,  however,  they  declined  to  pay  her  the  money,  and  the 
plaintiff  brought  an  action  in  the  county  court  for  the  amount  and 
recovered  judgment.     The  defendants  appealed. 

Sills,  for  the  defendants. 

Toller,  for  the  plaintiff. 

Wills,  J.  I  am  of  opinion  that  the  decision  of  the  county  court 
judge  was  right.  It  was  argued  for  the  defendants  that  this  was 
a  mere  equitable  assignment,  and  that  having  been  made  in  favor 
of  a  volunteer  without  consideration,  equity  would  not  enforce  it. 
But  I  think  that  a  misapprehension  of  the  rules  of  Courts  of  Equity 
is  involved  in  that  proposition.  The  rule  in  equity  comes  to  this; 
that  so  long  as  a  transaction  rests  in  expression  of  intention  only, 
and  something  remains  to  be  done  by  the  donor  to  give  complete 
effect  to  his  intention,  it  remains  uncompleted,  and  a  Court  of  Equity 
will  not  enforce  what  the  donor  is  under  no  obligation  to  fulfill.  But 
when  the  transaction  is  completed,  and  the  donor  has  created  a  trust 
in  favor  of  the  object  of  his  bounty,  equity  will  interfere  to  enforce 


372  HARDING    V.    HARDING  [CHAP.   Ill 

it.  The  reason  why  equity  will  not  interfere  in  favor  of  a  mere 
volunteer,  but  requires  a  valuable  consideration  for  the  transaction, 
is  that  in  such  a  case  there  is  nothing  wrong  in  the  donor  changing 
his  mind  and  withholding  from  the  object  of  his  liberality  the  con- 
templated benefit.  But  if  there  is  value  given  on  the  one  side  in 
exchange  for  the  donor's  intention,  then  there  is  a  contract,  or  some- 
thing approaching  to  a  contract,  between  the  parties,  and  the  donor 
cannot  withdraw  from  his  intention.  We  were  much  pressed  with 
the  authority  of  Holroyd  v.  Marshall,  10  H.  L.  C.  191,  33  L.  J. 
(Ch.)  193,  but  we  think  that  the  doctrine  there  laid  down  does  not 
apply  to  a  case  like  the  present.  In  that  case  the  goods  which  were 
the  subject  of  the  transaction  were  things  capable  of  being  conveyed 
by  a  legal  title,  things  as  to  which  the  grantor  was  competent  to  do 
something  further  to  complete  the  legal  title  of  the  grantee;  and  it 
was  held  that  he  was  bound  to  do  so,  as  he  had  had  consideration. 
When,  however,  the  subject-matter  of  the  transaction  is  an  equitable 
right  or  estate,  and  a  legal  title  cannot  be  given;  then  if  the  settlor 
has  done  all  in  his  power  and  nothing  remains  to  be  done  by  him, 
equity  regards  it  as  though  he  had  completed  the  legal  title,  and 
gives  effect  to  his  intention. 

In  the  present  case  it  was  proposed  to  assign  a  sum  of  money  due 
from  the  trustees,  the  defendants;  and  probably  before  the  Judi- 
cature Act  it  would  have  been  impossible  to  give  a  legal  title  to  Laura 
Harding,  so  as  to  enable  her  to  sue  in  her  own  name  in  respect  of 
this  right  of  action;  she  could  have  maintained  a  suit  in  equity,  but 
the  legal  title  could  not  have  been  completed  in  her.  I^ow  it  can 
be  done;  and  it  seems  to  me  that  the  legal  title  has  been  so  com- 
pleted by  the  notice  signed  by  George  Harding  and  sent  by  him  to 
the  plaintiff.  If  it  is  to  be  regarded  as  an  equitable  assignment,  he 
has  done  all  that  he  could  to  make  it  complete;  if,  as  a  legal  assign- 
ment, he  has  completed  it;  and  under  s.  25,  sub-s.  6  of  the  Judicature 
Act,  1873,  the  assignee  of  a  chose  in  action  may  sue  in  his  own  name, 
the  law  as  to  the  necessity  for  a  consideration  not  applying,  as  it 
seems  to  me,  if  the  assignment  is  completely  made.  If  the  assign- 
ment had  been  made  by  deed,  the  question  of  consideration  could 
not  arise;  and  in  my  opinion  the  question  of  want  of  consideration 
has  no  application  to  such  a  case  as  the  present.  But  there  is  a 
further  fact  in  the  present  case;  George  Harding  authorized  his 
daughter  to  communicate  his  lettc^r  to  the  trustees;  she  did  so,  and 
the  trustees  assented  to  the  assiginncnt.  It  seems  to  me  that  that  fact 
carries  us  a  step  further,  and  imports  into  the  case  another  doc- 
trine of  equity;  that  under  such  circumstances  the  assignee  is  re- 
garded as  the  cestui  que  trust  of  the  d(>,btor,  if  the  debtor  has  as- 
sentf'f]  to  the  obligation.  The  correspondence  shows  that  the  trustees 
assented  to  take  the  plaintiff  as  their  cestui  que  trust,  and  the  facts 
ought  to  have  satisfied  them  that  she  had  the  power  to  give  them 
a  proper  receipt.    The  authority  given  by  George  Harding  to  receive 


SECT.   Il]  COOK    V.    LUM  373 

the  money  was  unrevoked,  and  the  plaintiff  was  competent  to  give 
an  effectual  discharge.^  I  think  that  even  without  the  assent  of 
the  trustees  there  was  a  good  and  valid  assignment  to  the  plaintiff; 
but  with  such  assent  arises  the  second  doctrine  that  I  have  referred 
to,  which  settles  any  possible  question  as  to  her  right  to  maintain 
this  action. 

It  is  further  objected  that  the  action  cannot  be  maintained  against 
the  defendants  personally,  but  should  have  been  brought  against  them 
as  executors;  that  objection  I  think  untenable.  The  defendants  had 
stated  an  account  acknowledging  the  debt,  and  there  is  ample  au- 
thority for  saying  that  they  can  be  sued  in  their  personal  capacity. 

Appeal    dismissed."^ 


ELLEN  G.  COOK  v.  CHARLES  M.  LUM,  Ajdministratob 

New  Jeesey  Supreme  Court,  June  Term,  1893 

[Reported  in  55  New  Jersey  Law,  373] 

Beasley,  C.  J.  This  case  stands  before  the  court  on  a  special  ver- 
dict, and  the  problem  to  be  solved  involves  the  legal  efficacy  of  a 
gift  of  money. 

The  circumstances  were  these:  The  deceased,  Ellen  G.  Green,  who 
is  here  represented  by  her  administrator,  who  is  the  defendant  on  this 
record,  deposited  with  one  Kase  the  sum  of  $2,316,  who  thereupon 
gave  to  the  said  Ellen  a  paper  containing  in  column  eight  several 
sums  in  figures,  which  were  footed  up  and  amounted  to  the  sum 
just  specified.  The  paper  was  dated  "July  26th,  1890,"  and  there 
was  no  other  writing  upon  it. 

After  finding  the  foregoing  facts,  the  special  verdict  proceeds  as 
follows :  "And  the  jurors  aforesaid  further  say  that  except  said  paper, 
said  John  H.  Kase  never  gave  to  said  Ellen  Green  any  evidence  of 
indebtedness  from  himself  to  her  for  said  deposit.  .  .  .  That  said 
Ellen  Green  did  actually  deliver  said  paper  into  the  hands  of  said 
Ellen  G.  Cook  shortly  before  her,  said  Ellen  Green's,  death.  That 
said  Ellen  Green  delivered  said  paper  into  the  hands  of  said  Ellen 
G.  Cook,  with  the  intention  of  thereby  giving  to  said  Ellen  G.  Cook, 
for  herself,  the  money  in  the  hands  of  said  John  H.  Kase."  It  was 
further  found  that  Kase  was  not  informed  of  the  gift  until  several 
weeks  after  the  death  of  the  donor. 

1  Walker  v.  Bradford  Bank,  12  Q.  B.  D.  511;  Harding  v.  Harding,  17  Q.  B.  D.  442; 
Henderson  Nat.  Bank  v.  Lagow,  3  Ky.  L.  Rep.  173,  174;  Phipps  v.  Bacon,  183  Mass. 
5,  66  N.  E.  414;  Coe  v.  Hinkley,  109  Mich.  608,  67  N.  W.  915;  Hickman  v.  Chaney, 
155  Mich.  217,  118  N.  W.  993;  Richardson  v.  Mead,  27  Barb.  178;  Merrick  v.  Brain- 
ard,  38  Barb.  574;  Allen  v.  Brown,  51  Bard.  86;  Sheridan  r.  Mayor,  68  N.  Y.  30; 
Levins  v.  Stark,  57  Or.  189,  110  Pac.  980;  Buxton  v.  Barrett,  14  R.  I.  40;  Pearce  v. 
Wallis,  58  Tex.  Civ.  App.  315,  124  S.  W.  496,  ace.  But  see  ccmtra,  note,  Brownlow  & 
G.  40;  Patterson  v.  WilHams,  Lloyd  &  G.  temp.  Plunket,  95;  Hill  v.  Sheibley,  64  Ga. 
529;   Tallman  v.  Hoey,  89  N.  Y.  537. 

'  Grantham,  J.  delivered  a  concvirring  opimon. 


374  COOK    V.    LUM  [chap.    Ill 

The  general  legal  principle  regulating  the  subject  of  gifts  of  choses 
in  action  has  long  been  established.  It  is  to  the  effect  that  with 
respect  to  things  both  tangible  and  intangible,  mere  words  of  dona- 
tion will  not  suffice.  With  regard  to  the  former  class — that  is, 
things  corporeal  —  there  must  be,  in  addition  to  the  expression  of 
a  donative  purpose,  in  actual  tradition  of  the  corpus  of  the  gift 
whenever,  considering  the  nature  of  the  property  and  the  circum- 
stances of  the  actors,  such  a  formality  is  reasonably  practicable.  In 
some  instances,  when  the  situation  is  incompatible  with  the  perform- 
ance of  such  ceremony,  resort  may  be  had  to  what  has  been  called 
a  symbolical  delivery  of  the  subject. 

Touching  things  in  action,  as  there  can  be  no  actual  delivery  of 
them,  the  legal  requirement  is,  that  the  donor's  voucher  of  right  or 
title  must  be  surrendered  to  the  donee.  Such  surrender  is  deemed 
equivalent  to  an  actual  handing  over  of  things  corporeal. 

To  this  extent  the  law  of  the  subject  is  neither  doubtful  nor  ob- 
scure. The  difficulty  supervenes  as  soon  as  the  attempt  is  made  to 
apply  these  rules  to  the  ever-variant  conditions  of  the  cases  that  are 
being  presented  for  judicial  examination.  Even  when  the  thing 
given  has  been  a  personal  chattel,  whether  certain  acts  show  a  pur- 
pose to  give  consummated  by  a  delivery  of  it,  has  often  been,  and 
doubtless  will  be,  a  vexed  question.  The  uncertainty  in  construing 
the  circumstances  is  even  greater  than  we  have  rights  of  action  to 
deal  with.  There  are  a  multitude  of  decisions  which  demonstrate 
the  embarrassment  inherent  in  this  class  of  cases;  but  as  these  de- 
cisions, while  all  acknowledging  the  rules  just  indicated,  are  in  truth 
nothing  more  than  interpretations,  respectively,  of  the  facts  of  the 
particular  case,  and  as  such  facts  are  unlike  the  juncture  now  pres- 
ent, it  would  serve  no  useful  purpose  to  review  or  cite  them  in  de- 
tail. There  is  no  observed  precedent,  so  far  as  circumstances  are 
concerned,  for  the  matter  now  before  us.  Many  of  these  decisions 
may  be  found  in  the  Encyclopaedia  of  English  and  American  Law, 
tit.  "Gifts,"  and  any  person  who  will  examine  this  long  train  of 
cases  will  at  once  perceive  that  the  principal  difficulty  has  been  to 
decide  whether  the  evidence  in  hand  in  the  given  case  showed  a  de- 
livery of  the  subject  of  the  gift  in  a  legal  point  of  view. 

But  this  was  a  maze  not  without  its  clue,  for  the  cardinal  prin- 
ciple as  to  what  constituted  a  delivery  that  would  legalize  a  gift 
was  on  all  sides  admitted  and  was  generally  applied.  The  test  was 
this,  that  the  transf(!r  was  such  that,  in  conjunction  with  the  donative 
intention,  it  completely  stripped  the  donor  of  his  dominion  of  the 
thing  given,  wh((ther  that  thing  was  a  tangible  chattel  or  a  chose  in 
action.  The  rule  does  not  require  that  the  title  of  the  donee  should 
be  formally  perfect,  although  in  the  earliest  decisions  this  appears 
to  hav(;  be(!ri  indispensable,  but  now  the  law  is  otherwise  settled. 
Thus,  the  delivery,  with  donative  intention,  of  non-negotiable  notes 
or  bonds  affords  an  a[)t  illustration  of  the  rule  in  both  of  its  aspects. 


SECT.   Il]  HERBERT    V.    BRONSON  375 

Such  gifts  are  admittedly  valid,  although  the  title  of  the  donee  is 
not  ceremoniously  perfect,  as  it  wants  the  finishing  touch  of  a  written 
assignment;  but  the  transaction  is  validated  on  the  ground  that  it  is 
possessed  of  the  all-important  quality  of  depriving  the  donor  of  all 
control  over  the  property.  After  the  delivery  of  such  bond  or  note, 
the  donor  can  exercise  not  a  single  act  of  OAvnership  with  respect  to 
it;  he  cannot  sue  upon  it  nor  collect  it,  nor  regain  its  possession. 
And  it  is  this  absolute  abnegation  of  power  that,  in  a  legal  point 
of  view,  makes  the  transaction  enforceable. 

This  is  the  crucial  test,  and  if  it  be  applied  to  the  case  in  hand 
this  donation  is  not  to  be  sustained.  The  reason  is  that  the  donor 
parted  with  nothing  that  was  essential  to  his  own  dominion  over 
the  moneys  in  question.  After  she  had  transferred  the  slip  of  paper 
in  question  her  dominion  over  her  deposits  remained  plainly  intact. 
The  paper  was  in  no  sense  a  voucher  of  the  receipt  of  the  moneys; 
they  could  have  been  collected  without  its  production;  nor  was  it 
necessary  to  a  suit  for  their  recovery.  It  is  impossible  to  believe  that 
the  parties  intended  this  slip  of  paper,  which  contained  nothing  but 
a  line  of  figures  and  an  addition  of  them,  as  a  testimonial  showing 
the  transaction  to  which  it  immediately  appertained.  It  does  not 
appear  how  the  donor  became  possessed  of  this  paper,  but  construed 
intrinsically  it  has  the  appearance  of  having  been  used  for  the 
temporary  purpose  of  showing  the  aggregate  of  the  several  sums  on 
deposit,  and  it  carries  on  its  face  no  indication  whatever  that  it  was 
drawn  or  given  as  a  voucher  of  the  indebtedness  of  the  person  mak- 
ing it.  The  delivery  of  so  insignificant  a  paper  as  this  cannot,  in 
our  opinion,  operate  to  legalize  the  transaction. 

The  defendant  is  entitled  to  judgment?- 


EDWAKD  HERBERT  v.  GEORGE  W.  BRONSON"  and  Trustee 

Supreme  Judicial  Court  of  Massachusetts,  October  25,  1878 

{Reported  in  125  Massachusetts,  475] 

Trustee  process.  Writ  dated  December  31,  1877,  and  served  on 
January  1,  1878.  The  city  of  Fall  River,  summoned  as  trustee,  an- 
swered that  at  the  date  of  service  upon  it,  it  had  in  its  hands  belong- 
ing to  the  defendant  the  sum  of  $248.  James  Murphy,  Jr.,  appeared 
as  claimant  of  the  funds  in  the  hands  of  the  trustee  by  virtue  of  an 

1  Compare  Sewell  v.  Moxsy,  2  Sim.  n.  s.  189;  Airey  v.  Hall,  3  Sm.  &  G.  315;  Walker 
V.  Bradford  Bank,  12  Q.  B.  D.  511;  Re  Richardson,  30  Ch.  D.  396;  Maynard  v.  May- 
nard,  105  Me.  567;  Jackson  v.  Sessions,  109  Mich.  216;  Murphy  v.  Bordwell,  83 
Minn.  54;  Smither  v.  Smither,  30  Hun,  632;  Matson  v.  Abbey,  70  Hun,  475,  141 
N.  Y.  179;  Re  Huggins'  Est.  204  Pa.  167;  Read  v.  Long,  4  Yerg.  68;  Cowen  v.  First 
Nat.  Bank,  94  Tex.  547. 

As  to  gifts  of  choses  in  action,  having  tanstible  form  as  bonds,  poh'cies  of  insurance, 
Savings  Bank  books,  lottery  tickets,  etc.,  see  Ames's  Cas.  on  Trusts  (2d  ed.),  107-163; 
1  Williston,  Contracts,   §439. 


376  HERBERT    V.    BRONSON  [CHAP.    Ill 

assignment,  dated  April  9,  1877,  to  him  from  the  defendant,  of  "all 
claims  and  demands  I  now  have,  and  all  which,  at  any  time  between 
the  date  hereof  and  the  ninth  day  of  April  next,  I  may  and  shall 
have  against  the  city  of  Fall  River,  for  all  sums  of  money  due  and 
for  all  sums  of  money  and  demand  which,  at  any  time  between  the 
date  hereof  and  the  said  ninth  day  of  April  next,  may  and  shall  be- 
come due  to  me,  for  services  as  school  teacher." 

At  the  trial  in  the  Superior  Court,  before  Gardner,  J.,  without 
a  jury,  it  appeared  that,  at  the  date  of  the  assignment,  the  defendant 
was  employed  as  a  school  teacher  by  the  city,  under  a  contract,  from 
September,  1876,  to  June  30,  1877;  that  on  September  1,  1877,  the 
defendant  was  hired  by  a  new  contract  from  that  date  until  June  30, 
1878;  and  that  nothing  was  due  the  defendant  on  September  1,  1877, 
upon  his  prior  contract,  but  that  he  had  been  paid  in  full.  It  was 
admitted  by  the  plaintiff  that  the  assignment  was  founded  on  a 
valid  consideration;  that  it  was  duly  recorded;  and  that  there  was 
due  the  assignee  from  the  defendant  a  larger  sum  than  was  in  the 
hands  of  the  trustee.  The  claimant  contended  that  he  was  entitled 
to  all  sums  earned  by  the  defendant  while  in  the  employ  of  the  city, 
during  the  year  covered  by  the  assignment. 

The  judge  found  as  a  fact,  that  the  contract,  under  which  the 
defendant  was  employed  when  the  assignment  was  made,  terminated 
on  June  30,  1877,  and  that  a  new  contract  was  entered  into  between 
the  defendant  and  the  trustee  on  September  1,  1877;  ruled  that  the 
assignment  did  not  cover  funds  earned  since  September  1,  1877,  as 
against  the  trustee  process;  and  ordered  the  trustee  to  be  charged. 
The  claimant  alleged  exceptions. 

H.  A.  Dubuque,  for  the  claimant. 

H.  K.  Braley,  for  the  plaintiff,  was  not  called  upon. 

By  the  Court.  It  is  well  settled  that  money  to  be  earned  here-- 
after  under  a  new  engagement  is  not  assignable.  Mulhall  v.  Quinn, 
1  Gray,  105;  Hartley  v.  Tapley,  2  Gray,  565;  Twiss  v.  Cheever,  2 
Allen,  40.  Exceptions  overruled} 

1  Clanton  Bank  v.  Robinson,  195  Ala.  197;  Raulins  v.  Levi,  232  Mass.  42;  Heller 
V.  Lutz,  2.54  Mo.  704  Rodijkeit  v.  Andrcw.s  74  Ohio  St.  104;  Lehigh  R.  R.  Co.  v. 
Woodring,  IIG  Pa.  513,  ace.;  Tailby  v.  Official  Receiver,  13  A.  C.  523;  Edwards  v. 
Petcr.son,  80  Me.  307,  contra. 

"It  makes  no  difference,  if  instead  of  [an  assignment  of]  a  debt  now  duo,  it  is  of 
money  expected  to  become  due  at  some  future  time  to  the  assignor,  it  appearing  that 
there  wa«  an  existing  contract  upon  which  the  debt  might  arise."  Cutts  v.  Perldns, 
12  Mass.  212.  Set;  also  in  accord,  Harrop  v.  Landers  Co.,  45  Conn.  561;  Walton  v. 
Horkan,  112  Ga.  814;  Metcalf  v.  Kincaid,  87  la.  443;  Farrar  v.  Smith,  64  Me.  74; 
Emerson  v.  Railroad,  67  Me.  387;  Knevals  v.  Blauvclt,  82  Me.  458;  Shaffer  v.  Union 
Mining  Co.,  55  Md.  74;  Crocker  v.  Whitney,  10  Mass.  316;  Gardners).  Hoeg,  18  Pick. 
168;  Lannan  v.  Smith,  7  Gray,  150;  Kane  v.  Clough,  .36  Mich.  436;  Garland  v.  Harring- 
Um,  51  N.  H.  40<);  Runnrllk  v.  Bosquet,  60  N.  H.  .38;  Tiernay  v.  McGarity,  14  R.  I. 
231 ;  Kennedy  v.  Tiernay,  14  R.  L  528;  Chase  v.  Duby,  20  R.  I.  463;  Dolan  v.  Hughes, 
20  R.  I.  513;  Carter  v.  Nichols,  58  Vt.  553;  State  Bank  v.  Hastings,  15  Wis.  75.  As 
to  the  validity  of  asKignmeiitH  of  claims  against  thf!  United  States,  see  Kendall  v. 
United  States.  7  Wall.  113;  Ball  v.  Halsell,  163  U.  S.  72;  Price  v.  Forrest,  173  U.  S. 
410;  and  of  claims  against  municipal  corporations,  see  Delaware  County  v.  Diebold 
Co.,  133  U.  S.  473,  and  cases  cited. 


SECT.   Il]  WELCH    V.    MANDEVILLE  377 


WELCH  V.  MAOTDEVILLE 

Supreme  Court  of  the  United  States,  February  Term,  1816 

{Reported  in  1   Wlieaton,  233] 

Error  to  the  Circuit  Court  for  the  District  of  Columbia  for  Alex- 
andria County.  This  was  an  action  of  covenant  brought  in  the  name 
of  "Welch  (for  the  use  of  Prior)  against  Mandeville  and  Jamieson. 
The  suit  abated  as  to  Jamieson  by  a  return  of  no  inhabitant.  The 
defendant,  Mandeville,  filed  two  pleas.  The  second  plea,  upon  which 
the  question  in  this  court  arises,  states,  that,  on  the  5th  of  July, 
1806,  James  Welch  impleaded  Mandeville  and  Jamieson,  in  the  Cir- 
cuit Court  of  the  District  of  Columbia,  for  the  county  of  Alexandria, 
in  an  action  of  covenant,  in  which  suit  such  proceedings  were  had, 
that,  afterwards,  to  wit,  at  a  session  of  the  circuit  court,  on  the  31st 
day  of  December,  1807,  "the  said  James  Welch  came  into  court  and 
acknowledged  that  he  would  not  farther  prosecute  his  said  suit,  and 
from  thence  altogether  withdraw  himself."  The  plea  then  avers, 
that  the  said  James  Welch,  in  the  plea  mentioned,  is  the  same  per- 
son in  whose  name  the  present  suit  is  brought,  and  that  the  said 
Mandeville  and  Jamieson,  in  the  former  suit,  are  the  same  persons 
who  are  defendants  in  this  suit,  and  that  the  cause  of  action  is  the 
same  in  both  suits.  To  this  plea  the  plaintiff  filed  a  special  repli- 
cation, protesting  that  the  said  James  Welch  did  not  come  into  court 
and  acknowledge  that  he  would  not  farther  prosecute  the  said  suit 
and  from  thence  altogether  withdraw  himself;  and  avers  that  James 
Welch,  being  indebted  to  Prior,  in  more  than  8,707  dollars  and 
9  cents,  and  Mandeville  and  Jamieson  being  indebted,  by  virtue  of 
the  covenant  in  the  declaration  mentioned,  in  8,707  dollars  and  9 
cents,  to  Welch,  he,  Welch,  on  the  7th  of  September,  1799,  by  an 
equitable  assignment,  assigned  to  Prior,  for  a  full  and  valuable  con- 
sideration, the  said  8,707  dollars  and  9  cents,  in  discharge  of  the  said 
debt,  of  which  assignment  the  replication  avers  Mandeville  and  Jamie- 
son had  notice.  The  replication  farther  avers,  that  the  suit  in  the 
plea  mentioned  was  brought  in  the  name  of  Welch,  as  the  nominal 
plaintiff  for  the  use  of  Prior,  and  that  the  defendant,  Mandeville, 
knew  that  the  said  suit  was  brought,  and  was  depending  for  the  use 
and  benefit  of  the  said  Prior;  and  that  the  said  suit  in  the  plea 
mentioned,  without  the  authority,  consent,  or  knowledge  of  the  said 
Prior,  or  of  the  attorney  prosecuting  the  said  suit,  and  without  any 
previous  application  to  the  court,  was  "dismissed,  agreed."  The 
replication  farther  avers,  that  the  said  James  Welch  was  not  au- 
thorized by  the  said  Prior  to  agree  or  dismiss  the  said  suit  in  the 
plea  mentioned;  and  that  the  said  Joseph  Mandeville,  with  whom 
the  supposed  agreement  for  the  dismissal  of  the  said  suit  was  made, 
knew,  at  the  time  of  making  the  said  supposed  agreement,  that  the 


378  WELCH    V.    MANDEVILLE  [CHAP.    Ill 

said  James  Welch  had  no  authority  from  Prior  to  agree  or  dismiss 
said  suit.  The  replication  farther  avers,  that  the  said  agreement 
and  dismissal  of  the  said  suit  were  made  and  procured  by  the  said 
Joseph  Mandeville,  with  the  intent  to  injure  and  defraud  the  said 
Prior,  and  deprive  him  of  the  benefit  of  the  said  suit  in  the  plea 
mentioned.  The  replication  also  avers,  that  the  said  Prior  did  not 
know  that  the  said  suit  was  dismissed  until  after  the  adjournment 
of  the  court  at  which  it  was  dismissed;  and,  farther,  that  the  sup- 
posed entry  upon  the  record  of  the  court  in  said  suit,  that  the  plain- 
tiff voluntarily  came  into  court  and  acknowledged  that  he  would 
not  farther  prosecute  his  said  suit,  and  from  thence  altogether  with- 
draw himself,  and  the  judgment  thereupon  was  made  and  entered 
by  covin,  collusion,  and  fraud;  and  that  the  said  judgment  was,  and 
is,  fraudulent.  To  this  replication  the  defendant  filed  a  general  de- 
murrer, and  the  replication  was  overruled.  It  appeared  by  the  record 
of  the  suit  referred  to  in  the  plea,  that  the  entry  is  made  in  these 
words :  "This  suit  is  dismissed,  agreed/'  and  that  this  entry  was  made 
by  the  clerk  without  the  order  of  the  court,  and  that  there  is  no 
judgTnent  of  dismissal  rendered  by  the  court,  but  only  a  judgment 
refusing  to  reinstate  the  cause. 

The  cause  was  argued  by  Lee,  for  the  plaintiff,  and  Swann,  for 
the  defendant. 

Story,  J.,  delivered  the  opinion  of  the  court. 

The  question  upon  these  pleadings  comes  to  this,  whether  a  nominal 
plaintiff,  suing  for  the  benefit  of  his  assignee,  can,  by  a  dismissal 
of  the  suit  under  a  collusive  agreement  with  the  defendant,  create 
a  valid  bar  against  any  subsequent  suit  for  the  same  cause  of  action. 

Courts  of  law,  following  in  this  respect  the  rules  of  equity,  now 
take  notice  of  assignments  of  choses  in  action,  and  exert  themselves 
to  afford  them  every  support  and  protection  not  inconsistent  with  the 
established  principles  and  modes  of  proceeding  which  govern  tri- 
bunals acting  according  to  the  course  of  the  common  law.  They 
will  not,  therefore,  give  effect  to  a  release  procured  by  the  defendant 
under  a  covenous  combination  with  the  assignor  in  fraud  of  his 
assignee,  nor  permit  the  assignor  injuriously  to  interfere  with  the 
conduct  of  any  suit  commenced  by  his  assignee  to  enforce  the  rights 
which  passed  under  the  assignment.  The  dismissal  of  the  former 
suit,  stated  in  the  pleadings  in  the  present  case,  was  certainly  not 
a  retraxit;  and  if  it  had  been,  it  would  not  have  availed  the  parties, 
since  it  was  procured  by  fraud.  Admitting  a  dismissal  of  a  suit,  by 
agrcfmcnt,  1o  be  a  good  bar  to  a  subsequent  suit  (on  which  we  give 
no  opinion),  it  can  be  so  only  when  it  is  bona  fide,  and  not  for  the 
purfjosc  of  defeating  the  rights  of  third  persons.  It  would  be  strange 
indeed,  if  j)arti(;a  could  be  allowed,  und(^r  the  protection  of  its  forms, 
to  deff^at  the  wlioh^  objects  and  purpos(!S  of  the  law  itself. 

It  is  the  unanimous  opinion  of  the  court,  that  the  judgment  of  the 
circuit  court,  overruling  the  rc^plication  to  the  second  plea  of  the 


SECT.    Il]  HOMER    V.    SHAW  379 

defendant,  is  erroneous,  and  the  same  is  reversed,  and  the  cause  re- 
manded for  farther  proceedings.  Judgment  ajfirmed} 


HOKACE  S.  HOMEE  v.   FEEDERICK  E.  SHAW 

Supreme  Judicial  Court  of  Massachusetts,  March  15,  1912- 

May  24,  1912 

[^Reported  in  212  Massachusetts,  113] 

One  George  A.  Lancaster  entered  into  a  contract  to  do  a  certain 
portion  of  the  work  on  a  subway  for  which  the  defendant  was  the 
general  contractor.  Lancaster  began  performance  of  his  contract, 
and  being  in  need  of  money  to  pay  his  workmen  obtained  from  the 
plaintiff  various  sums,  and  as  security  gave  him  an  assignment  of 
money  which  might  be  coming  due  under  Lancaster's  contract  with 
the  defendant.  This  assignment  was  sent  to  the  defendant  for  ac- 
ceptance and  was  accepted  by  him.  Later,  on  the  plaintiff's  refusal 
to  advance  further  sums,  Lancaster  wrote  to  the  defendant  that  he 
was  unable  to  proceed  with  the  contract;  but  at  the  defendant's  re- 
quest Lancaster  ultimately  agreed  to  go  on  with  the  work,  on  the  de- 
fendant's agreeing  to  advance  the  money  necessary  to  pay  for  labor 
and  materials  used  in  completing  the  work,  and  also  to  pay  Lancaster, 
personally,  $25  a  week.  This  course  was  pursued  and  the  work  com- 
pleted. 

Braley,  J.  The  defendant's  liability  upon  acceptance  of  the  as- 
signment depended  upon  the  assignor's  performance  of  his  contract 

1  MandevUle  v.  Welch,  5  Wheat.  277,  283;  Fassett  v.  Mulock,  5  Col.  466;  Chap- 
man V.  Shattuck,  8  111.  49,  52;  Marr  v.  Hanna,  7  J.  J.  Marsh,  642;  Hackett  v.  Martin, 
8  Me.  77;  Matthews  v.  Houghton,  10  Me.  420;  Eastman  v.  Wright,  6  Pick.  316. 
Cutler  V.  Haven,  8  Pick.  490;  St.  Johns  v.  Charles,  105  Mass.  262;  Anderson  v.  Miller, 
15  Miss.  586;  Lipp  v.  South  Omaha  Co.,  24  Neb.  692;  Duncklee  v.  Greenfield  Co.,' 
23  N.  H.  245;  Sloan  v.  Sommers,  2  Green  (N.  J.),  509;  Gaullagher  v.  CaldweU,  22  Pa, 
300,  302;  Strong  v.  Strong,  2  Aikens,  373.  See  also  Brown  v.  Hartford  Ins.  Co.,  4 
Fed.  Cas.  379;  Wagner  v.  National  Ins.  Co.,  90  Fed.  Rep.  395;  Chisolm  v.  Newton, 
1  Ala.  371;  Cunningham  v.  Carpenter,  10  Ala.  109,  112;  Reed  v.  Nevins,  38  Me.  193; 
Rockwood  V.  Brown,  1  Gray,  261. 

Defences  acquired  by  the  debtor  against  assignor  before  notice  of  the  assignment 
are  valid.  McCarthy  v.  Mt.  Tecarte  Co.,  110  Cal.  687;  Parmly  v.  Buckley,  103  111. 
115;  Barker  v.  Barth,  192  111.  460;  Brown  v.  Leavitt,  26  Me.  251;  Weinwick  v.  Bender, 
33  Mo.  80;  Washoe  County  Bank  v.  Campbell,  41  Nov.  153;  Ingalls  v.  Burlingame, 
71  N.  H.  19;  Horowitz  v.  David,  145  N.  Y.  Supp.  998;  Rayburn  v.  Hurd,  20  Oreg. 
229;  Commonwealth  v.  Sides,  176  Pa.  616;  Ahrens  &c.  Co.  v.  Moore,  131  Tenn.  191; 
Stebbins  v.  Bruce,  80  Va.  389;    Dial  v.  Inland  Logging  Co.  52  Wash.  81. 

Defences  acquired  by  the  debtor  against  the  assignor  after  notice  of  assignment  are 
invalid.  Liquidation  Est.  Co.  v.  Willoughby,  [1898]  A.  C.  321;  Nance  v.  Polk  (Ark.) 
171  S.  W.  1195;  Kitzinger  v.  Beck,  4  Col.  App.  206;  Chicago  Title  Co.  v.  Smith,  158 
HI.  417;  Daggett  v.  Flanagan,  78  Ind.  253;  McFadden  v.  Wilson,  96  Ind.  253;  MiUi- 
ken  V.  Lorincr,  37  Me.  408;  St.  Andrew  v.  Manchaug  Mfg.  Co.,  134  Mass.  42;  Schilhng 
X.  Mullen,  55  Minn.  122;  Wells  v.  Edwards  Hotel  Co.  96  Miss.  191;  Leahy  v.  Dug- 
dale,  41  Mo.  517;  Cameron  v.  Little,  13  N.  H.  23;  Andrews  v.  Becker,  1  Johns.  426; 
Littlefield  v.  Stor>',  3  Johns.  426;  WUson  v.  Stilwell,  14  Ohio  St.  464,  471.  Compare 
Beran  v.  Tradesmen's  Nat.  Bank,  137  N.  Y.  450;  First  Nat.  Bank  v.  Clark,  9  Baxt. 
589. 


380  HOMER    V.    SHAW  [CHAP.    Ill 

to  transport,  erect  and  paint  the  steel  work  required  for  a  section 
of  a  subway  which  the  defendant  was  building  in  accordance  with 
the  plans  and  specifications  of  the  transit  commissioners.  If  not 
fully  performed  the  entire  contract  price  although  payable  in  monthly 
instalments  never  became  due,  or  if  before  completion  the  assignor 
by  reason  of  his  inability  to  go  on,  voluntarily  abandoned  the  work, 
he  could  not  recover  for  work  and  labor  already  performed  and 
furnished.  Homer  v.  Shaw,  177  Mass.  1.  Burke  v.  Coyne,  188  Mass. 
401,  404.  Buttrick  Lumber  Co.  v.  Collins,  202  Mass.  413,  420. 
After  the  assignor  entered  upon  the  performance  of  the  contract  he 
informed  the  defendant,  that  owing  to  the  failure  of  the  plaintiff 
to  advance  money,  which  apparently  he  had  agreed  to  furnish,  he 
would  be  unable  to  complete  the  work  as  his  workmen  had  not  been 
paid,  and  if  their  wages  remained  in  arrears  they  would  leave  his 
employment.  The  evidence,  if  no  further  action  had  been  taken  by 
the  parties,  and  performance  of  the  work  had  ceased,  would  have 
warranted  a  finding,  that,  the  assignor  having  repudiated  or  aban- 
doned his  contract  before  the  first  instalment  of  the  contract  price 
became  payable,  the  defendant  would  not  have  been  indebted  to  the 
plaintiff.  Homer  v.  Shaw,  177  Mass.  1.  Bowen  v.  Kimball,  203 
Mass.  364,  370,  371.  Barrie  v.  Quinby,  206  Mass.  259,  267.  But 
without  any  ostensible  change  the  assignor  remained  in  charge  of  the 
work  until  completion,  and  the  plaintiff  contends  under  the  sub- 
stituted declaration,  that  the  money  thereafter  received  should  be 
considered  as  earned  under  the  original  contract.  The  assignor 
needed  immediate  financial  assistance,  and  if  the  defendant  might 
have  advanced  the  money  which  the  evidence  shows  he  furnished  to 
enable  him  to  pay  his  employees,  yet  if  he  had  done  so  the  plaintiff's 
assignment  would  have  been  given  priority  over  the  loan.  Buttrick 
Lumber  Co.  v.  Collins,  202  Mass.  413.  The  parties  while  they 
could  not  modify  to  his  prejudice  the  terms  of  the  contract  assigned 
without  the  plaintiff's  consent,  or  by  a  secret  fraudulent  arrange- 
ment deprive  him  of  the  benefit  of  the  assignment,  were  not  pre- 
cluded from  entering  into  a  new  agreement  if  performance  by  the 
assignor  had  become  impossible  from  unforeseen  circumstances. 
Eaton  V.  Melius,  7  Gray,  556,  572.  Linnehan  v.  Matthews,  149  Mass. 
29.  It  consequently  was  a  question  of  fact  upon  all  the  evidence  for 
the  presiding  judge  before  whom  the  case  was  tried  without  a  jury, 
to  decide,  whether  upon  facing  the  exigencies  of  changed  conditions 
the  parties  mutually  agreed  to  a  cancellation  and  thereupon  in  good 
faith  ail  iii(lf!i)Oiident  contract  was  substituted,  by  the  terms  of  which 
the  defendant  undertook  to  furnisli  sufficient  funds  to  pay  the  work- 
men the  wages  then  due,  and  their  future  wages  as  they  accrued, 
while  the  assignor  was  to  receive  a  weekly  salary  for  his  personal 
services  of  supervision.  Tlie  refusal  to  comply  with  the  plaintiff's 
requests  for  findings,  and  the  general  finding  for  the  defendant  mani- 
festly show  his  conclusion  to  have  been,  that  the  first  contract  was 


SECT.    Il]  EMLEY    V.    PERRINE  381 

treated  as  having  been  rescinded,  and  the  plaintiff  had  no  enforce- 
able claim  against  the  defendant  under  the  assignment.  Earnshaw  v. 
Whittemore,  194  Mass.  187,  192.  Glidden  v.  Massachusetts  Hos- 
pital Life  Ins.  Co.  187  Mass.  538,  541.  The  plaintiff's  requests  for 
rulings  in  so  far  as  they  wfere  not  given  were  rightly  refused,  and 
the  exceptions  must  be  overruled.^  So  ordered. 


EUGEIsTE  EMLEY  v.  JAMES  H.  PEKEINE 

New  Jersey   Supreme   Court,   February   Term,    1896 

[Reported  in  58  Netu  Jersey  Law,  472] 

On  rule  to  show  cause,  &c. 

This  action  is  in  contract,  and  the  declaration  contains  only  the 
common  counts  in  assumpsit.  The  bill  of  particulars  declares  that 
the  declaration  is  founded  upon  the  following  instrument,  viz.  : 

"March  28,  1888. 
"Messrs.  Nightengale  Bros.: 

"I.  O.  U. 
"($250)  two  hiindred  and  fifty  dollars  for  value  received. 

"J.  H.  Perrine," 
assigned  by  delivery  to  plaintiff. 

One  of  the  pleas  was  the  general  issue. 

The  verdict  being  for  the  plaintiff,  the  defendant  obtained  this 
rule  to  show  cause  why  a  new  trial  should  not  be  granted. 

Argued  at  November  Term,  1895,  before  Beasley,  Chief  Justice, 
and  Justices  Magie  and  Ludlow. 

For  the  rule,  Clarence  Linn. 

The  opinion  of  the  court  was  delivered  by 

Magie,  J.  In  the  course  of  the  trial  defendant  offered  in  evidence 
an  assignment  for  the  benefit  of  creditors,  dated  December  8th,  1890, 
and  made  by  the  firm  of  Nightengale  Brothers,  and  by  John  and 
Joseph  Nightengale,  who  composed  that  firm,  to  John  S.  Barkalow. 
The  offer  was  rejected  on  the  ground  that  a  defence  of  that  character 
should  have  been  interposed  by  plea  or  notice. 

The  rejection  of  the  evidence  offered  was  erroneous. 

By  section  2  of  our  "Act  respecting  assignments  for  the  benefit  of 
creditors"  (Gen.  Stat.  p.  78),  such  an  instrument  operates  to  vest 
in  the  assignee  all  property  at  its  date  belonging  to  the  assignors, 
though  not  included  in  the  inventory  annexed. 

When  the  offer  was  made,  it  had  appeared  in  evidence  that  the 
instrument  upon  which  plaintiff  rested  his  claim  to  recover  had 
been  made  at  its  date  and  delivered  to  John  Nightengale,  one  of 
the  firm  of  Nightengale  Brothers,  and  had  been  retained  in  his  pos- 
session until  November  or  December,  1893,  when  it  was  delivered  by 
him  to  plaintiff  for  a  consideration. 

^  The  statement  of  facta  is  abbreviated. 


382  EMLEY    V.    PERRINE  [CHAP.   Ill 

That  instrument  was  non-uegotiable  and  the  title  which  plaintiff 
acquired  by  such  delivery  was  not  a  legal  but  an  equitable  title, 
which,  formerly,  he  could  only  assert  by  a  suit  in  the  name  of  the 
payees  of  the  due  bill  to  his  use.  1  Dan.  Neg.  Inst.,  §  742.  If  the 
present  suit  is  properly  prosecuted  in  his  own  name,  it  is  by  force 
of  the  act  of  March  4th,  1890,  amending  section  19  of  the  Practice 
act.    Pamph.  L.,  p.  24;  Gen.  Stat.,  p.  269,  §  340. 

But  a  transferee  of  non-negotiable  paper  by  delivery,  whether  en- 
titled to  bring  actions  thereon  in  his  own  name  or  not,  can  acquire 
no  better  title  to  the  paper  than  the  transferrer  had  at  the  time  of 
the  delivery.  The  assignment  offered  by  defendant  showed  that  the 
holders  of  this  due  bill  and  implied  obligation  of  defendant  had, 
long  before  its  delivery  to  plaintiff,  parted  with  all  their  title  thereto, 
and  that  such  title  had  thereby  vested  in  Barkalow,  their  assignee. 

The  evidence  of  the  assignment  was  clearly  relevant  and  material 
in  respect  to  the  title  of  the  plaintiff  to  the  chose  in  action  on  which 
he  sued. 

i^or  was  the  defendant  debarred  from  relying  upon  and  proving 
the  lack  of  title  of  the  plaintiff  or  his  transferrer,  because  it  had  not 
been  set  up  by  a  plea  or  notice. 

By  the  English  system  of  pleading  and  practice  a  defendant  in 
an  action  of  assumpsit  could  prove,  under  the  plea  of  the  general 
issue,  any  matter  which  showed  that  plaintiff  had  never  had  cause 
of  action.  1  Chit.  PI.  419.  Upon  that  plea,  until  the  adoption  of 
the  new  rules  in  the  reign  of  William  IV.,  the  question  always  was 
whether  there  was  a  subsiding  debt  or  cause  of  action  at  the  com- 
mencement of  the  suit.  1  Tidd.  Pr.  592.  This  was  the  system 
adopted  in  this  country.  Gould  PI.  c.  6,  part  1,  §  48.  In  this  state 
the  right  of  defence  under  the  general  issue  in  assumpsit  had  been 
left  unrestrained  until  the  passage  of  the  act  which  limits  such  de- 
fences to  those  specified  in  response  to  plaintiff's  demand.  In  the 
case  before  us  no  demand  seems  to  have  been  made. 

Defendant  was,  therefore,  in  no  mode  restrained  in  his  defense, 
and  evidence  tending  to  show  that  plaintiff  had  no  title  to  the  chose 
in  action  sued  on  was  competent.  The  evidence  offered  would  have 
shown  that  the  transferrer  of  this  chose  in  action  to  plaintiff  had 
not  at  that  time  any  title  thereto,  and  therefore  could  not  and  did 
not  confer  any  title  on  him. 

For  the  rejection  of  this  evidence  the  rule  to  show  cause  why  a 
new  trial  should  not  be  allowed  must  be  made  absolute.* 

*  Burton  v.  GaRe,  85  Minn.  355,  ace.  Other  authorities  are  collected  in  Ames's  Gas. 
on  TruBtB  (2d  cd.),  326,  «.;   1  Williston,  Contracts,  §  435. 


SECT.    II]         PELLMAN    V.    HART,    CUMMINGS   AND    HART  383 

PELLMAN  AND  Another  v.   HART,  CUMMINGS  and   HART 

Pennsylvania  Supreme  Court,  July  Term,  1845 

l^Beported  in  1  Pennsylvania  State,  263] 

In  error.     The  opinion  of  the  court  was  delivered  by  Rogers,  J. 

The  plaintiffs,  Hart,  Cummings  and  Hart,  having  issued  an  exe- 
cution on  a  judgment,  rendered  in  their  favor,  against  Daniel  Beck- 
ley,  attached  a  note  for  $311,  given  by  Samuel  H.  Knight  and 
Elizabeth  C.  Knight,  to  the  said  Daniel  Beckley.  The  garnishees 
admit  the  note  to  be  in  part  justly  due,  but  allege  that  previously 
to  the  attachment,  viz.,  on  the  5th  September,  1844,  Daniel  Beckley 
assigned  the  note  for  a  valuable  consideration  to  Mary  Beckley. 
The  plaintiff  replies  that  the  note  was  not  assigned  before  service 
of  the  attachment;  that  if  it  were  assigned,  it  was  fraudulent;  that 
it  was  delivered  afterwards  to  Beckley  to  effect  a  compromise  with 
his  creditors,  so  that  he  might  not  be  compelled  to  take  the  benefit 
of  the  bankrupt  law,  and  that  the  note  was  in  his  possession  at  the 
time  the  attachment  was  served. 

The  court  put  the  case  on  the  true  point,  when  they  referred  it 
to  the  jury  to  say,  whether  the  transfer  to  Mary  Beckley  was  bona 
fide;  and  if  so,  whether  Daniel  Beckley  again  became  the  owner  of 
the  note,  and  was  so  at  the  time  it  was  attached.  That  the  note 
was  assigned  before  the  attachment,  there  was  no  doubt;  and  to  the 
points  in  contest,  the  jury  responded  in  favor  of  the  defendant;  and 
even  if  wrong,  the  error  can  only  be  remedied  on  a  motion  for  a 
new  trial.  The  only  inquiry  is,  in  arriving  at  this  result :  Have  the 
court  erred  in  their  instruction  to  the  jury? 

The  plaintiffs,  it  is  contended,  have  a  right  of  action,  because  no 
notice  was  given  of  the  assignment  before  the  note  was  attached. 

If  the  debtor  had  paid  the  note  as  in  Bury  v.  Hartman,  4  Serg.  & 
Rawle,  177,  or  had  become  bound  as  security  of  the  promisor,  as 
in  Frantz  v.  Brown,  17  Serg.  &  Rawle,  287,  it  would  be  a  good  de- 
fence, unless  they  had  notice  of  the  assignment.  This  rule  is  in- 
tended for  the  protection  of  the  debtor.  So  equity  will  protect  the 
assignee  or  purchaser  for  a  valuable  consideration  without  notice 
of  the  assignment.  These  are  principles  which  cannot  be  gainsayed, 
and  are  recognized  by  many  cases  ruled  in  this  and  other  courts. 
But  this  is  not  the  point  here,  for  immediately  on  the  assignment, 
as  between  the  assignor,  who  is  the  original  promisor,  to  the  as- 
signee, and  the  latter,  the  equitable  title  vests  in  the  assignee,  which 
of  course  cannot  be  taken  to  pay  the  debt  of  the  assignor.  All  that 
can  be  seized  in  execution,  is  the  right  which  remains  in  the  assignor ; 
and  this  is  nothing  more,  where  the  assignment  is  made  hona  -fide, 
than  the  legal  title,  subject  to  the  equitable  interest  of  the  assignee. 
A  general  creditor,  unless  a  purchaser  without  notice,  is  in  no  better 
situation  than  the  debtor,  and  cannot  sell  a  greater  interest  than  the 


384  PELLMAN    V.    HART,    CUMMINGS    AND    HART     [CHAP.    Ill 

debtor  has  —  a  principle  which  applies  as  well  to  choses  in  action, 
as  a  note  or  bond,  as  to  any  other  chattel.  He  is  not  considered  in 
the  light  of  a  purchaser  without  notice,  nor  has  he  the  right  of  one. 
The  assignment,  as  is  said  in  Bury  v.  Hartman,  operates  as  a  new 
contract  between  the  obligor  and  the  assignee,  commencing  upon 
notice  of  the  assignment;  but  this  is  not  at  all  inconsistent  with  the 
principle,  that  as  between  the  obligor  and  the  assignee  the  latter 
acquires  such  an  equity,  eo  instanti  the  assignment  is  made,  as  can- 
not be  defeated  by  the  creditors  of  the  obligor.^ 

Again,  it  is  said,  the  note  was  re-delivered  to  Beckley,  and  there- 
fore the  subject  of  attachment.  It  is  unquestionably  true,  that  if 
the  note  had  been  re-transferred  properly  to  the  original  owner,  it 
would  be  liable  to  debts  of  the  execution  creditor;  but  when  it  was 
delivered  for  the  special  purpose,  as  the  jury  have  found,  of  effecting 
a  compromise  with  creditors,  which  failed,  it  remains  the  property 
of  the  assignee,  and  consequently  gives  no  right  to  the  attaching 
creditor.     And  to  this  effect,  the  court  instructed  the  jury. 

It  is  also  contended,  that  the  note  was  assigned  in  contemplation 
of  bankruptcy,  and  therefore  void.  This  is  a  point  not  taken  in 
the  Court  of  Common  Pleas;  yet  admitting  the  point  to  be  as  is 
stated,  as  between  the  promissor  and  the  assignee,  the  title  passes. 
And,  although,  if  the  debtor  had  been  prosecuted  to  bankruptcy,  the 
assignment  may  have  been  avoided;  yet  never  having  become  bank- 
rupt, I  do  not  see  what  right  any  one  of  the  creditors  has  to  attach 
the  note  in  payment  of  his  debts. 

Judgment  affirmed. 

1  Pickering  v.  Ilfracombe  Ry.  Co.,  L.  R.  3  C.  P.  235;  Jones  v.  Lowery,  104  Ala. 
252;  Walton  v.  Horkan,  112  Ga.  814;  Savage  v.  Gregg,  150  111.  161;  McGuire  v. 
Pitts,  42  la.  535;  Littlefield  v.  Srnith,  17  Me.  327;  Wakefield  v.  Marvin,  3  Mass.  558; 
Dix  V.  Cobb,  4  Mass.  512;  Thayer  v.  Daniels,  113  Mass.  129;  MacDonal  v.  Kneeland, 
5  Minn.  352;  Schoolfield  v.  Hirsh,  71  Miss.  55;  Smith  v.  Sterritt,  24  Mo.  260;  Knapp 
V.  Standley,  45  Mo.  App.  264;  Hendrickson  v.  Trenton  Bank,  81  Mo.  App.  332;  Marsh 
V.  Garney,  69  N.  H.  236;  Board  v.  Duparquct,  50  N.  J.  Eq.  234;  •  Van  Buskirk  v. 
Warren,  24  Barb.  457;  Williams  v.  Ingcrsoll,  89  N.  Y.  508;  Meier  v.  Hess,  23  Oreg. 
599;  Stevens  v.  Stevens,  1  Ashmead,  190;  United  States  v.  Vaughan,  3  Binn.  394; 
Speed  V.  May,  17  Pa.  91;  Patton  v.  Wilson,  34  Pa.  299;  Noble  v.  Thompson  Oil  Co., 
79  Pa.  354,  367;  Tiernay  v.  McGarity,  14  R.  I.  231;  Brown  v.  Minis,  1  McCord,  80; 
Ballingham  Co.  v.  Brisbois,  14  Wash.  173,  ace;  Bishop  v.  Holcomb,  10  Conn.  444; 
VanV)uskirk  v.  Hartford  Ins.  Co.,  14  Conn.  141;  {conf.  Clark  v,  Connecticut  Peat  Co., 
35  Conn.  .303);  Clodfelter  v.  Cox,  1  Sneed,  330;  Dews  v.  Olwill,  3  Baxt.  432;  Rhodes 
V.  Huyncs,  95Tenn.  673;  Ward  v.  Morri-son,  25  Vt.  593;  Nichols  v.  Hooper,  61  Vt. 
295,  omtra.  S<!e  also  McWilliams  v.  Webb,  32  la.  577;  Ruthvcn  v.  Clarke,  109  la. 
25;    Whiteside  v.  Tall,  88  Mo.  App.  186,  171;     1  WilUston,  Contracts,  §434. 


SECT.    Il]         AMERICAN    LITHOGRAPH    CO.    V.    ZIEGLER  385 


AMERICAN  LITHOGRAPH  COMPAI^Y  v.  CHARLES  S. 
ZIEGLER  AND  Others 

SuPBEME  Judicial  Court  of  Massachusetts,  ISToveniber  11,  12, 
1913-January  8,  1914 

\_Reported  in  216  Massachusetts,  287] 

LoEiNG,  J.  This  is  an  action  upon  a  written  contract  by  which 
the  defendants,  doing  business  under  the  name  of  the  Chester  Sus- 
pender Company,  agreed  to  pay  one  Klausner  $600  for  a  two-page 
advertisement  of  Chester  suspenders,  in  a  new  magazine  which 
Klausner  was  then  proposing  to  publish.  The  contract  sued  on  was 
dated  October  8,  1909,  and  on  October  30,  1909,  Klausner  executed 
and  delivered  to  the  plaintiff  an  assignment  of  it  in  these  words: 
"In  consideration  of  One  Dollar,  the  receipt  of  which  is  hereby  ac- 
knowledged, I  hereby  sell,  assign  and  transfer,  unto  American  Litho- 
graphic Company,  all  my  right,  title  and  interest  in  and  to  this 
contract,  and  all  benefits  to  accrue  thereon."  On  the  same  day 
(October  30,  1909)  Klausner  notified  the  defendants  that  he  had 
assigned  "your  order"  to  the  plaintiff,  who  would  "render  bill." 
When  the  stipulated  publication  had  been  made,  the  plaintiff  sent 
the  defendants  a  bill  which  they  refused  to  pay  on  the  ground  that 
the  magazine  published  was  not  what  Klausner  agreed  that  it  should 
be. 

At  the  trial  the  defendants  also  set  up  the  defense  that  the  work 
of  getting  up  and  publishing  the  proposed  new  magazine  was  a  per- 
sonal undertaking  to  be  performed  by  Klausner,  and  so  not  a  con- 
tract which  could  be  assigned  before  performance;  that  the  assign- 
ment made  was  an  assignment  of  the  right  to  perform  the  contract 
as  well  as  an  assignment  of  the  amount  due  when  the  contract  had 
been  performed,  and  so  was  invalid. 

But  there  was  no  evidence  that  the  plaintiff  undertook  to  act  upon 
that  part  of  the  assignment  which  entitled  it  to  publish  the  proposed 
magazine.  The  evidence  was  uncontradicted  that  this  was  done  by 
Klausner.  One  of  the  defendants  testified  that  they  knew  of  the 
proposed  assignment  to  the  plaintiff,  and  that  they  understood  "that 
it  was  a  sort  of  security  so  that  they  [the  plaintiff]  would  get  their 
money  for  it  [the  printing]." 

In  this  state  of  the  evidence  the  presiding  judge^  instructed  the 
jury  "that  that  assignment  was  an  assignment  that  could  be  made 
by  Klausner  to  the  Lithograph  Company.  It  was  for  the  purpose, 
as  the  papers  in  the  case  show  —  and  it  is  not  in  dispute  —  of  se- 
curing the  Lithograph  Company  for  the  expense  of  printing.  Now 
you  will  treat  this  case  just  the  same  as  if  Klausner  was  suing  the 
partnership  consisting  of  the  two  Zieglers  and  Van  der  Pyl   .    .    .  ; 

1  Aiken,  0.  J. 
13 


386  AMERICAN    LITHOGRAPH    CO.    V.   ZIEGLER    [CHAP.    Ill 

SO  I  repeat,  you  will  try  this  case  just  tlie  same  as  if  Klausner  were 
suing  the  Chester  Suspender  Company,  which  consists  of  the  three 
men  who  appeared  here  on  the  stand." 

Had  there  been  any  evidence  that  the  plaintiff  had  undertaken 
under  this  assignment  to  do  the  work  which  Klausner  was  to  do 
under  the  original  contract  with  the  defendants,  this  instruction 
would  have  been  wrong.  But  there  was  no  such  evidence  in  the  case. 
The  plaintiff  and  Klausner  never  had  acted  under  that  clause  in 
the  assignment;  they  had  acted  under  the  other  clause  by  which 
Klausner  assigned  to  the  plaintiff  "all  benefits  to  accrue  [to  him] 
thereon." 

To  find  for  the  plaintiff  as  they  did  the  jury  under  this  charge 
had  to  find  that  Klausner  had  performed  his  contract  with  the  de- 
fendants. In  other  words,  the  jury  had  to  find  that  those  things 
had  taken  place  which  the  defendants  contended  ought  to  have  taken 
place  to  make  them  liable  under  the  contract  to  some  one.  The  de- 
fense now  insisted  on  is  purely  technical.  It  is  this :  That  although 
the  assignment  contained  a  clause  which  carried  to  the  plaintiff  as 
assignee  the  money  due  under  their  contract  with  Klausner,  it  (the 
assignment)  contained  another  clause  which  undertook  to  give  the 
plaintiff  a  right  to  do  what  Klausner  was  to  do  under  the  original 
contract,  and  that  that  clause  is  void.  Their  contention  is  that  the 
existence  of  this  void  clause  in  the  assignment,  although  never  acted 
upon  by  the  parties  to  it,  renders  the  other  clause  of  the  assignment 
void.    We  are  of  opinion  that  the  contention  is  not  sound. 

The  right  of  the  plaintiff  to  bring  this  action  as  assignee  in  its 
own  name  depends  upon  the  law  of  the  forum.  See,  for  example, 
Leach  v.  Greene,  116  Mass.  534.  The  first  ruling  asked  for  was 
rightly  refused.^  The  view  which  we  have  taken  of  the  case  renders 
the  other  rulings  immaterial.  We  have  found  nothing  in  the  cases 
cited  by  the  defendants  which  requires  notice. 

We  are  of  opinion  that  a  written  assignment  of  money  to  be  due 
under  a  contract  made  before  performance  is  within  R.  L.  c.  173,  §  4. 

Exceptions  overruled. 

*  The  first  rulins  askod  for  was  as  follows:  "1.  The  construction,  validity  and 
effectiveness  of  the  assignment  from  Klausner  to  the  plaintiff  are  to  be  determined 
by  the  law  of  the  State  of  New  York."  , 


SECT.    Il]         HERMAN    V.    CONN.    MUTUAL   LIFE   INS.    CO.  387 

JOSEPH  M.  HEEMAN  v.   CONNECTICUT   MUTUAL  LIFE 
INSURANCE  COMPANY  and  Others 

SuPBEME  Judicial  Coukt  of  Massachusetts,  March  23,  1914- 

May  25,  1914 

[Reported  in  218  Massachusetts,  181] 

Bill  in  Equity,  filed  in  the  Superior  Court  on  September  15, 
1913,  and  afterwards  amended,  in  which  as  amended  the  Connecticut 
Mutual  Life  Insurance  Company,  Harry  R.  Stanley,  executor  of 
the  will  of  Sumner  C.  Stanley,  and  Bernhard  Sommer  were  named 
defendants,  and  which  contained  the  following  allegations  in  sub- 
stance : 

In  1896  Sommer  procured  an  ordinary  policy  of  life  insurance 
from  the  defendant  company  in  the  sum  of  $10,000,  payable  in  case 
of  his  death  to  his  heirs,  executors  and  assigns.  At  the  date  of  the 
bill  the  policy  had  a  cash  surrender  value  of  $4,000.  On  February 
11,  1909,  for  a  valuable  consideration  Sommer  assigned  his  interest 
in  the  policy  to  the  plaintiif  as  collateral  security  for  the  indebted- 
ness of  Sommer  to  the  plaintiff  and  others  described  in  the  instru- 
ment of  assignment.  One  George  E.  Williams,  who  at  the  time  of 
that  assignment  and  until  his  death  on  July  28,  1913,  was  the  general 
agent  of  the  insurance  company  in  Boston,  drew  the  assignment 
and  Sommer  delivered  it  and  the  policy  to  Williams  to  be  turned 
over  to  the  plaintiff.  Williams  delivered  the  assignment  to  the 
plaintiff  but  did  not  deliver  the  policy,  falsely  asserting  that  the 
company  held  it  as  collateral  security  for  premium  notes  payable 
to  it.  The  company  did  not  hold  the  policy  and  Sommer  was  in  no 
way  indebted  to  it.  Williams  held  the  policy  and  on  February  2, 
1910,  delivered  it  with  what  purported  to  be  an  assignment  of 
Sommer's  interest  therein  to  the  defendant  Stanley,  and  Stanley 
claimed  to  hold  it  as  security  for  a  loan  of  $4,000,  refusing  to  de- 
liver it  to  the  plaintiff  when  he  demanded  it  and  secreting  it  so  that 
it  could  not  be  reached  by  the  plaintiff  in  an  action  of  replevin.  The 
plaintiff  denied  the  validity  of  the  assignment  to  Stanley.  The 
company  refused  to  recognize  the  plaintiff's  rights  to  the  policy,  al- 
leging that  it  was  unable  to  determine  who  owned  it.  A  quarter 
annual  premium  on  the  policy  was  overdue  and  there  was  danger 
that  the  policy  would  lapse  for  non-payment  of  premiums. 

The  policy  provided  that  no  assignment  should  be  valid  unless 
made  in  writing  and  a  duplicate  or  certified  copy  filed  with  the 
Company.  Both  assignees  acted  in  good  faith.  Williams  died  on 
August  1,  1913.  The  plaintiff  notified  the  Insurance  Company  on 
October  5th,  1913,  of  the  assignment  of  the  policy  to  him.  Stanley 
notified  the  Insurance  Company  on  August  23,  1913,  of  the  assign- 
ment of  the  policy  to  him.  Each  assignee  was  ignorant  of  the  as- 
signment to  the  other,  until  after  the  death  of  Williams. 


388  HERMAN    V.    CONN.    MUTUAL   LIFE   INS.    CO.     [CHAP.    Ill 

Sheldon,  J.  2.  The  plaintiff  by  his  assignment  from  Sommer 
acquired  as  against  the  latter  a  valid  title  to  the  policy  of  insurance 
which  here  is  in  question.  As  between  the  plaintiff  and  Sommer, 
it  is  immaterial  that  the  assignment  was  not  written  upon  or  attached 
to  the  policy,  that  no  reference  to  the  assignment  was  written  or 
noted  on  the  policy,  or  that  no  notice  of  it  was  given  to  the  insurance 
company,  either  in  the  manner  required  by  the  fifth  clause  of  the 
policy  or  otherwise.  Merrill  v.  New  England  Mutual  Life  Ins.  Co. 
103  Mass.  245,  252.'  Hewins  v.  Baker,  161  Mass.  320.  Atlantic 
Mutual  Life  Ins.  Co.  v.  Gannon,  179  Mass.  291.  See  also  North- 
western Mutual  Life  Ins.  Co.  v.  Wright,  153  Wis.  252;  Wood  v. 
Phoenix  Mutual  Life  Ins.  Co.  22  La.  Ann.  617;  Manhattan  Life 
Ins.  Co.  V.  Cohen,  139  So.  W.  Eep.  51 ;  Howe  v.  Hagan,  97  N.  Y. 
Supp.  86;  Cowdrey  v.  Vandenburgh,  101  U.  S.  572;  Dunlevy  v. 
New  York  Life  Ins  Co.  204  Fed.  Eep.  670;  Fortescue  v.  Barnett, 
3  M.  &  K.  36.  The  contrary  statements  in  Palmer  v.  Merrill,  6 
Cush.  282,  have  not  been  followed.  James  v.  Newton,  142  Mass. 
366,  378.  Richardson  v.  White,  167  Mass.  58,  60.  The  English 
rule,  as  stated  in  Dearie  v.  Hall,  3  Buss.  1,  though  adopted  in  many 
other  jurisdictions,  is  not  the  law  of  this  Commonwealth.  Thayer 
V.  Daniels,  113  Mass.  129,  131.  Putnam  v.  Story,  132  Mass.  205, 
211. 

It  is  true  also,  as  the  plaintiff  has  contended,  that  the  owner  of 
a  chattel  does  not,  by  merely  entrusting  to  the  third  person  the  cus- 
tody or  even  the  possession  thereof,  hold  him  out  as  its  owner,  and 
will  not  by  that  fact  alone  be  estopped  from  setting  up  his  title 
against  even  a  bona  fide  purchaser  from  his  bailee.  Rogers  v.  Dut- 
ton,  182  Mass.  187,  189,  and  cases  there  cited.  But  we  have  here 
to  do,  not  with  a  chattel,  but  with  a  non-negotiable  chose  in  action, 
the  right  to  receive  in  the  future  a  certain  sum  of  money  upon  the 
happening  of  certain  contingencies.  The  policy  of  insurance  merely 
shows  the  existence,  nature  and  extent  of  the  right.  As  has  been 
correctly  stated  by  counsel  for  Stanley,  "it  is  the  tangible  e\'idence 
which  the  owner  of  the  right  possesses  in  order  to  show  title  to  the 
right."  The  court  must  apply  here  the  rule  stated  by  the  Chief 
Justice  in  Baker  v.  Davie,  211  Mass.  429,  440,  "that  when  an  owner 
has  so  acted  as  to  mislead  a  third  person  into  the  honest  belief  that 
the  one  dealing  with  the  property  had  a  right  to  do  so,  he  is  estopped 
from  showing  the  truth."  The  statement  of  Lord  Herschell  in  Lon- 
don Joint  Stock  Bank  v.  Simmons,  [1892]  A.  C.  201,  215,  quoted 
and  followed  by  this  court  in  Gardner  v.  Beacon  Trust  Co.  190 
Mass.  27,  28,  is  to  the  same  effect :  "The  general  rule  of  the  law 
is,  that  where  a  person  luis  obtained  the  property  of  another  from 
one  who  is  dfaling  with  it  without  the,  authority  of  the  true  owner, 
no  title  is  accjnired  as  against  that  owner,  even  though  full  value 
be  given,  and  the  property  bo  taken  in  the;  IxOief  that  an  unquestion- 
able title  thereto  is  being  obtained,  unless  the  person  taking  it  can 


SECT.    Il]         HERMAN    V.    CONN.    MUTUAL   LIFE   INS.    CO.  389 

show  that  the  true  owner  has  so  acted  as  to  mislead  him  into  the 
belief  that  the  person  dealing  with  the  property  had  authority  to 
do  so.  If  this  can  be  shown,  a  good  title  is  acquired  by  personal 
estoppel  against  the  true  owner."  The  same  general  principle  (al- 
though its  application  in  that  case  depended  upon  the  existence  of 
a  custom)  was  stated  again  in  Baker  v.  Davie,  211  Mass.  429,  436. 
See  also  Washington  v.  First  National  Bank,  147  Mich.  571; 
Brocklesby  v.  Temperance  Permanent  Building  Society,  [1895]  A. 
C.  173,  181;  Farquharson  Brothers  &  Co.  v.  King  &  Co.  [1901]  2 
K.  B.  697.     See  Scollans  v.  Kollins,  173  Mass.  275. 

But  this  estoppel  of  a  rightful  owner  to  set  up  his  title  against  a 
bona  fide  purchaser  for  value  from  one  who  had  not  the  right  to 
sell  rests  upon  the  conduct  of  the  rightful  owner.  It  arises  against 
him  when  by  his  own  conduct  he  has  so  clothed  the  wrongdoer  with 
the  indicia  of  ownership  as  to  justify  third  persons  in  regarding  the 
wrongdoer  as  either  the  rightful  owner  or  as  having  authority  from 
that  owner.  The  estoppel  arises  only  from  the  owner's  voluntary 
action  tending  to  produce  and  in  fact  producing  that  result.  If  this 
policy  had  been  delivered  to  the  plaintiff  and  then  had  been  ob- 
tained from  him  by  Sommer  or  Williams  by  means  of  a  common 
law  larceny,  there  would  have  been  no  foundation  for  an  estoppel 
against  the  plaintiff,  because,  whatever  third  persons  might  have 
thought  or  even  might  have  been  justified  in  thinking,  the  possession 
and  apparent  ownership  would  not  have  been  put  into  Sommer  or 
into  Williams  as  Sommer's  agent  by  any  voluntary  action  of  the 
plaintiff.  Bangor  Electric  Light  &  Power  Co.  v.  Robinson,  52  Fed. 
Rep.  520.  Farmers'  Bank  v.  Diebold  Safe  &  Lock  Co.  66  Ohio  St. 
367.  This  distinction  was  stated  clearly  by  Holmes,  C.  J.  in  Russell 
V.  American  Bell  Telephone  Co.  180  Mass.  467,  469,  et  seq.,  citing 
as  typical  cases  Knox  v.  Eden  Musee  American  Co.  148  N.  Y.  441, 
and  Pennsylvania  Railroad's  appeal,  86  Penn.  St.  80.  See  also  Var- 
ney  v.  Curtis,  213  Mass.  309,  312. 

The  rights  of  these  parties  depend  upon  the  application  of  the 
principles  which  we  have  stated. 

The  plaintiff  took  his  assignment  by  an  instrument  separate  and 
apart  from  the  policy  itself.  He  allowed  the  possession  of  the  policy 
to  remain  unaltered.  It  is  true  that  he  did  this  on  the  false  repre- 
sentation that  it  was  held  by  the  insurance  company  as  security  for 
a  premium  loan;  but  the  fact  remains  that  it  was  his  voluntary 
act.  He  took  no  other  precaution,  either  by  giving  notice  to  the 
company  or  otherwise.  He  testified  that  he  did  not  even  tell  Sommer 
that  the  policy  had  not  been  delivered  to  him.  He  trusted  every- 
thing to  Williams;  and  his  own  testimony  was  that  he  did  this  by 
reason  of  his  "full  confidence  in  Williams."  He  knowingly  allowed 
the  circumstances  to  be  such  as  to  indicate  that  Sommer  retained 
the  full  ownership  of  the  policy,  and  such  that  no  inquiry  of  the 
company  would  disclose  anything  to  the  contrary  or  throw  any  doubt 


390         OAK   GROVE    CON.    CO.    V.    JEFFERSON    COUNTY     [CHAP.    Ill 

upon  Sommer's  title.  For  this  reason,  such  cases  as  Mente  v.  Town- 
send,  68  Ark.  391,  are  not  applicable  here.  The  case  is  a  stronger 
one  than  Bridge  v.  Connecticut  Mutual  Life  Ins.  Co.  152  Mass.  343, 
and  the  reasoning  of  that  opinion  is  decisive  against  the  plaintiff. 
There  are  no  circumstances  upon  which  any  distinction  can  be  made 
in  his  favor.^ 


OAK  GEOYE  CON-STKUCTION"  C0MPA:N'Y  v. 
JEFFEKSON  COUNTY 

Circuit  Court   of  Appeals,   Sixth   Circuit,   February  2,   1915 

{Reported  in  219  Federal  Reporter,  858] 

Dennison,  Circuit  Judge.  The  county  of  Jefferson,  in  1906,  after 
due  preliminaries,  let  a  road  construction  and  improvement  contract 
to  five  men  associated  as  a  partnership  as  ''Oak  Grove  Construction 
Company."  Yery  soon  afterwards,  and  before  much  construction 
work  was  done,  these  associates  organized  an  Alabama  corporation, 
named  "The  Oak  Grove  Construction  Company"  (the  plaintiff), 
and  assigned  to  it  their  contract.  The  work  was  continued  by  plain- 
tiff about  three  years,  and  the  county  paid  plaintiff,  on  estimates, 
from  time  to  time,  the  greater  part  of  the  expense  of  the  work.  At 
the  end,  plaintiff  brought  this  suit  to  recover  a  balance  of  several 
thousand  dollars,  all  made  up  of  disputed  items,  and  all  having  ac- 
crued on  account  of  its  materials  furnished  and  work  done  long 
after  the  assignment.  Under  these  circumstances,  it  is  said  that  the 
trial  court  had  no  jurisdiction,  because  the  suit  was  brought  upon  an 
assigned  contract,  and  the  assignors  were  citizens  of  the  same  state 
with  defendant. 

[1]  The  provision  of  Section  1  of  the  Act  of  1887  as  amended  by 
Act  of  Aug.  13,  1888  (25  Stat.  433)  to  the  effect  that  the  federal 
courts  shall  not  entertain  a  suit  to  recover  the  contents  of  any  chose  in 
action  in  favor  of  any  assignee,  unless  the  same  suit  might  have  been 
there  brought  by  the  assignor  does  not,  in  our  judgment,  apply  to 
this  case.  The  ambiguity  inherent  in  the  phrase  "recover  the  con- 
tents of  a  chose  in  action"  has  been  cleared  by  deciding  that  the 
prohibition  is  one  against  suit  upon  an  assigned  right  of  action. 
Shoocraft  v.  Bloxhara,  124  U.  S.  730,  735,  8  Sup.  Ct.  686,  31  L. 
Ed.  574;  Kolze  v.  Hoadley,  200  U.  S.  76,  82,  26  Sup.  Ct.  220,  50 
L.  Ed.  377.  And  see  Brown  v.  Fletcher,  235  U.  S.  589,  35  Sup.  Ct. 
154,  58  L.  Ed. —  (Jan.  5,  1915).  Since  in  this  case  the  court  be- 
low directed  a  verdict  for  the  county,  we  must  assume,  for  the  pur- 
poses of  this  review,  whatever  facts  plaintiff's  testimony  tended  to 
show.  From  this  point  of  view,  it  is  clear  that  the  suit  is  not  brought 
upon  Jin  assigned  right  of  action.  Tlie  assignors  never  had  any 
'  Th<;  Btfttomont  of  facta  is  abbreviated  and  a  portion  of  the  opinion  omitted. 


SECT.    Il]      OAK   GROVE    CON.    CO.    V.    JEFFERSON    COUNTY  391 

right  to  bring  a  suit  to  recover  either  the  agreed  price  or  the  reason- 
able value  of  the  materials  furnished  and  work  done  by  plaintiff. 
The  right  of  action  originally  accrued  to  the  plaintiff,  it  never  ex- 
isted until  plaintiff  parted  with  these  considerations,  and  thereupon 
it  vested  in  plaintiff  and  vested  nowhere  else.  As  was  said  in  Paige 
V.  Eochester  (C.  C.)  137  Fed.  663,  665,  plaintiff's  "cause  of  action 
does  not  depend  upon  the  assignment  of  a  chose  in  action  to  him, 
but  upon  the  assignment  of  a  right  to  him  by  which,  by  performance, 
he  acquired  a  chose  in  action  to  himself." 

There  is  no  substantial  distinction  between  the  present  case  and 
American  Co.  v.  Continental  Co.,  188  TJ.  S.  104,  23  Sup.  Ct.  265, 
47  L.  Ed.  404,  in  which  an  assignee  of  a  contract  sued  the  other 
original  party  with  reference  to  a  breach  which  occurred  after  the 
contract  had  been  assigned,  and  such  a  suit  was  held  not  within  the 
prohibition.  True,  there  had  been,  in  that  case,  a  greater  degree 
of  substitution  and  release  of  the  assignor  than  our  subsequent  dis- 
cussion herein  of  the  subject  of  novation  indicates  to  be  essential  to 
the  maintenance  of  this  action ;  but  the  opinion  of  the  Supreme 
Court  expressly  denies  the  importance  of  substitution.  The  result 
is  placed  upon  the  arising  of  a  new  contract  between  defendant  and 
assignee.  The  same  character  of  new  contract  is  alleged  and  (by 
tendency)  proved  here  —  the  kind  which  comes  from  the  transfer 
of  an  assignable  contract  and  subsequent  continuing  performance  by 
the  assignee,  and  the  other  party's  acceptance  and  recognition  of 
the  assignee  as  one  entitled  to  perform  and  to  receive  performance. 
The  present  case  is  also  well  within  the  principle  of  Superior  City 
V.  Ripley,  138  TJ.  S.  93,  96,  97,  11  Sup.  Ct.  288,  34  L.  Ed.  914,  which 
has  been  applied  to  circumstances  analogous  to  those  here  involved 
(Seymour  v.  Farmers'  Co.  [C.  C.  A.  7]  128  Fed.  907,  63  C.  C.  A. 
633)  as  well  as  to  the  converse  situation  (Eau  Claire  v.  Payson 
[C.  C.  A.  7]  109  Fed.  676,  48  C.  C.  A.  608). 

Plant  Co.  V.  Jacksonville  Co.,  152  U.  S.  71,  72,  14  Sup.  Ct.  483, 
38  L.  Ed.  358,  is  not  inconsistent  with  the  view  we  adopt.  A  rail- 
road company,  being  by  contract  entitled  to  a  specific  consideration 
for  constructing  its  road,  employed  the  Plant  Company  to  build  the 
railroad,  and  the  Plant  Company  did  this  work  for  the  railroad. 
Then  the  railroad  assigned  to  the  Plant  Company  the  railroad's 
right  to  recover  the  consideration,  and  it  was  held  that  the  situation 
was  governed  by  the  prohibition  against  suits  by  an  assignee;  but 
the  distinction  between  that  case  and  this  is  obvious.  To  make  the 
cases  parallel,  it  would  have  to  be  supposed  that  in  this  case  the 
partnership  employed  the  corporation  to  do  the  construction  work 
as  the  agent  of  the  partnership,  and  that  theory  is  urged  by  defend- 
ant as  a  proper  inference  from  the  facts;  but  it  is  not  the  theory 
upon  which  this  review  must  depend.  Plaintiff's  testimony  tended 
to  show  the  other  theory  which  we  have  stated. 

Corbin  v.  Black  Hawk,  105  U.  S.  659,  26  L.  Ed.  1136,  is  also 


392         OAK   GROVE    CON.    CO.    V.    JEFFERSON    COUNTY     [CHAP.    Ill 

clearly  distinguishable.  That  suit  was  to  enforce  specific  per- 
formance of  a  promise  made  to  plaintiff's  assignor,  the  contract  was 
still  executory  on  both  sides,  and  an  inseparable  part  of  the  right 
sued  for  had  fully  accrued  before  the  assignment,  and  passed  thereby. 
We  conclude  that  neither  upon  the  demurrer  nor  upon  the  motion 
to  instruct  was  the  defendant  entitled  to  prevail  on  the  jurisdictional 
question. 

[2]  The  trial  court  put  its  final  action  upon  the  ground  that  a 
novation  as  between  the  first  parties  and  the  later  parties  was  nec- 
essary, and  that  this  did  not  sufficiently  appear.  If  by  novation  is 
meant  complete  substitution,  whereby  the  corporation  took  for  all 
purposes  the  place  of  the  partnership  and  the  partnership  was  re- 
leased from  all  liability  under  the  contract,  we  agree  with  the  trial 
court  that  this  did  not  appear.  The  law  requires  the  county  to 
take  a  bond  from  the  contractors.  This  was  done  when  the  contract 
was  let  to  the  partnership;  but  no  such  bond  was  required  of  the 
corporation,  nor  was  its  propriety  suggested.  This  circumstance  alone 
—  although  it  is  aided  by  others  —  makes  clear  that  there  could 
have  been  no  purpose  to  release  the  partnership  from  its  liability, 
and  to  accept,  in  substitution,  the  promise  of  the  corporation. 

This  conclusion  of  fact  causes  the  record  to  present  the  question 
whether,  lacking  such  novation,  plaintiff  may  nevertheless  recover; 
and  the  nature  of  the  real  inquiry  here  is  shown  by  reciting  the 
situation.  There  is  no  attempt  to  compel  the  county  to  perform  an 
executory  contract,  nor  to  accept  continuing  performance  from  an 
unsatisfactory  assignee.  It  is  not  asked  to  assume  any  continuing 
relations  with  an  assignee.  Whether  the  assignors  were  released  from 
their  obligations  is  not  practically  important,  because  those  obliga- 
tions have  been  fully  met,  and  the  county,  with  all  due  formality, 
has  accepted  the  work  and  acknowledged  complete  performance 
of  the  contract.^  No  resort  to  the  contract  terms  is  now  proposed, 
save  as  a  measure  of  compensation  for  some  of  the  work.  No  claim 
under  the  contract  is  made  by  the  assignors,  and  no  double  liability 
against  the  county  is  suggested.  The  county,  with  knowledge  of  the 
assignment,  saw  the  assignee  performing  for  three  years,  accepted 
performance,  made  partial  payments  to  the  assignee,  fully  accepted 
the  whole  work,  but  refuses  to  pay  the  balance  due.  Such  a  refusal 
must  be  supported  by  some  imperative  rule  of  law,  before  it  can  be 
justified.^ 

'  The  proofs  tfrndod  to  show  that  tlio  commissioners  for  the  county  actually  went 
over  the  improvoinents  with  plaintifT'.s  roprosentativcs,  and  actively  recognized  the 
carryinm  on  !ind  completion  of  the  contract,  by  i}laintiff. 

'  A  portion  only  of  the  opinion  is  printed. 


SECT.   II]  BRITISH   WAGGON    CO.    V.   LEA   &    CO.  393 

THE  BRITISH  WAGGON  COMPANY  AND  THE  PARKGATE 
WAGGON  COMPANY  v.   LEA  AND  COMPANY 

In  the  Queen's  Bench  Division,  January  13,  1880 

l^Reported  in  5  Queen  s  Bench  Division,  149] 

The  judgment  of  the  court  (Cockbukn,  C.  J.,  and  Manisty,  J.) 
was  delivered  by  — 

CocKBURN,  C.  J.  This  was  an  action  brought  by  the  plaintiffs 
to  recover  rent  for  the  hire  of  certain  railway  waggons,  alleged  to 
be  payable  by  the  defendants  to  the  plaintiffs,  or  one  of  them,  under 
the  following  circumstances :  — 

By  an  agreement  in  writing  of  Feb.  10,  1874,  the  Parkgate  Waggon 
Company  let  to  the  defendants,  who  are  coal  merchants,  fifty  rail- 
way waggons  for  a  term  of  seven  years,  at  a  yearly  rent  of  £600  a 
year,  payable  by  equal  quarterly  payments.  By  a  second  agreement 
of  June  13,  1874,  the  company  in  like  manner  let  to  the  defendants 
fifty  other  waggons,  at  a  yearly  rent  of  £625,  payable  quarterly  like 
the  former. 

Each  of  these  agreements  contained  the  following  clause:  "The 
owners,  their  executors,  or  administrators,  will  at  all  times  during 
the  said  term,  except  as  herein  provided,  keep  the  said  waggons  in 
good  and  substantial  repair  and  working  order,  and,  on  receiving 
notice  from  the  tenant  of  any  want  of  repairs,  and  the  number  or 
numbers  of  the  waggons  requiring  to  be  repaired,  and  the  place  or 
places  where  it  or  they  then  is  or  are,  will,  with  all  reasonable  de- 
spatch, cause  the  same  to  be  repaired  and  put  into  good  working 
order." 

On  Oct.  24,  1874,  the  Parkgate  Company  passed  a  resolution, 
under  the  129th  section  of  the  Companies  Act,  1862,  for  the  volun- 
tary winding  up  of  the  company.  Liquidators  were  appointed,  and 
by  an  order  of  the  Chancery  Division  of  the  High  Court  of  Justice, 
it  was  ordered  that  the  winding  up  of  the  company  should  be  con- 
tinued under  the  supervision  of  the  court. 

By  an  indenture  of  April  1,  1878,  the  Parkgate  Company  assigned 
and  transferred,  and  the  liquidators  confirmed  to  the  British  Com- 
pany and  their  assigns,  among  other  things,  all  sums  of  money, 
whether  payable  by  way  of  rent,  hire,  interest,  penalty,  or  damage, 
then  due,  or  thereafter  to  become  due,  to  the  Parkgate  Company, 
by  virtue  of  the  two  contracts  with  the  defendants,  together  with  the 
benefit  of  the  two  contracts,  and  all  the  interest  of  the  Parkgate 
Company  and  the  said  liquidators  therein;  the  British  Company, 
on  the  other  hand,  covenanting  with  the  Parkgate  Company  "to  olj- 
serve  and  perform  such  of  the  stipulations,  conditions,  pro-vasions, 
and  agreements  contained  in  the  said  contracts  as,  according  to  the 
terms  thereof,  were  stipulated  to  be  observed  and  performed  by  the 
Parkgate  Company."    On  the  execution  of  this  assignment  the  British. 


394  BRITISH    WAGGON    CO.    V.    LEA   &    CO.  [CHAP,    III 

Company  took  over  from  the  Parkgate  Company  the  repairing  sta- 
tions, which  had  previously  been  used  by  the  Parkgate  Company  for 
the  repair  of  the  wagons  let  to  the  defendants,  and  also  the  staff  of 
workmen  employed  by  the  latter  company  in  executing  such  repairs. 
It  is  expressly  found  that  the  British  Company  have  ever  since  been 
ready  and  willing  to  execute,  and  have,  with  all  due  diligence,  exe- 
cuted all  necessary  repairs  to  the  said  waggons.  This,  however, 
they  have  done  under  a  special  agreement  come  to  between  the  parties 
since  the  present  dispute  has  arisen,  without  prejudice  to  their  re- 
spective rights. 

In  this  state  of  things  the  defendants  asserted  their  right  to  treat 
the  contract  as  at  an  end,  on  the  ground  that  the  Parkgate  Company 
had  incapacitated  themselves  from  performing  the  contract,  first,  by 
going  into  voluntary  liquidation,  secondly,  by  assigning  the  contracts, 
and  giving  up  the  repairing  stations  to  the  British  Company,  between 
whom  and  the  defendants  there  was  no  privity  of  contract,  and  whose 
services,  in  substitution  for  those  to  be  performed  by  the  Parkgate 
Company  under  the  contract,  they  the  defendants  were  not  bound 
to  accept.  The  Parkgate  Company  not  acquiescing  in  this  view,  it 
was  agreed  that  the  facts  should  be  stated  in  a  special  case  for  the 
opinion  of  this  court,  the  use  of  the  waggons  by  the  defendants  being 
in  the  meanwhile  continued  at  a  rate  agreed  on  between  the  parties, 
without  prejudice  to  either,  with  reference  to  their  respective  rights. 

The  first  ground  taken  by  the  defendants  is  in  our  opinion  alto- 
gether untenable  in  the  present  state  of  things,  whatever  it  may  be 
when  the  affairs  of  the  company  shall  have  been  wound  up,  and  the 
company  itself  shall  have  been  dissolved  under  the  111th  section 
of  the  Act.  Pending  the  winding  up,  the  company  is  by  the  effect 
of  ss.  95  and  131  kept  alive,  the  liquidator  having  power  to  carry  on 
the  business,  "so  far  as  may  be  necessary  for  the  beneficial  winding 
up  of  the  company,"  which  the  continued  letting  of  these  waggons, 
and  the  receipt  of  the  rent  payable  in  respect  of  them,  would,  we  pre- 
sume, be. 

What  would  be  the  position  of  the  parties  on  the  dissolution  of 
the  company  it  is  unnecessary  for  the  present  purpose  to  consider. 

The  main  contention  on  the  part  of  the  defendants,  however,  was 
that,  as  the  Parkgate  Company  had,  by  assigning  the  contracts,  and 
by  making  over  their  repairing  stations  to  the  British  Company,  in- 
capacitated themselves  to  fulfill  their  obligation  to  keep  the  wagons 
in  repair,  that  company  had  no  right,  as  between  themselves  and  the 
defendants,  to  substitute  a  third  party  to  do  the  work  they  had  en- 
gaged to  perform,  nor  were  the  defendants  bound  to  accept  the  party 
80  substituted  as  the  one  to  whom  they  were  to  look  for  performance 
of  tbf!  contract ;  the  contract  was  therefore  at  an  end. 

The  authority  principally  relied  on  in  support  of  this  contention 
was  the  case  of  Kobson  v.  Drummond,  2  B.  &  Ad.  303,  approved  of 
by  tbis  court  in  Humble  v.  Hunter,  12  G.  B.  310.     In  Eobson  v. 


SECT.    II]  BRITISH    WAGGON    CO.    V.    LEA   &    CO.  395 

Drummond,  2  B.  &  Ad.  303,  a  carriage  having  been  hired  by  the 
defendant  of  one  Sharp,  a  coachmaker,  for  five  years,  at  a  yearly 
rent,  payable  in  advance  each  year,  the  carriage  to  be  kept  in  repair 
and  painted  once  a  year  by  the  maker  —  Kobson  being  then  a  part- 
ner in  the  business,  but  unknown  to  the  defendant  —  on  Sharp  re- 
tiring from  the  business  after  three  years  had  expired,  and  making 
over  all  interest  in  the  business  and  property  in  the  goods  to  Kob- 
son, it  was  held  that  the  defendant  could  not  be  sued  on  the  contract, 
—  by  Lord  Tenterden,  on  the  ground  that  "the  defendant  might 
have  been  induced  to  enter  into  the  contract  by  reason  of  the  per- 
sonal confidence  which  he  reposed  in  Sharp,  and  therefore  might 
have  agreed  to  pay  money  in  advance,  for  which  reason  the  defend- 
ant had  a  right  to  object  to  its  being  performed  by  any  other  person ;" 
and  by  Littledale  and  Parke,  JJ.,  on  the  additional  ground  that 
the  defendant  had  a  right  to  the  personal  services  of  Sharp,  and  to 
the  benefit  of  his  judgment  and  taste,  to  the  end  of  the  contract. 

In  like  manner,  where  goods  are  ordered  of  a  particular  manufac- 
turer, another,  who  has  succeeded  to  his  business,  cannot  execute  the 
order,  so  as  to  bind  the  customer,  who  has  not  been  made  aware 
of  the  transfer  of  the  business,  to  accept  the  goods.  The  latter  is 
entitled  to  refuse  to  deal  with  any  other  than  the  manufacturer  whose 
goods  he  intended  to  buy.  For  this  Boulton  v.  Jones,  2  H.  &  IST. 
564,  is  a  sufficient  authority.  The  case  of  Eobson  v.  Drummond, 
2  B.  &  Ad.  303,  comes  nearer  to  the  present  case,  but  is,  we  think, 
distinguishable  from  it.  We  entirely  concur  in  the  principle  on 
which  the  decision  in  Robson  v.  Drummond,  2  B.  &  Ad.  303,  rests, 
namely,  that  where  a  person  contracts  with  another  to  do  work  or 
perform  service,  and  it  can  be  inferred  that  the  person  employed 
has  been  selected  with  reference  to  his  individual  skill,  competency, 
or  other  personal  qualification,  the  inability  or  unwillingness  of  the 
party  so  employed  to  execute  the  work  or  perform  the  service  is  a 
sufficient  answer  to  any  demand  by  a  stranger  to  the  original  con- 
tract of  the  performance  of  it  by  the  other  party,  and  entitles  the 
latter  to  treat  the  contract  as  at  an  end,  notwithstanding  that  the 
person  tendered  to  take  the  place  of  the  contracting  party  may  be 
equally  well  qualified  to  do  the  service.  Personal  performance  is 
in  such  a  case  of  the  essence  of  the  contract,  which,  consequently, 
cannot  in  its  absence  be  enforced  against  an  unwilling  party.  But 
this  principle  appears  to  us  inapplicable  in  the  present  instance, 
inasmuch  as  we  cannot  suppose  that  in  stipulating  for  the  repair  of 
these  waggons  by  the  company  —  a  rough  description  of  work  which 
ordinary  workmen  conversant  with  the  business  would  be  perfectly 
able  to  execute  —  the  defendants  attached  any  importance  to  whether 
the  repairs  were  done  by  the  company,  or  by  any  one  with  whom 
the  company  might  enter  into  a  subsidiary  contract  to  do  the  work. 
All  that  the  hirers,  the  defendants,  cared  for  in  this  stipulation  was 
that  the  waggons  should  be  kept  in  repair;   it  was  indifferent  to 


396  BRITISH   WAGGON    CO.    V.    LEA    &    CO.  [CHAP.    Ill 

them  by  whom  the  repairs  should  be  done.  Thus  if,  without  going 
into  liquidation,  or  assigning  these  contracts,  the  company  had  en- 
tered into  a  contract  with  any  competent  party  to  do  the  repairs, 
and  so  had  procured  them  to  be  done,  we  cannot  think  that  this 
would  have  been  a  departure  from  the  terms  of  the  contract  to  keep 
the  waggons  in  repair.  While  fully  acquiescing  in  the  general  prin- 
ciple just  referred  to,  we  must  take  care  not  to  push  it  beyond  reason- 
able limits.  And  we  cannot  but  think  that,  in  applying  the  principle, 
the  Court  of  Queen's  Bench  in  Eobson  v.  Drummond,  2  B.  &  Ad. 
303,  went  to  the  utmost  length  to  which  it  can  be  carried,  as  it  is 
difficult  to  see  how  in  repairing  a  carriage  when  necessary,  or  paint- 
ing it  once  a  year,  preference  would  be  given  to  one  coachmaker 
over  another.  Much  work  is  contracted  for,  which  it  is  known  can 
only  be  executed  by  means  of  subcontracts;  much  is  contracted  for 
as  to  which  it  is  indifferent  to  the  party  for  whom  it  is  to  be  done, 
whether  it  is  done  by  the  immediate  party  to  the  contract,  or  by 
some  one  on  his  behalf.  In  all  these  cases  the  maxim  Qui  facit  per 
alium  facit  per  se  applies. 

In  the  view  we  take  of  the  case,  therefore,  the  repair  of  the  waggons, 
undertaken  and  done  by  the  British  Company  under  their  contract 
with  the  Parkgate  Company,  is  a  sufficient  performance  by  the  latter 
of  their  engagement  to  repair  under  their  contract  with  the  defend- 
ants. Consequently,  so  long  as  the  Parkgate  Company  continues  to 
exist,  and,  through  the  British  Company,  continues  to  fulfil  its 
obligation  to  keep  the  waggons  in  repair,  the  defendants  cannot,  in 
our  opinion,  be  heard  to  say  that  the  former  company  is  not  entitled 
to  the  performance  of  the  contract  by  them,  on  the  ground  that  the 
company  have  incapacitated  themselves  from  performing  their  obli- 
gations under  it,  or  that,  by  transferring  the  performance  thereof 
to  others,  they  have  absolved  the  defendants  from  further  performance 
on  their  part. 

That  a  debt  accruing  due  under  a  contract  can,  since  the  passing 
of  the  Judicature  Acts,  be  assigned  at  law  as  well  as  equity,  cannot 
since  the  decision  in  Brice  v.  Banister,  3  Q.  B.  D.  569,  be  disputed. 

We  are  therefore  of  opinion  that  our  judgment  must  be  for  the 
plaintiffs  for  the  amount  claimed.^ 

»  In  American  Smelting  &  Refinins  Company  v.  Bunker  Hill  &  Sullivan  Mining  Com- 
pany &  Concentrating  Company,  248  Federal  Reporter  172,  186,  the  court  said: 

"The  asHismment,  it  must  be  understood,  caiuiot  relieve  the  assignor  of  its  obliga- 
tions to  the  Mining  Company  under  its  agreement,  6  C.  J.  879.  But  the  Smelting 
Company  having  by  the  assignment  delegated  its  performance  to  the  A.  S.  &  R. 
Company,  and  the  A.  S.  A;  R.  Company  by  accepting  the  assignment  having  become 
bounfl  to  perform  as  the  Smelting  Company  was  bound  in  the  first  instance^,  the  Min- 
ing Comr<any  has  lost  no  remerlial  rights,  but  instead  has  been  accorded  a  like  remedy 
against  the  A.  S.  &  R.  f/omx)any  to  thiit  it  had  against  the  Smelting  Company."  See 
also  Rochester  Lantern  Co.  v.  The  Stiles  and  Parker  Press  Co.  135  N.  Y.  209. 


SECT.    Il]  KEMP    V.   BAERSELMAN  397 


KEMP  AND  Others  v.  BAEKSELMAN" 

In  the  Court  of  Appeal,  July  7,  1906 

[Beported  in  [1906]  2  King's  Bench,  604] 

The  plaintiff  George  H.  Kemp  was  previously  to  the  assignment 
hereinafter  mentioned  a  cake  manufacturer,  carrying  on  business  at 
two  places  in  London  (Annette  Koad,  Holloway,  and  Marti neau 
Road),  and  having  a  depot  at  Cardiff.  The  defendant  was  a  pro- 
vision merchant.  By  an  agreement  dated  March  24,  1904,  made  be- 
tween G.  H.  Kemp  and  the  defendant  it  was  agreed  as  follows :  — 

1.  "Baerselman  agrees  to  supply  and  Kemp  agrees  to  accept  all 
the  fresh  shell  eggs  Star  Wreaths  or  equal  to  Star  "Wreaths  that  he 
shall  require  for  manufacturing  purposes  for  one  year  from  April 
1,  1904,  to  April  1,  1905,"  at  certain  specified  prices. 

3.  "The  said  Baerselman  agrees  to  deliver  all  shell  eggs  ...  to 
either  of  Kemp's  London  factories  free  of  charge  and  all  goods  for 
Kemp's  Cardiff  depot  free  on  rail  or  boat." 

4.  "Every  14  days  a  statement  of  account  is  to  be  rendered  and 
after  being  checked  and  found  correct  Baerselman  to  draw  for  the 
amount  at  two  months  from  the  date  of  delivery." 

5.  "During  the  continuance  of  this  agreement  or  so  long  as  the 
said  Baerselman  shall  continue  to  supply  sound  fresh  eggs  satis- 
factorily to  the  said  Kemp  the  said  Kemp  undertakes  not  to  purchase 
eggs  from  any  other  merchant." 

In  July,  1904,  G.  H.  Kemp  purchased  the  business  of  a  company 
called  the  National  Bakery  Company,  carrying  on  business  at  Brew- 
ery Boad,  London,  'N.,  and  at  the  same  time  transferred  the  said 
business,  together  with  his  business  at  Annette  Boad  and  at  Cardiff, 
to  a  new  company  called  George  Kemp,  Limited,  the  business  at 
Martineau  Boad  being  abandoned. 

By  the  terms  of  the  amalgamation  of  the  said  businesses  the  share- 
holders in  the  National  Bakery  Company  received  as  the  purchase- 
money  of  their  business,  29,000L  of  debentures  in  George  Kemp, 
Limited ;  and  the  whole  of  the  ordinary  share  capital  of  George  Kemp, 
Limited,  consisting  of  20,000  shares  of  11.  each,  was,  with  the  excep- 
tion of  seven  shares,  taken  by  G.  H.  Kemp,  who  acted  as  the  man- 
ager of  the  amalgamated  businesses. 

On  September  17th,  ten  days  after  receiving  notice  of  the  amal- 
gamation, the  defendant  wrote  refusing  to  supply  any  more  eggs 
under  the  agreement.  Thereupon  G.  H.  Kemp  and  George  Kemp, 
Limited,  joined  in  bringing  this  action,  which  was  tried  before  Chan- 
nell,  J.,  without  a  jury.  He  held  that  the  plaintiffs  were  entitled  to 
recover  damages  suffered  due  to  the  refusal  to  deliver  eggs  at  Annette 
Boad  and  at  Cardiff  depot ;  but  not  for  the  refusal  to  deliver  at  Brew- 
ery Road.    Both  parties  appealed. 


398  KEMP    V.    BAERSELMAN  [CHAP.   Ill 

Lord  Alverstone,  C.  J.  "With  regard  to  the  subject  of  the  plain- 
tiff's cross  appeal  I  think  that  Channell  J.,  was  clearly  right,  and 
that  even  if  the  benefit  of  the  contract  was  assignable  so  far  as  it 
related  to  the  supply  of  eggs  to  the  business  carried  on  by  G.  H. 
Kemp,  still  the  plaintiffs  could  not  in  any  event  claim  to  have  a 
supply  for  the  Brewery  Eoad  business,  for  Kemp  never  carried  on 
business  there,  and  consequently  never  had  any  requirements  for 
that  business.  But,  with  regard  to  the  defendant's  appeal,  I  regret 
to  have  to  differ  from  Channell  J.,  and  the  reasons  why  I  differ 
from  him  are  these :  he  seemed  to  be  of  opinion  that,  because  this 
was  a  contract  for  the  supply  of  an  ordinary  marketable  commodity 
like  eggs,  the  benefit  of  the  contract  could  be  assigned,  and  that  it 
made  no  difference  to  the  defendant  who  the  persons  were  to  whom 
the  eggs  were  to  be  supplied  by  him.  He  did  not  anywhere  in  his 
judgment  deal  with  clause  5  —  the  clause  whereby  the  purchaser 
bound  himself  not  to  buy  eggs  from  any  other  persons,  and  did  not 
sufficiently  consider  the  personal  element  which  that  clause  intro- 
duced. I  can  find  nothing  in  the  judgments  in  Tolhurst's  Case^ 
in  the  House  of  Lords  which  can  be  interpreted  as  laying  down  the 
general  principle  for  which  Mr.  Hamilton  contended,  namely,  that 
the  benefit  of  any  contract  of  this  kind  can  be  assigned.  What  the 
House  of  Lords  did  say  in  that  case  was  that  in  that  particular  case 
the  contract  for  the  supply  of  chalk  for  fifty  years  was  to  be  treated 
as  a  contract  for  the  supply  to  a  given  cement-making  place,  and 
not  a  personal  contract.  But  there  is  nothing  that  I  can  see  in 
the  present  contract  which  enables  me  to  say  that  it  is  a  contract  to 
supply  eggs  to  a  particular  place.  The  first  clause  provides  that 
Baerselman  shall  supply,  and  Kemp  shall  accept,  all  the  fresh  eggs 
that  he,  Kemp,  shall  require  for  manufacturing  purposes  for  one 
year.  Then  by  clause  5  Kemp  undertakes  not  to  purchase  eggs  from 
any  other  merchant.  That,  as  I  have  said,  imposes  a  personal  obli- 
gation upon  the  purchaser  which  may  be  very  material  to  the  con- 
tract. It  is  not  seriously  contended  that  Kemp,  Limited,  or  any 
other  assignee  would  be  bound  by  that  obligation  unless  there  was 
something  amounting  to  a  novation ;  and  here  was  no  evidence  of  a 
novation.  I  think  this  contract  was  not  one  the  benefit  of  which 
can  be  assigned  simply  by  a  sale  of  the  business,  and  that  when  the 
facts  which  were  proved  had  beeomo  known  to  Baerselman  he  was 
entitled  to  refuse  to  continue  the  snpy)ly.  I  am  not  altogether  satis- 
fied that  there  is  not  also  an  argument  in  support  of  the  defendant's 
contention  to  be  based  on  the  terms  of  payment,  though  I  do  not 
attach  so  much  importance  to  it,  because  it  may  be  that,  when  the 
aut}ioriti(!S  come  to  be  examined,  it  will  be  found  that  the  Courts 
bav(!  treated  the  question  of  payment  as  one  which  does  not  prevent 
the  benefit  of  a  contract  from  being  assignable.  I  only  mention  it 
30  that  in  the  event  of  the  case  going  further  it  may  not  be  thought 
that  it  has  been  overlooked.     T  base  my  decision  on  the  ground  that 

1  [1903]  A.  C.  414. 


SECT.    Il]  JAMES    V.    CITY   OF   NEWTON  399 

clauses  1  and  5  shew  that  the  contract  was  a  personal  one,  the  measure 
of  the  defendant's  obligations  as  to  supply  being  the  extent  of  Kemp's 
personal  requirements,  and  the  undertaking  by  Kemp  not  to  buy 
eggs  of  other  merchants  being  an  undertaking  which  was  purely 
personal  to  himself.  The  defendant's  appeal  therefore  must  be  al- 
lowed.^ 


EDWAKD  B.  JAMES  v.  CITY  OF  NEWTON  and  Anotheb 

Supreme  Judicial  Coukt  of  Massachusetts,  Jan.  25-Sept.  7,  1886 

[^Reported  in  142  Massachusetts,  366] 

This  was  a  bill  in  equity  brought  by  the  plaintiff  against  the  City 
of  Newton  and  Royal  Gilkey,  assignee  in  insolvency  of  the  estate 
of  William  H.  Stewart,  to  enforce  payment  of  $600,  which  had  been 
assigned  to  the  plaintiff  by  Stewart  out  of  money  reserved  as  a  guar- 
anty by  the  City  of  Newton  for  the  proper  performance  of  a  contract 
by  Stewart  to  build  a  schoolhouse.  The  City  of  Newton  in  its 
answer  admitted  that  it  had  in  its  hands  over  $600,  due  on  account 
of  this  contract,  and  stated  that  it  was  "willing  to  pay  said  balance 
to  such  person  or  persons  as  should  be  justly  entitled  to  receive  the 
same."  The  defendant  Gilkey  in  his  answer  claimed  that  the  assign- 
ment was  invalid.^ 

C.  C.  Powers,  for  the  plaintiff. 

W.  8.  Slocum,  for  the  City  of  Newton. 

W.  B.  Durant,  for  Gilkey. 

Field,  J.  The  assignment  in  this  case  is  a  formal  assignment,  for 
value,  of  "the  sum  of  six  hundred  dollars  now  due  and  to  become 
due  and  payable  to  me"  from  the  City  of  Newton,  under  and  by 
virtue  of  a  contract  for  building  a  grammar  schoolhouse,  and  it  is 
agreed  that  this  sum  "shall  be  paid  out  of  the  money  reserved  as 
a  guaranty  by  said  city,"  and  the  assignee  is  empowered  "to  collect 
the  same."  There  is  no  douBt  that  it  would  operate  as  an  assign- 
ment to  the  extent  of  $600,  if  there  can  be  assignment,  without  the 
consent  of  the  debtor,  of  a  part  of  a  debt  to  become  due  under  an 
existing  contract ;  and  the  cases  that  hold  that  an  order  drawn  on 
a  general  or  a  particular  fund  is  not  an  assignment  pro  tanto,  unless 
it  is  accepted  by  the  person  on  whom  it  is  drawn,  need  not  be  no- 
ticed. That  a  court  of  law  could  not  recognize  and  enforce  such  an 
assignment,  except  against  the  assignor  if  the  money  came  into  his 
hands,  is  conceded.  The  assignee  could  not  sue  at  law  in  the  name 
of  the  assignor,  because  he  is  not  an  assignee  of  the  whole  of  the 
debt.     He  could  not  sue  at  law  in  his  own  name,  because  the  City 

^  The  statement  of  facts  is  abbreviated  and  concurring  opinions  by  Sir  Gorell 
Barnes,  President,  and  Farwell,  L.  J.  are  omitted. 
*  The  statement  of  facts  has  been  much  abbreviated. 


400  JAMES    V.    CITY   OF    NEWTON  [CHAP.    Ill 

of  Newton  has  not  promised  him  that  it  will  pay  him  $600.  The 
$600  is  expressly  made  payable  "out  of  the  money  reserved  as  a 
guaranty  by  said  city;"  and,  by  the  contract,  the  balance  reserved 
was  payable  as  one  entire  sum;  and  at  law  a  debtor  cannot  be  com- 
pelled to  pay  an  entire  debt  in  parts,  either  to  the  creditor  or  to 
an  assignee  of  the  creditor,  unless  he  promises  to  do  so.  Courts  of 
law  originally  refused  to  recognize  any  assignments  of  choses  in 
action  made  without  the  assent  of  the  debtor,  but  for  a  long  time 
they  have  recognized  and  enforced  assignments  of  the  whole  of  a 
debt,  by  permitting  the  assignee  to  sue  in  the  name  of  the  assignor, 
under  an  implied  power,  which  they  hold  to  be  irrevocable.  Partial 
assignments  such  courts  have  never  recognized,  because  they  hold 
that  an  entire  debt  cannot  be  divided  into  parts  by  the  creditor  with- 
out the  consent  of  the  debtor.  It  is  not  wholly  a  question  of  pro- 
cedure, although  the  common  law  procedure  is  not  adapted  to  de- 
termining the  rights  of  different  claimants  to  parts  of  a  fund  or 
debt.  The  rule  has  been  established,  partially  at  least,  on  the  ground 
of  the  entirety  of  the  contract,  because  it  is  held  that  a  creditor 
cannot  sue  his  debtor  for  a  part  of  an  entire  debt,  and,  if  he  brings 
such  an  action  and  recovers  judgment,  the  judgment  is  a  bar  to  an 
action  to  recover  the  remaining  part.  There  must  be  distinct  prom- 
ises in  order  to  maintain  more  than  one  action.  Warren  v.  Com- 
ings, 6  Cush.  103. 

It  is  said  that,  in  equity,  there  may  be,  without  the  consent  of  the 
debtor,  an  assignment  of  a  part  of  an  entire  debt.  It  is  conceded 
that,  as  between  assignor  and  assignee,  there  may  be  such  an  assign- 
ment. The  law  that,  if  the  debtor  assents  to  the  assignment  in  such 
a  manner  as  to  imply  a  promise  to  the  assignee  to  pay  to  him  the  sum 
assigned,  then  the  assignee  can  maintain  an  action,  rests  upon  the 
theory  that  the  assignment  has  transferred  the  proj^erty  in  the  sum 
assigned  to  the  assignee  as  the  consideration  of  the  debtor's  promise 
to  pay  the  assignee,  and  that  by  this  promise  the  indebtedness  to 
the  assignor  is  pro  tanto  discharged.  It  has  been  held,  by  courts 
of  equity  which  have  hesitated  to  enforce  partial  assignments  against 
the  debtor,  that  if  he  brings  a  bill  of  interpleader  against  all  the 
persons  claiming  the  debt  or  fund,  or  parts  of  it,  the  rights  of  the 
defendants  will  be  determined  and  enforced,  because  the  debtor,  al- 
though he  has  not  expressly  promised  to  pay  the  assignees,  yet  asks 
that  the  fund  be  distributed  or  the  debt  paid  to  the  different  de- 
fendants according  to  their  rights  as  between  themselves;  and  the 
rnlf!  against  p;irtial  assignments  was  establislied  for  the  benefit  of 
the  debtor.  Puldic  Schools  v.  Heath,  2  McCarter,  22;  Fourth  J^a- 
tional  Bank  v.  Noonan,  14  Mo.  App.  243. 

In  many  jurisdictions  courts  of  equity  have  gone  farther,  and 
have  held  that  an  assignment  of  a  part  of  a  fund  or  debt  may  be 
enforced  in  equity  by  a  bill  brought  by  the  assignee  against  the 
debtor  and  assignor  while  the  debt  remains  unpaid.     The  procedure 


SECT.    Il]  JAMES    V.    CITY   OF    NEWTON  401 

in  equity  is  adapted  to  determining  and  enforcing  all  the  rights  of 
the  parties,  and  the  debtor  can  pay  the  fund  or  debt  into  court,  have 
his  costs  if  he  is  entitled  to  them,  and  thus  be  compensated  for  any 
expense  or  trouble  to  which  he  may  have  been  put  by  the  assignment. 
But  some  courts  of  equity  have  gone  still  farther,  and  have  held 
that,  after  notice  of  a  partial  assignment  of  a  debt,  the  debtor  can- 
not rightfully  pay  the  sum  assigned  to  his  creditor,  and,  if  he  does, 
that  is  no  defence  to  a  bill  by  the  assignee.  The  doctrine  carried 
to  this  extent  effects  a  substantial  change  in  the  law.  Under  the 
old  rule,  the  debtor  could  with  safety  settle  with  his  creditor  and 
pay  him,  unless  he  had  notice  or  knowledge  of  an  assignment  of  the 
whole  of  the  debt;  under  this  rule,  he  cannot,  if  he  have  notice  or 
knowledge  of  an  assignment  of  any  part  of  it. 

It  may  be  argued  that,  if  a  bill  in  equity  can  be  maintained  against 
the  debtor  by  an  assignee  of  a  part  of  the  debt,  it  must  be  on  the 
ground,  not  only  that  the  plaintiff  has  a  right  of  property  in  the 
sum  assigned,  but  also  that  it  is  the  debtor's  duty  to  pay  the  sum 
assigned  to  the  assignee;  and  that,  if  this  is  so,  it  follows  that,  after 
notice  of  the  assignment,  the  debtor  cannot  rightfully  pay  the  sum 
assigned  to  the  assignor. 

The  facts  of  this  case,  however,  do  not  require  us  to  decide  whether 
a  bill  can  be  maintained  after  the  debtor  has  paid  the  entire  debt 
to  his  creditor,  although  after  notice  of  a  partial  assignment.  The 
City  of  Newton,  in  its  answer,  says  that  it  "is  willing  to  pay  said 
balance  to  such  person  or  persons  as  should  be  justly  entitled  to 
receive  the  same,  whether  said  plaintiff,  or  said  Gilkey  as  such  as- 
signee;" and  prays  "that  said  plaintiff  and  said  Gilkey  may  inter- 
plead, and  settle  and  adjust  their  demands  between  themselves,  and 
that  the  court  shall  order  and  decree  to  whom  said  sum  shall  be 
paid."  This  is  in  effect  asking  the  aid  of  the  court  in  much  the 
same  manner  as  if  the  City  of  T^ewton  had  brought  a  bill  of  inter- 
pleader; and  the  proceedings  are  not  open  to  the  objection  that  the 
court  is  compelling  the  City  of  ISTewton  to  assent  to  an  assignment 
against  its  will. 

This  is  the  first  bill  in  equity  to  enforce  a  partial  assignment  of 
a  debt  which*  has  been  before  this  court.  It  has  been  often  declared 
here  that  there  cannot  be  an  assignment  of  a  part  of  an  entire  debt 
without  the  assent  of  the  debtor;  but  the  cases  are  all  actions  at 
law,  and  in  the  majority  of  them  the  statement  was  not  necessary 
to  the  decision. 

In  Tripp  v.  Brownell,  12  Cush.  376,  381,  the  action  was  assumpsit, 
to  recover  the  amount  of  the  plaintiff's  lay  as  a  mariner  on  a  whaling 
voyage.  The  defence  was  an  assignment  of  the  balance  due,  made  by 
the  plaintiff  and  accepted  by  the  defendant.  This  was  held  a  good 
defence,  the  court  saying :  "It  is  in  terms  an  assignment  of  the  whole 
lay;  it  must  be  so  by  operation  of  law.  It  is  not  competent  for  a 
creditor  to  assign  part  of  the  debt,  so  as  to  give  any  equitable  in- 


402  JAMES    V.    CITY   OF    NEWTON  [CHAP.    Ill 

terest  in  part  of  the  debt,  or  create  any  lien  upon  it.  The  debtor, 
or  holder  of  the  assignable  interest,  cannot,  without  his  own  consent, 
be  held  legally  or  equitably  liable  to  an  assignee  for  part,  and  to  the 
original  creditor,  or  another  assignee  for  another  part.  Mandeville 
V.  Welch,  5  Wheat.  277;  Gibson  v.  Cooke,  20  Pick.  15;  Bobbins  v. 
Bacon,  3  Greenl.  346." 

Gibson  v.  Cooke,  ubi  supra,  was  assumpsit,  brought  in  the  name 
of  Gorham  Gibson  for  the  benefit  of  one  Plympton,  to  whom  Gibson 
had  given  an  order  on  the  defendant  to  pay  Plympton  $175.33  "as 
my  income  becomes  due."  The  defendant  held  property  in  trust  to 
pay  over  the  "net  proceeds  once  a  quarter"  to  Gibson  and  others. 
The  court  held  that  it  did  not  appear  that,  "at  the  time  of  the  as- 
signment, or  at  any  period  since,  the  whole  amount  due  to  Gorham 
Gibson  would  correspond  with  the  amount  of  the  draft,"  and  that 
"a  debtor  is  not  to  have  his  responsibilities  so  far  varied  from  the 
terms  of  his  original  contract  as  to  subject  him  to  distinct  demands 
on  the  part  of  several  persons,  when  his  contract  was  one  and  en- 
tire." 

Knowlton  v.  Cooley,  102  Mass.  233,  was  a  trustee  process,  and 
the  trustee  had  in  his  hands  $147  due  the  defendant  as  wages,  and 
the  claimant  held  an  order,  given  by  the  defendant  before  the  wages 
were  earned,  for  the  payment  to  him  of  the  defendant's  wages,  "as 
fast  as  they  became  due,  to  the  amount  of  $150,"  which  the  trustee 
had  accepted.  The  court  held  that  the  order  was  an  assignment  of 
wages,  and  not  having  been  recorded,  was  invalid  against  a  trustee 
process  by  the  St.  of  1865,  c.  43,  s.  2.  The  court  say:  "The  accept- 
ance of  the  order  by  Barton  [the  trustee]  does  not  change  its  char- 
acter. His  assent  was  necessary  to  give  it  any  validity  even  as  an 
assignment.    Gibson  v.  Cooke,  20  Pick.  15." 

Papineau  v.  ISTaumkeag  Steam  Cotton  Co.,  126  Mass.  372,  was 
an  action  of  contract,  and  the  court  say:  "The  order  of  Couillard 
on  the  defendant,  in  favor  of  the  plaintiff,  was  not  an  order  for  pay- 
ment of  all  that  should  be  due  the  drawer  as  wages  at  the  several 
times  when  the  instalments  were  to  be  paid.  It  was  not,  therefore, 
an  assignment  of  wages  to  the  plaintiff,  unless  the  defendant  saw 
fit  to  assent  to  it  as  such,  but  a  mere  order  for  money." 

It  is  settled  that  an  assignment  of  a  part  of  a  debt,  if  assented 
to  by  the  debtor  in  such  a  manner  as  to  imply  a  promise  to  pay 
it  to  the  assignee,  is  good  against  a  trustee  process,  or  against  an 
assignee  in  insolvency.  Tnylor  v.  Lynch,  5  Gray,  49;  Lannan  v. 
Smith,  7  Gray,  150.  In  Bourne  v.  Cabot,  3  Met.  305,  the  court 
say,  "The  order  of  Litchfield  on  the  defendant  was  a  good  assign- 
ment of  the  fund,  pro  tanto,  to  the  plaintiff,  and  the  express  promise 
to  ihc.  assignee,  to  pay  him  the  balance  when  the  vessel  should  be 
sold,  r-onstituted  a  legal  contract." 

It  is  also  settled  that  an  equitable  assignment  of  the  whole  fund 
in  tlie  hands  of  the  trustee  is  good  against  a  trustee  process,  although 


SECT.    Il]  JAMES    V.    CITY   OF   NEWTON  403 

the  trustee  has  received  no  notice  of  the  assignment  until  after  the 
trustee  process  is  served,  and  has  never  assented  to  it.  Wakefield 
V.  Martin,  3  Mass.  558;  Kingman  v.  Perkins,  105  Mass.  Ill;  Norton 
V.  Piscataqua  Ins.  Co.,  Ill  Mass.  532;  Taft  v.  Bowker,  132  Mass. 
277 ;  Williams  v.  Ingersoll,  89  N.  Y.  508. 

Before,  as  well  as  since,  the  St.  of  1865,  c.  43,  s.  1  (Pub.  Sts.  c. 
183,  s.  38),  if  the  assignment  was  for  collateral  security,  and  the 
assignee  was  bound  to  pay  immediately  to  the  assignor,  out  of  the 
sum  assigned,  any  balance  remaining  after  payment  of  his  debt,  it 
has  been  held  that  the  excess  above  the  debt  for  which  the  assignment 
is  security  is  attachable  by  the  trustee  process.  Macomber  v.  Doane, 
2  Allen,  541 ;  Darling  v.  Andrews,  9  Allen,  106 ;  Warren  v.  Sullivan, 
123  Mass.  283;  Giles  v.  Ash,  123  Mass.  353.  See  Lannan  v.  Smith, 
uhi  supra. 

In  Macomber  v.  Doane,  ubi  supra,  the  court  say:  "An  order  con- 
stitutes a  good  form  of  assignment,  it  being  for  the  whole  sum  due 
or  becoming  due  to  the  drawer,  and  it  needs  not  be  accepted  to  make 
it  an  assignment."  The  order  was  for  one  month's  wages,  which,  as 
subsequently  ascertained,  amounted  to  $37.50,  but  it  was  given  as 
security  for  groceries  furnished  and  to  be  furnished,  and,  on  the 
day  of  the  service  of  the  writ,  the  defendant  owed  the  plaintiff  for 
groceries  $28.79,  and  the  remaining  $8.71  was  held  by  the  trustee 
process. 

Some  of  these  cases  were  noticed  in  Whitney  v.  Eliot  National 
Bank,  137  Mass.  351,  and  the  court  then  declined  to  decide  "whether 
in  equity  there  may  not  be  an  assignment  of  a  part  of  a  debt." 

Without  considering  the  cases  upon  the  effect  of  orders  or  drafts 
for  money,  as  constituting  assignments  of  the  debt  or  of  a  part  of 
it,  it  seems  never  to  have  been  decided  in  this  Commonwealth  that 
an  assignment  for  value  of  a  part  of  an  entire  debt  is  not  good,  to 
the  extent  of  the  assignment,  against  trustee  process.  In  trustee 
process,  the  trustee  of  the  defendant,  if  charged,  is  by  the  statute 
compelled  to  pay  to  the  plaintiff  so  much  of  what  he  admits  to  be 
due  to  the  defendant  as  is  necessary  to  satisfy  the  plaintiff's  judg- 
ment; and,  as  an  entire  debt  may  thus  be  divided,  it  seems  equitable 
that  an  assignee  of  a  part  of  the  debt  should  be  admitted  as  a  claim- 
ant, and  this  is  in  effect  done  when  the  assignment  is  as  collateral 
security. 

Palmer  v.  Merrill,  6  Cush.  282,  was  assumpsit  against  the  ad- 
ministrator of  Spaulding,  who  had  caused  his  life  to  be  insured  by 
a  policy  payable  to  himself,  his  executors,  administrators,  or  as- 
signs; and  he,  by  a  memorandum  in  writing  indorsed  on  the  policy, 
for  a  valuable  consideration,  assigned  and  requested  the  insurer  to 
pay  the  plaintiff  the  sum  of  $400,  part  of  the  sum  insured  by  the 
policy,  in  case  of  loss  on  the  same,  of  which  assignment  and  request 
the  insurers  on  the  same  day  had  due  notice.  The  policy,  with  this 
indorsement  thereon,  remained  in  the  custody  of   Spaulding  until 


404  JAMES    V.    CITY    OF    NEWTON  [CHAP.    Ill 

his  decease,  and  came  into  tlie  hands  of  the  administrator  of  his 
estate,  who  collected  the  whole  amount  of  the  insurance,  and  rep- 
resented the  estate  as  insolvent;  and  the  question  was  "whether  the 
case  shows  an  assignment  which  vested  any  interest  in  this  policy, 
legal  or  equitable,  in  the  plaintiff." 

The  court  held  that  it  did  not,  and  said :  "According  to  the  modern 
decisions,  courts  of  law  recognize  the  assignment  of  a  chose  in  action, 
so  far  as  to  vest  an  equitable  interest  in  the  assignee,  and  authorize 
him  to  bring  an  action  in  the  name  of  the  assignor,  and  recover  a 
judgment  for  his  own  benefit.  But  in  order  to  constitute  such  an 
assignment  two  things  must  concur:  first,  the  party  holding  the 
chose  in  action  must,  by  some  significant  act,  express  his  intention 
that  the  assignee  shall  have  the  debt  or  right  in  question,  and,  ac- 
cording to  the  nature  and  circumstances  of  the  case,  deliver  to  the 
assignee  or  to  some  person  for  his  use,  the  security,  if  there  be  one, 
bond,  deed,  note  or  written  agreement,  upon  which  the  debt  or  chose 
in  action  arises;  and,  secondly,  the  transfer  shall  be  of  the  whole 
and  entire  debt  or  obligation  in  which  the  chose  in  action  consists. 
...  It  appears  to  us  that  the  order  indorsed  on  this  policy  and 
retained  by  the  assured  fails  of  amounting  to  an  assignment  in  both 
of  these  particulars."  The  court  further  said  that,  if  an  order  be 
''for  a  part  only  of  the  fund  or  debt,  it  is  a  draft  or  bill  of  exchange, 
which  does  not  bind  the  drawee,  or  transfer  any  proprietary  or  equi- 
table interest  in  the  fund,  until  accepted  by  the  drawee.  It  there- 
fore creates  no  lien  upon  the  fund.  Upon  this  point  the  authorities 
seem  decisive.  "Welch  v.  Mandeville,  1  "Wheat.  233,  s.  c.  5  ib.  277; 
Eobbins  v.  Bacon,  3  Greenl.  346;  Gibson  v.  Cooke,  20  Pick.  15." 

"Welch  V.  Mandeville,  uhi  supra,  was  an  action  of  covenant  broken, 
brought  by  Prior  in  the  name  of  "Welch  against  Mandeville,  who 
set  up  a  release  by  Welch,  to  which  Prior  replied  that  "Welch,  be- 
fore the  release,  had  assigned  the  debt  due  by  reason  of  the  covenant 
to  him,  of  which  the  defendant  had  notice.  The  court  consider  the 
effect  of  certain  bills  of  exchange,  and  say :  "But  where  the  order 
is  drawn  either  on  a  general  or  a  particular  fund  for  a  part  only 
it  does  not  amount  to  an  assignment  of  that  part,  or  give  a  lien  as 
against  the  drawee,  unless  he  consent  to  the  appropriation  by  an  ac- 
ceptance of  the  draft;"  that  "a  creditor  shall  not  be  permitted  to 
split  up  a  single  cause  of  action  into  many  actions  without  the  assent 
of  his  debtor;"  and  that  "if  the  plaintiff  could  show  a  partial  assign- 
ment to  the  extent  of  the  bills,  it  would  not  avail  him  in  support 
of  the  present  suit." 

The  equitable  doctrine  now  maintained  by  the  Supreme  Court  of 
the  United  States  is  shown  by  "Wright  v.  Ellison,  1  "Wall.  16; 
Christmas  v.  Kusscll,  14  "Wall.  69;  Trist  v.  Child,  21  Wall.  441; 
and  I'f'iigh  v.  Porter,  112  U.  S.  737.  In  Peugh  v.  Porter,  that  court 
ordered  that  a  decree  be  entered  that  Peugh,  subject  to  certain  rights 
in  the  estate  at  Winder,  was  entitled  to  one  fourth  of  a  fund,  by 


SECT.    Il]  JAMES    V.    CITY   OF   NEWTON  405 

virtue  of  an  assignment  of  one  fourth  of  a  claim  against  Mexico, 
made  before  the  establishment  of  the  claim  from  which  the  fund 
was  derived,  and  before  the  fund  was  in  existence,  and  declared  the 
law  to  be  that  "it  is  indispensable  to  a  lien  thus  created  that  there 
should  be  a  distinct  appropriation  of  the  fund  by  the  debtor,  and 
an  agreement  that  the  creditor  should  be  paid  out  of  it."  In  Kobbins 
V.  Bacon,  ubi  supra,  the  order  was  for  the  payment  of  the  whole  of 
a  particular  fund,  and  was  held  good. 

The  existing  law  of  Maine  is  declared  in  National  Exchange  Bank 
V.  McLoon,  73  Maine,  498,  by  an  elaborate  opinion,  and  the  con- 
clusion reached  is  that  an  assignment  of  a  part  of  a  chose  in  action 
is  good  in  equity,  and  against  a  trustee  process. 

In  England  it  is  held  that  the  particular  fund  or  debt  out  of 
which  the  payment  is  to  be  made  must  be  specified  in  the  assign- 
ment (Percival  v.  Dunn,  29  Ch,  L.  128)  ;  but  the  assignment  of  a 
part  of  a  debt  or  fund  is  good  in  equity.  The  present  case  is  like 
Ex  parte  Moss,  14  Q.  B.  D.  310,  and  a  stronger  case  for  the  plain- 
tiff than  Brice  v.  Bannister,  3  Q.  B.  D.  569,  where,  although  the 
procedure  was  under  the  St.  of  36  &  37  Vict,  c,  66,  the  foundation 
of  the  liability  was  that  the  assignment  was  good  in  equity;  and 
the  case  at  bar  is  relieved  from  the  difficulties  which  induced  Brett, 
L.  J.,  in  that  case  to  dissent;  and  Brice  v.  Bannister  was  approved 
in  Ex  parte  Hall,  10  Ch.  D.  615.  The  present  case  also  resembles 
Tooth  V.  Hallett,  L.  R.  4  Ch.  242,  except  that  there  the  sums  paid 
by  the  trustee  for  creditors  in  finishing  the  house  exhausted  all  that 
became  due  under  the  contract.  See  also  Addison  v.  Cox,  L.  R.  8 
Ch.  76. 

In  Appeals  of  Philadelphia,  86  Penn.  St.  179,  it  is  conceded  that 
the  rule  that  an  assignment  of  a  part  of  a  debt  is  valid  prevails  in 
equity  between  individuals;  but  the  court  refused  to  apply  it  to 
a  debt  due  from  a  municipal  corporation,  on  the  ground  that  "the 
policy  of  the  law  is  against  permitting  individuals,  by  their  private 
contracts,  to  embarrass  the  principal  officers  of  a  municipality." 
See  Geist's  appeal,  104  Penn.  St.  351.  But  there  is  no  ground  for 
any  such  distinction  in  this  Commonwealth. 

In  ISTew  York  the  assignment  of  a  part  of  a  debt  or  fund  is  good 
in  equity.  Field  v.  Mayor,  2  Seld.  179;  Risley  v.  Phenix  Bank, 
83  N.  Y.  318.  And  the  same  doctrine  is  maintained  in  other  States. 
Daniels  v.  Meinhard,  53  Ga.  359;  Etheridge  v.  Vernoy,  74  N.  C. 
809;  Lapping  v.  Duffy,  47  Ind.  51;  Fordyce  v.  JSTelson,  91  Ind.  447; 
Bower  v.  Hadden  Blue  Stone  Co.,  3  Stew.  (!N".  J.)  171;  Gardner  v. 
Smith,  5  Heisk.  256;  Grain  v.  Aldrich,  38  Cal.  514;  Des  Moines  v. 
Hinkley,  62  Iowa,  637;  Canty  v.  Latterner,  31  Minn.  239;  First 
National  Bank  v.  Kimberlands,  16  W.  Va.  555. 

From  the  examination  of  our  cases,  it  appears  not  to  have  been 
decided  that  there  cannot  be  an  assignment  of  a  part  of  a  fund  or 
debt  which  will  constitute  an  equitable  lien  or  charge  upon  it,  and 


406  DONOVAN    V.    MIDDLEBROOK  [CHAP.    Ill 

be  enforced  in  equity  against  the  debtor  or  person  holding  the  fund. 
Palmer  v.  Merrill,  ubi  supra,  may  well  rest  upon  the  first  reason 
given  for  the  decision.  See  Stearns  v.  Quincy  Ins.  Co.,  124  Mass. 
61-63.  The  decisions  of  courts  of  equity  in  other  jurisdictions  are 
almost  unanimous  in  maintaining  such  a  lien  where  the  assignment 
is  for  value,  distinctly  appropriates  a  part  of  the  fund  or  debt,  and 
makes  the  sum  assigned  specifically  payable  out  of  it. 

Without  undertaking  to  decide  what  is  not  before  us,  and  con- 
fining ourselves  to  the  facts  in  the  case,  which  are  that  the  debt  is 
admitted  and  remains  unpaid,  and  the  debtor  in  his  answer  asks 
the  court  to  determine  the  rights  of  the  different  claimants,  we  think 
that  there  should  be  a  decree  that  the  city  of  Newton  pay  to  the 
plaintiff  $600 ;  and  that  the  remainder  of  the  sum  due  from  the  city, 
after  deducting  its  costs,  be  paid  to  Gilkey,  assignee. 

The  assignment  was  not  made  in  fraud  of  the  laws  relating  to 
insolvency.  So  ordered.^ 


EICHAED    J.    DOTnTOVAN",    Appellant,    v.   FREDEKICK    J. 
MIDDLEBROOK,  and  others.  Respondents 

ITew  York  Supreme  Court,  Appellate  Division,  June,  1904 

[Reported  in  95  New  York  Appellate  Division,  365] 

McLaughlin,  J. :  This  appeal  is  from  a  judgment  dismissing 
the  complaint  at  the  close  of  plaintiff's  case.  The  action  was  brought 
to  recover  one-half  of  broker's  commissions  in  the  sale  of  real  estate 
under  an  alleged  assignment.  The  complaint  alleged,  in  substance, 
that  in  March  or  April,  1903,  the  defendants  employed  one  Joseph 
Toch  to  secure  a  purchaser  for  certain  real  estate  in  the  city  of  New 
York,  and  agreed  if  successful  to  pay  him  a  commission  of  two  per 
cent  of  the  purchase  money;  that  Toch,  with  the  aid. and  influence 
of  one  Horowitz,  produced  a  purchaser  to  whom  the  property  was 
sold  for  $325,000;  that  Toch  thereupon,  in  consideration  of  the  ser- 
vices of  Horowitz,  entered  into  the  following  agreement  with  him, 
which  was  confirmatory  of  a  previous  oral  agreement: 

"In  consideration  of  one  (1)  dollar  I  hereby  agree  with  Salo 
A.  Horowitz,  representing  Mr.  Ralph  C.  Gerlacli  in  the  purchase 
of  the  Ryan  property  from  Mary  Ryan  and  Frederick  J.  Middle- 
brook,  executor,  that  said  Horowitz  is  entitled  to  one-half  of  the 
commission  earned,  amounting  to  $3,250.00,  resulting  from  said  sale. 

"Dated  Nkw  York,  April  Gth,  1903. 

"  Joseph  Toch." 

'  Tlif  nuthoritif'S  on  the  effect  of  partial  assignmentB  are  collected'  in  Ames's  Caa. 
on  TnjHts  {2d  od.).  63  n.;  1  Williaton,  Contracts,  §441. 


SECT.    Il]  DONOVAN    V.    MIDDLEBROOK  407 

That,  by  this  agreement,  Toch  assigned  to  Horowitz  one-half  of 
the  commission  earned,  of  which  fact  the  defendants  were  informed, 
and  prior  to  the  commencement  of  the  action  such  claim  was  duly 
assigned  to  the  plaintiff  and  judgment  demanded  for  $3,250.  The 
answer,  among  other  defenses  pleaded,  denied  substantially  all  of 
the  material  allegations  of  the  complaint  upon  which  plaintiff's  right 
to  a  recovery  was  predicated. 

At  the  trial  the  agreement  above  set  forth  between  Toch  and 
Horowitz  was  introduced  in  evidence  and  this  constituted  plaintiff's 
entire  proof  as  tending  to  show  that  any  claim  which  Toch  had 
against  the  defendants  for  the  commissions  earned  had  been  assigned 
by  him  to  the  plaintiff's  assignor.  Upon  this  proof  the  complaint 
was  dismissed,  the  trial  court  holding  that  such  agreement  did  not 
constitute  an  assignment  of  the  commission  alleged  to  have  been 
earned  by  Toch,  or  any  part  of  it.  This  ruling  of  the  trial  court  is 
challenged,  it  being  urged  that  the  instrument  constituted  an  assign- 
m.ent  of  one-half  of  the  commissions.  The  action  is  at  law.  The 
plaintiff  predicates  his  right  to  a  recovery  upon  the  fact  that  the 
defendants  were  indebted  to  Toch,  and  Toch  assigned  a  portion  of 
that  indebtedness  to  his  assignor.  The  only  evidence  of  the  assign- 
ment is  the  paper  referred  to,  and  a  bare  inspection  of  it  shows,  as 
it  seems  to  me,  that  it  did  not  constitute  an  assignment.  There  are 
no  words  in  it  which  either  expressly  or  inferentially  can  be  said  to 
transfer  any  interest  in  the  claim  which  Toch  had  against  the 
defendants  to  plaintiff's  assignor.  The  agreement  is  between  Toch 
and  Horowitz.  At  most  it  is  an  agreement  on  the  part  of  Toch 
to  pay  to  Horowitz  one-half  of  what  the  defendants  are  to  pay  to 
him.  The  fact  that  the  plaintiff  called  this  paper  an  assignment 
did  not  make  it  so.  (Wemple  v.  Hauenstein,  19  App.  Div.  552.) 
To  constitute  a  valid  assignment  there  must  be  a  perfected  transaction 
between  the  parties  intended  to  vest  in  the  assignees  a  present  right  in 
the  thing  assigned.  An  agreement  to  pay  a  certain  sum  out  of,  or 
that  one  is  entitled  to  receive,  from  a  designated  fund,  when  received, 
does  not  operate  as  a  legal  or  equitable  assignment,  since  the  assignor 
in  either  case  retains  control  over  the  subject-matter.  "The  test  is," 
even  of  an  equitable  assignment,  "whether  the  debtor  would  be  jus- 
tified in  paying  the  debt  or  the  portion  contracted  about  to  the  person 
claiming  to  be  assignee."  (Fairbanks  v.  Sargent,  117  N.  Y.  320.) 
"It  is  the  settled  doctrine  in  this  State,"  says  the  court  in  Thomas 
V.  N.  Y.  &  G.  L.  R.  Co.  (139  N.  Y.  163),  "that  an  agreement,  either 
by  parol  or  in  writing,  to  pay  a  debt  out  of  a  designated  fund, 
does  not  give  an  equitable  lien  upon  the  fund  or  operate  as  an 
equitable  assignment  thereof."  In  Williams  v.  Ingersoll  (89  IST.  Y. 
508)  Judge  Earl  said:  "Whatever  the  law  may  be  elsewhere,  it 
must  be  regarded  as  the  settled  law  of  this  State,  that  an  agreement 
either  by  parol  or  in  writing  to  pay  a  debt  out  of  a  designated  fund 
does  not  give  an  equitable  lien  upon  the  fund  or   operate  as  an 


408  MARCH    V.    WARD  [CHAP.    Ill 

equitable  assignment  thereof.  It  was  so  aecided  in  Rogers  v. 
Hosack's  Executors  (18  Wend.  319).  That  case  was  followed,  and 
the  same  rule  laid  down  in  Christmas  v.  Eussell  (14  Wall,  69)  and 
Tristv.  Child  (21  id.  441)." 

The  paper  in  question,  as  already  indicated,  did  not  constitute  an 
assignment  and  the  trial  court  was  correct  in  so  holding. 

The  judgment  is  right  and  should  be  affirmed,  with  costs, 

Patterson,  O'Brien,  Ingraham  and  Hatch,  JJ.,  concurred. 

Judgment  affirmed,  with  costs. 


SECTIOI^   III 
JOINT  OBLIGATIONS 


MARCH  V.  WARD 

At  Nisi  Peius,  June  30,  1792 

\_Beported  in  Peake's  Cases,  130] 

Assumpsit  on  a  promissory  note  made  by  the  defendant  and  one 
Bowling,  in  the  following  words,  viz : 

"I  promise  to  pay  three  months  after  date,  to  Wm.  March,  £8  5s.  for  value  received 
in   fixtures. 

"Robert  Bowling. 

"Thomas  Wabd." 

It  was  objected  that  this  promissory  note  was  joint  only,  and 
not  several. 

Lord  Kenyon,  I  think  that  this  note,  beginning  in  the  singular 
number,  is  several  as  well  as  joint,  and  that  the  present  action  may 
be  maintained  on  it.  I  remember  a  case  tried  before  Mr,  Moreton 
at  Chester,  exactly  similar  to  the  present,  wherein  I  was  counsel  for 
the  defendant;  I  persuaded  the  judge  that  it  was  a  joint  note  only, 
and  the  plaintiff  was  nonsuited,  but  on  an  application  being  after- 
wards made  to  this  Court,  they  were  of  a  contrary  opinion,  and  a 
new  trial  was  granted.     The  letter  I  applies  to  each  severally. 

Verdict  for  the  plaintiff} 

*  The  of)li!^ation  is  joint  and  several.  Bank  of  Louisiana  v.  SterUng,  2  La.  62; 
New  Orleans  v.  Ripley,  5  La.  122;  Hcmmenway  v.  Stone,  7  Maes.  68;  Van  Alstyne 
V.  Van  Slyck,  10  Barb.  383;  Dill  v.  White,  .52  Wis.  456;  Neg.  Instruments  Law.  Sec. 
17  (7). 

"If  two,  three,  or  more  bind  thomselvos  in  an  obligation  thus,  ohlioamua  nos,  and 
say  no  more,  the  obligation  is,  and  shall  be  takon  to  be  joint  only,  .and  not  several." 
Shep.  Touch,  375.  fioc.  also  .lerniKan  v.  Wimberly,  I  Gii.  220;  Bank  of  Louisiana  v. 
Sterling,  2  La.  62;  New  Orleans  v.  Ripley,  5  La.  122;  Meyer  v.  Estcs,  164  Mass.  467. 
But  see  r.onlrn,  Mf)rangf'  v.  Mudne,  6  Abb.  Prac.  243. 

"If  three  be  bound  jointly  and  severally  in  a  bond,  the  obligee  cannot  sue  two  of 
them  only,  but  he  must  either  sue  them  all  or''each  of  them  separately.    And  though 


SECT,    III]     CITY    OF   PHILADELPHIA    V.    REEVES    &    CABOT  409 


THE  CITY  OF  PHILADELPHIA  v.  KEEVES  AND  CABOT 

Pennsylvania  Supreme  Court,  1865 
[^Re-ported  in  48  Pennsylvania,  472] 

Error  to  the  District  Court  of  Philadelphia. 

This  was  an  action  of  covenant,  by  the  City  of  Philadelphia  against 
Samuel  J.  Reeves  and  Joseph  Cabot,  as  sureties  of  Fort  Ihrie.  After 
a  declaration  in  the  usual  form,  on  a  covenant  dated  May  9th,  1859, 
between  the  plaintiff  and  defendants,  for  the  use  of  a  wharf  or  land- 
ing at  the  foot  of  Callowhill  Street,  on  the  river  Delaware;  the  de- 
fendants craved  oyer  of  the  instrument  on  which  suit  was  brought. 

The  plaintiffs  thereupon  placed  on  record  a  copy  of  the  following 
instrument :  — 

"Memorandum.  The  City  of  Philadelphia  demise  to  Fort  Ihrie  the  wharf  or  land- 
ing at  the  foot  of  Callowhill  Street,  on  the  river  Delaware,  and  the  pier  and  wharf 
next  south  thereof,  being  the  same  premises  heretofore  called  and  known  as  the  Callow- 
hill Street  Ferry  and  Landing,  for  the  term  of  three  years  from  April  25th,  1859,  at 
the  annual  rent  of  twenty-three  hundred  dollars,  payable  quarterly:  the  first  payment 
to  be  made  on  the  25th  day  of  July,  1859;  and  if  the  rent  shall  remain  unpaid  on  any 
day  on  which  the  same  ought  to  be  paid,  then  the  lessors  may  enter  on  the  premises 
and  proceed,  by  distress  and  sale  of  the  goods  there  found,  to  levy  the  rent  and  all 
costs.  The  lessee  and  his  sureties,  Joseph  Cabot  and  Samuel  J.  Reeves,  covenant  with 
the  lessors  to  pay  the  rent  punctually  as  above  provided  for,  and  the  lessee  covenants 
during  the  term  to  keep,  and  at  the  end  thereof  peaceably  to  deliver  up  the  premises 
in  good  order  and  repair,  reasonable  wear  and  tear  and  damage  by  accidental  fire 
excepted,  and  not  assign  this  lease  or  underlet  the  premises,  or  any  part  thereof. 

"And  if  the  lessee  shall  in  any  particular  violate  any  one  of  his  said  covenants, 
then  the  lessors  may  cause  a  notice  to  be  left  on  the  premises  of  their  intention  to 
determine  this  lease,  and  at  the  expiration  of  ten  days  from  the  time  of  so  leaving 
such  notice,  this  lease  shall  absolutely  determine;  and  upon  the  expiration  or  other 
determination  of  this  lease,  any  attorney  may  immediately  thereafter,  as  attorney  for 
the  lessee,  sign  an  agreement  for  entering,  in  any  competent  court,  an  amicable  action 
and  judgment  in  ejectment  (without  any  stay  of  execution)  against  the  lessee,  and  all 
persons  claiming  under  him,  for  the  recovering  by  the  lessors  of  possession  of  the 
hereby  demised  premises,  for  which  this  shall  be  a  sufficient  warrant;  and  the  lessee 
thereby  releases  to  the  lessors  all  errors  and  defects  whatsoever  in  entering  such 
action  or  judgment,  or  in  any  proceeding  thereon,  or  concerning  the  same.  No  such 
determination  of  this  lease,  nor  taking  or  recovering  possession  of  the  premises,  shall 
deprive  the  lessors  of  any  action  against  the  lessee  or  his  sureties  for  the  rent,  or 
against  the  lessee  for  damages.  All  rights  and  liabilities  herein  given  to  or  imposed 
upon  either  of  the  parties  hereto  shall  extend  to  the  heirs,  executors,  administrators, 
successors,  and  assigns  of  such  party. 

"In  witness  whereof  the  lessee  and  his  sureties  have  hereunto  set  their  hands  and 
seals,  and  the  corporate  seal  of  the  lessors  has  been  hereunto  affixed  by  the  mayor 
of  the  city  of  Philadelphia,  this  9th  day  of  May,  a.d.  1859,  the  said  lease  having  been 
awarded  prior  to  the  election  of  the  said  lessee  as  a  member  of  common  council. 

"Fort  Ihrie.  [seal.] 

"(Signed)  "Samuel  J.  Reeves,     [seal.] 

"Joseph  Cabot.  [seal.] 

"Sealed  and  delivered  in 
the  presence  of  E.  B.  McDowell. 

[sEiiL.]  "Alexander  Henry, 

"Mayor  of  Philadelphia." 

that  doctrine  has  been  several  times  questioned,  yet  it  has  been  held  good  law  from 
the  time  of  Lord  Coke."  Streatfield  v.  Halliday,  3  T.  R.  779,  782;  Stevens  v.  Catlin, 
152  111.  56,  58,  ace. 


410  CITY    OF   PHILADELPHIA    V.   REEVES    &    CABOT    [CHAP.    Ill 

This  instrument  being  read  and  heard,  the  defendants  by  their 
attorney  prayed  judgment  of  the  said  writ  and  declaration,  because 
the  supposed  covenant  in  the  said  declaration  mentioned,  if  any  such 
were  made,  was  jointly  made  with  Fort  Ihrie,  who  sealed  and  de- 
livered also  the  said  deed,  who  is  still  living,  to  wit,  &c.,  and  not  by 
the  said  Samuel  J.  Reeves  and  Joseph  Cabot  alone,  wherefore,  in- 
asmuch as  the  said  Fort  Ihrie  is  not  named  in  the  said  writ  and 
declaration  together  with  the  said  Samuel  J.  Reeves  and  Joseph 
Cabot,  they,  the  said  Samuel  J.  Reeves  and  Joseph  Cabot,  prayed 
judgment  of  the  writ  and  declaration,  and  that  the  same  may  be 
quashed,  S:c. 

To  this  the  plaintiff  demurred,  and  stated  the  following  cause  of 
demurrer,  viz.,  "that  the  instrument  of  which  there  has  been  oyer, 
shows  on  the  face  thereof  that  the  said  defendants  are  bound  as 
sureties  for  the  said  Fort  Ihrie,  and  that  by  reason  of  the  subject- 
matter  the  said  covenant  is  not  jointly  with  said  Fort  Ihrie,"  &c. 

The  court  below  entered  judgment  for  the  defendants  on  the  de- 
murrer, which  was  the  error  assigned. 

David  W.  Sellers  and  F.  Carroll  Brewster,  for  plaintiff  in  error. 

E.  Spencer  Miller,  for  defendants  in  error. 

The  opinion  of  the  court  was  delivered,  January  25th,  1865,  by 

Strong,  J.  That  the  covenant  for  the  payment  of  rent,  upon 
which  this  suit  was  brought,  imposed  upon  the  defendants  only  an 
obligation  jointly  with  Fort  Ihrie,  their  principal,  is  too  clear  for 
doubt.  It  is  a  general  presumption  of  law,  when  two  or  more  per- 
sons undertake  an  obligation,  that  they  undertake  jointly.  Words 
of  severance  are  necessary  to  overcome  this  primary  presumption.  In 
all  written  contracts,  therefore,  whether  the  liability  incurred  is 
joint  or  several,  or  joint  and  several,  is  to  be  determined  by  looking 
at  the  words  of  the  instruments,  and  at  them  alone.  The  subject- 
matter  of  the  contract,  and  the  interests  of  the  parties  assuming 
a  liability,  have  nothing  to  do  with  the  question.  It  may  be  other- 
wise with  respect  to  the  rights  of  the  covenantees,  where  there  are 
more  than  one.  There  are  not  wanting  cases  in  which  it  has  been 
held  that  when  the  interests  of  the  covenantees  are  several,  they 
may  sue  severally,  though  the  terms  of  the  covenant  upon  which 
they  sue  are  strictly  joint.^  Even  this,  however,  has  been  doubted. 
But,  however  it  may  be  with  the  rights  of  covenantees,  it  is  a  settled 
rule  that  whether  the  liability  of  covenantors  is  joint,  or  several,  or 
botli,  depends  exclusively  upon  the  words  of  the  covenant.  And 
the  language  of  severalty  or  joinder  is  the  test.^     The  covenant  is 

'  rjolflHmith  ».  Riichs,  17  Fod.  Rep.  726;  Burton  ?).  Honry,  90  Ala.  281;  St.  Louis 
&r..  ]{.  R.  Do.  7).  Coultas,  .33  111.  1S9;  HaskinH  d.  Lnmburd,  10  Me.  140;  Jacobs  i).  Davis, 
34  Mrl.  204:  Alpnuirh  v.  Wood,  r,:i  N.  J.  L.  03K,  044;  L.  L.  Satlor  Lumber  Co.  v.  Exler, 
2.30  Pa.  13r,;  (],i7.\<-v  V.  Wayne,  .30  Tex.  080;  Shari)  v.  Conklinn,  10  Vt.  355;  Anderson 
V.  Nicholo,  (Vt.)  107  Atl.  110,  'ir.c. 

'  But  promiHorn  on  Hubscription  papers  are  held  to  promise  severally  though  the 
language  in  appropriat<!  for  a  joint  promise.     Davis,  &c.  Co.  v.  Barber,  51  Fed.  Rep 


SECT.    Ill]  RICHARDS    V.    HEATHER  411 

always  joint,  unless  declared  to  be  otherwise :  Enys  v.  Donnithorne, 
2  Burrows,  1190;  Philips  v.  Bonsall,  2  Binn.  138.  It  is  true,  that 
in  the  covenant  to  pay  rent,  contained  in  the  lease  to  Fort  Ihrie, 
the  two  defendants  are  described  as  sureties,  but  they  and  the  lessee 
undertook  to  pay  the  rent  as  one  party.  Their  being  described  as 
sureties  cannot  be  regarded  as  a  declaration  of  intent  to  undertake 
severally.  Nor  does  the  covenant  contain  any  words  of  several  lia- 
bility for  rent.  The  defendants  assumed  no  other  obligation  than 
that  they  and  the  lessee  would  pay.  The  case  is  indubitably  within 
the  general  rule  that  a  covenant  by  two  or  more  is  joint  as  to  them, 
if  not  expressly  declared  several,  or  joint  and  several.  The  plea  in 
abatement  was  therefore  correctly  sustained,  and  the  judgment  on 
the  demurrer  was  right.  The  judgment  is  affirmed.^ 


RICHARDS  AND  Another  v.  HEATHER 

In  the  King's  Bench,  November  6,  1817 

[^Reported  in  1  Barnewall  &  Alder  son,  29] 

Assumpsit  for  work  and  labor.  The  declaration  contained  only 
one  set  of  counts,  charging  the  defendant  in  his  own  right.  Plea, 
non  assumpsit.  At  the  trial  before  Abbott,  J.,  at  the  last  spring 
assizes  for  the  county  of  Southampton,  the  plaintiff  proved  two  dis- 
tinct demands;  one  due  from  the  defendant  individually,  the  other 
in  respect  of  work  done  upon  a  ship,  which  had  belonged  to  the 
defendant,  and  one  Rous,  who  had,  jointly  with  the  defendant,  given 
directions  for  the  work,  and  who  was  dead  at  the  time  of  action 
brought.  The  learned  judge  entertaining  a  doubt  whether  in  re- 
spect of  this  last  demand  the  defendant  should  not  have  been  charged 
as  surviving  partner,  directed  the  jury  to  find  a  verdict  for  the  whole 
sum  claimed,  with  liberty  to  the  defendant  to  move  to  reduce  it  to 
the  amount  of  the  first  demand  only,  if  the  court  should  be  of  that 
opinion.  Accordingly,  Pell,  Serjt.,  in  Easter  Term  last,  obtained 
a  rule  nisi  for  that  purpose;  and  now 

148;  Price  v.  Railroad  Co.,  18  Ind.  137;  Landwerlen  v.  Wheeler,  106  Ind.  523;  Hall 
V.  Thayer,  12  Met.  130;  Davis  v.  Belford,  70  Mich.  120;  Gibbons  v.  Bente,  51  Minn. 
499;  Cornish  &  Co.  v.  West,  82  Minn.  107.  But  see  contra,  Davis  v.  Shafer,  50  Fed. 
Rep.  764;  Darnell  v.  Lyon,  85  Tex.  455.  See  further  22  L.  R.  A.  80,  n.;  L.  R.  A.  1915 
B  224. 

1  Illustrations  of  the  rule  that  obligations  are  presumptively  joint  may  be  found  in 
Byers  v.  Doby,  1  H.  Bl.  236;  Hill  v.  Tucker,  1  Taunt.  7;  Mansell  v.  Burredge,  7  T.  R. 
352;  Hatsall  v.  Griffith,  4  Tyr.  487;  Crosby  v.  Jeroloman,  37  Ind.  264;  Eller  v.  Lacy 
137  Ind.  436;  Field  v.  Runk,  2  Zab.  525;  Alpaugh  v.  Wood,  53  N.  J.  L.  638;  Trenton 
Potteries  Co.  v.  Oliphant,  56  N.  J.  Eq.  680,  698;  Muzzy  v.  Whitney,  10  Johns.  226; 
Stage  V.  Olds,  12  Ohio,  158.  Compare  Shipman  v.  Straitsville  Co.,  158  U.  S.  356; 
Davis,  &c.  Co.  v.  Jones,  66  Fed.  Rep.  124;  Des  Moines  Co.  v.  York  Co.,  92  la.  396; 
Colt  V.  Learned,  118  Mass.  380;  Ernst  v.  Bartle,  1  Johns.  Cas.  319.  But  contra,  by 
statute.  Pecquet  v.  Pecquet,  17  La.  Ann.  204;  Stowers  v.  Blackburn,  21  La.  Ann.  127; 
Burney  v.  Ludeling,  47  La.  Ann,  73;    Clough  n.  Holden,  115  Mo.  336. 


412  RICHARDS    V.    HEATHER  [CHAP.   HI 

Gaselee  and  A.  Moore  showed  cause. 

Pell,  Serjt.,  contra. 

LoKD  Ellenbokough,  C.  J.  I  am  of  opinion  that  the  plaintiff 
is  entitled  to  both  the  sums  which  he  seeks  to  recover  under  this 
declaration.  It  would  be  more  convenient  in  all  cases,  where  a  debt 
accrues  from  the  defendant  as  surviving  partner,  to  declare  against 
him  accordingly,  because  it  is  convenient  to  make  the  forms  of  dec- 
laration subservient  to  the  information  of  the  party  charged;  but 
it  is  not  essentially  necessary  to  the  maintenance  of  the  action,  for 
where  there  are  several  partners  who  are  living,  one  of  them  may 
be  declared  against  as  the  sole  debtor,  and  the  only  objection  to  this 
mode  of  declaring  is,  that  the  plaintiff  is  liable  to  be  turned  round, 
by  a  plea  in  abatement.^  But  inasmuch  as  where  the  other  partner 
is  dead  there  cannot  be  any  plea  in  abatement,  cessante  ratione, 
cessat  lex.  The  reason  which  requires  that  the  demand  shall  be 
stated  as  a  joint  demand  ceases  when  a  plea  in  abatement  can  be 
no  longer  pleaded.  It  seems  to  me,  therefore,  that  the  plaintiff  may 
maintain  his  action,  as  well  for  the'  demand  for  which  the  defendant 
was  liable  individually,  as  for  that  for  which  he  was  liable  jointly 
with  the  other  partner,  who  is  now  dead.  According  to  every  prin- 
ciple of  law,  the  joint  debt  may,  by  reason  of  the  death  of  the  party, 
be  now  treated  as  if  it  had  been  originally  a  separate  debt.  I  think 
therefore  there  is  not  any  occasion  to  make  any  distinction  in  the 
declaration  on  account  of  the  sources  from  which  the  debts  originally 
sprung. 

Bayley,  J.  I  think  that  the  plaintiff  is  entitled  to  recover  both 
sums,  and  that  the  doctrine  in  Spalding  v.  Mure  cannot  be  sup- 
ported. Upon  a  count  for  work  and  labor,  goods  sold  and  delivered, 
and  money  had  and  received,  &c.,  a  plaintiff  may  recover  all  such 
demands  as  fall  within  the  range  of  that  count;  if  he  has  twenty 
demands  he  may  recover  each  and  every  particular  demand  to  which 
that  count  is  applicable.  Supposing  there  had  been  one  demand 
only,  namely,  a  separate  demand,  could  plaintiff  have  been  prevented 
from  recovering  that  demand  on  this  declaration,  on  the  ground  of 
a  variance?  Certainly  not;  it  is  true  in  respect  of  that  demand  he 
is  solely  indebted.  Then  as  to  the  demand  which  was  due  from 
the  defendant  and  Rous  jointly,  the  work  was  done  for  each,  and 
each  was  liable  for  the  whole;  this  is  the  argument  adopted  by  Lord 
Mansfield  in  Rice  v.  Shute,  5  Burr,  2613 :  "All  contracts  with  part- 
ners are  joint  and  several;  every  partner  is  liable  to  pay  the  whole." 
Proving  that  another  person  contracted  docs  not  negative  that  the 
di'fciidant  himself  contracted.     If  that  ])o  the  case,  and  if  the  work 

'  Riw  V.  Sbiitf!,  T)  Burr,  2011;  Mountstophon  )'.  Rrooko,  1  R.  &  Aid.  224;  First 
Nat.  Hunk  v.  Ilfimor.  49  Fori.  Rop.  45  (C.  C.  A.);  Elder  ?).  Thompson,  13  Gr.ay,  91; 
Coon  V.  Andnrwm,  101  Mir^Ji.  2'.)r>;  Davis  v.  Choutoau,  32  Minn.  548;  Sandwich  Mfg. 
Co.  V.  Kimhcrly,  37  Minn.  214;  Maiiror  v.  Midway,  25  Neb.  575;  Boolor  v.  Rank,  34 
Neb.  348;  T.i(i)crnian  v.  Urothors,  55  N.  J.  370;  Nash  v.  Skinner,  12  Vt.  219;  Hicks 
V.  Cram,  17  Vt.  449;    Wilson  v.  McCorniick,  80  Va.  995,  ace. 


SECT.    Ill]  RICHARDS    V.    HEATHER  413 

which  was  originally  done  for  Rous  and  Heather  was  originally 
done  for  either,  it  follows  that  it  may  be  truly  predicated  that  the 
defendant  Avas  solely  indebted  for  work  and  labor  done  for  him; 
and  then  I  do  not  see  upon  what  principle  the  plaintiff  can  be  pre- 
vented from  recovering  for  this  demand  also  under  this  declaration. 

Abbott,  J.  I  am  of  the  same  opinion.  The  question  was  re- 
served, in  consequence  of  a  doubt  suggested  by  me  upon  the  form  of 
the  declaration;  and  my  doubt  was,  whether  it  was  not  necessary 
to  charge  the  defendant,  as  surviving  partner,  in  respect  of  the  last 
demand.  My  doubt  did  not  arise  in  respect  of  there  being  evidence 
given  of  two  distinct  demands,  but  in  respect  of  the  form  of  the 
declaration,  as  applicable  to  the  last  demand.  It  is  possible  that 
I  may  have  had  an  indistinct  recollection  of  what  fell  from  the 
court  in  Spalding  v.  Mure,  but  I  now  think  that  the  doctrine  there 
laid  down  is  not  law.  By  the  law  of  England,  where  several  per- 
sons make  a  joint  contract,  each  is  liable  for  the  whole,  although 
the  contract  be  joint.  In  Whelpdale's  case,  5  Hep.  119,  the  plain- 
tiff had  declared  on  a  bond  made  by  the  defendant,  to  which  the 
defendant  pleaded  non  est  factum;  the  jury  found  that  the  bond  was 
a  joint  bond,  made  by  the  defendant  and  another  to  the  plaintiff, 
and  upon  this  special  verdict  it  was  adjudged  by  the  court  that  the 
plaintiff  should  recover;  "because  when  two  men  are  jointly  bound 
in  one  bond,  although  neither  of  them  is  bound  by  himself,  yet 
neither  of  them  can  say  that  the  bond  is  not  his  deed;  for  he  has 
sealed  and  delivered  it,  and  each  of  them  is  bound  in  the  whole." 
That  was  a  case  upon  a  deed,  but  Rice  v.  Shute  was  a  case  upon 
a  simple  contract;  and  it  was  there  held  that  although  the  promise 
was  a  joint  promise,  yet  the  defendant,  who  was  sued  alone,  could 
not  say  that  he  did  not  promise;  and  that  the  only  way  of  taking 
advantage  of  the  omission  of  the  other  joint  contractor  was  by  plea 
in  abatement.  These  two  cases  establish  this,  that  proof  of  a  joint 
contract  is  sufficient  to  sustain  an  allegation  that  one  contracted; 
and  therefore  there  is  no  variance;  and  if  not,  then  the  proof  given 
in  this  case  was  competent  to  sustain  the  declaration  in  respect  of 
both  demands,  and  this  rule  must  be  discharged. 

HoLEOYD,  J.  I  think  that  the  proof  was  properly  received.  The 
declaration  charges  that  the  defendant  was  indebted  in  a  certain 
sum,  for  work  and  labor,  which  he  promised  to  pay.  Under  this 
declaration  the  plaintiff  would  not  be  entitled  to  recover  anything, 
except  for  a  ground  of  action  corresponding  with  that  stated  in,  the 
declaration.  N'ow  it  is  not  disputed  but  that  the  joint  demand  was 
a  demand  coming  within  the  description  of  work  and  labor;  and  if 
the  defendant  had  been  alone  sued  for  it  without  the  other,  the  plain- 
tiff might  have  recovered,  because  there  would  not  have  been  any 
variance.  It  seems  to  me,  therefore,  this  demand  may  now  be  re- 
covered, although  there  was  a  separate  cause  of  action. 

Rule  discharged. 


414  JELL   V.   DOUGLAS  [CHAP.    Ill 


JELL  V.  DOUGLAS 
In  the  King's  Bench,  Eastek  Teem,  1821 
[Reported  in  4  Barnewall  &  Alderson,   374] 

Assumpsit  for  goods  sold  and  delivered  by  Jell  to  the  defendant. 
Plea,  general  issue.  At  the  trial,  before  Abbott,  C.  J.,  at  the  last 
summer  assizes  for  the  county  of  Kent,  the  proof  was,  that  the  goods 
were  sold  to  the  defendant  by  the  plaintiff  and  his  son,  who  were 
in  partnership.  The  son  had  died  before  the  commencement  of 
this  action.  It  was  contended  that  this  was  a  variance,  inasmuch 
as  the  contract  stated  in  the  declaration  was  with  the  plaintiff  alone ; 
whereas  that  given  in  evidence  was  with  the  plaintiff  and  another. 
Abbott,  C.  J.,  reserved  the  point,  and  directed  the  jury  to  find  a 
verdict  for  the  plaintiff,  with  liberty  to  the  defendant  to  move  to  enter 
a  nonsuit.  A  rule  nisi  for  that  purpose  having  been  obtained  in 
last  Michaelmas  Term,  — 

Marryat  and  Chitty  now  showed  cause. 

Abbott,  C.  J.  It  is  a  well-established  rule  that  where  two  per- 
sons are  joint-sellers  of  goods,  they  must  both  join  in  an  action 
brought  to  recover  the  price.  It  was  decided  in  Kichards  v.  Heather, 
1  B.  &  A.  29,  that  a  party  may  maintain  an  action  against  a  sur- 
viving partner  without  describing  him  as  such;  and  the  reason  of 
that  decision  was  this,  that  if  the  partners  had  been  alive,  and  one 
only  was  sued,  that  circumstance  could  only  be  taken  advantage  of 
by  plea  in  abatement,  and  was  no  defence  upon  the  general  issue. 
But  if  one  of  two  joint  contractors  sue,  both  being  alive,  that  is  a 
variance,^  and  a  good  defence  upon  the  general  issue.^  It  seems, 
therefore,  to  be  reasonable  that  where  a  surviving  joint-contractor 
sues,  the  fact  of  his  being  survivor  should  appear  in  the  declaration. 
In  a  note  to  Weber  v.  Tivill,  2  Saund.  121,  n.  1,  Mr.  Serjt.  Williams 
lays  it  down,  that  it  is  necessary  that  all  the  persons  with  whom  a 
contract  has  been  made,  if  living,  should  join  in  the  action,  and  if 
any  of  them  are  dead,  that  fact  should  be  stated.  From  my  own 
experience  I  can  say  that  that  has  been  the  general  practice,  and 
I  think  ought  not  to  have  been  departed  from  in  this  instance.  The 
rule  for  a  nonsuit  must  be  made  absolute.  Rule  absolute. 

(Jurney  and  Comyn  were  to  have  argued  in  support  of  the  rule. 

»  r;hanter  v.  Leese,  4  M.  &  W.  295,  ace. 

2  f)r,  if  the  record  shows  thn  defect,  by  demurrer  or  motion  in  arrest  of  judgment. 
Petrie  v.  liurv,  :i  B.  &  C  3.53;  PuRh  v.  StrinRfiold,  3  C.  R.  n.  a.  2;  Wetherell  v.  Lang- 
Hton,  1  Ex.  P)M;  Beach  v.  Hotchldss,  2  Conn.  697;  Baker  v.  Jewell,  6  Mass.  460; 
Wigirin  V.  r^inimings,  8  Allen,  353;  Davis  v.  Chouteau,  32  Minn.  548;  Ehle  v.  Purdy, 
6  Wend.  629. 


SECT.    Ill]  KING    V.    HOABE  415 

KING  AND  Another  v.  HOARE 
In  the  Exchequek,  JSTovember  25,  1844 
[Reported  in  13  Meeson  &  Welsby,  494] 

Parke,  B.  The  plea  in  this  case,  to  an  action  of  debt,  stated  that 
the  contract  in  the  declaration  was  made  by  the  plaintiff  with  the 
defendant  and  one  N.  T.  Smith  jointly,  and  not  with  the  defendant 
alone;  and  that,  in  1843,  the  plaintiff  recovered  a  judgment  against 
Smith  for  the  same  debt,  with  costs,  "as  appears  by  the  record  re- 
maining in  the  Court  of  Queen's  Bench,  which  judgment  still  re- 
mains in  full  force  and  unreversed,"  concluding  with  the  common 
verification.^ 

To  this  plea  there  was  a  demurrer,  assigning  several  special  causes : 
First,  that  it  was  a  plea  in  abatement  not  properly  pleaded ;  to  which 
the  answer  is,  that  the  plea  does  not  give  a  better  writ,  and  is  clearly 
a  plea  in  bar.  Secondly,  that  it  amounts  to  the  general  issue,  which 
it  certainly  does  not,  for  it  admits  a  debt  originally  due.  Thirdly, 
that  it  does  not  aver  that  the  debt  was  not  due  from  the  defendant 
and  Smith  severally,  as  well  as  jointly;  to  which  it  was  properly 
answered  that  the  plea  sufficiently  shows  the  identical  contract  de- 
clared upon  to  be  joint,  and  that  it  cannot  be  contended,  prima  facie 
at  least,  that  the  same  contract  was  both  joint  and  several. 

The  matter  of  form  being  disposed  of,  the  question  is  reduced  to 
one  of  substance :  whether  a  judgment  recovered  against  one  of  two 
joint  contractors  is  a  bar  in  an  action  against  another. 

It  is  remarkable  that  this  question  should  never  have  been  actually 
decided  in  the  courts  of  this  country.  There  have  been,  apparently, 
conflicting  dicta  upon  it.  Lord  Tenterden,  in  the  case  of  Watters  v. 
Smith,  2  B.  &  Ad.  892,  is  reported  to  have  said  that  a  mere  judgment 
against  one  would  not  be  a  defence  for  another.  My  brother  Maule 
stated,  in  that  of  Bell  v.  Bankes,  3  Man.  &  G.  267,  that  a  security 
by  one  of  two  joint  debtors  would  merge  the  remedy  against  both. 
In  the  case  of  Lechmere  v.  Fletcher,  1  C  &  M.  634,  Bayley,  B., 
strongly  intimates  the  opinion  of  the  Court  of  Exchequer,  that  the 
judgment  against  one  was  a  bar  for  both  of  two  joint  debtors ;  though 
the  point  was  not  actually  ruled,  as  the  case  did  not  require  it.  In 
the  absence  of  any  positive  authority  upon  the  precise  question,  we 
must  decide  it  upon  principle,  and  by  analogy  to  other  authorities; 
and  we  feel  no  difficulty  in  coming  to  the  conclusion  that  the  plea 
is  good. 

If  there  be  a  breach  of  contract,  or  wrong  done,  or  any  other  cause 
of  action  by  one  against  another,  and  judgment  be  recovered  in  a 
court  of  record,  the  judgment  is  a  bar  to  the  original  cause  of  action, 
because  it  is  thereby  reduced  to  a  certainty,  and  the  object  of  the 
suit  attained,  so  far  as  it  can  be  at  that  stage;  and  it  would  be  use- 
^  The  discussion  of  the  propriety  of  this  conclusion  is  omitted 


416  KING    V.    HOARE  [CHAP.    Ill 

less  and  vexatious  to  subject  the  defendant  to  another  suit  for  the 
purpose  of  obtaining  the  same  result.  Hence  the  legal  maxim, 
transit  in  rem  judicatam,  —  the  cause  of  action  is  changed  into 
matter  of  record,  which  is  of  a  higher  nature,  and  the  inferior 
remedy  is  merged  in  the  higher.  This  appears  to  be  equally  true 
where  there  is  but  one  cause  of  action,  whether  it  be  against  a  single 
person  or  many.  The  judgment  of  a  court  of  record  changes  the 
nature  of  that  cause  of  action,  and  prevents  its  being  the  subject  of 
another  suit,  and  the  cause  of  action,  being  single,  cannot  after- 
wards be  divided  into  two.  Thus  it  has  been  held  that  if  two  com- 
mit a  joint  tort,  the  judgment  against  one  is,  of  itself,  without  exe- 
cution, a  sufficient  bar  to  an  action  against  the  other  for  the  same 
cause.  Brown  v.  Woottom,  Yelv.  67;  and  s.  c,  Cro.  Jac.  73;  and 
Moor,  762.  And  though,  in  the  report  in  Yelverton,  expressions  are 
used  which  at  first  sight  appear  to  make  a  distinction  between  ac- 
tions for  unliquidated  damages  and  debts,  yet  upon  a  comparison  of 
all  the  reports,  it  seems  clear  that  the  true  ground  of  the  decision 
was  not  the  circumstance  of  the  damages  being  unliquidated.  Chief 
Justice  Popham  states  the  true  ground.  He  says,  "If  one  hath  judg- 
ment to  recover  in  trespass  against  one,  and  damages  are  certain" 
(that  is,  converted  into  certainty  by  the  judgment),  "although  he 
be  not  satisfied,  yet  he  shall  not  have  a  new  action  for  this  trespass. 
By  the  same  reason,  e  contra,  if  one  hath  cause  of  action  against 
tAvo,  and  obtain  judgment  against  one,  he  shall  not  have  remedy 
against  the  other;  and  the  difference  betwixt  this  case  and  the  case 
of  debt  and  obligation  against  two  is,  because  there  every  of  them 
is  chargeable,  and  liable  to  the  entire  debt;  and  therefore  a  recovery 
against  one  is  no  bar  against  the  other,  until  satisfaction."  And  it 
is  quite  clear  that  the  Chief  Justice  was  referring  to  the  case  of  a 
joint  and  several  obligation,  both  from  the  argument  of  the  counsel, 
as  reported  in  Cro.  Jac,  and  the  statement  of  the  case  in  Yelverton. 

We  do  not  think  that  the  case  of  a  joint  contract  can,  in  this  re- 
spect, be  distinguished  from  a  joint  tort.  There  is  but  one  cause 
of  action  in  each  case.  The  party  injured  may  sue  all  the  joint  tort- 
feasors or  contractors,  or  he  may  sue  one,  subject  to  the  right  of 
pleading  in  abatement  in  the  one  case,  and  not  in  the  other;  but, 
for  the  purpose  of  this  decision,  they  stand  on  the  same  footing. 
Whether  the  action  is  brought  against  one  or  two,  it  is  for  the  same 
cause  of  action. 

The  distinction  between  the  case  of  a  joint  and  several  contract 
is  very  clear.  It  is  argued  that  each  party  to  a  joint  contract  is 
severally  liable,  and  so  he  is  in  one  sense,  that  if  sued  severally,  and 
he  does  not  plead  in  abatement,  he  is  liable  to  pay  the  entire  debt; 
but  he  is  not  sevemny  liablf  in  the  sjimo  sense  as  he  is  on  a  joint 
and  several  bond,  which  instrument,  thonc:h  on  one  piece  of  parch- 
ment or  paper,  in  effect  comprises  the  joint  bond  of  all,  and  the 
several  bonds  of  each  of  the  obligors,  and  gives  different  remedies 


SECT.    Ill]  KING    V.    HOARE  417 

to  the  obligee.  Another  mode  of  considering  this  case  is  suggested 
by  Bayley,  B.,  in  the  case  of  Lechmere  v.  Fletcher,  and  was  much 
discussed  during  the  argument,  and  leads  us  to  the  same  conclusion. 
If  there  be  a  judgment  against  one  of  two  joint  contractors,  and  the 
other  is  sued  afterwards,  can  he  plead  in  abatement,  or  not?  If  he 
cannot,  he  would  be  deprived  of  a  right  by  the  act  of  the  plaintiff, 
without  his  privity  or  concurrence,  in  suing  and  obtaining  judgment 
against  the  other.  If  he  can,  then  he  may  plead  in  bar  the  judgment 
against  himself;  and  if  that  be  not  a  bar,  the  plaintiff  might  go 
on,  either  to  obtain  a  joint  judgment  against  himself  and  his  co- 
contractor,  so  that  he  would  be  twice  troubled  f'or  the  same  cause; 
or  the  plaintiff  might  obtain  another  judgment  against  the  co-con- 
tractor, so  that  there  would  be  two  separate  judgments  for  the  same 
debt.  Further,  the  case  would  form  another  exception  to  the  gen- 
eral rule,  that  an  action  on  a  joint  debt,  barred  against  one,  is  barred 
altogether;  the  only  exception  now  being  where  one  has  pleaded 
matter  of  personal  discharge,  as  bankruptcy  and  certificate.  It  is 
quite  clear,  indeed,  and  was  hardly  disputed,  that  if  there  were  a 
plea  in  abatement,  both  must  be  joined,  and  that  if  they  were,  the 
judgment  pleaded  by  one  would  be  a  bar  for  both ;  and  it  is  impossible 
to  hold  that  the  legal  effect  of  a  judgment  against  one  of  two  is  to 
depend  on  the  contingency  of  both  being  sued,  or  the  one  against 
whom  judgment  is  not  obtained  being  sued  singly,  and  not  pleading 
in  abatement.  These  considerations  lead  us,  quite  satisfactorily  to 
our  own  minds,  to  the  conclusion  that  where  judgment  has  been  ob- 
tained for  a  debt,  as  well  as  a  tort,  the  right  given  by  the  record 
merges  the  inferior  remedy  by  action  for  the  same  debt  or  tort  against 
another  party. 

During  the  argument,  a  decision  of  the  Chief  Justice  Marshall, 
in  the  Supreme  Court  of  the  United  States,  was  cited  as  being  con- 
trary to  the  conclusion  this  court  has  come  to ;  the  case  is  that  of 
Sheehy  v.  Mandeville.  We  need  not  say  we  have  the  greatest  re- 
spect for  every  decision  of  that  eminent  judge,  but  the  reasoning 
attributed  to  him  by  that  report  is  not  satisfactory  to  us ;  and  we  have 
ince  been  furnished  with  a  report  of  a  subsequent  case,  in  which 
that  authority  was  cited  and  considered,  and  in  which  the  Supreme 
Judicial  Court  of  Massachusetts  decided  that,  in  an  action  against 
two  on  a  joint  note,  a  judgment  against  one  was  a  bar.  Ward  v. 
Johnson,  13  Mass.  148. 

For  these  reasons  we  are  of  opinion  that  our  judgment  must  be 

for  the  defendant.  ,  Judgment  for  the  defendant} 

1  Mason  v.  Eldred,  6  Wall.  231  (overruling  Sheehy  v.  Mandeville,  6  Cranch,)  254; 
Trafton  v.  United  States,  3  Storjs  651;  Brady  v.  Reynolds,  13  Cal.  31;  Wann  v. 
McNulty,  2  Gilm.  359;  Moore  1).  Rogers,  19  111.  347;  Crosby  v.  Jeroloman,  37  Ind. 
264;  Ward  v.  Johnson,  13  Maas.  148;  Cowley  v.  Patch,  120  Mass.  137;  Davison  v. 
Harmon,  65  Minn.  402;  Robertson  v.  Smith,  18  Johns.  459;  Candee  v.  Smith,  9; 
N.  Y.  349;  Ryckman  v.  Manerud,  68  Oreg.  350;  McFarlane  v.  Kinp,  206  Pa.  317; 
Lauer  v.  Bandow,  48  Wis.  638,  ace.  But  otherwise  by  statute  in  many  jurisdictions. 
The  law  of  each  state  is  separately  considered  in  1  Williston,  Contracts,  §  336. 


418  HALE    V.    SPAULDING  [CHAP.    Ill 


WILLIAM  HALE  v.  LEONAKD  V.  SPAULDING 

SuPEEME  Judicial  Court  of  Massachusetts,  November  3,  1887- 

January  4,  1888 

[Reported  in  145  Massachusetts,  482] 

Contract,  upon  an  instrument  under  seal,  dated  May  23,  1885,  by 
the  terms  of  which  the  defendants,  six  in  number,  agreed  to  pay  to 
the  plaintiff,  on  demand,  six  sevenths  of  any  loss  to  which  he  might 
be  subjected  as  the  indorser  of  a  certain  note  for  a  corporation, 

Aaron  H.  Saltmarsh  alone  defended.  He  filed  an  answer  alleging 
that  the  plaintiff,  since  the  execution  of  the  contract  declared  on, 
had  executed  and  delivered  the  following  paper,  under  seal,  to  one 
of  the  joint  obligors  under  the  contract: 

"Eeceived  of  L.  V.  Spaulding  $1060.84,  in  full  satisfaction  for 
his  liability  on  the  document"  signed,  &c.,  and  dated  May  23,  1885. 

At  the  trial  in  the  Superior  Court,  before  Hammond,  J.,  it  ap- 
peared that  on  September  20,  1886,  the  defendants,  except  Salt- 
marsh,  settled  with  the  plaintiff  for  their  proportionate  part  of  the 
amount  alleged  to  be  due  under  the  agreement  declared  on,  and  the 
plaintiff  executed  the  paper  under  seal,  annexed  to  the  answer,  and 
delivered  it  to  the  defendant  Spaulding.  The  plaintiff  offered  to 
prove  facts  showing  that,  in  giving  said  sealed  paper  annexed  to 
the  answer,  there  was  no  intention  of  releasing  the  defendant  Salt- 
marsh.  The  judge  ruled  that  said  offer  was  not  material,  and  that 
said  sealed  paper  released  the  defendant  Saltmarsh,  and  ordered  a 
verdict  for  the  defendant.     The  plaintiff  alleged  exceptions. 

W.  n.  Moody,  for  the  plaintiff. 

H.  N.  Merrill,  for  Saltmarsh. 

C.  Allen,  J.  The  words  ''in  full  satisfaction  for  his  liability" 
import  a  release  and  discharge  to  Spaulding,  and,  the  instrument 
being  under  seal,  it  amounts  to  a  technical  release.  The  plaintiff 
does  not  controvert  the  general  rule,  that  a  release  to  one  joint 
obligor  releases  all.  Wiggin  v.  Tudor,  23  Pick.  434,  444;  Goodnow 
V.  Smith,  18  Pick.  414;  Pond  v.  Williams,  1  Gray,  630,  536.  But 
this  result  is  avoided  when  the  instrument  is  so  drawn  as  to  show 
a  contrary  intention.  I  Lindl.  Part.  433;  2  Chit.  Con.  (11th  Am. 
ed.)  1154  et  seq.;  Ex  parte  Good,  5  Ch.  D.  46,  55.  The  difficulty 
with  the  plaintiff's  case  is,  that  there  is  nothing  in  the  instrument 
before  us  to  show  such  contrary  intention.  Usually  a  reservation 
of  riglits  against  other  parties  is  inserted  for  that  purpose;  or  the 
instrument  is  put  in  the  form  of  a  covenant  not  to  sue.  See  Ken- 
worthy  V.  Sawyer,  125  Mass.  28;  Willis  v.  De  Castro,  4  C.  B.  (n.  s.) 
216;  North  v.  Wakefield,  13  Q.  B.  536,  541.  Parol  evidence  to 
show  the  actual  intention  is  incompetent.  Tuekerman  v.  Ncwhall, 
17  Mass.  580,  585.     Tlu;  instrument  given  in  this  case  was  a  mere 


SECT.   Ill]  PRICE    V.    BARKER   AND    CLARK  419 

receipt  under  seal  of  money  from  one  of  several  joint  obligors,  in 
full  satisfaction  for  his  liability  on  the  document  signed  by  himself 
and  others.  There  is  nothing  to  get  hold  of  to  show  an  intent  to 
reserve  rights  against  the  others.  He  might  already  have  discharged 
each  of  them  by  a  similar  release.  Exceptions  overruled} 


PKICE,  Public  Officee,  &c.,  v.  BAEKER  AND  CLARK, 
Executors  of  GEORGE  HOPPS 

In  the  Queen's  Bench,  February  22,  1855 

[^Reported  in  4  Ellis  &  Blackburn,  760] 

CoLEKiDGE,  J.,  now  delivered  the  judgment  of  the  Court. 

This  was  an  action  by  the  public  officer  of  a  banking  Company 
against  the  executors  of  George  Hopps.  The  declaration  was  on 
a  bond  conditioned  for  the  security  to  the  bank  of  a  banking  account 
of  one  William  Brown.  The  plea  set  out  the  bond,  which  was  the 
joint  and  several  writing  obligatory  of  the  said  George  Hopps  and 
"William  Brown,  and  then  set  out  a  general  release,  made  after  the 
accruing  of  the  causes  of  action,  and  averred  that  the  release  was 
made  in  the  lifetime  of  the  said  George  Hopps  without  the  privity, 
knowledge,  authority,  or  consent  of  the  said  George  Hopps.  The 
replication  set  out  the  release,  which,  after  general  words  of  release, 
contained  the  following  proviso.  "Provided  always,  that  nothing 
herein  contained  shall  extend,  or  he  deemed  or  construed  to  extend, 
to  prevent  the  said  Banking  Company,  their  successors  or  assigns,  or 
the  partners  for  the  time  being  constituting  the  said  Company," 
"from  suing  or  prosecuting  any  person  or  persons,  other  than  the 
said  William  Brown,  his  executors,  administrators,  or  assigns,  who 
is,  are,  shall  or  may  be  liable  or  accountable  to  pay  or  make  good 
to  the  said  Banking  Company  all  or  any  part  of  any  debt  or  debts, 
eum  or  sums  of  money,  now  due  from  the  said  William  Brown  to 
the  said  Company,  either  as  drawer,  indorser,  or  acceptor  of  any 
bill  or  bills  of  exchange  or  promissory  note  or  notes,  or  as  being 
jointly  or  severally  bound  with  the  said  William  Brown  in  any  bond 
or  bonds,  obligation  or  obligations,  or  other  instrument  whatsoever, 
or  otherwise  howsoever,  as  if  these  presents  had  not  been  executed: 
it  being  understood  and  agreed  that,  as  regards  any  such  suits  or 
prosecutions,  these  presents  shall  not  operate  or  be  pleaded  in  bar, 
or  as  a  release." 

To  this  replication  the  plaintiff  demurred:  and  the  demurrer 
was  argued  before  us  in  the  course  of  the  Term. 

1  ReB.W.  A.,  [1901]  2  K.  B.  642;  Allin  v.  Shadburne,  1  Dana,  68;  Lunt  v.  Stevens, 
24  Me.  534;  Rowley  v.  Stoddard,  7  Johns.  207;  Newcomb  v.  Raynor,  21  Wend.  108; 
Goldbeck  v.  Bank,  147  Pa.  267;  Maslin  v.  Hiett,  37  W.  Va.  15,  ace.  Compare  Wattera 
V.  Smith,  2  B.  &  Ad.  889:  Field  v.  Robins,  8  A.  &  E.  90;  Bender  v.  Been,  78  la.  283; 
Young  V.  Currier,  63  N.  H.  419;   Crafta  v.  Sweeney,  18  R.  I.  730. 


420  PRICE    V.    BARKER   AND   CLARK  [CHAP.    Ill 

On  the  argument  two  questions  arose: 

1st,  Whether  the  general  words  of  the  release  were  restrained  by 
the  proviso,  so  that,  in  order  to  give  effect  to  the  whole  instrument, 
we  must  construe  it  as  a  covenant  not  to  sue,  instead  of  a  release. 

And,  2dly,  Assuming  the  deed  to  operate  merely  as  a  covenant 
not  to  sue,  whether  the  reservation  of  rights  against  other  parties 
than  the  principal  debtor  contained  in  the  proviso  would  prevent 
the  surety  from  being  discharged  by  a  binding  covenant  to  give  time 
to,  or  not  to  sue,  the  principal  debtor. 

To  entitle  the  plaintiff  to  our  judgment,  it  must  appear  that  the 
deed  operated  only  as  a  covenant  not  to  sue,  and  that  the  rights  of 
the  plaintiff  as  against  the  surety  were  preserved  by  the  particular 
reservation  in  question,  notwithstanding  such  covenant  not  to  sue. 

With  regard  to  the  first  question,  two  modes  of  construction  are 
for  consideration.  One,  that,  according  to  the  earlier  authorities, 
the  primary  intention  of  releasing  the  debt  is  to  be  carried  out,  and 
the  subsequent  provision  for  reserving  remedies  against  co-obligors 
and  co-contractors  should  be  rejected  as  inconsistent  with  the  in- 
tention to  release  and  destroy  the  debt  evinced  by  the  general  words 
of  the  release,  and  as  something  which  the  law  will  not  allow,  as 
being  repugnant  to  such  release  and  extinguishment  of  the  debt. 
The  other,  that,  according  to  the  modern  authorities,  we  are  to  mould 
and  limit  the  general  words  of  the  release  by  construing  it  to  be 
a  covenant  not  to  sue,  and  thereby  allow  the  parties  to  carry  out 
the  whole  of  their  intentions  by  preserving  the  rights  against  parties 
jointly  liable.  We  quite  agree  with  the  doctrine  laid  down  by  Lord 
Denman,  in  Nicholson  v.  Revill,  4  A.  &  E.  675,  as  explained  by 
Baron  Parke  in  Kearsley  v.  Cole,  16  M.  &  W.  136,  that  if  the  deed 
is  taken  to  operate  as  a  release,  the  right  against  a  party  jointly 
liable  cannot  be  preserved :  and  we  think  that  we  are  bound  by 
modern  authorities  (see  Solly  v.  Forbes,  2  Br.  &  B.  38;  Thompson 
V.  Lack,  3  Com.  B.  540;  and  Payler  v.  Homersham,  4  M.  &  S.  423) 
to  carry  out  the  whole  intention  of  the  parties  as  far  as  possible, 
by  holding  the  present  to  be  a  covenant  not  to  sue,  and  not  a  release. 
It  is  impossible  to  suppose  for  a  moment  that  the  parties  to  this 
deed  could  have  contemplated  the  extinguishment  of  their  rights  as 
against  parties  jointly  liable.  It  was  argued,  indeed,  that  the  par- 
ticular words  of  the  proviso  in  the  present  case  prevented  this  con- 
struction by  appearing  to  recognize  that  Brown  was  not  to  be  sued, 
and  that,  in  an  action  against  him,  the  deed  was  to  operate  as  a 
release  and  might  be  pleaded  at  bar.  The  words,  however,  that  the 
proviso  was  not  to  extend  to  prevent  the  bank  from  suing  or  prose- 
cuting any  person  or  persons  other  than  the  said  defendant  or  his 
representatives,  which  were  said  to  show  that  Brown  was  not  to 
be  sued,  arr;  quite  as  applicable  to  a  covenant  not  to  sue  as  to  a  re- 
lease;  and   the  latcir  general   words   in    the  conclusion  of  the  deed 


SECT.    Ill]  PRICE    V.    BARKER   AND    CLARK  421 

"that,  as  regards  any  such  suits  or  prosecutions"  (against  parties 
jointly  liable),  ''these  presents  shall  not  operate  or  be  pleaded  in 
bar,"  are,  we  think,  like  the  words  of  actual  release,  too  general  to 
prevent  us  by  inference  from  giving  effect  to  the  plainly  expressed 
intention  that  the  parties  jointly  liable  should  not  be  discharged  by 
an  extinguishment  of  the  debt.  If,  therefore,  the  testator,  whom 
the  defendants  represent,  had  been  in  the  situation  of  co-obligor 
merely  we  should  think  that  he  was  not  discharged  by  the  deed. 

It  remains,  however,  in  the  second  place,  to  consider  what  effect 
the  deed  had  upon  his  liabilities  in  reference  to  his  relations  as  surety 
for  Brown,  the  principal  debtor.  It  was  thrown  out,  indeed,  in  ar- 
gument, that  we  were  bound  to  consider  him  as  a  principal  debtor 
and  not  as  a  surety  upon  this  bond,  the  obligatory  part  of  the  bond 
being  joint  and  several  without  any  reference  to  either  being  surety 
or  principal.  But,  for  the  purpose  of  seeing  the  relation  of  the 
parties,  we  must  look  at  the  condition  of  the  bond,  as  set  out  upon 
the  pleadings,  which  plainly  discloses  that  the  defendant  was  a  surety 
for  the  liabilities  of  Brown. 

If  the  question,  whether  a  covenant  not  to  sue,  qualified  by  such 
a  proviso  as  that  in  the  present  case,  and  entered  into  by  the  creditor 
without  the  consent  of  the  surety,  discharges  the  surety,  were  a  new 
one  unaffected  by  authority,  we  should  pause  before  deciding  that 
such  a  case  does  not  fall  within  the  general  rule  of  the  creditor  dis- 
charging a  surety  by  entering  into  a  binding  agreement  to  give  time 
to  his  principal  debtor;  and  we  should  have  thought  the  forcible 
observations  of  Lord  Truro  in  the  recent  case  of  Owen  v.  Homan, 
3  Macn.  &  G.  378,  entitled  to  much  consideration.  We  find,  how- 
ever, that  the  Court  of  Exchequer  in  a  solemn  and  well-considered 
judgment,  in  the  case  of  Kearsley  v.  Cole,  16  M.  &  W.  128,  136, 
after  referring  to  all  the  authorities,  states  that  the  point  must  "be 
considered  as  settled"  :  ^ 

It  seems  to  be  the  result  of  the  authorities  that  a  covenant  not 
to  sue,  qualified  by  a  reserve  of  the  remedies  against  sureties,  is  to 
allow  the  surety  to  retain  all  his  remedies  over  against  the  princi- 
pal debtor;  and  that  the  covenant  not  to  sue  is  to  operate  only  so 
far  as  the  rights  of  the  surety  may  not  be  affected. 

Probably  many  deeds  of  this  nature  are  framed  continually  on  the 
supposition  that  the  law  has  been  supposed  to  be  settled,  in  the  man- 
ner stated  in  the  Exchequer,  since  the  time  of  Lord  Eldon :  and  Ave 
think  that,  sitting  as  a  Court  of  coordinate  jurisdiction  with  the 
Exchequer,  we  ought  not  to  disturb  the  law  stated  by  them  in  a 
solemn  judgment  to  be  clearly  settled. 

Our  judgment,  therefore,  upon  the  demurrer  in  the  present  case 
is  in  favor  of  the  plaintiff.  Judgment  for  the  plaintiff."^ 

^  A  portion  of  the  opinion  is  here  omitted. 

2  See  also  Willis  v.  De  Castro,  4  C.  B.  N.  s.  216;  Bateson  v.  Gosling,  L.  R.  7  C.  P. 
9;   Craeoe  v.  .Tones,  L.  R.  8  Ex.  81;   Line  v.  Nelson,  38  N.  J.  L.  358. 

In  New  York  Bank  Note  Company  v.  Kidder  Press  Mfg.  Co.  192  Mass.  391,  408,  the 


422  DAVIS    V.    VAN   BUREN  [CHAP.    Ill 

MARTIN  V.  CEUMP 

In  the  King's  Bench,  Easter  Teem,  1698 

{^Re-ported  in  2  Salkeld,  444] 

Two  joint  merchants  make  B  their  factor;  one  dies,  leaving  an 

executor;  this  executor  and  the  survivor  cannot  join,  for  the  remedy 

survives,  hut  not  the  duty;  and  therefore  on  recovery  he  must  be 

accountable  to  the  executor  for  that/ 


CHARLES  H.  DAVIS  et  al,  Appellants,  v.  MYNDERT  VAN 
BUREN,  Executor,  etc.,  Respondent 
New  York  Court  of  Appeals,  February  18-22,   1878 
[Reported  in  72  New  YorTc,  587] 
Per  Curiam.     One  Bixbee  was  arrested  at  the  suit  of  the  plain- 
tiffs, in  an  action  commenced  against  him  by  them  in  the  New  York 
Common  Pleas,  and  to  procure  his  discharge  from  such  arrest,  he. 

Court  said:  "Although  the  breach  of  the  contract  in  itself  was  not  a  tort,  it  was  entitled 
to  but  one  satisfaction  of  damages,  whether  obtained  by  compromise  when  unliquidated 
or  by  payment  after  the  amount  has  been  ascertained  and  adjudicated.  Vanuxem  v. 
Burr,  151  Mass.  386,  388,  389.  In  Stimpson  v.  Poole,  141  Mass.  502,  505,  it  was 
said  '  money  paid,  which  is  to  be  in  full  for  an  unliquidated  or  a  disputed  claim,  is 
taken  in  discharge  of  it,  and  constitutes  a  full  defence  against  any  further  assertion  of 
the  claim.  What  has  been  received  is  in  law  deemed  to  be  a  satisfaction  of  the  claim.' 
That  the  Hamilton  company  [a  co-obliger  of  the  defendant,  from  which  the  plaintiff 
had  accepted  a  sum  of  money  by  way  of  compromise,  and  to  which  the  plaintiff  had 
given  a  release  with  a  reservation  of  rights  against  the  defendant]  in  fact  might  not 
have  been  liable  to  respond  does  not  affect  the  adjustment  or  the  application  of  the 
payment.  Leddy  v.  Barney,  139  Mass.  394,  307.  If  the  reservation  by  the  releasor 
that  it  did  not  relinquish  its  claim  against  the  defendant  corporation  prevents  the  re- 
lease from  being  a  full  discharge,  the  receipt  of  a  partial  payment  likewise  is  to  be 
treated  as  a  partial  satisfaction  which  the  plaintiff  must  apply  in  reduction  of  the  sum 
awarded  by  the  decree.  Brown  v.  Cambridge,  3  Allen,  474,  476.  Wood  v.  Mann,  125 
Mass.  319.     Hudson  v.  Baker,  185  Mass.  122,  125." 

'  Survivorship  in  the  case  of  a  joint  rif^ht  is  illustrated  in  Anderson  v.  Martindale; 
1  East,  497;  Trummell  v.  Harndl,  4  Ark.  602;  McLeod  v.  Scott,  38  Ark.  72,  76;  Su- 
preme Lodge  V.  Portingall,  167  111.  291;  Vandenhauvel  v.  Storrs,  3  Conn.  203;  IncUana, 
&c.  Ry.  Co.  V.  Adamson,  114  Ind.  282;  Needham  v.  Wright,  140  Ind.  190,  198;  Mc- 
Calla  V.  Rigg,  3  A.  K.  Marsh.  259;  Peters  v.  Davis,  7  Mass.  257;  Hedderly  v.  Downs, 
31  Minn.  183. 

Illustrations  of  the  doctrine  of  survivorship  in  the  case  of  a  joint  Hability  may  be 
found  in  Richardson  v.  Horton,  6  Beav.  185;  Murphy's  Adm.  v.  Branch  Bank,  5  Ala. 
421;  Bundy  v.  Williams.  1  Root,  543;  Bulkly  v.  Wright,  2  Root,  10;  Ballance  v. 
Bamuel,  4  111.  380;  Moore  v.  Rogers,  19  111.  .347;  Eggleston  v.  Buck,  31  111.  254;  Cum- 
mings  V.  People,  .50  111.  1.32;  Stevens  v.  Catlin,  1.52  111.  56;  Clark  v.  Parish,  1  Bibb, 
547;  Now  Haven,  &c.  Co.  v.  Haydon,  119  M,a.ss.  .361;  Tucker  v.  Utley,  168  Mass.  415; 
Fuller  V.  Wilbur,  170  Mass.  .506;  Murray  v.  Mimiford,  6  Cow.  441;  Bradley  v.  Bur- 
well,  3  Denio,  61.  Comins  ?'.  Pottle,  22  Ilim,  287;  Wood  v.  Fi.sk,  63  N.  Y.  245;  Doug- 
lass V.  Ferris,  138  N.  Y.  192,  207;  Biirgoyne  v.  Ohio  Life  Ins.  Co.,  5  Ohio  St.  586, 
Kennedy  v.  Carpenter,  2  Whart.  344,  361. 

But  the  estate  of  a  d<!ceased  joint  contractor  has  been  m.ade  lial)le  in  many  states 
by  Htatutf-.  Rf.(;d  V.  Rummers,  79  Ala.  522.  524;  Stevens  v.  Catlin,  152  111.  .56;  Clark 
V.  Parish,  1  Bibb,  .547;  Foster  v.  Hooper,  2  Mass.  .572;  Martin  v.  Hunt,  1  Allen,  418; 
New  Haven,  &r.  Co.  v.  Hayden,  119  M.ass.  .361;  Cohl)  v.  Fogg,  166  Mnm.  466,  476; 
Suydam  v.  BarV)fT,  18  N.  Y.  468;  Bunroyne  ?».  Ohio  Life  Ins.  Co.,  5  Ohio  St.  .586;  Weil 
V.  Cnerin,  42  Ohio  St.  299,  302;  Eckert  v.  Myers,  45  Ohio  St.  525;  Taylor  v.  Taylor, 
6  Humph.  110;   Chadwick  v.  Hopkins,  4  Wyo.  379. 


SECT.     Ill]  DAVIS     V.     VAN     BUREN  423 

Benjamin  G.  Bloss  and  Jordan  Mott,  defendant's  testator,  executed 
an  undertaking  as  required  by  section  187  of  the  old  Code.  There 
was  default  in  the  undertaking,  and  the  plaintiffs  then  caused  a 
summons  to  be  issued  in  this  action  against  Bloss  and  Mott,  which 
was  served  on  Bloss;  before  it  could  be  served  on  Mott,  he  died. 
Bloss  was  afterwards  discharged  in  bankruptcy,  and  the  defendant, 
as  executor  of  Mott,  was  substituted,  and  the  action  continued  against 
him. 

The  undertaking  is  a  joint  obligation.  It  is  so  in  terms,  and  we 
cannot  interpolate  into  it  words  of  severalty.  It  could  have  been 
made  joint  and  several,  but  it  was  not.  Bloss  and  Mott  were  sureties. 
They  did  not  assume  a  principal  obligation;  they  undertook  for 
another;  they  had  no  interest  except  as  sureties,  and  were  entitled 
to  all  the  right  of  sureties.  This  case  cannot,  therefore,  be  distin- 
guished from  Wood  v.  Fisk  (63  N.  Y.,  245),  and  the  defendant,  as 
the  representative  of  Mott,  cannot  be  held.  It  is  a  rule  of  the  com- 
mon law,  too  long  settled  to  be  disturbed,  that  if  a  joint  obligor  dy- 
ing be  a  surety,  not  liable  for  the  debt  irrespective  of  that  joint  obli- 
gation, his  estate  is  absolutely  discharged,  both  at  law  and  in  equity, 
the  survivor  only  being  liable.  Towers  v.  Moore,  2  Vern.  98 ;  Simp- 
son V.  Vaughan,  2  Atk.  31 ;  Bradley  v.  Burwell,  3  Denio,  61 ;  Bichter 
V.  Pappenhausen,  42  N.  Y.  393;  Pickersgill  v.  Tohms,  15  Wall.  140; 
Getty  V.  Binsse,  49  N.  Y.  388;  Eisley  v.  Brown,  67  id.  160. 

However  unjust  this  rule  may  be  in  its  general  operation  we  have 
no  right  to  abrogate  it.  We  must  enforce  it  whenever  it  is  applicable, 
and  leave  to  the  law-making  power  any  needed  change. 

The  judgment  must  be  affirmed. 

All  concur.  Judgment  affirmed} 

^  Compare  Richardson  v.  Horton,  6  Beav.  185. 

"The  sole  ground  upon  which  the  appellants  deny  the  right  of  the  respondents  to 
share  in  the  assigned  estate  is  that,  by  the  death  of  the  assignor,  he  being  a  mere 
surety,  the  liability  upon  his  guaranty  was  extinguished,  and  they  ceased  to  have  any 
claim  upon  his  estate;  and  the  appellants  reply  for  their  contention  upon  the  principle 
laid  down  in  United  States  v.  Price,  9  How.  [U.  S.]  90;  Getty  v.  Binsse,  49  N.  Y.  385; 
Wood  V.  Fisk,  63  id.  245;   Risley  v.  Brown,  67  id.  160,  and  kindred  cases. 

"It  is  undoubtedly  the  rule  that  in  case  of  a  joint  obhgation  of  sureties,  if  one  of 
the  obligors  die,  his  representatives  are,  at  law,  discharged,  and  the  survivor  alone 
can  be  sued;  but  that  where  the  joint  obligors  were  all  principal  debtors,  or  received 
some  benefit  from  the  joint  obligation,  courts  of  equity  have  taken  jurisdiction  in  the 
case  of  the  death  of  one  of  the  obligors,  and  enforced  the  obligation  against  his  repre- 
sentatives. The  ground  upon  which  those  courts  have  proceeded  is  that  in  conscience 
the  estate  of  the  deceased  obligor  ought  to  respond  to  the  obligation;  and  they  have 
given  relief  in  all  cases  where,  in  consequence  of  a  primary  liability  on  the  part  of 
the  deceased  obligor,  or  of  a  benefit  received  by  him  from  the  joint  obligation,  it  was 
morally  and  equitably  just  that  his  estate  should  be  made  liable,  and  unconscionable 
that  it  should  be  discharged.  But  it  has  been  a  rule  in  courts  of  equity  that  where 
the  deceased  joint  obligor  was  a  mere  surety,  receiving  no  benefit  from  the  obligation, 
and  having  no  interest  therein,  except  as  surety,  his  estate,  in  case  of  his  death,  is 
discharged  from  liability.  This  rule,  in  such  cases,  rests  upon  the  ground  that  the 
surety  is  not  bound  in  morals  or  good  conscience  to  pay,  except  in  accordance  with 
the  strict  letter  of  his  obligation,  and  that  being  discharged  therefrom  at  law,  there  is 
no  room  for  the  interference  of  equity  upon  principles  of  natural  justice  by  them 
administered.  The  reasoning  upon  which  the  exemption  of  the  deceased  surety's 
estate  from  liability  is  founded,  though  sanctioned  by  numerous  cases,  is  not  very  con- 
vincing, and  has  not  always  been  viewed  by  judges  and  jurists  with  favor. 


424         osBORN  V.  Martha's  vineyard  r.  r.  co.     [chap,  hi 


SAMUEL  OSBORN,  Jr.,  and  Others  v.  MARTHA'S  VINEYARD 
RAILROAD  COMPANY 

Supreme  Judicial  Court  of  Massachusetts,  October  27,  1885- 
January  11,  1886 

[Reported  in  140  Massachusetts,  549] 

Gardner,  J.  This  action  was  originally  commenced  by  Samuel 
Osborn,  Jr.,  one  of  the  plaintiffs.  After  the  trial  of  the  case  Os- 
born  moved  to  amend  his  writ  by  adding,  as  joint  plaintiffs  with 
him,  Shubael  L.  Norton,  and  Nathaniel  M.  Jernegan,  which  motion 
was  allowed.  The  action  then  proceeded  upon  the  allegation  in  their 
declaration,  that  the  defendant  owed  the  three  plaintiffs  $600,  ac- 
cording to  the  account  annexed,  which  was  for  twenty  tons  of  iron 
rails  at  $30  per  ton,  giving  credit  for  $400,  paid  to  Norton  and  Jer- 
negan. 

The  first  question  which  arises  is  whether  the  contract  made  by 
the  plaintiffs  with  the  defendant  was  joint  or  several.  The  report 
finds  that  the  three  plaintiffs  purchased  twenty  tons  of  iron  rails  in 
their  own  names,  giving  a  promissory  note,  signed  by  the  three,  to 
the  vendor  therefor.  In  this  purchase,  there  was  no  reference  to 
any  separate  interest  of  the  purchasers  in  the  iron  rails,  and  they 
became  joint  owners  thereof.  They  then  sold  the  rails  to  the  de- 
fendant, making  no  reservation  of  any  single  interest  in  any  one 
of  the  vendors.  The  defendant  promised  jointly,  not  separately,  to 
pay  the  three  plaintiffs  the  price  therefor.  This  contract  was  joint, 
the  several  payees  having  therein  a  joint  interest,  so  that  no  one 
could  sue  for  his  proportion.  When  they  jointly  undertook  to  sell 
the  rails  in  one  mass  to  the  defendant,  they  held  themselves  out  to 
be  joint  owners,  voluntarily  assuming  that  relation  to  the  property 
sold  to  the  defendant.  The  contract  became  a  joint  contract,  the 
plaintiffs  being  joint  creditors,  not  several,  of  the  defendant.  2  Chit. 
Cont.  (11th  Am.  ed.)  1340.  The  three  owners  represented,  in  effect, 
that  they  had  a  common  interest  in  the  property,  without  any  dif- 


"It  is  difficult  to  porcoivo  why  the  estate  of  a  surety  who  was  a  joint  oblisor  upon, 
whose  crerlit  and  responsibility,  mainly,  the  ohliffce  loaned  his  money,  should  be  dis- 
charged by  the  death  of  the  surety.  It  would  seem  that  in  good  conscience  and  sound 
morals,  and  upon  principles  of  nsitural  justice,  it  should  respond,  and  bear  the  loss, 
if  any,  rather  than  the  obligee  who  trusted  the  surety.  But  it  has  been  quite  uni- 
formly held  that  the  mere  joint  obligation  of  the  deceased  surety  is  not  sufficient  to 
create  an  equity  against  his  estate. 

"In  all  the  cases  which  have  come  under  my  observation  where  it  has  been  held 
that  death  discharged  the  obligation  of  a  joint  surety,  it  appeared  that  the  joint 
obli'.?or  was  a  mere  surety,  who  received  no  Ix-nefit  whatever  from  the  joint  obliga- 
tion. The  cases  to  be  found  in  the  books  are  generally  those  of  joint  accommodation 
indorsers  of  notes,  joint  suretic^s  upon  official  bonds,  or  upon  undertakings  given  on 
appeal,  or  mere  sureties  upon  other  instruments  of  a  similar  nature."  Richardson  v. 
Draper,  H7  N.  Y.  .H:i7,  :U4. 

See  aUo  Douglass  v.  Ferris.  138  N.  Y.  192,  207. 


SECT.    Ill]         OSBORN    V.    MARTHA's   VINEYARD   R.   R,    CO.  425 

ference  in  their  respective  interests  and  possessions,  and  that  pay- 
ment was  to  be  made  of  the  entire  sum. 

The  two  plaintiffs  Norton  and  Jernegan,  in  behalf  of  themselves 
and  of  Osborn,  settled  with  the  defendant  for  the  amount  due,  in 
full  payment  and  satisfaction  of  their  demand,  receiving  as  pay- 
ment in  part  money  and  in  part  shares  of  stock  in  the  defendant 
corporation.  The  plaintiff  Osborn  insists  that  he  is  not  bound  by 
this  settlement  and  that,  in  the  name  of  the  three  vendors,  he  can 
recover  in  money  that  portion  of  the  original  indebtedness  to  which, 
as  between  himself  and  his  associates,  he  was  entitled. 

The  interest  of  the  three  plaintiffs  in  their  joint  claim  against  the 
defendant  was  such  that  each  had  an  interest  in  the  entire  claim. 
One  of  them  had  not  only  an  interest  in  the  third  which  might  be 
his  share,  but  also  in  the  two  thirds  belonging  to  the  others.  It  has 
been  settled  in  this  action  that  one  cannot  maintain  an  action  for 
his  share;  the  three  must  join  in  the  suit,  because  each  one  has  a 
joint  interest  in  the  entire  amount  due  them,  and  in  every  part  there- 
of. Osborn  is  debarred  from  bringing  suit  for  his  third  part,  be- 
cause Norton  and  Jernegan  own  that  third  as  fully  as  does  Osborn. 
Each  having  such  an  interest  in  the  debt  due,  one  being  unable  to 
sue  for  the  whole  or  his  share  thereof,  it  follows  that  each  one,  being 
interested  in  the  entire  claim,  can  settle  it  with  the  defendant.  Each 
of  the  three,  by  the  manner  of  their  dealing  with  the  defendant  and 
with  the  property,  has  effectually  authorized  his  partners  in  the 
contract  to  dispose  of  his  interest  by  payment,  settlement,  or  accord 
and  satisfaction,  and  to  release  the  defendant  from  its  obligation 
under  the  contract.     1  Pars.  Cont.  25. 

In  this  case  there  was  no  formal  release  by  writing  under  seal. 
The  plaintiffs  Norton  and  Jernegan,  upon  the  settlement,  "gave  the 
"defendant  a  receipted  bill  of  the  demand  for  the  price  of  the  rails 
and  interest."  The  delivery  of  the  shares  of  stock  by  the  defendant 
to  the  plaintiffs,  and  the  payment  of  the  money  were  accepted  in 
satisfaction  and  payment  of  the  debt.  It  was  an  accord  and  satis- 
faction unconditional,  actually  executed  and  accepted.  This  oper- 
ates to  release  the  defendant  from  further  liability  upon  the  contract. 
No  particular  form  of  words  is  necessary  to  constitute  a  valid  re- 
lease. "Any  words  which  show  an  evident  intention  to  renounce 
the  claim  upon,  or  to  discharge,  the  debtor  are  sufficient."  2  Chit. 
Cont.  (11th  Am.  ed.)  1146.  The  plaintiff  Osborn  in  his  argument 
has  not  urged  that  this  settlement  was  not  in  effect  a  release.  If 
this  transaction  between  the  parties,  if  assented  to  by  all  who  par- 
ticipated in  it,  was  such  as  to  release  the  defendant  from  all  liability 
to  Norton  and  Jernegan,  of  which  there  is  no  contention,  then  it 
follows  that  the  release  of  two  was  the  release  of  all.  When  there 
is  such  a  unity  of  interest  as  to  require  a  joinder  of  all  the  parties 
interested  in  a  personal  action,  the  release  of  one  is  as  effectual  as 
the  release  of  all.  Austin  v.  Hall,  13  Johns.  286;  Decker  v.  Living- 
ston, 15  Johns.  479. 


426         OSBORN  V.  Martha's  vineyard  r.  r.  co.     [chap,  hi 

In  this  case,  fraud  is  not  set  up,  nor  is  there  any  suggestion  of 
fraud  in  the  transaction.  The  settlement  was  in  effect  an  accord 
and  satisfaction,  which  operates  as  a  release.  Wallace  v.  Kelsall, 
7  M.  &  W.  264,  272. 

The  settlement  made  by  Norton  and  Jernegan  with  the  defendant 
released  the  defendant  from  further  liability  upon  its  contract  with 
the  plaintiffs,  and  the  action  cannot  be  maintained.  By  the  terms 
of  the  report  there  must  be  Judgment  for  the  defendant.^ 

1  Wallace  v.  Kelsall,  7  M.  &  W.  264;  Husband  v.  Davis,  10  C.  B.  645,  ace.  Simi- 
larly a  release  by  one  joint  creditor  discharges  the  right  of  aU.  Rawstorne  v.  Gandell, 
M.  &  W.  304;  Myrick  v.  Dame,  9  Gush.  248;  Napier  v.  McLeod,  9  Wend.  120.  As 
to  the  rule  in  equity,  see  Piercy  v.  FVnney,  L.  R.  12  Eq.  69;  Steeds  v.  Steeds,  22 
Q.  B.  D.  537;   PoweU  v.  Brodhurst,  [1901]  2  Ch.  160. 

Joint  obligations  have  been  much  discussed  in  the  civil  law.  See  the  French  Code 
Civil,  Arts.  1197-1216;  the  German  Biirgerliches  Gesetzbuch,  §§420-432;  Wind- 
scheid,  Pandektenrecht,   §  292  seq. 


CHAPTER  IV 

THE   STATUTE  OF   FRAUDS  ^ 


ACT  OF  29  CHAELES  II  Chaptek  3   (1676) 

ly.  And  be  it  further  enacted  by  the  authority  aforesaid,  That 
from  and  after  the  said  four  and  twentieth  day  of  June  no  action 
shall  be  brought  whereby  to  charge  any  executor  or  administrator 
upon  any  special  promise,  to  answer  damages  out  of  his  own  estate; 

(2)  or  whereby  to  charge  the  defendant  upon  any  special  promise 
to  answer  for  the  debt,  default  or  miscarriages  of  another  person;, 

(3)  or  to  charge  any  person  upon  any  agreement  made  upon  con- 
sideration of  marriage;  (4)  or  upon  any  contract  or  sale  of  lands, 
tenements  or  hereditaments,  or  any  interest  in  or  concerning  them*,, 
(5)  or  upon  any  agreeement  that  is  not  to  be  performed  within  the 
space  of  one  year  from  the  making  thereof;  (6)  unless  the  agreement 
upon  which  such  action  shall  be  brought,  or  some  memorandum  or 
note  thereof,  shall  be  in  writing,  and  signed  by  the  party  to  be 
charged  therewith,  or  some  other  person  thereunto  by  him  lawfully 
authorized. 

XYII.  And  be  it  further  enacted  by  the  authority  aforesaid,  That 
from  and  after  the  said  four  and  twentieth  day  of  June  no  contract 
for  the  sale  of  any  goods,  wares  and  merchandizes,  for  the  price  of 
ten  pounds  sterling  or  upwards,  shall  be  allowed  to  be  good,  except 
the  buyer  shall  accept  part  of  the  goods  so  sold,  and  actually  receive 
the  same,  or  give  something  in  earnest  to  bind  the  bargain,  or  in 
part  of  payment,  or  that  some  note  or  m,emorandum  in  writing  of 
the  said  bargain  be  made  and  signed  by  the  parties  to  be  charged 
by  such  contract,  or  their  agents  thereunto  law^fully  authorized. 


WAKNER  v.  TEXAS  AND  PACIFIC  RAILWAY  COMPANY 

United  States  Supreme  Court,  May  S-lSTovember  30,  1896 

[Reported  in  164  United  States,  418] 

This  was  an  action  brought  May  9,  1892,  by  "Warner  against  the 
Texas  and  Pacific  Railway  Company,  a  corporation  created  by  the 

^  As  the  other  contracts  within  the  statute  and  the  means  of  satisfj-ing  it  are  cus^- 
tornarily  dealt  with  in  connection  with  other  subjects  than  contracts,  cases  are  here 
included  only  upon  clause  (5)  of  Section  IV. 

427 


428  WARNER    V.    TEXAS   AND   PACIFIC   RY.    CO.        [CHAP.    IV 

laws  of  the  United  States,  upon  a  contract  made  in  1874,  by  whicli 
it  was  agreed  between  the  parties  that  if  the  plaintiff  would  grade 
the  ground  for  a  switch,  and  put  on  the  ties,  at  a  certain  point  on 
the  defendant's  railroad,  the  defendant  would  put  down  the  rails  and 
maintain  the  switch  for  the  plaintiff's  benefit  for  shipping  purposes 
as  long  as  he  needed  it.  The  defendant  pleaded  that  the  contract 
was  oral,  and  within  the  statute  of  frauds,  because  it  was  "not  to 
be  performed  within  one  year  from  the  making  thereof,"  and  be- 
cause it  was  "a  grant  or  conveyance  by  this  defendant  of  an  estate 
of  inheritance,  and  for  a  term  of  more  than  one  year,  in  lands." 

At  the  trial,  the  plaintiff,  being  called  as  witness  in  his  own  be- 
half, testified  that  prior  to  the  year  1874  he  had  been  engaged  in 
the  lumbering  and  milling  business  in  Iowa  and  in  Arkansas,  and 
in  contemplation  of  breaking  up  and  consolidating  his  business,  came 
to  Texas,  and  selected  a  point,  afterwards  known  as  Warner's 
Switch,  as  a  suitable  location,  providing  he  could  obtain  transporta- 
tion facilities ;  that  he  found  at  that  point  an  abundance  of  fine  pine 
timber,  and  three  miles  back  from  the  railroad,  a  stream,  known  as 
Big  Sandy  Creek,  peculiarly  adapted  to  floating  logs,  and  lined  for 
many  miles  above  with  pine  timber;  that  in  1874  the  defendant's 
agent,  after  conversing  with  him  about  his  experience  in  the  lumber 
business,  the  capacity  of  his  mill,  and  the  amount  of  lumber  acces- 
sible from  the  proposed  location,  made  an  oral  contract  with  him 
by  which  it  was  agreed  that  if  he  would  furnish  the  ties  and  grade 
the  ground  for  the  switch,  the  defendant  would  put  down  the  iron 
rails  and  maintain  the  switch  for  the  plaintiff's  benefit  for  shipping 
purposes  as  long  as  he  needed  it;  that  the  plaintiff  immediately 
graded  the  ground  for  the  switch,  and  got  out  and  put  down  the 
ties,  and  the  defendant  put  down  the  iron  rails  and  established  the 
switch;  and  that  the  plaintiff,  on  the  faith  of  the  continuance  of 
transportation  facilities  at  the  switch,  put  up  a  large  saw-mill, 
bought  many  thousand  acres  of  land  and  timber  rights  and  water 
privileges  of  Big  Sandy  Creek,  made  a  tram  road  three  miles  long 
from  the  switch  to  the  creek,  and  otherwise  expended  large  sums  of 
money,  and  sawed  and  shipped  large  quantities  of  lumber,  until  the 
defendant,  on  May  19,  1887,  while  its  road  was  operated  by  re- 
ceivers, tore  up  the  iwitch  and  ties,  and  destroyed  his  transportation 
facilities,  leaving  his  lands  and  other  property  Avithout  any  connec- 
tion with  the  railroad.  His  testimojiy  also  tended  to  prove  that  he 
had  tbeniby  b(!en  injured  to  the  amount  of  more  than  $50,000,  for 
which  the  defendant  was  liable,  if  the  contract  sued  on  was  not  within 
the  statute  of  frauds. 

On  cross-examination,  tlu;  plaint  iff  testified  that,  when  he  made 
th(!  contract,  he  expected  to  engiigc  in  the  manufacture  of  lumber  at 
this  place  for  more  than  one  year,  and  to  stay  there,  and  to  have  a 
site  for  lumber  there  as  long  as  he  livcfl ;  and  that  he  told  the  defend- 
ant's agent,  in  th(!  conversation  between  them  at  the  time  of  making 


CHAP.    IV]  WAKNER    V.    TEXAS   AND   PACIFIC   RY.    CO.  429 

the  contract,  that  there  was  lumber  enough  in  sight  on  the  railroad 
to  run  a  mill  for  ten  years,  and  by  moving  back  to  the  creek  there 
would  be  enough  to  run  a  mill  for  twenty  years  longer. 

No  other  testimony  being  offered  by  either  party,  bearing  upon 
the  question  whether  the  contract  sued  on  was  within  the  statute  of 
frauds,  the  Circuit  Court,  against  the  i>laintiff's  objection  and  ex- 
ception, ruled  that  the  contract  was  within  the  statute,  instructed 
the  jury  to  find  a  verdict  for  the  defendant,  and  rendered  judgment 
thereon,  which  was  affirmed  by  the  Circuit  Court  of  Appeals,  upon 
the  ground  that  the  contract  was  within  the  statute  of  frauds,  as  one 
not  to  be  performed  within  a  year,  13  U.  S.  App.  236.  The  plain- 
tiff sued  out  this  writ  of  error. 

Mr.  Horace  CliUton,  for  plaintiff  in  error. 

Mr.  John  F.  Dillon,  for  defendant  in  error.  Mr.  Winslow  S.  Pierce 
and  Mr.  David  D.  Duncan  were  on  his  brief. 

Mr.  Justice  Geay,  after  stating  the  case,  delivered  the  opinion  of 
the  court. 

The  statute  of  frauds  of  the  State  of  Texas,  reenacting  in  this 
particular  the  English  statute  of  29  Car.  II.  c.  3,  §  4  (1677),  pro- 
vides that  no  action  shall  be  brought  "upon  any  agreement  which 
is  not  to  be  performed  within  the  space  of  one  year  from  the  making 
thereof,"  unless  the  "agreement  upon  which  such  •  action  shall  be 
brought,  or  some  memorandum  or  note  thereof,  shall  be  in  writing 
and  signed  by  the  party  to  be  charged  therewith,  or  by  some  person 
by  him  thereunto  lawfully  authorized."  Texas  Stat.  January  18, 
1840;  1  Paschal's  Digest  (4th  ed.),  art.  3875,  Eev.  Stat,  of  1879, 
art.  2464;  Bason  v.  Hughart,  2  Tex.  476,  480. 

This  case  has  been  so  fully  and  ably  argued,  and  the  construction 
of  this  clause  of  the  statute  of  frauds  has  so  seldom  come  before  this 
court,  that  it  will  be  useful,  before  considering  the  particular  con- 
tract now  in  question,  to  refer  to  some  of  the  principal  decisions  upon 
the  subject  in  the  courts  of  England,  and  of  the  several  States. 

In  the  earliest  reported  case  in  England  upon  this  clause  of  the 
statute,  regard  seems  to  have  been  had  to  the  time  of  actual  per- 
formance, in  deciding  that  an  oral  agreement  that  if  the  plaintiff 
would  procure  a  marriage  between  the  defendant  and  a  certain  lady, 
the  defendant  would  pay  him  fifty  guineas,  was  not  within  the 
statute;  Lord  Holt  saying:  "Though  the  promise  depends  upon  a 
contingent,  the  which  may  not  happen  in  a  long  time,  yet  if  the 
contingent  happen  within  a  year,  the  action  shall  be  maintainable, 
and  is  not  within  the  statute."  Erancam  v.  Eoster  (1692),  Skinner, 
326;  s.  c.  Holt,  25. 

A  year  later,  another  case  before  Lord  Holt  presented  the  question 
whether  the  words  "agreement  not  to  be  performed  within  one  year" 
should  be  construed  as  meaning  every  agreement  which  need  not  be 
performed  within  the  year,  or  as  meaning  only  an  agreement  which 
could  not  be  performed  within  the  year,  and  thus,  according  as  the 


430  WARNER    V.    TEXAS   AND   PACIFIC   RY.    CO.        [CHAP.    IV 

one  or  the  other  construction  should  be  adopted,  including  or  ex- 
cluding an  agreement  which  might  or  might  not  be  performed  within 
the  year,  without  regard  to  the  time  of  actual  performance.  The 
latter  was  decided  to  be  the  true  construction. 

That  was  an  action  upon  an  oral  agreement,  by  which  the  de- 
fendant promised  for  one  guinea  paid,  to  pay  the  plaintiff  so  many 
at  a  day  of  his  marriage;  and  the  marriage  did  not  happen  within 
the  year.  The  case  was  considered  by  all  the  judges.  Lord  Holt 
"was  of  opinion  that  it  ought  to  have  been  in  writing,  because  the 
design  of  the  statute  was,  not  to  trust  to  the  memory  of  witnesses 
for  a  longer  time  than  one  year."  But  the  great  majority  of  the 
judges  were  of  opinion  that  the  statute  included  those  agreements 
only  that  were  impossible  to  be  performed  within  the  year,  and  that 
the  case  was  not  within  the  statute,  because  the  marriage  might  have 
happened  within  a  year  after  the  agreement;  and  laid  down  this 
rule:  "Where  the  agreement  is  to  be  performed  upon  a  contingent, 
and  it  does  not  appear  within  the  agreement  that  it  is  to  be  per- 
formed after  the  year,  then  a  note  in  writing  is  not  necessary,  for 
the  contingent  might  happen  within  the  year;  but  where  it  appears 
by  the  whole  tenor  of  the  agreement  that  it  is  to  be  performed  after 
the  year,  there  a  note  is  necessary."  Peter  v.  Compton  (1693), 
Skinner,  35-3;  s.  c.  Holt,  326;  s.  c.  cited  by  Lord  Holt  in  Smith  v. 
Westall  1  Ld.  Eaym.  316,  317;  Anon.,  Comyns,  49,  50;  Comberbach, 
463. 

Accordingly  about  the  same  time,  all  the  judges  held  that  a  promise 
to  pay  so  much  money  upon  the  return  of  a  certain  ship,  which 
ship  happened  not  to  return  within  two  years  after  the  promise  made, 
was  not  within  the  statute,  "for  that  by  possibility  the  ship  might 
have  returned  within  a  year;  and  although  by  accident  it  happened 
not  to  return  so  soon,  yet,  they  said,  that  clause  of  the  statute  ex- 
tends only  to  such  promises  where,  by  the  express  appointment  of 
the  party,  the  thing  is  not  to  be  performed  within  a  year."  Anon., 
1  Salk.  280. 

Again,  in  a  case  in  the  King's  Bench  in  1762,  an  agreement  to 
leave  money  by  will  was  held  not  to  be  within  the  statute,  although 
uncertain  as  to  the  time  of  performance.  Lord  Mansfield  said  that 
the  law  was  settled  by  the  earlier  eases,  Mr.  Justice  Denison  said: 
"The  statute  of  frauds  plainly  means  an  agreement  not  to  be  per- 
formed within  the  space  of  a  yenr,  and  expressly  and  specifically  so 
agrf'C'f].  A  rontingency  is  not  within  it;  iior  any  case  that  depends 
upon  contingency.  It  does  not  extend  to  cases  where  the  thing  only 
may  ])o.  performed  within  the  year;  and  the  act  cannot  be. extended 
fnrflifT  than  the  words  of  it."  And  Mr.  Justice  Wilmot  said  that 
the  rule  laid  down  in  1  Salk.  280,  above  quoted,  was  the  true  rule. 
Fen  ton  v.  Emblers,  3  Burrow,  1278;  s.  c.  1  W.  Bl.  353. 

It  thus  appears  to  have  been  the  settled  construction  of  this  clause 
of  the  statute  in  England,  before  the  Declaration  of  Independence, 


CHAP.   IV ]  WARNER   V.   TEXAS   AND   PACIFIC   RY.    CO. 


431 


that  an  oral  agreement  which,  according  to  the  intention  of  the 
parties,  as  shown  by  the  terms  of  the  contract,  might  be  fully  per- 
formed within  a  year  from  the  time  it  was  made,  was  not  within 
the  statute,  although  the  time  of  its  performance  was  uncertain, 
and  might  probably  extend,  and  be  expected  by  the  parties  to  extend, 
and  did  in  fact  extend,  beyond  the  year. 

The  several  States  of  the  Union,  in  reenactiug  this  provision  of 
the  statute  of  frauds  in  its  original  words,  must  be  taken  to  have 
adopted  the  known  and  settled  construction  which  it  had  received 
by  judicial  decisions  in  England.  Tucker  v.  Oxley,  5  Cranch,  34, 
42;  Pennock  v.  Dialogue,  2  Pet.  1,  18;  Macdonald  v.  Hovey,  110 
U.  S.  619,  628.  And  the  rule  established  in  England  by  those  de- 
cisions has  ever  since  been  generally  recognized  in  England  and 
America,  although  it  may  in  a  few  instances  have  been  warped  or 
misapplied. 

The  decision  in  Boydell  v.  Drummond  (1809),  11  East,  142,  which 
has  been  sometimes  supposed  to  have  modified  the  rule,  was  really 
in  exact  accordance  with  it.  In  that  case,  the  declaration  alleged 
that  the  Boydells  had  proposed  to  publish  by  subscription  a  series 
of  large  prints  from  some  of  the  scenes  of  Shakespeare's  plays,  in 
eighteen  numbers  containing  four  plates  each,  at  the  price  of  three 
guineas  a  number,  payable  as  each  was  issued,  and  one  number,  at 
least,  to  be  annually  published  after  the  delivery  of  the  first;  and 
that  the  defendant  became  a  subscriber  for  one  set  of  prints,  and  ac- 
cepted and  paid  for  two  numbers,  but  refused  to  accept  or  pay  for 
the  rest.  The  first  prospectus  issued  by  the  publishers  stated  certain 
conditions,  in  substance  as  set  ovit  in  the  declaration,  and  others 
showing  the  magnitude  of  the  undertaking,  and  that  its  completion 
would  unavoidably  take  a  considerable  time.  A  second  prospectus 
stated  that  one  number  at  least  should  be  published  annually,  and 
the  proprietors  were  confident  that  they  should  be  enabled  to  produce 
two  numbers  within  the  course  of  every  year.  The  book  in  which 
the  defendant  subscribed  his  name  had  only,  for  its  title,  "Shakes- 
peare subscribers,  their  signatures,"  without  any  reference  to  either 
prospectus.  The  contract  was  held  to  be  within  the  statute  of  frauds, 
as  one  not  to  be  performed  within  a  year,  because,  as  was  demon- 
strated in  concurring  opinions  of  Lord  Ellenborough  and  Justices 
Grose,  La  Blanc,  and  Bayley,  the  contract,  according  to  the  under- 
standing and  contemplation  of  the  parties,  as  manifested  by  the  terms 
of  the  contract,  was  not  to  be  fully  performed  (by  the  completion 
of  the  whole  work)  within  the  year;  and  consequently,  a  full  com- 
pletion within  the  year,  even  if  physically  possible,  would  not  have 
been  according  to  the  terms  or  the  intent  of  the  contract,  and  could 
not  have  entitled  the  publishers  to  demand  immediate  payment  of 
the  whole  subscription. 

In  Wells  V.  Horton  (1826),  4  Bing.  40;  s.  o.  12  J.  B.  Moore,  177, 
it  was  held  to  be  settled  by  the  earlier  authorities  that  an  agreement 


432  WARNER    V.    TEXAS   AND   PACIFIC   RY.    CO.        [CHAP.    IV 

by  "vvhich  a  debtor,  in  consideration  of  his  creditors  agreeing  to 
forbear  to  sue  bim  during  bis  lifetime,  promised  that  bis  executor 
sbould  pay  tbe  amount  of  tbe  debt,  was  not  witbin  tbe  statute  and 
Cbief  Justice  Best  said:  "Tbe  present  case  is  clearly  distinguisbable 
from  Boydell  v.  Drummond,  wbere  upon  tbe  face  of  tbe  agreement 
it  appeared  tbat  tbe  contract  was  not  to  be  executed  witbin  a  year."  ^ 

In  Soucb  V.  Strawbridge  (1846),  2  C,  B.  808,  a  contract  to  sup- 
port a  cbild,  for  a  guinea  a  month,  as  long  as  the  child's  father  should 
think  proper,  was  held  not  to  be  witbin  tbe  statute,  which,  as  Chief 
Justice  Tindal  said,  "speaks  of  'any  agreement  tbat  is  not  to  be 
performed  within  tbe  space  of  one  year  from  tbe  making  thereof; 
pointing  to  contracts  the  complete  performance  of  which  is  of  neces- 
sity extended  beyond  tbe  space  of  a  year.  That  appears  clearly 
from  tbe  case  of  Boydell  v.  Drummond,  tbe  rule  to  be  extracted 
from  which  is,  tbat,  where  tbe  agreement  distinctly  shows,  upon  tbe 
face  of  it,  that  the  parties  contemplated  its  performance  to  extend 
over  a  greater  space  of  time  than  one  year,  the  case  is  witbin  the 
statute;  but  that,  where  the  contract  is  such  that  tbe  whole  may  be 
performed  witbin  a  year,  and  there  is  no  express  stipulation  to  the 
contrary,  the  statute  does  not  apply." 

"In  Murphy  tr.  O'Sullivan  (1866),  11  Irish  Jurist  (n.  s.)  Ill, 
tbe  Court  of  Exchequer  Chamber  in  Ireland,  in  a  series  of  careful 
opinions  by  Mr.  Justice  O'Hagan  (afterwards  Lord  Chancellor  of 
Ireland),  Baron  Fitzgerald,  Chief  Baron  Pigot,  and  Chief  Justice 
Monaban,  reviewing  tbe  English  cases,  held  tbat  under  the  Irish 
statute  of  frauds  of  7  "Will.  III.  c.  12  (which  followed  in  this  respect 
the  words  of  tbe  English  statute),  an  agreement  to  maintain  and 
clothe  a  man  during  his  life  was  not  required  to  be  in  writing. 

In  tbe  recent  case  of  McGregor  v.  McGregor,  21  Q.  B.  D.  424 
(1888),  tbe  English  Court  of  Appeal  held  that  a  lawful  agreement 
made  between  husband  and  wife,  in  compromise  of  legal  proceedings, 
bv  which  they  agreed  to  live  apart,  the  husband  agreeing  to  allow 
tbe  wife  a  weekly  sura  for  maintenance,  and  she  agreeing  to  main- 
tain herself  and  her  children,  and  to  indemnify  bim  against  any 
debts  contracted  by  her,  was  not  witbin  tbe  statute.  Lord  Esher, 
M.  R.,  thought  the  true  doctrine  on  the  subject  was  tbat  laid  down 

'  Promises  which  by  their  terms  extend  over  the  life  of  the  promisor  or  promisee 
are  not  within  the  statute.  Hill  v.  .lamieson,  16  Ind.  125;  Bell  v.  Hewitt's  Ex.,  24  Ind. 
280;  TIarr)er  ?;.  Harper,  .57  Ind.  547;  Welz  v.  Rhorlius,  87  Ind.  1;  Pennsylvania  Co. 
V.  Dolfin,  0  Ind.  App.  100;  Atehison,  &c.  R.  R.  Co.  v.  English,  38  Kan.  110;  Howard 
V.  RurKen,  4  Dr.na.  1.37;  Rnll  v.  MoCrea,  8  B.  Mon.  422;  Myles  v.  Myles,  6  Bush,  237; 
Rtowers  V.  Hollis,  83  Ky.  544;  Hutchison,  40  Me.  1,54;  Worthy  v.  Jones,  11  Gray, 
108;  Carr  v.  MeParthv,  70  Mich.  2.58;  McCormick  ?'.  Drummett,  0  Neb.  .384;  Bland- 
inK  V.  Sari'f-nt,  33  N.  IT.  230;  Dressor  v.  Droasor,  35  Bar!).  .573;  Thorp  v.  Stewart,  44 
Hun,  232;  Richardson  r.  Pierce,  7  R.  I.  .3.30;  East  Line  Co.  v.  Scott,  72  Tex.  70; 
Blancharr!  r.  Wfcks,  'M  Vt.  580;  Thomas  v.  Armstronc,  80  Va.  323;  Heath  v.  Heath, 
31  Wi.M.  223.  But  »"<•  mnlrn.  Vose  v.  Strong,  45  111.  App.  08,  nff'd.  144  111.  108;  Deaton 
V.  Tennossee  Coid  Co.,  12  ITeisk.  0.50. 

Similarly  contracts  to  be  performed  at  the  death  of  a  person  are  not  within 
the  statutf.  Frosf  v.  Tarr.  .53  Ind.  .300;  Riddle  v.  Backus,  38  la.  81;  McDaniel  v. 
HutchojHon.  1.30  Ky.  412;  Sword  v.  Keith,  31  Mich.  247;  .lilson  v.  Gilbert,  26  Wis.  637. 


CHAP.    IV]  WARNER    V.    TEXAS   AND   PACIFIC   RY.    CO.  433 

by  Chief  Justice  Tindal  in  the  passage  above  quoted  from  Souch  v. 
Strawbridge.  Lord  Justice  Lindley  said:  "The  provisions  of  the 
statute  have  been  construed  in  a  series  of  decisions  from  which  we 
cannot  depart.  The  effect  of  these  decisions  is  that  if  the  contract 
can  by  possibility  be  performed  within  the  year,  the  statute  does 
not  apply."  Lord  Justice  Bowen  said:  "There  has  been  a  decision 
which  for  two  hundred  years  has  been  accepted  as  the  leading  case 
on  the  subject.  In  Peter  v.  Compton,  it  was  held  that  'an  agree- 
ment that  is  not  to  be  performed  within  the  space  of  a  year  from  the 
making  thereof  means,  in  the  statute  of  frauds,  an  agreement  which 
appears  from  its  terms  to  be  incapable  of  performance  within  the 
year."  And  each  of  the  three  judges  took  occasion  to  express  ap- 
proval of  the  decision  in  Murphy  v.  O' Sullivan,  above  cited,  and  to 
disapprove  the  opposing  decision  of  Hawkins,  J.,  in  Davey  v.  Shan- 
non, 4  Ex.  D.  81. 

The  cases  on  this  subject  in  the  courts  of  the  several  States  are 
generally  in  accord  with  the  English  cases  above  cited.  They  are 
so  numerous,  and  have  been  so  fully  collected  in  Browne  on  the 
Statute  of  Frauds  (5th  ed.),  c.  13,  that  we  shall  refer  to  but  few  of 
them,  other  than  those  cited  by  counsel  in  the  case  at  bar. 

In  Peters  v.  Westborough,  19  Pick.  364,  an  agreement  to  support 
a  girl  of  twelve  years  old  until  she  was  eighteen  was  held  not  to 
be  within  the  statute.^  Mr.  Justice  Wilde,  in  delivering  judgment, 
after  quoting  Peter  v.  Compton,  Eenton  v.  Emblers,  and  Boydell  v. 
Drummond,  above  cited,  said:  "From  these  authorities  it  appears 
to  be  settled,  that  in  order  to  bring  a  parol  agreement  within  the 
clause  of  the  statute  in  question,  it  must  either  have  been  expressly 
stipulated  by  the  parties,  or  it  must  appear  to  have  been  so  understood 
by  them,  that  the  agreement  was  not  to  be  performed  within  a  year. 
And  this  stipulation  or  understanding  is  to  be  absolute  and  certain, 
and  not  to  depend  upon  any  contingency.  And  this,  we  think,  is  the 
clear  meaning  of  the  statute.  In  the  present  case,  the  performance 
of  the  plaintiff's  agreement  with  the  child's  father  depended  on  the 
contingency  of  her  life.  If  she  had  continued  in  the  plaintiff's 
service,  and  he  had  supported  her-  and  she  had  died  within  a  year 
after  the  making  of  the  agreement,  it  would  have  been  fully  per- 
formed. And  an  agreement  by  parol  is  not  within  the  statute,  when 
by  the  happening  of  any  contingency  it  might  be  performed  within 
a  year." 

In  many  other  States,  agreements  to  support  a  person  for  life 
have  been  held  not  to  be  within  the  statute.  Browne  on  Statute  of 
Frauds,  §  276.     The  decision  of  the  Supreme  Court  of  Tennessee  in 

1  Wooldridge  v.  Stern,  42  Fed.  Rep.  311;  White  v.  Murtland,  71  111.  250;  McKin- 
ney  v.  McCloskey,  8  Dnlv,  368,  76  N.  Y.  ."^04:  Taylor  v.  Deseve,  81  Tex.  246,  ace. 
See  also  Wiggins  v.  Keizer,  6  Ind.  252;  Hollis  v.  Stowers,  83  Ky.  544;  Elhcott  v. 
Turner,  4  Md.  476;    McLees  v.  Hale,  10  Wend.  426;   Shahan  v.  Swan,  48  Ohio  St.  25. 

Goodrich  v.  Johnson.  66  Ind.  258;  Bristol  v.  Sutton,  115  Mich.  365;  Shute  v.  Dorr, 
5  Wend.  204;  Jones  v.  Hay,  52  Barb.  501,  contra. 


434  WARNER    V.    TEXAS   AND   PACIFIC   RY.    CO.        [CHAP.    IV 

Deaton  v.  Tennessee  Coal  Co.,  12  Heisk.  650,  cited  by  the  defendant 
in  error,  is  opposed  to  the  weight  of  authority. 

In  Eoberts  v.  Rockbottom  Co.,  7  Met.  46,  Chief  Justice  Shaw  de- 
clared the  settled  rule  to  be  that  ''when  the  contract  may,  by  its 
terms,  be  fully  performed  within  the  year,  it  is  not  void  by  the 
statute  of  frauds,  although  in  some  contingencies  it  may  extend  be- 
yond a  year";  and  stated  the  case  then  before  the  court  as  follows: 
"The  contract  between  the  plaintiff  and  the  company  was  that  they 
should  employ  him,  and  that  he  should  serve  them,  upon  the  terms 
agreed  on,  five  years,  or  so  long  as  Leforest  should  continue  their 
agent.  This  is  a  contract  which  might  have  been  fully  performed 
within  the  year.  The  legal  effect  is  the  same  as  if  it  were  expressed 
as  an  agreement  to  serve  the  company  so  long  as  Leforest  should 
continue  to  be  their  agent,  not  exceeding  five  years ;  though  the  latter 
expression  shows  a  little  more  clearly  that  the  contract  might  end 
within  a  year,  if  Leforest  should  quit  the  agency  within  that  time." 

In  Blanding  v.  Sargent,  33  N".  H.  239,  the  court  stated  the  rule, 
as  established  by  the  authorities  elsewhere,  and  therefore  properly 
to  be  considered  as  adopted  by  the  legislature  of  ISTew  Hampshire 
when  re-enacting  the  statute,  to  be  that  "the  statute  does  not  apply 
to  any  contract,  unless  by  its  express  terms  or  by  reasonable  construc- 
tion it  is  not  to  be  performed,  that  is,  incapable  in  any  event  of 
being  performed,  within  one  year  from  the  time  it  is  made";  and 
that  "if  by  its  terms,  or  by  reasonable  construction,  the  contract  can 
be  fully  performed  within  a  year,  although  it  can  only  be  done  by 
the  occurrence  of  some  contingency  by  no  means  likely  to  happen, 
such  as  the  death  of  some  party  or  person  referred  to  in  the  contract, 
the  statute  has  no  application,  and  no  writing  is  necessary";  and 
therefore  that  an  agreement  by  a  physician  to  sell  out  to  another 
physician  his  business  in  a  certain  town,  and  to  do  no  more  business 
there,  in  consideration  of  a  certain  sum  to  be  paid  in  five  years,  was 
not  within  the  statute,  because  "if  the  defendant  had  died  within  a 
year  from  the  making  of  the  contract,  having  kept  his  agreement 
while  he  lived,  his  contract  would  have  been  fully  performed."  The 
decisions  in  other  States  are  to  the  same  effect.  Browne  on  Statute 
of  Frauds,  §  277. 

In  Hinckley  v.  Southgate,  11  Vt.  428,  cited  by  the  defendant  in 
error,  the  contract  held  to  be  within  the  statute  of  frauds  was  in 
express  terms  to  carry  on  a  mill  for  a  year  from  a  future  day;  and 
the  suggestion  in  the  opinion  tbnt  if  the  time  of  performance  de- 
pends upon  a  contingency,  the  test  is  whether  the  contingency  will 
probably  happen,  or  may  reasonably  be  expected  to  happen,  within 
the  year,  was  not  necessary  to  the  decision  of  the  case,  and  cannot 
stand  with  the  other  authorities.  Browne  on  Statute  of  Frauds, 
§  270. 

In  Linsnott  v.  McTntire,  15  Maine,  201,  also  cited  by  the  defendant 
in  error,  an  agreement  to  sell  a  farm  at  the  best  advantage,  and  to 


CHAP.    IV]  .  WARNER    V.    TEXAS   AND   PACIFIC   RY,    CO.  435 

pay  to  the  plaintiff  any  suan  remaining  after  refunding  the  de- 
fendant's advances  and  paying  him  for  his  trouble,  was  held  not 
to  be  within  the  statute  of  frauds;  Chief  Justice  Weston  saying: 
"The  sale  did  not  happen  to  be  made  until  a  year  had  expired;  but 
it  might  have  taken  place  at  an  earlier  period,  and  there  is  nothing 
in  the  case  from  which  it  appears  that,  in  the  contemplation  of  the 
parties  at  the  time,  it  was  to  be  delayed  beyond  a  year.  This  clause 
of  the  statute  has  been  limited  to  cases  where,  by  the  express  terms 
of  the  agreement,  the  contract  was  not  to  be  performed  within  the 
space  of  a  year.  And  it  has  been  held  to  be  no  objection  that  it 
depended  on  a  contingency,  which  might  not  and  did  not  happen, 
until  after  that  time." 

In  Herrin  v.  Butters,  20  Maine,  119,  likewise  cited  by  the  de- 
fendant in  error,  the  contract  held  to  be  within  the  statute  could 
not  possibly  have  been  perfomed  within  the  year,  for  it  was  to  clear 
eleven  acres  in  three  years,  one  acre  to  be  seeded  down  the  present 
spring,  one  acre  the  next  spring,  and  one  acre  the  spring  following, 
and  to  receive  in  consideration  thereof  all  the  proceeds  of  the  land, 
except  the  two  acres  first  seeded  down. 

In  Broadwell  v.  Getman,  2  Denio,  87,  the  Supreme  Court  of  New 
York  stated  the  rule  thus :  "Agreements  which  may  be  completed 
within  one  year  are  not  within  the  statute ;  it  extends  to  such  only 
as  by  their  express  terms  are  not  to  be,  and  cannot  be,  carried  into 
full  execution  until  after  the  expiration  of  that  time."  The  con- 
tract there  sued  on  was  an  agreement  made  in  January,  1841,  by 
which  the  defendant  agreed  to  clear  a  piece  of  woodland  for  the 
plaintiff,  and  to  partly  make  a  fence  at  one  end  of  it,  which  the 
plaintiff  was  to  complete,  the  whole  to  be  done  by  the  spring  of 
1842;  and  the  defendant  was  to  have  for  his  compensation  the  wood 
and  timber,  except  that  used  for  the  fence,  and  also  the  crop  to  be 
put  in  by  him  in  the  spring  of  1842.  The  court  well  said :  "As  this 
agreement  was  made  in  January,  1841,  and  could  not  be  completely 
executed  until  the  close  of  the  season  of  1842,  it  was  within  the 
statute,  and  not  being  in  writing  and  signed  was  void.  Upon  this 
point  it  would  seem  difficult  to  raise  a  doubt  upon  the  terms  of  the 
statute." 

In  Pitkin  v.  Long  Island  Eailroad,  2  Barb.  Ch.  221,  cited  by  the 
defendant  in  error,  a  bill  in  equity  to  compel  a  railroad  company 
to  perform  an  agreement  to  maintain  a  permanent  turnout  track 
and  stopping  place  for  its  freight  trains  and  passenger  cars  in  the 
neighborhood  of  the  plaintiff's  property,  was  dismissed  by  Chan- 
cellor Walworth  upon  several  grounds,  the  last  of  which  was  that, 
as  a  mere  executory  agreement  to  continue  to  stop  with  its  cars  at 
that  place,  "as  a  permanent  arrangement,"  the  agreement  was  within 
the  statute  of  frauds,  because  from  its  nature  and  terms  it  was  not 
to  be  performed  by  the  company  within  one  year  from  the  making 
thereof. 


436  WARNER   V.   TEXAS  AND   PACIFIC  RY.    CO,        [CHAP.    IV 

In  Kent  v.  Kent,  62  N.  Y.  560,  an  agreement  by  which  a  father, 
in  consideration  of  his  son's  agreeing  to  work  for  him  upon  his  farm, 
without  specifying  any  time  for  the  service,  agreed  that  the  value  of 
the  work  should  be  paid  out  of  his  estate  after  his  death,  which  did 
not  happen  until  twenty  years  after  the  son  ceased  work,  was  not 
within  the  statute.  Judge  Allen,  delivering  the  judgment  of  the 
Court  of  Appeals,  said :  "The  statute,  as  interpreted  by  courts,  does 
not  include  agreements  which  may  or  may  not  be  performed  within 
one  year  from  the  making,  but  merely  those  which  within  their 
terms,  and  consistent  with  the  rights  of  the  parties,  cannot  be  per- 
formed within  that  time.  If  the  agreement  may  consistently  with 
its  terms  be  entirely  performed  within  the  year,  although  it  may  not 
be  probable  or  expected  that  it  will  be  performed  within  that  time, 
it  is  not  within  the  condemnation  of  the  statute." 

In  Saunders  v.  Kasterbine,  6  B.  Monroe,  17,  cited  by  the  defendant 
in  error,  the  contract  proved,  as  stated  in  the  opinion  of  the  court, 
was  to  execute  a  bill  of  sale  of  a  slave  when  the  purchaser  had  paid 
the  price  of  $400,  in  monthly  instalments  of  from  $4  to  $8  each, 
which  would  necessarily  postpone  performance,  by  either  party,  be- 
yond the  year. 

In  Railway  Co.  v.  Whitley,  54  Ark.  199,  a  contract  by  which  a 
railway  company,  in  consideration  of  being  permitted  to  build  its 
road  over  a  man's  land,  agreed  to  construct  and  maintain  cattle 
guards  on  each  side  of  the  road,  was  held  not  to  be  within  the  statute, 
because  it  was  contingent  upon  the  continuance  of  the  use  of  the 
land  for  a  railroad,  which  might  have  ceased  within  a  year.  And 
a  like  decision  was  made  in  Sweet  v.  Desha  Lumber  Co.,  56  Ark.. 
629,  upon  facts  almost  exactly  like  those  in  the  case  at  bar. 

The  construction  and  application  of  this  clause  of  the  statute  of 
frauds  first  came  before  this  court  at  December  term,  1866,  in  Packet 
Co.  V.  Sickles,  5  Wall.  580,  which  arose  in  the  District  of  Columbia 
under  the  statute  of  29  Car.  II.  c.  3,  §  4,  in  force  in  the  State  of 
Maryland  and  in  the  District  of  Columbia.  Alexander's  British 
Statutes  in  Maryland,  509;  Ellicott  v.  Peterson,  13  Md.  476,  487; 
Comp.  Stat.  D.  C,  c.  23,  §  7. 

That  was  an  action  upon  an  oral  contract  by  which  a  steamboat 
company  agreed  to  attach  a  patented  contrivance,  known  as  the 
Sickles  cut-oif,  to  one  of  its  steamboats,  and  if  it  should  effect  a 
saving  in  the  consumption  of  fuel,  to  use  it  on  that  boat  during  the 
continuance  of  the  patent,  if  the  boat  should  last  so  long;  and  to 
p.'iy  to  the  plaiiitifTs  weekly,  for  tlie  use  of  the  cut-off,  three  fourths 
of  the  value  of  the  fuel  saved,  to  be  ascertained  in  a  specified  manner. 
At  the  date  of  the  contract,  the  patent  had  twelve  years  to  run.  The 
court,  in  an  opinion  delivered  by  Mr.  Justice  Nelson,  held  the  con- 
tract to  be  witliin  the  statute;  and  said:  "The  substance  of  the  con- 
tract is  that  thf  defendants  are  to  pay  in  money  a  certain  proportion 
of  the  ascertained  value  of  the  fuel  saved  at  stated  intervals  through- 


CHAP.    IV]  WARNER    V.    TEXAS   AND   PACIFIC   RY.    CO.  437 

out  the  period  of  twelve  years,  if  the  hoat  to  which  the  cut-off  is 
attached  should  last  so  long."  ''It  is  a  contract  not  to  be  performed 
within  the  year,  subject  to  a  defeasance  by  the  happening  of  a  cer- 
tain event,  which  might  or  might  not  occur  within  that  time."  5 
Wall.  594—596.  And  reference  was  made  to  Birche  v.  Liverpool,  9 
B.  &  C.  392,  and  Dobson  v.  Collis,  1  H.  &  N.  81,  in  each  of  which 
the  agreement  was  for  the  hire  of  a  thing,  or  of  a  person,  for  a  term 
specified  of  more  than  a  year,  determinable  by  notice  within  the 
year,  and  therefore  within  the  statute,  because  it  was  not  to  be  per- 
formed within  a  year,  although  it  was  defeasible  within  that  period. 

In  Packet  Co.  v.  Sickles,  it  appears  to  have  been  assumed,  almost 
without  discussion,  that  the  contract,  according  to  its  true  construc- 
tion, was  not  to  be  performed  in  less  than  twelve  years,  but  was  de- 
feasible by  an  event  which  might  or  might  not  happen  within  one 
year.  It  may  well  be  doubted  whether  that  view  can  be  reconciled 
with  the  terms  of  the  contract  itself,  or  with  the  general  current  of 
the  authorities.  The  contract,  as  stated  in  the  fore  part  of  the 
opinion,  was  to  use  and  pay  for  the  cut-off  upon  the  boat  "during 
the  continuance  of  the  said  patent,  if  the  said  boat  should  last  so 
long."  5  Wall.  581,  594;  s.  c.  (Lawyer's  Cop.  Pub.  Co.  ed.)  bk. 
18,  pp.  552,  554.  The  terms  "during  the  continuance  of"  and  "last 
so  long"  would  seem  to  be  precisely  equivalent;  and  the  full  per- 
formance of  the  contract  to  be  limited  alike  by  the  life  of  the  patent, 
and  by  the  life  of  the  boat.  It  is  difficult  to  understand  how  the 
duration  of  the  patent  and  the  duration  of  the  boat  differed  from 
one  another  in  their  relation  to  the  performance  or  the  determination 
of  the  contract;  or  how  a  contract  to  use  an  aid  to  navigation  upon 
a  boat,  so  long  as  she  shall  last,  can  be  distinguished  in  principle 
from  a  contract  to  support  a  man,  so  long  as  he  shall  live,  which 
has  been  often  decided,  and  is  generally  admitted,  not  to  be  within 
the  statute  of  frauds. 

At  October  term,  1875,  this  court,  speaking  by  Mr.  Justice  Miller, 
said:  "The  statute  of  frauds  applies  only  to  contracts  which,  by 
their  terms,  are  not  to  be  performed  within  a  year,  and  does  not 
apply  because  they  may  not  be  performed  within  that  time.  In 
other  words,  to  make  a  parol  contract  void,  it  must  be  apparent  that 
it  was  the  understanding  of  the  parties  that  it  was  not  to  be  per- 
formed within  a  year  from  the  time  it  was  made."  And  it  was 
therefore  held,  in  one  case,  that  a  contract  by  the  owner  of  a  valu- 
able estate,  employing  lawyers  to  avoid  a  lease  thereof  and  to  recover 
the  property,  and  promising  to  pay  them  a  certain  sum  out  of  the 
proceeds  of  the  land  when  recovered  and  sold,  was  not  within  the 
statute,  because  all  this  might  have*been  done  within  a  year;  and 
in  another  case,  that  a  contract,  made  early  in  ISTovember,  1869,  to 
furnish  all  the  stone  required  to  build  and  complete  a  lock  and  dam 
which  the  contractor  with  the  State  had  agreed  to  complete  by  Sep- 
tember 1,  1871,  was  not  within  the  statute,  because  the  contractor, 


438  WARNER    V.    TEXAS   AND   PACIFIC   RY.    CO.        [CHAP.    IV 

by  pushing  the  work,  might  have  fully  completed  it  before  November, 
1870.  McPhersou  v.  Cox,  96  U.  S.  404,  416,  417 ;  Walker  v.  Johu- 
son,  96  U.  S.  424,  427. 

In  Texas,  where  the  contract  now  in  question  was  made,  and  this 
action  upon  it  was  tried,  the  decisions  of  the  Supreme  Court  of  the 
State  are  in  accord  with  the  current  of  decisions  elsewhere. 

In  Thouvenin  v.  Lea,  26  Tex.  612,  the  court  said :  "An  agree- 
ment which  may  or  may  not  be  performed  within  a  year  is  not  re- 
quired by  the  statute  of  frauds  to  be  in  writing ;  it  must  appear  from 
the  agreement  itself  that  it  is  not  to  be  performed  within  a  year." 
In  that  case,  the  owner  of  land  orally  agreed  to  sell  it  for  a  certain 
price,  payable  in  five  years;  the  purchaser  agreed  to  go  into  posses- 
sion and  make  improvements;  and  the  seller  agreed,  if  there  was 
a  failure  to  complete  the  contract,  to  pay  for  the  improvements.  The 
agreement  to  pay  for  the  improvements  was  held  not  to  be  within 
the  statute;  the  court  saying:  "There  is  nothing  from  which  it  can 
be  inferred  that  the  failure  to  complete  the  contract  (by  reducing 
it  to  writing,  for  instance,  as  was  stipulated  should  be  done)  or  its 
abandonment,  might  not  occur  within  a  year  from  the  time  it  was 
consummated.  The  purchaser,  it  is  true,  was  entitled  by  the  agree- 
ment to  a  credit  of  five  years  for  the  payment  of  the  purchase  money, 
if  the  contract  had  been  reduced  to  writing.  But  appellant  might 
have  sold  to  another,  or  the  contract  might  have  been  abandoned 
by  the  purchaser,  at  any  time;  and  upon  this  alone  depended  ap- 
pellant's liability  for  the  improvements."  See  also  Thomas  v.  Ham- 
mond, 47  Tex.  42. 

In  the  very  recent  case  of  Weatherford,  &c..  Railway  v.  Wood,  88 
Tex.  191,  it  was  held  that  an  oral  agreement  by  a  railroad  com- 
pany to  issue  to  one  Wood  annually  a  pass  over  its  road  for  him- 
self and  his  family,  and  to  stop  its  trains  at  his  house,  for  ten  years, 
was  not  within  the  statute.  The  court,  after  reviewing  many  of  the 
authorities,  said :  "It  seems  to  be  well  settled  that  where  there  is  a 
contingency  expressed  upon  the  face  of  the  contract,  or  implied  from 
the  circumstances,  upon  the  happening  of  which  within  a  year  the 
contract  or  agreement  will  be  performed,  the  contract  is  not  within 
the  statute,  though  it  be  clear  that  it  cannot  be  performed  within 
a  year  except  in  the  event  the  contingency  happens."  "If  the  con- 
tingency is  beyond  the  control  of  the  parties,  and  one  that  may,  in 
the  usual  course  of  events,  happen  within  the  year,  whereby  the 
contract  will  be  performed,  the  law  will  presume  that  the  parties 
contemplated  its  happening,  whether  they  mention  it  in  the  contract 
or  not.  The  statute  only  applies  to  contracts  not  'to  he  performed 
witliin  the  space  of  one  year  from  the  making  thereof.'  If  the  con- 
tint'f'ncy  is  such  that  its  happening  may  bring  the  performance 
within  a  year,  the  contract  is  not  within  the  terms  of  the  statute; 
and  this  is  true  whether  the  parties  at  the  time  had  in  mind  the  hap- 
pening of  the  contingency  or  not.     The  existence  of  the  contingency 


CHAP.    IV  ]  WARNER    V.    TEXAS   AND   PACIFIC   RY.    CO.  439 

in  this  class  of  cases,  and  not  the  fact  that  the  parties  may  or  may 
not  have  contemplated  its  happening,  is  what  prevents  the  agreement 
from  coming  within  the  scope  of  the  statute.  Applying  these  prin- 
ciples to  the  case  under  consideration,  we  think  it  clear  that  the 
contract  above  set  out  was  not  within  the  statute.  The  agreement 
to  give  the  pass  and  stop  the  trains  was  personal  to  Wood  and  his 
family.  He  could  not  transfer  it.  In  case  of  his  death  within  the 
year,  the  obligation  of  the  company  to  him  would  have  been  per- 
formed, and  no  right  thereunder  would  have  passed  to  his  heirs  or 
executors.  If  it  be  held  that  each  member  of  his  family  had  an 
interest  in  the  agreement,  the  same  result  would  have  followed  the 
death  of  such  member,  or  all  of  them,  within  the  year.  If  the  agree- 
ment had  been  to  give  to  Wood  a  pass  for  life,  it  would,  under  the 
above  authorities,  not  have  been  within  the  statute;  and  we  can  see 
no  good  reason  for  holding  it  to  be  within  the  statute  because  his 
right  could  not  have  extended  beyond  ten  years.  The  happening  of 
the  contingency  of  the  death  of  himself  and  family  vnthin  a  year 
would  have  performed  the  contract  in  one  case  as  certainly  as  in 
the  other."     88  Tex.  195,  196. 

In  the  case  at  bar,  the  contract  between  the  railroad  company 
and  the  plaintiff,  as  testified  to  by  the  plaintiff  himself,  who  was  the 
only  witness  upon  the  point,  was  that  if  he  would  furnish  the  ties 
and  grade  the  ground  for  the  switch  at  the  place  where  he  proposed 
to  erect  a  saw-mill,  the  railroad  company  would  "put  down  the  iron 
rails  and  maintain  the  switch  for  the  plaintiff's  benefit  for  shipping 
purposes  as  long  as  he  needed  it." 

The  parties  may  well  have  expected  that  the  contract  would  con- 
tinue in  force  for  more  than  one  year;  it  may  have  been  very  im- 
probable that  it  would  not  do  so;  and  it  did  in  fact  continue  in  force 
for  a  much  longer  time.  But  they  made  no  stipulation  which  in 
terms,  or  by  reasonable  inference,  required  that  result.  The  ques- 
tion is  not  what  the  probable,  or  expected,  or  actual  performance  of 
the  contract  was;  but  whether  the  contract,  according  to  the  reason- 
able interpretation  of  its  terms,  required  that  it  should  not  be  per- 
formed within  the  year.  No  definite  term  of  time  for  the  perform- 
ance of  the  contract  appears  to  have  been  mentioned  or  contem- 
plated by  the  parties ;  nor  was  there  any  agreement  as  to  the  amount 
of  lumber  to  be  sawed  or  shipped  by  the  plaintiff,  or  as  to  the  time 
during  which  he  should  keep  up  his  mill. 

The  contract  of  the  railroad  company  was  with,  and  for  the  benefit 
of,  the  plaintiff  personally.  The  plaintiff's  own  testimony  shows 
(although  that  is  not  essential)  that  he  understood  that  the  per- 
formance of  the  contract  would  end  with  his  own  life.  The  obliga- 
tion of  the  railroad  company  to  maintain  the  switch  was  in  terms 
limited  and  restricted  by  the  qualification  "for  the  plaintiff's  bene- 
fit for  shippin.2:  purposes  as  long  as  he  needed  it";  and  no  contin- 
gency which  should  put  an  end  to  the  performance  of  the  contract, 


440  WARNER    V.    TEXAS   AND   PACIFIC   RY.    CO.        [CHAP.    IV 

Other  than  his  not  needing  the  switch  for  the  purpose  of  his  busi- 
ness, appears  to  have  been  in  the  mouth,  or  in  the  mind,  of  either 
party.  If,  within  a  year  after  the  making  of  the  contract,  the  plain- 
tiif  had  died,  or  had  abandoned  his  whole  business  at  this  place,  or 
for  any  other  reason  had  ceased  to  need  the  switch  for  the  shipping 
of  lumber,  the  railroad  company  would  have  been  no  longer  under 
any  obligation  to  maintain  the  switch,  and  the  contract  would  have 
been  brought  to  an  end  by  having  been  fully  performed. 

The  complete  performance  of  the  contract  depending  upon  a  con- 
tingency which  might  happen  within  the  year,  the  contract  is  not 
within  the  statute  of  frauds  as  an  "agreement  which  is  not  to  be 
performed  within  the  space  of  one  year  from  the  making  thereof." 

Nor  is  it  within  the  other  clause  of  the  statute  of  frauds,  relied  on 
in  the  answer,  which  requires  certain  conveyances  of  real  estate  to 
be  in  writing.  The  suggestion  made  in  the  argument  for  the  defend- 
ant in  error,  that  the  contract  was,  in  substance,  a  grant  of  an  ease- 
ment in  real  estate,  and  as  such  within  the  statute,  overlooks  the 
difference  in  real  estate,  and  as  such  within  the  statutes  in  this  par- 
ticular. The  existing  statutes  of  Texas,  while  they  substantially 
follow  the  English  statute  of  frauds,  so  far  as  to  require  a  convey- 
ance of  any  "estate  of  inheritance  or  freehold,  or  for  a  term  of  more 
than  one  year,  in  lands  and  tenements,"  as  well  as  "any  contract  for 
the  sale  of  real  estate,  or  the  lease  thereof  for  a  longer  term  than 
one  year,"  to  be  in  writing,  omit  to  reenact  the  additional  words  of 
the  English  statute,  in  the  clause  concerning  conveyances,  "or  any 
uncertain  interest  of,  in,  to,  or  out  of,"  lands  or  tenements,  and,  in 
the  other  clause,  "or  any  interest  in  or  concerning  them."     Stat. 

29  Car.  II.  c.  3,  §§  1,  4;  Texas  Eev.  Stat,  of  1879,  arts.  548,  2464; 
1  Paschal's  Digest,  arts.  997,  3875;  James  v.  Fulcrod,  5  Tex.  512, 
516;  Stuart  v.  Baker,  17  Tex.  417,  420;  Anderson  v.  Powers,  59 
Tex.  213. 

Judgment  reversed,  and  case  remanded  to  the  Circuit  Court,  with 
directions  to  set  aside  the  verdict  and  to  order  a  new  trial} 

1  Heflin  v.  Milton,  69  Ala.  354;  Graham  v.  Railroad,  111  Ark.  598;  Orland  v.  Fin- 
nell.  133  Cal.  475;  Clark  v.  Pendleton,  20  Conn.  495;  Sarles  v.  Sharlow,  5  Dak.  100; 
White  V.  Murtland,  71  111.  250;  Rtranshan  v.  Indianapolis,  &c.  R.  R.  Co.,  38  Ind.  185; 
Sutphen  v.  Sutphcn,  30  Kan.  510;  Louis^dll(■,  &c.  R.  R.  Co.  v.  OfTutt,  99  Ky.  427; 
Story  V.  Story  (Ky.),  61  S.  W.  Rep.  279,  62  S.  W.  Rep.  865;  Walker  v.  Metropolitan 
Ins.  Co.,  56  Me.  371;  Raltimorc  Breweries  Co.  v.  Callahan,  82  Md.  106;  Carnig  v. 
Carr,  167  Mass.  .544;  Wicbeler  v.  Milwaukee  Ins.  Co.,  .30  Minn.  464;  Harrington  v. 
Kansas  City  R.  R.  Co.,  60  Mo.  App.  223;  Borks  v.  Pacific  Laundry  Co.,  86  Mo.  App. 
616;  Powder  River  Co.  v.  Lamb,  .38  Neb.  339;  C.ault  v.  Brown,  48  N.  H.  183;  Plimp- 
ton ».  Curtiss,  15  Wend.  3.36;  Tnistee.s  v.  Brooklyn  Fire  Ins.  Co.,  19  N.  Y.  305; 
Blake  v.  Voit't.  1.34  N.  Y.  69;    Randall  v.  Turner,  17  Ohio  St.  262;   Blakeney  v.  Goode, 

30  Ohio  St.  350;  .lones  v.  Pouch,  41  Ohio  St.  146;  Hodges  v.  Richmond  Mfg.  Co.,  9 
R.  I.  482;    S<'d<lon  v.  Rosenbaum,  85  Va.  928,  ncc. 

Dolwon  V.  Collis,  1  H.  &  N.  81;  Meyer  v.  Roberts,  46  Ark.  80;  Wilson  v.  Ray,  13 
ind.  1;  Gooflrich  v.  .lohnson,  66  Ind.  258;  Carney  v.  Mosher,  97  Mich.  554;  Mallett 
V.  Lf;wiH,  61  Mi.sH.  105;  Biest  v.  Ver  Stecg  Shoe  Co.,  70  S.  W.  Rep.  1081  (Mo.  App.); 
Shute  V.  Dorr.  5  Wcnrl.  204;  Day  v.  New  York  Central  R.  R.  Co.,  51  N.  Y.  583.  89 
N.  Y.  014;    Izard  v.  Middleton.  1  Dcsaus,  116;   Jones  v.  McMichacl,  12  Rich.  L.  176; 


CHAP.    IV ]  DOYLE    V.   DIXON  441 


JOHN  DOYLE  V.  JOHN  DIXON 
Supreme  Judicial  Court  of  Massachusetts,  September  Term,  1867 

\_Beported  in  97  Massachusetts,  208] 

Contract  for  breach  of  an  agreement  by  the  defendant  not  to  go 
into  the  grocery  business  in  Chicopee  for  five  years. 

At  the  new  trial  in  the  superior  court,  before  Rockwell,  J.,  after 
the  decision  reported  12  Allen,  576,  it  appeared  in  evidence  that  the 
defendant  was  a  grocer  at  Chicopee,  and  that  on  November  19,  1864, 
he  and  the  plaintiff  entered  into  an  agreement  and  signed  a  memo- 
randum thereof  in  writing,  by  which  it  was  provided  that  on  De- 
cember 1  ensuing  the  defendant  would  transfer  to  the  plaintiff  his 
stock  of  goods,  and  would  lease  to  the  plaintiff  his  shop  for  five 
years,  at  an  agreed  rent,  receiving  from  the  plaintiff  the  market 
value  of  the  stock,  and  five  hundred  dollars  besides  as  bonus,  and 
that  if  either  party  should  "back  out"  he  should  forfeit  to  the  other 
two  hundred  dollars. 

It  appeared  also  that  on  November  21  the  plaintiff  went  to  the 
defendant's  shop  and  said  that  some  of  his  family  were  sick  at  North 
Brookfield  and  he  wanted  to  go  home,  and  would  like  to  take  the 
lease  at  once  and  "settle  up  the  whole  business,"  and  the  defendant 
agreed  to  do  so,  and  proposed  that  they  should  go  to  an  attorney's 
office  for  the  lease  to  be  drawn.  One  witness  testified  that,  during 
this  conversation,  "the  defendant  said  he  had  some  flour  coming, 
and  asked  if  the  plaintiff  would  take  it  of  him;  and  the  plaintiff 
said  he  did  not  want  it,  that  he  had  not  much  capital  and  it  would 
not  be  convenient  to  take  it;  and  the  defendant  said.  Will  you  give 
me  the  privilege  of  selling  it?  and  the  plaintiff  said,  Yes;  and  the 
defendant  thanked  him  for  it  and  said  he  would  not  trouble  him  by 
going  into  business  in  five  years."  The  plaintiff  himself  testified 
that  the  defendant  said,  "I  have  a  lot  of  flour  coming;  if  you  don't 
want  to  buy  it,  will  you  give  me  the  privilege  to  sell  it?"  that  he 
replied,  "Yes;"  and  that  the  defendant  then  said,  "If  you'll  let  me 
sell  the  flour  it  is  all  I  want,  and  I  shall  not  trouble  you  in  the 
grocery  business  in  Chicopee  in  five  years." 

It  appeared  further  that  the  parties  then  went  to  an  attorney's 
office,  and  that,  while  the  lease  was  in  preparation,  the  plaintiff  asked 
if  it  would  not  be  well  to  mention  in  it  that  the  defendant  was  not 
to  go  into  the  business  in  Chicopee  for  five  years,  and  the  defend- 
ant said  it  would  be  foolish,  and  the  attorney  said  that  there  was 

Deaton  v.  Tennessee  Coal  Co.,  12  Heisk.  650,  c&ntra.     See  also  Buhl  v.  Stephens,  84 
Fed.  Rep.  922;   Swnft  v.  Swift,  46  Cal.  266;   Butler  v.  Shehan,  61  III.  App.  561. 

In  a  few  states  contracts  to  marry  at  a  time  more  than  a  year  in  the  future  have 
been  held  not  witlun  the  statute;  but  the  contrary  view  is  better  supported.  "See 
1  Williston,  Contracts,   §501. 


442  DOYLE    V.   DIXON  [CHAP.    IV 

no  need  of  it;  tliat  the  parties  agreed  that  the  lease  thus  drawn 
should  be  deposited  with  the  parish  priest;  and  that  a  day  or  two 
before  December  1  the  plaintiff  paid  the  bonus  of  five  hundred 
dollars,  and  on  or  before  that  day  all  the  other  stipulations  of  the 
memorandum  signed  on  November  19  w^ere  fully  performed  by  the 
parties  respectively. 

It  was  also  in  evidence  that  on  May  15,  1866,  the  defendant  did 
enter  into  the  grocery  business  in  Chicopee,  and  continued  in  it  to 
the  time  of  the  commencement  of  this  action  on  August  15  following. 

The  plaintiff  claimed  his  right  of  action  only  upon  and  by  virtue 
of  the  agreement  of  November  21 ;  whereupon  the  defendant  re- 
quested the  judge  to  rule  that  he  could  not  recover  upon  an  oral  agree- 
ment not  to  go  into  the  grocery  business  in  Chicopee  within  five  years, 
because  such  agreement  was  not  to  be  performed  within  one  year 
from  the  making  thereof  and  was  within  the  statute  of  frauds;  but 
the  judge  ruled  the  contrary. 

The  defendant  alleged  exceptions. 

A.  L.  8 pule,  for  the  defendant. 

G.  M.  Stearns,  for  the  plaintiff. 

Gkay^  J.^  It  is  well  settled  that  an  oral  agreement  which  according 
to  the  expression  and  contemplation  of  the  parties  may  or  may  not 
be  fully  performed  within  a  year  is  not  within  that  clause  of  the 
statute  of  frauds  which  requires  any  "agreement  not  to  be  performed 
within  one  year  from  the  making  thereof"  to  be  in  writing  in  order 
to  maintain  an  action.  An  agreement  therefore  which  will  be  com- 
pletely performed  according  to  its  terms  and  intention  if  either  party 
should  die  within  the  year  is  not  within  the  statute.  Thus  in  Peters 
V.  Westborough,  19  Pick.  364,  it  was  held  that  an  agreement  to  sup- 
port a  child  until  a  certain  age  at  which  the  child  would  not  arrive 
for  several  years  was  not  within  the  statute,  because  it  depended 
upon  the  contiugency  of  the  child's  life,  and,  if  the  child  should  die 
within  one  year,  would  be  fully  performed.  On  the  other  hand, 
if  the  agreement  cannot  be  completely  performed  within  a  year,  the 
fact  that  it  may  be  terminated,  or  further  performance  excused  or 
rendered  impossible,  by  the  death  of  the  promisee  or  of  another  per- 
son within  a  year,  is  not  sufficiont  to  take  it  out  of  the  statute.  It 
was  therefore  held  in  Hill  v.  Hooper,  1  Gray,  131,  that  an  agree- 
ment to  employ  a  boy  for  five  years  and  to  pay  his  father  certain 
sums  at  stated  periods  during  that  time  was  within  the  statute;  for 
althongh  by  the  death  of  the  boy  the  services  which  were  the  con- 
sideration of  the  promise  would  cease,  and  the  promise  therefore  be 
detorniinod,  it  would  certainly  not  be  completely  performed.  So  if 
the  death  of  the  promisor  within  the  year  would  merely  prevent  full 
perforninnce  of  the  agreement,  it  is  witliin  the  statute;  but  if  his 
death  would  leave  the  agreement  completely  performed  and  its  pur- 
pose fully  carried  out,  it  is  not.    It  has  accordingly  been  repeatedly 

'  OrJy  HO  rrnicli  of  tho  case  Ls  printed  as  relates  to  the  Statute  of  Frauds. 


CHAP.    IV]  CHERRY    V.    HEMING   AND    NEEDHAM  443 

held  by  this  court  that  an  agreement  not  hereafter  to  carry  on  a 
certain  business  at  a  particular  place  was  not  within  the  statute, 
because,  being  only  a  personal  engagement  to  forbear  doing  certain 
acts,  not  stipulating  for  anything  beyond  the  promisor's  life,  and 
imposing  no  duties  upon  his  legal  representatives,  it  would  be  fully 
performed  if  he  died  within  the  year.  Lyon  v.  King,  11  Met.  411; 
Worthy  V.  Jones,  11  Gray,  168.  An  agreement  not  to  engage  in  a 
certain  kind  of  business  at  a  particular  place  for  a  specified  number 
of  years  is  within  the  same  principle;  for  whether  a  man  agrees  not 
to  do  a  thing  for  his  life,  or  never  to  do  it,  or  only  not  to  do  it  for 
a  certain  number  of  years,  it  is  in  either  form  an  agreement  by 
which  he  does  not  promise  that  anything  shall  be  done  after  his 
death,  and  the  performance  of  which  is  therefore  completed  with 
his  life.  An  agreement  to  do  a  thing  for  a  certain  time  may  perhaps 
bind  the  promisor's  representatives,  and  at  any  rate  is  not  performed 
if  he  dies  within  that  time.  But  a  mere  agreement  that  he  will  him- 
self refrain  from  doing  a  certain  thing  is  fully  performed  if  he 
keeps  it  so  long  as  he  is  capable  of  doing  or  refraining.  The  agree- 
ment of  the  defendant  not  to  go  into  business  again  at  Chicopee  for 
five  years  was  therefore  not  within  the  statute  of  frauds. 

Exceptions  overruled.^ 


CHEREY  V.  HEMING  &  NEEDHAM 

In  the  Exchequer,  December   5,   1849 

[Reported  in  4  Exchequer,  63] 

This  was  an  action  of  covenant  on  an  indenture,  dated  the  31st 
of  March,  1836,  whereby  the  plaintiff  assigned  certain  letters  patent 
to  the  defendants,  who  covenanted  to  pay  the  plaintiff  840/.^  by  in- 
stalments extending  over  several  years,  subject  to  a  proviso,  that  if, 
at  the  expiration  of  twelve  months  from  the  date  of  the  indenture, 
the  defendants  should  not  approve  of  the  working  of  the  patent,  and 
should  give  notice  of  their  disapprobation,  and  of  their  intention  to 
sell  the  patent,  then  the  payment  of  the  first  instalment  should  be 
suspended;  and  if,  having  given  such  notice,  the  defendants  should 
within  six  months  sell  the  patent,  then  the  covenant  should  cease  and 
determine.  The  defendants  pleaded  non  est  factum. 

At  the  trial,  before  Platt,  B.,  at  the  Middlesex  Sittings  after 
Easter  Term,  1849,  it  appeared  that  the  defendant  Needham  had 
executed  the  deed,  and  there  was  the  signature  to  it  of  all  the  parties, 
except  that  of  the  defendant  Heming.  There  was,  however,  a  seal 
at  the  foot  of  the  deed  for  each  party,  being  the  seal  ordinarily  used 
in  the  office  of  the  plaintiff's  attorney  who  prepared  the  deed,  and 

1  McGirr  v.  Campbell,  71  N.  Y.  App.  D.  83:  Witter  v.  Gottschalk,  5  Ohio  Dec. 
77,  25  Ohio  St.  76,  contra.    Compare  O'Neal  v.  Hines.  145  Ind.  32. 


444  CHERRY    V.    HEMING    &    NEEDHAM  [CHAP.    IV 

who  had  attested  the  execution  of  the  defendant  Needham.  The 
deed  was  produced  out  of  the  custody  of  Heming.  The  defendants 
had  endeavored  to  work  the  patent,  but,  being  dissatisfied  with  it, 
sent  the  following  notice  in  the  handwriting  of  the  defendant  Hem- 
ing, and  signed  by  both  the  defendants :  — 

It  was  objected,  that  there  was  no  evidence  of  the  execution  of 
the  deed  by  the  defendant  Heming;  but  the  learned  Judge  ruled  that 
there  was  evidence  for  the  jury.  It  was  also  objected,  that  this  was 
a  contract  within  the  4th  section  of  the  Statute  of  Frauds,  29  Car. 
II.  c.  2,  and  ought,  therefore,  to  have  been  signed  by  the  defendant 
Heming.  His  Lordship  was  of  opinion  that  a  deed  was  not  within 
the  meaning  of  that  statute,  and  a  verdict  was  found  for  the  plaintiff. 

Paeke,  B.  The  rule  must  be  discharged.  With  respect  to  the 
question,  whether  this  is  an  instrument  within  the  Statute  of  Frauds, 
I  think  that  Donellan  v.  Read  is  an  answer;  and,  in  my  opinion, 
that  case  was  rightly  decided.  The  question  turns  upon  the  construc- 
tion of  the  words  "not  to  be  performed;"  and  in  Donellan  v.  Head 
the  Court  considered  that  those  words  meant,  not  to  be  performed 
on  either  side,  and  did  not  include  cases  where  the  contract  was 
performed  on  the  one  side.  That  was  certainly  in  accordance  with 
the  opinion  expressed  by  Lord  Tenterden  in  Bracegirdle  v.  Heald. 
If  Donellan  v.  Read  had  been  simply  a  decision  on  a  doubtful  point, 
we  ought  to  be  bound  by  it,  unless  manifestly  wrong ;  and  the  learned 
observations  of  Mr.  Smith  are  not  sufficient  to  induce  me  to  say 
that  it  was  wrongly  decided.  The  case  of  Peter  v.  Compton,  which 
he  relies  on,  does  not  support  his  view.  All  that  can  be  said  of  that 
case  is,  that,  there  being  two  answers  to  the  Statute  of  Frauds,  Lord 
Holt  gives  one  which  is  satisfactory,  namely,  that  the  agreement 
might  have  been  performed  within  the  year.  It  is  unnecessary  to 
give  an  opinion  on  the  other  points;  but  I  must  own  that  I  think 
a  deed  is  not  within  the  Statute  of  Frauds,  because,  in  my  opinion, 
that  statute  was  never  meant  to  apply  to  the  most  solemn  instrument 
which  the  law  recognizes.  I  also  think  that  the  notice  which  refers  to 
the  deed  would,  if  it  were  necessary  to  have  recourse  to  it,  be  a  suffi- 
cient note  or  memorandum  within  the  statute.  I  do  not  mean  to 
be  concluded  by  this  expression  of  my  opinion  on  the  two  latter 
points,  but  only  to  state  my  present  impression. 

Alderson,  B.  —  I  also  think  that  Donellan  v.  Read  is  good  law ; 
but  even  if  it  were  not,  this  case  would  not  require  its  assistance, 
because,  this  being  the  case  of  a  deed,  it  must  be  taken  to  have  been 
sealed  by  the  parties  in  due  form,  and  the  statute  does  not  apply 
to  such  instruments,  but  only  to  parol  agreements. 

RoLFE,  B.  I  am  strongly  inclined  to  think  that  the  statute  does 
not  extend  to  dcfds,  because  its  requirements  Avould  be  satisfied  by 
the  parties  putting  their  mark  to  the  writing.  The  object  of  the 
statute  was  to  prevent  matters  of  importance  from  resting  on  the 
frail  testimony  of  memory  alone.     Before  the  Norman  time,  signa- 


CHAP.    IV]  DIETRICH    V.    HOEFELMEIR  445 

ture  rendered  the  instrument  authentic.  Sealing  was  introduced  be- 
cause the  people  in  general  covild  not  write.  Then  there  arose  a  dis- 
tinction between  what  was  sealed  and  what  was  not  sealed,  and  that 
went  on  until  society  became  more  advanced,  when  the  statute  ulti- 
mately said  that  certain  instruments  must  be  authenticated  by  sig- 
nature. That  means,  that  such  instruments  are  not  to  rest  on  parol 
testimony  only,  and  it  was  not  intended  to  touch  those  which  were 
already  authenticated  by  a  ceremony  of  a  higher  nature  than  a 
signature  or  a  mark. 

Platt,  B.,  concurred.  Rule  discharged.^ 


DIETKICH  ET  AL  V.  HOEFELMEIR 

Michigan  Supreme  Court,  July  19,  1901 

[Reported  in  128  Michigan,  145] 

Moore,  J.  This  is  an  action  of  trover  brought  to  recover  the 
value  of  40  sheep  claimed  to  have  been  converted  by  the  defendant 
to  his  own  use  on  the  6th  day  of  January,  1900.  The  declaration 
was  in  the  usual  form  of  declarations  in  trover.  The  plea  was  the 
general  issue,  with  notice  of  a  contract  between  the  parties  by  which 
the  defendant  took  20  sheep  from  the  plaintiffs,  to  double  in  four 
years  from  the  6th  day  of  January,  1896,  and  also  a  notice  of  tender. 
Some  time  in  the  month  of  December,  1895,  one  of  the  plaintiffs  met 
the  defendant  at  his  place  of  business  in  Ravenna,  when  the  defend- 
ant wanted  to  know  if  the  plaintiff  had  any  sheep  to  sell.  Plaintiff 
Leo  Dietrich  said  he  had  no  sheep  to  sell,  but  would  let  defendant 
have  20  sheep  on  shares,  to  double  in  four  years,  provided  it  was 
satisfactory  to  his  brother  Jacob.  Soon  after  that  date,  and  on  the 
6th  day  of  January,  1896,  the  defendant  went  to  the  place  of  the 
plaintiffs  to  get  the  sheep,  when  it  was  agreed  between  the  plaintiffs 
and  defendant  as  follows :  — 

"Plaintiffs  agreed  to  let  the  defendant  have  20  sheep,  all  ewes, 
and  all  with  lamb,  all  good  size  and  all  good  grade;  the  defendant  to 
take  said  sheep  to  double  in  four  years;  and  return  at  the  end  of 
four  years  40  ewe  sheep,  all  to  be  with  lamb,  and  the  same  grade  or 
quality  of  sheep,  to  be  delivered  by  the  defendant  to  the  plaintiffs 
at  his  (defendant's)  farm." 

The  sheep  delivered  were  from  2  to  6  years  old.  Defendant  was 
to  return  sheep  not  younger  than  2  nor  more  than  6  years  old.  A 
demand  was  made  upon  him  for  the  sheep.  Upon  his  refusal  to  de- 
liver them,  this  suit  was  brought. 

At  the  conclusion  of  the  testimony  for  the  plaintiffs,  counsel  for 
defendant  moved  the  court  "to  direct  a  verdict  in  favor  of  the  de- 
fendant — 

1  Compare  Reeve  v.  Jennings,  [1910]  2  K.  B.  522. 


446  DIETRICH    V.    HOEFELMEIR  [CHAP.    IV 

"First,  upon  tlie  ground  that  the  contract  testified  to  by  the  wit- 
nesses for  the  plaintiffs  is  a  verbal  contract,  and  not  one  to  be  per- 
formed within  a  year  by  the  defendant,  and  therefore  within  the 
statute  of  frauds,  so  called; 

"Second,  upon  the  ground  that  the  transaction  on  January  6th 
and  prior  thereto  between  these  parties  concerning  these  sheep,  as 
testified  to  by  the  plaintiffs'  witnesses,  was  a  sale  of  the  sheep,  and 
not  a  bailment,  and  that  the  title  passed  to  the  defendant,  and  the 
plaintiffs  have  no  title  or  interest  in  the  specific  sheep  for  which  they 
seek  to  recover  in  this  action  of  trover;  and, 

"Third  (which  is  covered  in  that,  perhaps),  that  an  action  of 
trover  will  not  lie.  If  any  action  would  lie,  it  would  be  an  action 
of  assumpsit." 

The  trial  judge  was  of  the  opinion  that  the  contract  was  within 
the  statute  of  frauds  and  was  absolutely  void,  and  directed  a  verdict 
for  the  defendant.    The  case  is  brought  here  by  writ  of  error. 

Counsel,  in  their  brief,  say: 

"The  position  of  defendant  may  be  stated  as  follows :  — 

"1.  The  contract  on  the  part  of  defendant  to  deliver  to  plaintiffs 
40  sheep  at  the  end  of  four  years  was  not  in  writing,  and  by  its 
terms  was  not  to  be  performed  within  one  year,  and  therefore  was 
within  the  statute  of  frauds.  The  contract  on  the  part  of  the  plaintiffs 
to  deliver  to  defendant  20  sheep  was  to  be  performed  presently,  and 
was  fully  executed,  and  therefore  was  not  within  the  statute  of  frauds. 

"2.  The  transaction  constituted  a  sale,  and  not  a  bailment,  of 
the  sheep  by  plaintiffs  to  the  defendant. 

"3.  The  plaintiffs  have  mistaken  the  form  of  their  action.  While 
they  might  have  recovered  upon  the  appropriate  common  counts  in 
an  action  of  assumpsit,  they  cannot  recover  in  the  present  action  of 
trover." 

We  think  this  position  is  not  tenable.  Were  it  not  for  the  statute 
of  frauds,  this  contract  would  not  be  void;  and,  were  it  completely 
executed,  it  would  be  taken  out  of  the  statute,  so  that  neither  party 
could  question  its  validity.  Browne,  Stat.  Frauds  (5th  ed.),  §  116. 
The  plaintiffs  are  not  invoking  the  aid  of  the  statute  to  avoid  the 
contract.  That  is  done  by  defendant,  who  has  agreed  by  parol  to 
do  something  which  he  now  refuses  to  do  because  the  contract  was 
not  made  in  writing,  after  the  other  parties  have  performed  their 
agreement.  The  defendant  cannot  separate  an  agreement,  which  all 
the  parties  regarded  as  an  entire  one,  into  two  parts,  and  say  that 
one  of  tbese  parts  was  performed  within  a  year,  and  therefore  makes 
a  compl(;t(!  contract,  by  which  defendant  has  obtained  title  to  the 
property,  while,  as  to  the  other  part  of  the  contract,  by  which  de- 
fondant  was  to  return  twice  the  number  of  the  sheep  which  he  had 
received,  that  as  that  agreement  was  not  to  be  performed  within 
a  year,  and  has  never  in  fact  been  performed,  it  is  void  because  not 
in  writing,  and  therefore  he  will  not  perform  it.     To  allow  this  con- 


CHAP.    IV]  SMITH    V.   ASHANTI   EXPLORERS  447 

tention  would  be  to  permit  the  making  of  a  contract  never  contem- 
plated by  the  parties. 

Under  the  provisions  of  subdivision  1,  §  9515,  3  Comp.  Laws,  the 
contract  the  parties  undertook  to  make  was  void  because  it  could 
not  be  performed  within  a  year,  and  was  not  in  writing.  The  circuit 
judge  was  right  in  declaring  it  to  be  absolutely  void.  Scott  v.  Bush, 
26  Mich.  418,  421  (12  Am.  Eep.  311) ;  Kelly  v.  Kelly,  54  Mich.  30, 
48  (19  N".  W.  580)  ;  Kaub  v.  Smith,  61  Mich.  543,  547  (28  K  W. 
676,  1  Am.  St.  Rep.  619);  Wardell  v.  Williams,  62  Mich.  50,  62 
(28  K  W.  796,  4  Am.  St.  Rep.  814) ;  Winner  v.  Williams,  62  Mich. 
363,  366  (28  N.  W.  904).  If  this  is  so,  it  did  not  convey  the  title 
of  the  sheep  to  the  defendant,  but  the  title  remained  with  the  plain- 
tiffs. After  the  defendant  has  got  possession  of  the  sheep  belonging 
to  plaintiffs  by  reason  of  a  contract  made  void  by  the  statute,  he 
cannot  invoke  the  aid  of  the  statute  to  defeat  the  title  of  the  plain- 
tiffs, and  say  the  same  contract  confers  upon  himself  title  to  the 
property.  The  law  is  not  so  unfair  and  unjust  as  that  would  be. 
The  title  to  the  sheep,  then,  remaining  in  the  plaintiffs,  and  the  de- 
fendant, without  the  consent  of  the  plaintiffs,  having  sold  them,  and 
having,  upon  demand  made,  refused  to  return  them,  the  plaintiffs 
were  entitled  to  maintain  this  action. 

Judgment  reversed  and  new  trial  ordered. 

The  other  justices  concurred.^ 


SMITH  V.   GOLD  COAST  AND   ASHANTI  EXPLORERS,  Ltd. 

In  the  King's  Bench  Division,  January  15,  1903 

[Reported  in   [1903]    1  King's  Bench,  285] 

Lord  Alverstone,  C.  J.  We  are  of  opinion  that  there  must  be 
a  new  trial  in  this  case.  The  Common  Serjeant  directed  the  jury  to 
find  a  verdict  for  the  defendants,  because,  in  his  opinion,  the  con- 
tract sued  upon  was  one  which  was  not  to  be  performed  within  the 
space  of  one  year  from  the  making  thereof,  and  was  therefore  within 
Sec.  4  of  the  Statute  of  Frauds.  The  contract  set  up  by  the  plaintiff 
was  entered  into  on  December  6,  1901,  and  by  it  he  was  engaged 

^  Berry  v.  Graddy,  1  Met.  (Ky.)  553;  Marcy  v.  Marcy,  9  Allen,  8;  Kelley  v.  Thomp- 
son, 175  Mass.  427;  Buckley  v.  Buckley,  9  Nev.  373;  Bartlett  v.  Wheeler,  44  Barb. 
162;  BroadweU  v.  Getman,  2  Denio,  87;  Parks  v.  Francis,  50  Vt.  626,  ace.  See  also 
Reinheimer  v.  Carter,  31  Ohio  St.  579,  587. 

Wehner  v.  Bauer,  160  Fed.  240;  Manning  v.  Pippen,  95  Ala.  537,  541;  Johnson 
V.  Watson,  1  Ga.  348;  Fraser  v.  Gates,  118  111.  99,  112;  Haugh  v.  Blythe,  20  Ind.  24; 
Piper  V.  Fosher,  121  Ind.  407;  Smalley  v.  Greene,  52  la.  241;  Dant  v.  Head,  90  Ky. 
255;  Blanton  v.  Knox,  3  Mo.  342;  Bless  v.  Jenkins,  129  Mo.  647;  Marks  v.  Davis,  72 
Mo.  App.  557;  Blanding  v.  Sargent,  33  N.  H.  239;  Little  v.  Little,  36  N.  H.  224 
Perkins  v.  Clay,  54  N.  H.  518;  Matter  of  Chamberlain,  146  N.  Y.  App.  D.  583: 
Durfee  v.  O'Brien,  16  R.  I.  213;  Gee  v.  Hicks,  1  Rich.  Eq.  5;  Reed  v.  Gold,  102  Va.  37 
McCellan  v.  Snnford,  26  Wis.  595;  Washburn  v.  Dosch,  68  Wis.  436;  Phillips  v. 
Holland,  149  Wis.  624,  contra.    See  also  Sheehy  v.  Adarene,  41  Vt.  541. 


448  SMITH    V.    ASHANTI    EXPLORERS  [CHAP.    IV 

by  the  defendants  to  act  as  their  solicitor  for  a  year  certain  from 
December  7,  1901.  The  question  is  whether  that  is  a  contract  within 
Sec.  4  of  the  Statute  of  Frauds. 

In  one  sense  the  contract  may  be  said  to  be  one  which  is  not  to 
be  performed  within  the  space  of  one  year  from  the  date  when  it 
was  made.  It  depends  upon  whether  the  period  of  service  is  to  ex- 
clude or  include  the  day  next  after  that  on  which  the  contract  was 
entered  into.  It  is  contended  for  the  defendants  that  a  year's  service 
"from"  December  7,  1901,  would  commence  on  December  8  —  that 
is  to  say,  that  the  year  would  exclude  December  7,  1901,  and  would 
include  December  7,  1902.  If  that  is  the  contract,  then  it  is  clear, 
on  the  authority  of  Britain  v.  Rossiter^  that  the  contract  is  Avithin 
the  statute,  for  it  was  there  decided  that  where  the  service  is  to  com- 
mence on  the  second  day  after  that  on  which  the  contract  is  made, 
the  contract  is  one  which  is  not  to  be  performed  within  a  year.  But 
if  the  contract  in  this  case  was  for  a  year's  service  commencing  on 
December  7,  1901  —  that  is,  on  the  day  next  after  that  on  which 
the  contract  was  made  —  and  terminating  on  December  6,  1902, 
there  is  authority  for  holding  that  such  a  contract  is  not  within  the 
statute.  In  Cawthorne  v.  Cordrey-  it  had  been  ruled  at  the  trial 
that  an  agreement  made  on  a  Sunday  for  a  year's  service  to  com- 
mence on  the  Monday  was  not  within  the  statute.  In  the  course 
of  the  argument  on  a  rule  for  a  new  trial  Willes  J.  said:  "If  a 
builder  undertakes  to  build  a  house  within  a  year,  that  means  a 
year  from  the  next  day" ;  and  Byles  J.  said :  "If  you  adopt  the  reason- 
able rule  which  excludes  fractions  of  a  day,  taking  the  receipt  to 
define  the  duration  of  the  contract,  there  would  be  only  three  hundred 
and  sixty-five  days."  These  dicta  are  an  expression  of  opinion  in 
favour  of  the  view  that  the  statute  does  not  apply  where  the  service 
is  to  commence  on  the  day  next  after  the  agreement.  Then  Brett, 
L.  J.,  in  Britain  v.  Hossiter  ^  referring  to  Cawthorne  v.  Cordrey  * 
said:  "There  was  however  a  dictum  of  Willes  J.,  which  seems  to 
be  supported  by  the  opinion  of  Byles  J. ;  these  are  great  authorities ; 
and  that  dictum  seems  to  have  been  that  if  a  contract  is  made  on 
a  day,  say  Monday,  for  a  service  for  a  year,  to  commence  on  the 
following  day,  say  a  Tuesday,  the  service  is  to  be  performed  within 
365  days  from  the  making  of  the  contract;  but  that  inasmuch  as  the 
law  takes  no  notice  of  part  of  a  day,  and  the  contract  was  made  in 
the  middle  of  the  Monday,  the  service  to  be  performed  within  365 
days  after  that,  the  law  did  not  count  that  half-day  of  the  Monday, 
and  therefore  the  contract  was  to  be  performed  within  365  days 
after  it  was  made,  and  that  was  within  a  year.  This  view  was 
founded  upon  a  fiction,  namely,  that  the  law  does  not  take  notice 
of  part  of  a  day.  I  am  not  prepared  to  say  that  under  like  cir- 
cuiriHtances  one  might  not  follow  that  dictum,  and  carry  it  to  the 

1  11  Q.  B.  D.  123.  «  IIQ.  B.  D.  123. 

»  13  C.  B.  (N.  S.)  406.  *  13  C  B.  (N.  S.)  406. 


CHAP.    IV]  ODELL    V.    WEBENDORFER  449 

length  of  a  decision.  It  is  not  necessary  to  say  so  here,  because  the 
case  has  not  arisen."  The  case  has  now  arisen  for  our  decision,  and 
I  cannot  regard  that  passage  from  Brett,  L.  J.'s  judgment  as  being 
intended  to  express  disapproval  of  the  dicta  in  Cawthorne  v.  Cord- 
rey.^  On  the  contrary,  I  think  that  these  cases  shew  that  a  contract 
for  a  year's  service  to  commence  on  the  day  next  after  the  day  on 
which  the  contract  was  made  is  not  an  agreement  which  is  not  to  be 
performed  within  the  space  of  one  year  from  the  making  thereof, 
within  the  meaning  of  Sec.  4.  The  contract  set  up  by  the  plaintiff  is, 
therefore,  not  of  necessity  within  the  statute,  and  the  case  must  go 
down  for  a  new  trial. 

Wills  and  Channell,  JJ.,  concurred. 

New  trial  ordered.    Leave  to  appeal.^ 


WILLIAM  D.  ODELL,  Eespondent,  v.  HENEY 
WEBENDOKFER,  Appellant 

Appellate  Division  of  the  New  York  Supreme  Court,  April 

Term,  1900 

[^Reported  in  50  New  York  Supreme  Court,  Appellate  Division,  579] 

HiRSCHBERG,  J.  The  plaintiff  alleges  that  he  was  hired  by  the 
defendant  on  April  1,  1898,  to  work  his  farm  for  one  year  and  to 
furnish  an  additional  man,  for  which  he  was  to  be  paid  sixty  dollars 
a  month,  and  to  receive  house  rent,  a  horse  once  a  week,  four  quarts 
of  milk  per  day,  potatoes,  apples,  and  stable  room.  He  claims  that 
he  was  unlawfully  discharged  December  1,  1898,  and  sues  for  his 
money  wages  during  the  remainder  of  the  term,  and  for  the  value 
of  the  "privileges."  The  defendant  denied  that  the  hiring  was  for 
a  year,  alleged  that  the  discharge  was  for  adequate  cause,  and  pleaded 
the  Statute  of  Frauds. 

The  agreement  for  hiring,  as  stated  by  the  plaintiff,  was  oral, 
and  was  made  in  the  middle  of  March,  1898,  for  a  year,  to  commence 
April  1,  1898.  The  plaintiff  claims  that  the  agreement  was  re- 
newed April  1,  1898,  but  his  evidence  would  seem  to  be  limited  to 
proof  that  its  terms  were  merely  restated,  and  that  no  new  contract 
was  actually  entered  into  on  that  day.  He  said  on  direct  examina- 
tion :  "Q.    Was  this  talk  the  first  of  April  ?    A.     We  were  mention- 

'  13  C.  B.  (  N.  S.  )406. 

'  The  decision  was  affirmed  by  the  Court  of  Appeal  in  [1903]  1  K.  B.  538. 

Oral  Contracts  for  a  year's  service  beginning  the  following  day  were  upheld  in 
Dickson  v.  Frisbee,  52  Ala.  165;  Prokop  v.  Bedford  Waist  Co.,  105  N.  Y.  Misc.  573, 
187   N.  Y.     App.    D.   662    (overruling  earlier  New  York  decisions  to  the  contrary). 

Such  contracts  were  held  unenforceable  in  Raymond  v.  Phipps,  215  Mass.,  559; 
Brosius  V.  Evans,  90  Minn.  521;    Keller  v.  Mayer  Fertilizer  Co.,  153  Mo.  App.  120; 
McElroy  v.  Ludlum,  32  N.  J.  Eq.  828. 
15 


450  ODELL    V.    WEBENDORFER  [CHAP.    IV 

ing  over  what  it  was  already  understood.  Q,  "What  was  the  talk? 
A.  That  was  it.  Q.  Did  you  have  a  similar  talk  with  him  before? 
A.  I  did.  Q.  What  was  the  occasion  of  your  speaking  to  him  that 
day?  A.  After  I  made  the  arrangements  with  Mr.  Webendorfer  to 
work  for  him,  I  heard  that  he  didn't  always  stand  up  to  his  agree- 
ments, and  I  thought  to  make  myself  safe  I  would  repeat  it  there 
on  the  first  day  of  April,  and  have  an  understanding."  On  cross- 
examination  he  said :  "Q.  So  that  when  it  came  the  first  of  April 
you  had  no  agreement  to  make  with  Mr.  Webendorfer  at  all?  A. 
Only  to  repeat  the  bargain.  Q.  Answer  the  question.  Did  you 
have  any  further  agreement  with  him,  did  you  have  any  further 
agreement  or  contract  on  the  first  day  of  April?  A.  I  didn't  pre- 
sume it  was  necessary,  but  as  I  say,  as  I  heard  Mr.  Webendorfer 
didn't  always  stand  up  to  his  agreements,  I  thought  that  it  was  nec- 
essary for  me  to  repeat  the  contract,  and  see  if  it  was  satisfactory. 
Q.  On  the  first  day  of  April  you  talked  over  your  previous  contract? 
A.  Yes,  sir.  Q.  You  made  no  new  contract?  A.  No,  sir,  just  the 
previous  bargain." 

By  the  plaintiff's  own  showing  the  contract  was  not  made  on  the 
first  of  April.  No  contract  was  made  that  day,  but  only  the  terms 
of  the  prior  contract  were  restated  by  either  him  or  the  defendant, 
for  the  sake  of  certainty  as  to  the  mutual  obligations.  What  was 
actually  said  on  the  first  of  April  does  not  appear  in  the  case  at  all. 
This  is  not  sufficient  to  take  the  case  out  of  the  operation  of  the 
statute.  A  new  contract  then  made  is  requisite;  that  is,  the  former 
contract  should  then  be  expressly  renewed  or  the  employer  cannot 
be  held  bound.  Oddy  v.  James,  48  N.  Y.  685 ;  Berrien  v.  Southack, 
26  N.  Y.  St.  Rep.  932;  Billington  v.  Cahill,  51  Hun,  132. 

It  was  error  also  to  permit  the  jury  to  include  the  "privileges" 
in  the  assessment  of  damages.  The  plaintiff  made  no  proof  what- 
ever as  to  the  money  value  of  the  privileges,  and  there  was,  there- 
fore, nothing  in  the  case  on  which  the  damages  created  by  their  loss 
could  be  estimated. 

The  judgment  and  order  should  be  reversed  and  a  new  trial  granted. 

All  concurred. 

Judgment  and  order  reversed  and  new  trial  granted,  costs  to  abide 
the  events 

*  "  On  the  new  trial  the  jjlaintiff  testified  that  on  the  1st  day  of  April,  1898,  he  had 
a  separate  and  distinct  understanding  with  the  defendant  as  to  what  the  bargain  would 
be;  that  he  statc.-d  to  th(!  defendant  that  h(!  suj^posed  his  work  was  to  conunence  that 
mominK  to  cf)ntinue  for  the;  year,  and  that  they  then  had  an  understanding  in  hie 
lan(Cii.'".t;e  as  follows:  'He,'  the;  defendant,  'said  I  was  to  work  for  the  year  and  have 
Hixty  flolhirs  a  month,  and  I  was  to  furnish  my  man,  and  I  was  to  have  the  privilege 
of  hous<-  Tfnt,  wood,  potatoes,  apples,  and  milk,  and  a  horse  and  wapon  once  a  week. 
I  was  to  pay  the  liired  man.  Mr.  Webendf)rfer  was  to  pay  me,  and  I  was  to  pay  the 
hired  man  out  of  what  Mr.  Webendorfer  paid  me.  I  was  to  board  the  hired  man,  and 
under  that  arranKement  I  went  to  work  for  Mr.  Webendorfer  at  that  time.'  If  this 
conversation  rejilly  was  had  between  the  parties  on  .\i)ril  first,  beinu  in  effect  a  distinct 
renewal  of  the  contract  as  previously  made  and  aureed  upon,  it  would  serve  to  take 
the  case  out  of  the  opinion  of  the  statute,  notwithstanding  that  the  terms  of  both 


CHAP.    IV]  ODELL    V.    WEBENDORFER  451 

contracts  were  identical.  On  the  second  trial  the  plaintiff  further  testified  that  the 
first  contract  was  made  on  Sunday  and  on  election  day,  and  that  was  one  of  the  rea- 
sons why,  to  quote  his  words,  '  I  took  pains  to  make  the  contract  on  the  1st  of  Aprfl 
again.'  He  further  testified:  'Q.  How  did  you  happen  to  have  this  talk  that  you 
spoke  of,  with  Mr.  Webendorfer  on  the  morning  of  the  first  of  April?  A.  Well,  be- 
cause I  had  heard  that  Mr.  Webendorfer  didn't  always  stand  to  his  agreements, 
and  I  thought  to  have  myself  secured.  I  thought  I  would  make  a  new  arrangement 
on  the  first  of  April  and  everything  would  be  all  right.  Q.  You  thought  you  would 
repeat  the  bargain?    A.    I  thought  I  would  make  the  bargain." 

"The  difference  in  his  evidence  given  on  the  two  trials  is  vital.  On  the  first  trial 
the  suggestion  was  a  mere  rehearsal  of  the  terms  of  the  original  contract  for  the  pur- 
pose of  avoiding  any  misunderstandinn;  as  to  what  they  were.  On  the  second  trial 
he  testified  that  the  bargain  was  expressly  renewed."  Odell  c.Webendorfer,  60  N.Y. 
App.  Div.  460,  461.  See  also  Comes  «.  Lamson,  16  Conn.  246;  Sines  o.  Superin- 
tendents, 58  Mich.  503;  Turners.  Hochstadter,  7  Hun,  80;  Lajos  v.  Eden  Musee  Co., 
30  N.  Y.  Supp.  916. 


CHAPTER  V 

PERFORMANCE    OF    CONTRACTS 


SECTION"  I 
EXPRESS    CONDITIONS 


A,  —  Conditions  Pkecedent 


CONSTABLE  V.  CLOBERIE 

In  the  King's  Bench,  Hilary  Term,  1626 

[Reported  in  Palmer,  397] 

Covenant  upon  a  charter-party.  The  plaintiff  covenanted  that  his 
ship  should  go  a  voyage  to  Cadiz  with  the  next  wind ;  and  the  defend- 
ant covenanted  that  if  the  ship  went  the  intended  voyage,  and  re- 
turned to  the  Downs,  the  plaintiff  should  have  so  much  for  the  voyage. 
The  defendant  traversed  that  the  ship  went  with  the  next  wind,  and 
upon  demurrer  the  traverse  was  overruled,  for  the  substance  of  the 
covenant  was  that  the  ship  should  go,  and  not  that  she  should  go 
with  the  next  wind,  for  that  may  change  every  hour;  and  this  is 
proved  by  the  covenant  of  the  defendant,  viz.,  "if  the  ship  went  the 
intended  voyage;"  and  this  was  the  primary  intention  of  the  parties, 
and  not  that  she  should  go  with  the  next  wind.  But,  per  Justice 
Jones,  if  the  defendant  has  covenanted  that  if  the  plaintiff  went  to 
Cadiz  with  the  next  wind,  he  would  pay,  &c.,  there  the  plaintiff  ought 
to  aver  that  he  went  with  the  next  wind. 


HALE  V.  FINCH 

Supreme  Court  of  the  United  States,  November  7-Dec.  5,  1881 

[Reported  in  104  United  States,  261] 

TiriH  was  an  action  for  breach  of  an  alleged  covenant  of  the  de- 
fendant that  a  steamboat  the  "New  World"  should  not  engage  in 
business  on  the  waters  of  the  State  of  California,  or  upon  the  Col- 
umbia River.     The  steamboat  had  been  originally  bought  by  the 

452 


SECT.    l]  HALE    V.    FINCH  453 

Oregon  Steam  Navigation  Company  from  the  California  Steam 
!N^avigation  Company  and  resold  by  the  former  company  to  one 
"Winsor  and  Associates,  who  resold  to  the  plaintiff  Hale  who  in 
turn  sold  to  the  defendant  Tinch. 

Mr.  Justice  Haklan   [after  discussing  other  points  continued]  : 

This  brings  us  to  the  main  contention  on  behalf  of  plaintiffs  in 
error,  viz. :  that  the  language  of  the  bill  of  sale  from  Hale  to  Finch, 
if  interpreted  in  the  light  of  all  the  circumstances  attending  its  exe- 
cution, imports  a  covenant  upon  the  part  of  the  latter,  that  he  would 
not  use  or  permit  the  use  by  others,  of  the  steamboat  or  its  machinery, 
within  a  prescribed  period,  either  upon  the  waters,  rivers  and  bays 
of  California,  or  upon  the  Columbia  river  and  its  tributaries.  If, 
however,  the  language,  properly  interpreted,  imports  only  a  con- 
dition, for  breach  of  which  the  vendor  had  no  remedy  other  than  by 
suit  to  recover  the  property  sold,  then  it  is,  as  indeed  it  must  be, 
conceded,  that  the  judgment  below  was  right. 

We  are  of  opinion  that  the  latter  construction  is  the  proper  one. 

If  we  look  both  at  the  circumstances  preceding  and  at  those  im- 
mediately attending  the  purchase  by  Finch,  and  if  we  even  impute 
to  him  full  knowledge  of  everything  that  occurred,  as  well  when  the 
Oregon  Steam  Navigation  Company  made  its  original  purchase,  as 
when  it  subsequently  sold  to  Winsor  and  his  associates  —  all  which 
counsel  for  plaintiffs  contends  we  are  bound,  by  the  settled  rules  of 
law,  to  do  —  what  do  we  find  ? 

The  written  memorandum  between  that  company  and  the  Cali- 
fornia Steam  Navigation  Company,  in  words  aptly  chosen,  shows, 
as  we  have  seen,  an  express  covenant  and  agreement,  upon  the  part 
of  the  former,  that  neither  the  "New  World,"  nor  its  machinery,  shall 
be  used  on  the  waters  of  California  within  ten  years  from  May  1, 
1864,  and,  also,  to  pay  a  certain  sum,  as  actual  liquidated  damages, 
for  any  breach  of  such  covenant  and  agreement.  The  bill  of  sale  from 
the  Oregon  Steam  Navigation  Company  to  Winsor  and  his  associates 
did  not  contain  any  words  of  covenant  or  agreement.  But  that  com- 
pany, in  view  of  its  express  covenants  to  the  California  Steam  Navi- 
gation Company,  took  care  to  exact  from  its  vendees  a  separate 
written  obligation,  in  which  the  latter,  in  express  terms,  covenanted 
and  agreed  with  that  company,  in  like  manner  as  the  latter  had 
covenanted  and  agreed  with  the  California  Steam  Navigation  Com- 
pany. The  next  writing  executed  was  the  bill  of  sale  from  Winsor 
to  Hale.  That  instrument  shows  nothing  more  than  a  covenant  to 
warrant  the  title  to  the  steamboat.  It  makes  no  reference,  in  any 
form,  to  any  waters  from  which  the  steamboat  should  be  excluded. 
Then  comes  the  bill  of  sale  executed  by  Hale  to  Finch.  Its  material 
portions  are  the  same  in  substance  and,  in  language,  almost  identical 
with  the  bill  of  sale  given  by  the  Oregon  Steam  Navigation  Co.  to 
Winsor.  Each  contains  a  covenant  and  agreement,  upon  the  part 
of  the  vendor,  simply  to  warrant  and  defend  the  title  to  the  steam- 


454  HALE    V.    FINCH  [CHAP.   V 

boat,  its  macliinery,  etc.,  against  all  persons  whomsoever.  But  each 
recites,  let  it  be  observed,  only  an  agreement  that  the  sale  is  upon 
the  express  condition  that  it  shall  not  be  used  or  employed  upon  those 
waters.  Upon  the  sale  by  the  Oregon  Steam  Navigation  Company 
to  Winsor  and  his  associates,  the  former,  as  we  have  seen,  was  care- 
ful to  take  the  separate  obligation  of  the  latter,  with  surety,  con- 
taining covenants  and  agreements,  described  in  such  terms  as  to  show 
that  the  draughtsman,  as  well  as  all  parties  knew  the  difference  be- 
tween a  covenant  and  a  condition.  The  same  criticism  may  be  made 
in  reference  to  the  separate  writing  signed  by  Finch  and  Hale,  at 
the  time  of  the  execution  by  the  latter  of  the  bill  of  sale  to  the  former. 
The  latter  shows,  it  is  true,  several  covenants  and  agreements  upon 
the  part  of  Finch,  but  no  covenant  or  agreement  in  reference  to  the 
use  of  the  boat,  such  as  is  found  in  the  writings  which  passed  be- 
tween the  California  Steam  Navigation  Company  and  the  Oregon 
Steam  Navigation  Company,  or  such  as  are  contained  in  the  separate 
agreement  between  the  latter  and  Winsor  and  his  associates. 

If,  therefore,  we  suppose  (which  we  could  not  do  without  dis- 
crediting some  of  the  testimony)  that  Finch,  at  the  time  of  his  pur- 
chase, had  knowledge  of  all  the  papers  executed  upon  prior  sales 
of  the  "New  World,"  the  absence,  as  well  from  the  bill  of  sale  ac- 
cepted by  him,  as  from  the  written  agreement  of  the  same  date, 
signed  by  him  and  Hale,  of  any  covenant  or  agreement  that  he  would 
not  use  that  vessel,  or  permit  it  to  be  used,  on  the  prohibited  waters 
within  the  period  prescribed,  quite  conclusively  shows  that  he  never 
intended  to  assume  the  personal  responsibility  which  would  result 
from  such  a  covenant. 

It  thus  appears  that  the  circumstances,  separately  considered,  mili- 
tate against  the  construction  for  which  plaintiff  contends. 

But,  if  we  omit  all  consideration  of  the  circumstances  under  which 
the  bill  of  sale  from  Hale  to  Finch  was  executed,  and  look  solely  at 
the  language  employed  in  that  instrument,  there  seems  to  be  no 
ground  upon  which  the  claim  of  plaintiff  can  stand.  The  words  are 
precise  and  unambiguous.  No  room  is  left  for  construction.  It  is 
undoubtedly  true,  as  argued  by  counsel,  that  neither  express  words 
of  covenant,  nor  any  particular  technical  words,  nor  any  special 
form  of  words,  are  necessary  in  order  to  charge  a  party  with  cove- 
nant. 1  lloll.  Abr.,  518 ;  Lant  v.  Norris,  1  Burr.,  287;  Williamson 
V.  Codrington,  1  Ves.,  516  Sheppard's  Touchstone,  161,  162;  Court- 
ney V.  Taylor,  7  Scott  (N.  II.),  749;  2  Pars.  Cont.,  510.  "The  law," 
say  Bacon,  "does  not  seem  to  have  appropriated  any  set  form  of 
words  wliioh  are  absolutely  necessary  to  be  made  use  of  in  creating 
a  covenant."  Bac.  Abr.,  Covenant,  A.  So,  in  Sheppard's  Touch- 
stone, 161,  162,  it  is  said:  "There  need  not  be  any  formal  words, 
as  'cov(;nant/  'promise,'  and  the  like,  to  make  a  covenant  on  which 
to  ground  an  action  of  covenant,  for  a  covenant  may  be  had  by  any 
other  words;  and  upon  any  part  of  an  agreement  in  writing,  in  what- 


SECT.    l]  HALE    V.    FINCH  455 

soever  words  it  be  set  down,  for  anything  to  be  or  not  to  be  done, 
the  party  to  or  with  whom  the  promise  or  agreement  is  made  may- 
have  his  action  upon  the  breach  of  the  agreement."  "Sometimes," 
says  Mr.  Parsons,  "words  of  proviso  and  condition  will  be  construed 
into  words  of  covenant  when  such  is  the  apparent  intention  and 
meaning  of  the  parties."  2  Pars.  Cont.,  510,  511.  There  are  also 
cases  in  the  books  in  which  it  has  been  held  that  even  a  recital  in  a 
deed  may  amount  to  a  covenant.  Farrall  v.  Hilditch,  5  C.  B.  (JST. 
S.),  840;  Great  Northern  K.  W.  Co.  v.  Harrison,  12  C.  B.,  576; 
Severn  and  Gierke's  Case,  1  Leon,  122.  And  there  are  cases  in  which 
the  instrument  to  be  construed  was  held  to  contain  both  a  condition 
and  a  covenant;  as  "If  a  man  by  indenture  letteth  lands  for  years, 
provided  always,  and  it  is  covenanted  and  agreed,  between  the  said 
parties,  that  the  lessee  should  not  alien."  It  was  adjudged  that  this 
was  "A  condition  by  force  of  the  proviso,  and  a  covenant  by  force  of 
the  other  words."     Co.  Litt.,  203  b. 

But  according  to  the  authorities,  including  some  of  those  above 
cited,  and  from  the  reason  and  sense  of  the  thing,  a  covenant  will 
not  arise  unless  it  can  be  collected  from  the  whole  instrument  that 
there  was  an  agreement,  or  promise,  or  engagement,  upon  the  part 
of  the  person  sought  to  be  charged,  for  the  performance  or  non-per- 
formance of  some  act.  Comyns,  in  his  Digest  (Covenant,  A  2),  says 
that  "Any  words  in  a  deed  which  show  an  agreement  to  do  a  thing, 
make  a  covenant."  "But,"  says  the  same  author,  "where  words  do 
not  amount  to  an  agreement,  covenant  does  not  lie;  as,  if  they  are 
merely  conditional  to  defeat  the  estate;  as,  a  lease,  provided  and 
upon  condition  that  the  lessee  collect  and  pay  the  rents  of  his  other 
houses."  Com.  Dig.,  Covenant,  A  3.  The  language  last  quoted  is 
found  also  in  Piatt's  Treatise  of  the  Law  of  Covenants.  Law  Li- 
brary, Vol.  3,  p.  17.  It  there  appears  in  connection  with  his  refer- 
ence to  the  case  where  A  leased  to  B  for  years,  on  condition  that 
he  should  acquit  the  lessor  of  ordinary  and  extraordinary  charges, 
and  should  keep  and  leave  the  houses  at  the  end  of  the  term  in  as 
good  plight  as  he  found  them.  In  such  case,  the  author  remarks, 
the  lessee  was  held  liable  to  an  action  for  omitting  to  leave  the  houses 
in  good  plight,  "for  here  an  agreement  was  implied." 

Applying  these  doctrines  to  the  case  before  us,  its  solution  is  not 
difficult.  Without  stopping  to  consider  whether  a  covenant  upon 
the  part  of  Finch  could  arise  out  of  a  bill  of  sale  which  he  did  not 
sign,  but  merely  accepted  from  his  vendor  (Piatt,  Covenants,  ch. 
1),  it  is  sufficient  to  say  that  that  instrument  contains  no  agreement 
or  engagement  or  promise  by  him  that  he  would  or  would  not  do 
anything.  There  is,  in  terms,  a  covenant  by  Hale  to  Finch  to  defend 
the  title  of  the  boat  and  its  machinery  against  all  persons  whomso- 
ever. This  is  immediately  followed  by  language  implying  an  agree- 
ment, not  that  Finch  would  not  use,  or  permit  others  to  use,  the 
boat  and  its  machinery  upon  the  prohibited  waters  within  the  period 


456  STEWART   V.   GRIFFITH  [CHAP.   V 

limited,  but  only  an  agreement  that  the  sale  was  upon  the  express 
condition  that  neither  the  boat  nor  its  machinery  should  be  so  used. 
It  is  the  case  of  a  bare,  naked  condition,  unaccompanied  by  words 
implying  an  agreement,  engagement  or  promise  by  the  vendee  that 
he  would  personally  perform  or  become  personally  responsible  for 
the  performance  of  the  express  condition  upon  which  the  sale  was 
made.  The  vendee  took  the  property  subject  to  the  right  which  the 
law  reserved  to  the  vendor,  of  recovering  it  upon  breach  of  the  con- 
dition prescribed.  The  vendee  was  willing,  as  the  words  in  their 
natural  and  ordinary  sense  indicate,  to  risk  the  loss  of  the  steamboat 
when  such  breach  occurred,  but  not  to  incur  the  personal  liability 
which  would  attach  to  a  covenant  or  agreement  upon  his  part,  that 
he  would  not  use,  and  should  not  permit  others  to  use,  the  boat  or 
its  machinery  upon  the  waters  and  within  the  period  named.  If 
this  be  not  so,  then  every  condition  in  a  deed  or  other  instrument, 
however  bald  that  instrument  might  be  of  language  implying  an 
agreement,  could  be  turned,  by  mere  construction,  and  against  the 
apparent  intention  of  the  parties,  into  a  covenant  or  agreement  in- 
volving personal  responsibility.  The  vendor  having  expressly,  and 
the  vendee  impliedly,  agreed  that  the  sale  was  upon  an  express  con- 
dition —  stated  in  such  form  as  to  preclude  the  idea  of  personal  re- 
sponsibility upon  the  part  of  the  vendee  —  we  should  give  effect  to 
their  intention,  thus  distinctly  declared.  Judgment  affirmed.^ 


STEWAET    V.    GRIFFITH,    EXECUTOR    OF    BALL, 
DECEASED 

SuPEEME  Court  of  the  United  States^,  April  8-25,  1910 
[Reported  in  217  United  States  323] 

Me.  Justice  Holmes  delivered  the  opinion  of  the  court. 

This  is  a  bill  in  equity,  brought  by  the  executor  of  one  Ball 
for  the  specific  performance  of  a  contract  made  by  the  appel- 
lant to  purchase  certain  land.  The  plaintiff  had  a  decree  in  the 
Court  of  Appeals  of  the  District  of  Columbia,  and  the  defend- 
ant appealed.    31  App.  D.  C.  29. 

The  material  parts  of  the  contract  are  as  follows :  "This  agree- 
ment, Made  by  and  between  L.  A.  Griffith,  duly  authorized  Agent 
and  Attorney  under  a  certain  power  of  Attorney  from  Alfred  W. 
Ball  both  of  Prince  George's  County,  Maryland,  parties  of  the  first 
part,  and  Wm.  W.  Stewart  of  "Washington,  D.  C,  of  the  second  part, 
Witnnsscth  that  tlie  said  W.  W.  Stewart  has  paid  to  the  said  L.  A. 
Griffith,  Agent,  the  snni  of  Five  TTuiidrcd  Dollars  ($500)  part  pur- 

'  The  statement  of  facta  ia  al)brcviatcd  and  a  portion  of  the  opinion  omitted. 


SECT.    I J  STEWART   V.   GRIFFITH  457 

chase  price  o£  the  total  sum  to  be  paid  for  a  certain  tract  of  land, 
owned  by  the  said  Alfred  W.  Ball,"  in  Maryland  as  described,  "same 
being  sold  at  the  rate  of  $40  per  acre,"  "And  the  said  L.  A. 
Griffith  as  the  Agent  and  duly  authorized  Attorney  of  said  Alfred 
W.  Ball,  hereby  grants  bargains  and  sells,  and  agrees  to  convey 
by  proper  deed  .  .  .  duly  executed  by  the  said  Ball  to  the  said 
Stewart  the  said  Two  Hundred  and  forty  acres  of  land  upon  further 
payments  and  conditions  hereinafter  named  to  wit :  The  balance  of 
one-half  of  the  purchase  price  of  the  said  240  acres,  more  or  less, 
at  the  rate  of  Forty  dollars  per  acre  is  to  be  paid  to  the  party  of 
the  first  part  on  the  7th  day  of  November  1903,  and  the  remaining 
one-half  of  the  total  purchase  price,  is  to  be  divided  into  five 
equal  payments  secured  by  five  promissory  notes,  secured  by  purchase 
money  mortgage  upon  the  said  property  to  be  given  by  the  said 
Stewart  and  Wife,"  with  immaterial  details.  A  burial  lot  of  one  acre 
is  reserved  "conditioned  however  that  if  the  said  Ball  should  desire 
to  abandon  the  said  burial  tract  ...  he  shall  have  paid  to  him 
therefor  by  the  said  party  of  the  second  part  the  sum  of  ($40)  Forty 
Dollars,"  &c.  "The  said  land  is  to  be  surveyed  and  a  plat  made 
thereof,  and  the  total  purchase-price  is  to  be  at  the  rate  of  Forty 
Dollars  per  acre  as  determined  by  the  said  Survey  the  costs  of  the 
said  Survey  is  to  be  borne  equally  by  the  said  parties  of  the  first 
part  and  the  second  parts;  the  said  L.  A.  Griffith  and  W.  W. 
Stewart  each  to  pay  one-half  of  the  total  survey  costs.  Proper- 
Deed  or  Deeds  of  Conveyance  and  abstracts  of  title  of  the  said 
land  based  upon  title  search  therefor  is  to  be  made  and  by  J.  K. 
^Roberts  .  .  .  showing  clear  and  unencumbered  fee  simple  title,  in 
the  said  land  above  mentioned  and  described,  in  the  said  Alfred  W. 
Ball,  and  one  half  of  the  total  costs  for  same  not  exceeding  $50,  is  to 
be  borne  equally  by  the  parties  hereto.  In  case  the  remainder  of  the 
first  half  of  the  purchase  price  be  not  paid  on  November  7,  1903, 
then  the  said  $500  so  paid  to  the  said  Griffith  is  to  be  forfeited 
and  the  Contract  of  sale  and  conveyance  to  be  null  and  void, 
and  of  no  effect  in  law,  otherwise  to  be  and  remain  in  full 
force."  .  .  .  "The  possessory  right  to  all  of  the  said  premises  on 
the  property  mentioned  herein  is  to  remain  in  the  said  Ball,  until 
the  one-half  payment  of  the  total  purchase  price  herein  provided 
for  on  November  7th,  1903,  has  been  fully  paid  and  satisfied,  to 
the  said  L.  A.  Griffith,  Agent.  Witness  our  hands  and  seals  this 
5th  day  of  June  1903.  L.  A.  Griffith.  Wm.  W.  Stewart."  With 
seals. 

The  first  defense  is  based  on  this  document  itself.  It  is  said 
that  the  defendant  made  no  covenant  and  therefore  was  free  to 
withdraw  if  he  chose  to  sacrifice  the  five  hundred  dollars  that  he 
had  paid.  This  contention  should  be  disposed  of  before  we  proceed 
to  the  other  questions  in  the  case.  The  argument  is  that  the  condi- 
tion of  forfeiture  just  stated  and  the  consequence  that  the  contract 


458  STEWART    V.    GRIFFITH  [CHAP.   V 

is  to  be  void  and  of  no  effect  in  law  disclose  tlie  only  consequences  of 
default  on  the  purchaser's  part,  much  as  until  after  Lord  Coke's 
time  the  only  consequence  of  breaking  the  condition  of  a  bond  was 
an  obligation  to  pay  the  penalty.  The  obligor  was  held  to  have  an 
election  between  performing  the  condition  and  payment.  Bromage 
V.  Genning,  1  Eoll.  E.  368;  1  Inst.  206&;  Hulbert  v.  Hart,  1  Vern. 
133  (1682).  Some  circumstances  were  referred  to  in  aid  of  this 
conclusion,  but  as  we  think  the  meaning  of  the  document  plain  we 
shall  not  mention  them,  except  in  connection  with  other  matters, 
further  than  to  say  that  there  is  nothing  that  would  change  or  affect 
our  view. 

It  seems  to  have  been  held  within  half  a  century  after  Hulbert 
V.  Hart,  that,  under  some  circumstances  at  least,  a  bond  would  be 
construed  to  import  a  promise  of  the  event  constituting  the  condition. 
Hobson  V.  Trevor,  1  Strange,  533,  8.  C,  2  P.  Wms.  191  (1723). 
Anonymous,  Moseley,  37  (1728)  ;  Roper  v.  Bartholomew,  12  Price, 
797,  811,  822,  826,  832.  Hooker  v.  Pynchon,  8  Gray,  550,  552.  But 
in  this  case  we  are  not  confined  to  a  mere  implication  of  a  promise 
from  the  penalty.  The  tenor  of  the  "agreement"  throughout  im- 
ports mutual  undertakings.  The  $500  is  paid  as  "part  purchase  price 
of  the  total  sum  to  be  paid,"  that  is,  that  the  purchaser  agrees  to 
pay.  The  land  is  described  as  "being  sold."  There  are  words  of  pres- 
ent conveyance  inoperative  as  such  but  implying  a  concluded 
bargain,  like  the  word  "sold"  just  quoted.  So  one-half  of  the  purchase 
price  "is  to  be"  divided  and  the  notes  secured  by  mortgage  "to  be 
given ;"  and  in  the  case  of  the  burial  lot  Ball  "shall  have  paid  to  him" 
$40  if  he  elects  to  abandon  it :  Here  is  an  absolute  promise  in 
terms,  which  it  would  be  unreasonable  to  make  except  on  the  footing 
of  a  similar  promise  as  to  the  main  parcel  that  the  purchaser  desired 
to  get.  We  are  satisfied  that  Stewart  bound  himself  to  take  the 
land.  See  Wilcoxson  v.  Stitt,  65  California,  596.  Dana  v.  St.  Paul 
Investment  Co.,  42  Minnesota,  194.  The  condition  plainly  is  for 
the  benefit  of  the  vendor  and  hardly  less  plainly  for  his  benefit  alone, 
except  so  far  as  it  may  have  fixed  a  time  when  Stewart  might  have 
called  for  performance  if  he  had  chosen  to  do  so,  which  he  did 
not.  This  being  so,  the  word  void  means  voidable  at  the  vendor's 
election  and  the  condition  may  be  insisted  upon  or  waived  at  his 
choice.  Insurance  Co.  v.  Norton,  96  U.  S.  234.  Oakes  v.  Manu- 
facturers' Insurance  Co.,  135  Massachusetts,  248,  249.  Titus  v. 
Glens  Falls  Ins.  Co.,  81  K  Y.  410,  419. 

Decree  affirmed.^ 

^  A  portion  of  the  opinion  is  omitted. 


SECT.    l]  WORSLEY    V.    WOOD  459 


WORSLEY  V.  WOOD  and  Others,  Assignees  of  Locktee  and 
Bream,  Bankrupts;  in  Error 

In  the  King's  Bench,  June  7,  1796 

[Reported  in  6  Term  Reports,  710] 

This  was  an  action  of  covenant  brought  in  the  Court  of  Common 
Pleas.^  The  declaration  stated  that  by  a  policy  of  insurance  made 
before  Lockyer  and  Bream  became  bankrupts,  namely,  on  the  9th 
of  March,  1792,  it  was  witnessed  that  Lockyer  and  Bream  had  paid 
IIZ.  16s.  to  the  Phoenix  Company,  and  had  agreed  to  pay  to  them, 
at  their  office,  the  sum  of  111.  IQs.  on  the  25th  of  March,  1793,  and 
the  like  sum  yearly  on  the  said  day  during  the  continuance  of  the 
policy  for  insurance  from  loss  or  damage  by  fire,  not  exceeding  the 
sum  of  7,000?.  That  "Worsley  covenanted  with  L.  and  B.  that,  so 
long  as  the  assured  should  pay  the  above  premium,  the  capital  stock 
and  funds  of  the  Phoenix  Company  should  be  liable  to  pay  to  the 
assured  any  loss  that  the  assured  should  suffer  by  fire  on  the  prop- 
erty therein  mentioned,  not  exceeding  7,000Z.,  according  to  the  tenor 
of  the  printed  proposals  delivered  with  the  policy.  That  in  the 
printed  proposals  referred  to  by  the  policy  it  is  declared  that  all 
persons  assured  sustaining  any  loss  by  fire  should  forthwith  give 
notice  to  the  company,  and  as  soon  as  possible  after  deliver  in  as 
particular  an  account  of  their  loss  as  the  nature  of  the  case  would 
admit,  and  make  proof  of  the  same  by  their  oath  and  by  their  book 
of  accounts,  or  other  vouchers  as  should  be  reasonably  required,  and 
should  procure  a  certificate  under  the  hands  of  the  minister  and 
churchwardens  and  of  some  reputable  householders  of  the  parish, 
not  concerned  in  the  loss,  importing  that  they  were  acquainted  with 
the  character  and  circumstances  of  the  person  insured,  and  knew 
or  believed  that  he  by  misfortune  and  without  any  kind  of  fraud  or 
evil  practice  had  sustained  by  such  fire  the  loss  and  damage  therein 
mentioned;  and  in  case  any  difference  should  arise  between  the  as- 
sured and  the  company  touching  any  loss,  such  difference  should  be 
submitted  to  the  judgment  of  arbitrators.  The  declaration  then 
stated  that  on  the  first  of  July,  1792,  a  loss  happened  by  fire  in  the 
house  of  L.  and  B.,  in  which  all  their  books  of  accounts  were  de- 
stroyed, to  the  amount  of  7,000?.  That  L.  and  B.  on  the  same  day 
gave  notice  of  it  to  the  company,  and  on  the  same  day  delivered  to 
the  company  as  particular  an  account  of  their  loss  as  the  nature  of 
the  case  admitted,  and  were  then  and  there  also  ready  and  willing 
and  then  and  there  tendered  to  make  proof  of  the  loss  by  their  oath, 
and  to  produce  such  vouchers  as  could  be  reasonably  required  in  that 
behalf;  that  on  the  same  day  they  procured  and  delivered  to  the 
said  company  a  certificate  under  the  hands  of  four  reputable  house- 

»  See  2  H.  Bl.  574. 


460  WORSLEY    V.    WOOD  [CHAP.   V 

holders  of  the  parish,  to  the  effect  required  in  the  printed  proposals, 
and  applied  to  E.  Embry,  the  minister,  and  H.  Hutchins  and  J. 
Bellamy,  the  churchwardens  of  the  parish,  to  sign  such  certificate, 
but  that  they,  without  any  reasonable  or  probable  cause,  wrongfully 
and  unjustly  refused  and  have  ever  since  refused  to  sign  it.  The 
declaration  then  stated  that  the  funds  of  the  company  were  sufficient 
to  pay  this  loss,  yet  the  company  have  not  paid  it,  either  to  the  bank- 
rupts or  to  their  assignees;  nor  have  the  company  submitted  the 
said  difference  to  the  judgment  of  such  arbitrators,  &c. 

The  defendant  pleaded  3d :  That  the  minister  and  churchwardens 
did  not  refuse  wrongfully  and  injuriously,  and  without  any  reason- 
able or  probable  cause,  to  sign  the  certificate;  on  which  issue  was 
taken. ^ 

The  jury  found  all  the  issues  for  the  plaintiffs,  and  gave  a  verdict 
for  3,000Z. 

The  defendant  below  removed  the  record  into  this  Court  by  writ 
of  error,  and  assigned  for  error  that  the  declaration,  the  replica- 
tion, and  the  other  pleadings  of  the  plaintiffs  below,  were  not  suffi- 
cient in  law  to  maintain  the  action. 

This  case  was  twice  argued  in  this  Court,  the  first  time  in  last 
Easter  Term  by  Wood  for  the  plaintiff  in  error  and  Lambe  for  the 
defendants,  and  now  by  Law  for  the  former  and  Gibhs  for  the  latter. 

Lord  Kenyon,  C.  J.^  We  are  called  upon  in  this  action  to  give 
effect  to  a  contract  made  between  these  parties ;  and  if  from  the  terms 
of  it  we  discover  that  they  intended,  that  the  procuring  of  the  cer- 
tificate by  the  assured  should  precede  their  right  to  recover,  and  that 
it  has  not  been  procured,  we  are  bound  to  give  judgment  in  favor 
of  the  defendant  below.  These  insurance  companies,  who  enter  into 
very  extensive  contracts  of  this  kind,  are  liable  (as  we  but  too  fre- 
quently see  in  courts  of  justice)  to  great  frauds  and  impositions. 
Common  prudence,  therefore,  suggests  to  them  the  propriety  of  taking 
all  possible  care  to  protect  them  from  frauds  when  they  make  these 
contracts.  The  Phoenix  Company  have  provided,  among  other  things, 
that  the  assured  should,  as  soon  as  possible  after  the  calamity  has 
happened,  deliver  in  an  account  of  their  loss,  and  procure  a  certifi- 
cate under  the  hands  of  the  minister  and  churchwardens,  and  of 
some  reputable  householders  of  the  parish,  importing  that  they  knew 
the  character  and  circumstances  of  the  assured,  and  believed  that 
they  had  sustained  the  loss  without  any  kind  of  fraud.  That  this 
is  a  prudent  regulation,  this  very  case  is  sufficient  to  convince  us; 
for  it  appears  on  the  record,  that  soon  after  the  fire  the  assured  de- 
liverer! ill  an  account  of  their  loss,  which  they  said  amounted  to 
7,000/.,  that  they  obtained  a  certificate  from  some  of  the  reputable 
inhabitants  tliat  tlie  loss  did  amount  to  that  sum,  and  that  the  jury 
aftfr  inquiring  into  all  tlie  circumstances  were  of  opinion  that  the 

'  The  Btatcmcnt  of  th«  plcadinKB  is  abbreviated  and  a  portion  omitted. 
*  Ahuhuiwt,  Gbose,  and  LAwaaNCE,  J.  J.,  dclivrjrcd  ooncurrinK  opinions. 


SECT.    l]  WORSLEY    V.    WOOD  461 

loss  did  not  exceed  3,000Z.;  and  yet  it  is  also  stated  that  the  minister 
and  churchwardens,  who  refused  to  certify  that  they  believed  that 
the  loss  amounted  to  7,000?.,  wrongfully  and  without  any  reasonable 
or  probable  cause  refused  to  sign  such  certificate.  The  great  ques- 
tion here  is,  Whether  or  not  it  was  the  intention  of  these  parties 
that  that  certificate  should  precede  payment  by  the  insurance  office; 
now  it  seems  to  me  from  the  printed  proposals  that  it  was  their  in- 
tention that  it  should  precede  payment.  What  is  a  condition  prece- 
dent, or  what  a  condition  subsequent,  is  well  expressed  by  my 
brother  Ashhurst  in  the  case  of  Hotham  v.  The  East  India  Com- 
pany, to  which  I  refer  in  general.  If  there  be  a  condition  precedent 
to  do  an  impossible  thing,  the  obligation  becomes  single ;  but  however 
improbable  the  thing  may  be,  it  must  be  complied  with,  or  the  right 
which  was  to  attach  on  its  being  performed  does  not  vest.  If  the 
condition  be,  that  A.  shall  enfeoff  B.,  and  A.  do  all  in  his  power  to 
perform  the  condition,  and  B.  will  not  receive  livery  of  seisin,  yet 
from  the  time  of  Lord  Coke  to  the  present  moment,  it  has  not  been 
doubted  but  that  the  right  which  was  to  depend  on  the  performance 
of  that  condition  did  not  arise.  In  the  case  of  Hesketh  v.  Gray, 
which  has  been  cited  as  a  determination  in  this  court,  there  was 
also  an  application  to  the  Great  Seal,  at  the  time  when  Lord  Chief 
Justice  Willes  was  the  first  commissioner,  to  dispense  with  the  con- 
dition, which  was,  that  the  Bishop  of  Chichester  should  accept  the 
resignation  of  a  living;  but  it  was  held,  that  there  was  no  ground 
for  a  court  of  equity  to  interfere.  This  Court  also  held,  when  the 
case  came  before  them,  that  it  was  a  condition  precedent,  and  must 
be  performed. 

In  this  case,  however,  it  is  said  that,  though  the  minister  and 
churchwardens  did  not  certify,  some  of  the  inhabitants  did  certify, 
and  that  that  was  sufficient,  it  being  a  performance  of  the  condition 
cy  pres.  But  I  confess,  I  do  not  see  how  the  terms  cy  pres  are  ap- 
plicable to  this  subject;  the  argument  for  the  plaintiffs  below  goes 
to  show  that  if  none  of  the  inhabitants  of  this  parish  certified,  a 
certificate  by  the  inhabitants  of  the  next  or  of  any  other  parish  would 
have  answered  the  purpose.  But  the  assured  cannot  substitute  one 
thing  for  another.  In  the  case  of  Campbell  v.  French,  we  explained 
the  grounds  of  this  doctrine,  and  said  that  the  party  who  had  not 
complied  with  the  condition  could  not  substitute  other  terms  or 
conditions  in  lieu  of  those  which  all  the  parties  to  the  contract  had 
originally  made.  So  here  it  was  competent  to  the  insurance  office 
to  make  the  stipulations  stated  in  their  printed  proposals;  they  had 
a  right  to  say  to  individuals  who  were  desirous  of  being  insured, 
"Knowing  how  liable  we  are  to  be  imposed  upon,  we  will,  among 
other  things,  require  that  the  minister,  churchwardens,  and  some  of 
the  reputable  inhabitants  of  your  parish  shall  certify  that  they  be- 
lieve that  the  loss  happened  by  misfortune  and  without  fraud,  other- 
wise we  will  not  contract  with  you  at  all."     If  the  assured  say  that 


462      LIVERPOOL   AND   LONDON   INS.    CO.    V.    KEARNEY     [CHAP.   V 

the  minister  and  churchwardens  may  obstinately  refuse  to  certify, 
the  insurers  answer,  "We  will  not  stipulate  with  you  on  any  other 
terms."  Such  are  the  terms  on  which  I  understand  this  insurance 
to  have  been  effected;  and,  therefore,  I  am  clearly  of  opinion,  that 
there  is  no  foundation  for  the  action,  and  that  the  judgment  below 
must  be  reversed.^ 


LIVERPOOL  AND  LONDON"  AND   GLOBE   INSURANCE 
COMPANY  V.  KEARNEY 

Supreme  Court  of  the  United   States,  November   7,   1900- 
January  7,  1901 

[Reported  in  180  United  States,  132] 

The  case  is  stated  in  the  opinion  of  the  court. 

Mr.  E.  S.  Quinton,  for  plaintiff  in  error. 

Mr.  A.  C.  Cruce  and  Mr.  W.  I.  Cruce,  for  defendants  in  error. 

Mr.  Justice  Harlan  delivered  the  opinion  of  the  court. 

This  action  was  brought  to  recover  the  amount  alleged  to  be  due 
on  two  policies  of  fire  insurance  issued  by  the  Liverpool  and  London 
and  Globe  Insurance  Company  —  one  dated  June  15,  1894,  for 
$2,500,  and  the  other  dated  February  11,  1895,  for  $1,000  —  each 
policy  covering  such  losses  as  might  be  sustained  by  the  insured 
Kearney  &  Wyse,  in  consequence  of  the  destruction  by  fire  of  their 
stock  of  hardware  in  the  town  of  Ardmore,  Indian  Territory. 

Each  policy  contained  the  following  clause,  called  the  iron-safe 
clause:  "The  assured  under  this  policy  hereby  covenants  and  agrees 
to  keep  a  set  of  books,  showing  a  complete  record  of  business  trans- 
acted, including  all  purchases  and  sales,  both  for  cash  and  credit, 
together  with  the  last  inventory  of  said  business;  and  further  cove- 
nants and  agrees  to  keep  such  books  and  inventory  securely  locked 
in  a  fireproof  safe  at  night,  and  at  all  times  when  the  store  men- 
tioned in  the  within  policy  is  not  actiuilly  open  for  business,  or  in 
some  secure  place  not  exposed  to  a  fire  which  would  destroy  the  house 
where  such  business  is  carried  on;  and,  in  case  of  loss,  the  assured 
agrees  and  covenants  to  produce  such  books  and  inventory,  and  in 

'  Prot.  Ins.  Co.  v.  Pharson,  5  Iiid.  417;  Johnson  v.  Phoenix  Ins.  Co.,  112  Mass.  49; 
Auflctt<'  V.  Union  St.  Jo8<'j)h,  178  Mass.  113;  Lane  v.  St.  Paul,  .'50  Minn.  227;  Logan 
V.  f'oninK^nnal  Union  Ins.  Co.,  1.3  Can.  S.  C.  270,  ace.  Sco  also  Cohimbia  Ins.  Co.  v. 
Liiv/TcricA-,  H)  P<'t.  .007;  Aotna  Ins.  Co.  v.  Poo])]c'»  Tlank,  62  Fori.  Rop.  222;  Daniels  v. 
Equital)l<-  Fire  Ins.  Co.,  .50  Conn.  .5.'')1;  Lemllxtter  v.  Etna  Ins  Co.,  13  Me.  265;  Kelly 
r.  Snn  Fire  Office,  141  Pa.  10;    Osewalt  v.  Hartford  Fire  Ins.  Co.,  175  Pa.  427. 

O'Neill  V.  Ma.sHachns<'tt«  Benefit  Assoc..  63  Hun,  292,  143  N.  Y.  73;  Lang  v.  Eagle 
Fire  Cn.,  12  N.  Y.  App.  Oiv.  .39,  46.  contra. 

Sf!e  also  American  Central  Ins.  C.<}.  v.  Rothchild,  S2  111.  166;  German  Am.  Ins.  Co. 
V.  Norris,  \(){)  Ky.  29;  Home  Fire  Ina.  Co.  v.  Hammang,  44  Neb.  666,  576;  Schmurr 
V.  State  InB.  Co..  30  Oreg.  29. 


SECT.    l]      LIVERPOOL   AND   LONDON   INS.    CO.    V.    KEARNEY       463 

the  event  of  the  failure  to  produce  the  same,  this  policy  shall  be 
deemed  null  and  void,  and  no  suit  or  action  at  law  shall  be  main- 
tained thereon  for  any  such  loss." 

The  insurance  company  insisted  in  its  defence  that  the  terms  and 
conditions  contained  in  this  clause  of  the  policies  had  not  been  kept 
and  performed  by  the  insured. 

There  was  a  verdict  and  judgment  in  favor  of  the  plaintiffs  in  the 
United  States  Court  for  the  Southern  District  of  the  Indian  Terri- 
tory, and  that  judgment  was  affirmed  in  the  United  States  Court 
of  Appeals  for  that  Teritory. 

The  insurance  company  sued  out  a  writ  of  error  to  the  United 
States  Circuit  Court  of  Appeals  for  the  Eighth  Circuit,  and  that 
court  affirmed  the  judgment.     94  Fed.  Rep.  314. 

The  controlling  facts  are  thus  (and  we  think  correctly)  stated  in 
the  opinion  of  Judge  Thayer,  speaking  for  the  court  below :  "On  the 
night  of  April  18,  1895,  between  the  hours  of  one  and  three  a.  m., 
a  fire  accidently  broke  out  in  a  livery  stable  in  the  town  of  Ardmore, 
which  was  about  three  hundred  yards  distant  from  the  plaintiffs' 
place  of  business.  Efforts  to  arrest  the  progress  of  the  conflagration 
failed,  and  when  it  had  approached  so  near  to  the  plaintiffs'  place 
of  business  that  the  windows  of  their  store  were  cracking  from  the 
heat  and  the  building  was  about  to  take  fire,  one  of  the  plaintiffs 
entered  the  building  for  the  purpose  of  removing  the  books  of  the 
firm  to  a  safer  place,  thinking  that  it  would  be  better  to  remove  them 
than  to  take  the  chances  of  their  being  destroyed  by  fire.  He  opened 
an  iron  safe  in  the  store,  in  which  they  had  been  deposited  for  the 
night,  which  was  called  a  fireproof  safe,  and  took  them  therefrom, 
and  to  his  residence,  some  distance  away.  The  books  consisted  of 
a  ledger,  a  cash  book,  a  day  book  or  blotter,  and  a  small  paper-cov- 
ered book  containing  an  inventory  that  the  firm  had  taken  of  their 
stock  on  or  about  January  1,  1895.  In  the  hurry  and  confusion 
incident  to  the  removal  of  the  books,  the  inventory  was  either  left 
in  the  safe  and  was  destroyed,  or  was  otherwise  lost,  and  could  not 
be  produced  after  the  fire.  The  other  books,  however,  were  saved, 
and  were  exhibited  to  the  insurer  after  the  fire,  and  were  subse- 
quently produced  as  exhibits  on  the  trial.  There  was  neither  plea 
nor  proof  that  the  loss  of  the  inventory  was  due  to  fraud  or  bad 
faith  on  the  part  of  plaintiffs,  or  either  of  them.  The  trial  judge 
charged  the  jury  that  the  set  of  books  which  had  been  kept  and 
which  were  produced  on  the  trial  Vere  substantially  in  compliance 
with  the  terms  of  the  policy  upon  that  subject,'  and  no  exception  was 
taken  by  the  defendant  to  this  part  of  the  charge." 

It  was  also  said  in  the  same  opinion:  "That  books,  though  used 
at  the  trial  as  exhibits,  do  not  form  a  part  of  the  record.  For  these 
reasons  no  question  arises  as  to  the  sufficiency  of  the  set  of  books  that 
was  kept  which  we  are  called  upon  to  consider.  It  must  be  taken 
for  granted  that  it  was  a  proper  set  of  books,  as  the  trial  court  held. 


464      LIVERPOOL   AND   LONDON   INS.    CO.    V.    KEARNEY     [CHAP.    V 

The  only  substantial  ground  for  complaint  seems  to  be  that  the 
inventory  was  not  produced." 

The  argument  in  behalf  of  the  defendant  assumes  that  the  in- 
surance company  is  entitled  to  a  literal  interpretation  of  the  words 
of  the  policies.  But  the  rules  established  for  the  construction  of 
written  instruments  apply  to  contracts  of  insurance  equally  with 
other  contracts.  It  was  well  said  by  Nelson,  C.  J.,  in  Turley  v. 
JSTorth  American  Tire  Insurance  Co.,  25  "Wend.  374,  377,  referring 
to  a  condition  of  a  policy  of  insurance  requiring  the'  insured,  if 
damage  by  fire  was  sustained,  to  produce  a  certificate  under  the  hand 
and  seal  of  the  magistrate  or  notary  public  most  contiguous  to  the 
place  of  the  fire  setting  forth  certain  facts  in  regard  to  the  fire  and 
the  insured,  that  "this  clause  of  the  contract  of  insurance  is  to  re- 
ceive a  reasonable  interpretation;  its  intent  and  substance,  as  de- 
rived from  the  language  used,  should  be  regarded.  There  is  no  more 
reason  for  claiming  a  strict  literal  compliance  with  its  terms  than  in 
ordinary  contracts.  Full  legal  effect  should  always  be  given  to  it 
for  the  purpose  of  guarding  the  company  against  fraud  or  impo- 
sition. Beyond  this,  we  would  be  sacrificing  substance  to  form  — 
following  words  rather  than  ideas." 

To  the  general  rule  there  is  an  apparent  exception  in  the  case  of 
contracts  of  insurance,  namely,  that  where  a  policy  of  insurance  is 
so  framed  as  to  leave  room  for  two  constructions,  the  words  used 
should  be  interpreted  most  strongly  against  the  insurer.  This  ex- 
ception rests  upon  the  ground  that  the  company's  attorneys,  officers, 
or  agents  prepared  the  policy,  and  it  is  its  language  that  must  be 
interpreted.  National  Bank  v.  Insurance  Co.,  95  U.  S.  673,  678-9; 
Moulor  V.  American  Life  Ins.  Co.,  Ill  U.  S.  335,  341. 

Turning  now  to  the  words  of  the  policies  in  suit,  what  is  the  better 
and  more  reasonable  interpretation  of  those  provisions  so  far  as 
they  relate  to  the  issues  in  this  case?  The  covenant  and  agreement 
"to  keep  a  set  of  books,  showing  a  complete  record  of  business  trans- 
acted, including  all  purchases  and  sales,  both  for  cash  and  credit, 
together  with  the  last  inventory  of  said  business,"  should  not  be  in- 
terpreted to  mean  such  books  as  would  be  kept  by  an  expert  book- 
keeper or  accountant  in  a  large  business  house  in  a  great  city.  That 
provision  is  satisfied  if  the  books  kept  were  such  as  would  fairly 
show,  to  a  man  of  ordinary  intelligence,  "all  purchases  and  sales, 
both  for  cash  and  credit."  There  is  no  reason  to  suppose  that  the 
books  of  the  plaintiff  did  not  meet  such  a  requirement. 

That  of  which  the  company  most  complains  is  that  the  insured 
did  not  produce  the  last  inventory  of  their  business,  and  removed 
the  books  and  inventory  from  the  fireproof  safe  in  which  they  had 
been  placed  the  night  of  the  fire.  It  will  be  observed  that  the  in- 
surcid  had  the  right  to  keep  the  books  and  inventory  cither  in  a  fire- 
proof safe  or  in  some  secun;  place  not  exposed  to  a  fire  that  would 
destroy  the  house  in  which  their  business  was  conducted.     But  was 


SECT.    l]      LIVERPOOL   AND   LONDON    INS.    CO.    V.    KEARNEY       465 

it  intended  by  the  parties  that  the  policy  should  become  void  unless 
the  fireproof  safe  was  one  that  was  absolutely  sufficient  against  every 
fire  that  might  occur?  We  think  not.  If  the  safe  was  such  as  was 
commonly  used,  and  such  as,  in  the  judgment  of  prudent  men  in  the 
locality  of  the  property  insured,  was  sufficient,  that  was  enough 
within  the  fair  meaning  of  the  words  of  the  policy.  It  cannot  be 
supposed  that  more  was  intended.  If  the  company  contemplated  the 
use  of  a  safe  perfect  in  all  respects  and  capable  of  withstanding  any 
fire  however  extensive  and  fierce,  it  should  have  used  words  expressing 
that  thought. 

Nor  do  words  "or  in  some  secure  place  not  exposed  to  a  fire  which 
would  destroy  the  house  where  such  business  is  carried  on"  nec- 
essarily mean  that  the  place  must  be  absolutely  secure  against  any 
fire  that  would  destroy  such  house.  If,  in  selecting  a  place  in  which 
to  keep  their  books  and  last  inventory,  the  insured  acted  in  good 
faith  and  with  such  care  as  prudent  men  ought  to  exercise  under 
like  circumstances,  it  could  not  be  reasonably  said  that  the  terms 
of  the  policy  relating  to  that  matter  were  violated.  Indeed,  upon 
the  facts  stated,  the  plaintiffs  were  under  a  duty  to  the  insurance 
company  to  remove  their  books  and  inventory  from  the  iron  safe, 
and  thereby  avoid  the  possibility  of  their  being  destroyed  in  the 
fire  that  was  sweeping  towards  their  store,  provided  the  circum- 
stances reasonably  indicated  that  such  a  course  on  their  part  would 
more  certainly  protect  the  books  and  inventory  from  destruction  than 
to  allow  them  to  remain  in  the  safe.  If  they  believed,  from  the  cir- 
cumstances, that  the  books  and  inventory  would  be  destroyed  by 
the  fire  if  left  in  the  safe,  and  if,  under  such  circumstances,  they  had 
not  removed  them  to  some  other  place  and  the  books  or  inventory 
had  been  burned  while  in  the  safe,  the  company  might  well  have 
claimed  that  the  inability  of  the  insured  to  produce  the  books  and 
inventory  was  the  result  of  design  or  negligence,  and  precluded  any 
recovery  upon  the  policies.  We  are  of  opinion  that  the  failure  to 
produce  the  books  and  inventory,  referred  to  in  the  policy,  means 
a  failure  to  produce  them  if  they  are  in  existence  when  called  for, 
or  if  they  have  been  lost  or  destroyed  by  the  fault,  negligence,  or  de- 
sign of  the  insured.  Under  any  other  interpretation  of  the  policies, 
the  insured  could  not  recover  if  the  books  and  inventory  had  been 
stolen,  or  had  been  destroyed  in  some  other  manner  than  by  fire, 
although  they  had  been  placed  "in  some  secure  place  not  exposed 
to  a  fire"  that  would  reach  the  store.  If  the  plaintiffs  had  the  right, 
under  the  terms  of  the  policy,  as  undoubtedly  they  had,  to  remove 
their  books  and  inventory  from  the  safe  to  some  secure  place  not 
exposed  to  a  fire  which  might  destroy  the  building  in  which  they 
carried  on  business,  surely  it  was  never  contemplated  that  they  should 
lose  the  benefit  of  the  policies  if,  in  so  removing  their  books  and 
inventory,  they  were  lost  or  destroyed,  they  using  such  care  on  the 
occasion  as  a  prudent  man,  acting  in  good  faith,  would  exercise. 


466  GLOBE   MUTUAL   LIFE    V.    WAGNER  [CHAP.   V 

A  literal  interpretation  of  tlie  contracts  of  insurance  might  sustain 
a  contrai'y  view,  but  the  law  does  not  require  such  an  interpretation. 
In  so  holding  the  court  does  not  make  for  the  parties  a  contract 
which  they  did  not  make  for  themselves.  It  only  interprets  the 
contract  so  as  to  do  no  violence  to  the  words  used  and  yet  to  meet 
the  ends  of  justice. 

We  perceive  no  error  in  the  view  taken  by  the  court  below;  and 
having  noticed  the  only  questions  that  need  to  be  examined,  its  judg- 
ment is  Affirmed. 


THE  GLOBE  MUTUAL  LIFE  IlSrSURANCE  ASSOCIATION" 
OF  CHICAGO  V.  DOHA  WAGNER 

Illinois  Supreme  Court,  December  20,  1900 

[Reported  in  188  Illinois,  133] 

Action  by  the  appellee  upon  a  policy  of  insurance  on  the  life  of 
her  son,  Richard  Wagner.  The  plaintiff  recovered  judgment  and 
the  appellant  appealed  successively  to  the  Court  of  Appeals  and 
to  this  court.     Further  facts  appear  in  the  opinion. 

Hoyne,  O'Connor  &  Hoyne,  for  appellant. 

Francis  T.  Colhy,  for  appellee. 

Mr.  Justice  Wilkin  delivered  the  opinion  of  the  court. 

The  chief  ground  urged  by  appellant  for  a  reversal  of  the  judg- 
ment of  the  Appellate  Court  is  the  falsity  of  the  answer  to  one  of  the 
questions  appearing  in  the  medical  examination  of  the  insured.  On 
the  back  of  the  application  made  by  appellee,  in  what  purports  to 
be  the  medical  examination  of  the  insured,  this  question  and  answer 
appear :  "Q.  —  How  many  brothers  dead?  Ans.  —  N'one."  The  medi- 
cal examination  is  certified  to  by  the  medical  examiner,  as  follows: 

"I  certify  that  I  have,  this  7th  day  of  October,  1895,  made  a  personal  examination 
of  the  above  named  person,  (Richard  Wagner,)  and  that  the  above  answers  are  in  my 
own  handwriting,  and  that  the  signature  of  the  applicant  or  person  examined  was 
written  in  my  presence. 

"M.  J.  McKenna,  M.D." 

Preceding  the  medical  examiner's  certificate,  and  immediately  at 
the  end  of  the  series  of  questions  and  answers  referred  to  in  the  cer- 
tificate, of  which  the  quoted  question  is  one,  appears  the  following 
language,  to  which  is  affixed  the  signature  of  Richard  Wagner,  the 
insured  :  ''I  hereby  declare  and  warrant  that  the  answers  to  the  above 
questions,  and  the  statements  made  in  the  application  on  the  other 
side  hereof,  are  true,  and  were  written  by  me  or  by  my  proper  agent, 
and  that  said  answers  and  statements,  together  with  this  warranty, 
shall  form  the  basis  of  any  contract  of  insurance  that  may  be  entered 
into  between  me  and  the  Globe  Mutual  Insurance  Association,  and 
that  if  a  contract  of  insurance  is  issued  it  shall  not  be  binding  on 


SECT.    l]  GLOBE    MUTUAL   LIFE    V.   WAGNER  467 

the  company  unless,  upon  its  date  and  delivery,  I  shall  be  in  sound 
health."  On  the  front  side  of  the  sheet,  on  the  back  of  which  is  the 
medical  examination  and  statement  signed,  as  above,  by  the  insured, 
is  the  application  by  appellee  for  the  policy,  and  over  her  signature 
appears  the  following:  "I  hereby  make  application  for  the  policy 
described  above,  and  as  an  inducement  to  the  association  to  issue  a 
policy,  and  as  a  consideration  therefor,  make  the  agreement  as  to 
agency,  and  all  other  agreements,  and  warranties  contained  in  the 
medical  examination,  as  fully  as  if  I  had  signed  the  same." 

It  appears  from  the  evidence  that  a  brother  of  the  insured  died 
in  London,  England,  more  than  four  years  prior  to  the  date  of  the 
application  for  insurance  in  this  case,  but  there  is  no  evidence  tend- 
ing to  show  that  the  insured  ever  knew  of  his  brother's  death.  Ap- 
pellant asserts,  however,  that,  whether  he  knew  of  it  or  not,  the 
statement  that  none  of  his  brothers  were  dead  is  a  warranty,  and  being 
untrue,  avoids  the  policy.  Appellee  contends  that  the  statement, 
though  false,  is  not  a  warranty,  but  a  mere  representation,  which, 
unless  material,  would  not  avoid  the  policy. 

In  the  absence  of  explicit,  unequivocal  stipulations  requiring  such 
an  interpretation,  it  should  not  be  inferred  that  the  insured  or  the 
appellee  took  a  life  policy  with  the  distinct  understanding  that  it 
should  be  void  if  any  statements  made  in  the  medical  examination 
should  be  false,  whether  the  insured  was  conscious  of  the  falsity 
thereof  or  not.  (Moulor  v.  American  Life  Ins.  Co.,  Ill  U.  S.  335.) 
Whether  or  not  the  deceased  knew  of  the  death  of  his  brother  at  the 
time  of  the  application  for  insurance  was  a  question  for  the  jury,  and 
no  evidence  of  such  knowledge  appears  in  the  record.  To  hold  that, 
as  a  precedent  to  any  binding  contract,  he  should  guarantee  abso- 
lutely that  none  of  his  brothers  were  dead  would  be  unreasonable, 
in  the  absence  of  a  more  explicit  stipulation  than  here  appears.  It 
not  infrequently  happens  that  a  man  loses  trace  of  all  or  part  of  his 
relations,  and  to  hold  him  to  absolutely  guarantee  that  they  were 
living,  in  order  that  he  might  obtain  insurance,  would  sometimes  be 
to  require  an  impossibility,  and  would  be  almost  absurd. 

What  is  said  in  Moulor  v.  American  Life  Ins  Co.,  supra,  is  pe- 
culiarly applicable  to  the  case  at  bar.  In  that  case  the  insured  made 
a  false  statement  as  to  his  having  had  certain  diseases,  and  "war- 
ranted that  the  above  are  fair  and  true  answers."  The  court  say: 
"The  entire  argument  in  behalf  of  the  company  proceeds  upon  a 
too  literal  interpretation  of  those  classes  in  the  policy  and  application 
which  declare  the  contract  null  and  void  if  the  answers  of  the  in- 
sured to  the  questions  propounded  to  him  were  in  any  respect  untrue. 
What  was  meant  by  'true'  and  'untrue'  answers?  In  one  sense,  that 
only  is  true  which  is  comformable  to  the  actual  state  of  things.  In 
that  sense  a  statement  is  untrue  which  does  not  express  things  exactly 
as  they  are,  but  in  another  and  broader  sense,  the  word  'true'  is  often 
used  as  a  synonym  of  honest ;  sincere ;  not  fraudulent.    Looking  at  all 


468  SHADFORTH    V.    HIGGIN  [CHAP.   V 

the  clauses  in  the  application,  in  connection  with  the  policy,  it  is  rea- 
sonably clear  —  certainly  the  contrary  cannot  be  confidently  asserted 
—  that  what  the  company  required  of  the  applicant  as  a  condition 
precedent  to  any  binding  contract  was,  that  he  would  observe  the  ut- 
most good  faith  towards  it,  and  make  full,  direct,  and  honest  answers 
to  all  questions,  without  evasion  or  fraud,  and  without  suppression, 
misrepresentation,  or  concealment  of  facts  with  which  the  company 
ought  to  be  made  acquainted,  and  that  by  so  doing,  and  only  by  so 
doing,  would  he  be  deemed  to  have  made  fair  and  true  answers." 
In  that  case  the  untrue  statements  were  held  to  be  representations, 
and  not  warranties,  and  we  think,  on  the  same  reasoning,  the  answer 
here  in  question  should  be  so  held,  and  in  the  absence  of  proof  by 
the  company  of  fraud  or  intentional  misstatement  on  the  part  of 
the  insured  the  policy  was  not  rendered  invalid  merely  because  the 
answer  proved  to  be  false. 

We  are  satisfied  the  court  below  committed  no  reversible  error, 
and  the  judgment  of  that  court  will  be  affirmed. 

Judgment  affirmed. 


SHADFORTH  v.  HIGGIN 
At  Nisi  Pbius,  coeam  Lokd  Ellenborough,  Hilary  Term,   1813 

[Reported  in  3  Campbell,  385] 

Assumpsit  upon  the  following  agreement  by  the  plaintiff  and  de- 
fendant :  — 

"James  Shadforth,  part-owner  of  the  ship  Fanny,  of  300  tons,  cop- 
pered and  armed,  agrees  to  despatch  said  vessel  immediately  in 
ballast  direct  to  Jamaica,  and,  on  her  arrival  at  Rio  Nova  Bay, 
Salt  Gut,  and  St.  Ann's,  receive  a  full  and  complete  cargo  of  produce, 
consisting  of  sugar,  rum,  coffee,  and  pimento.  In  return  Messrs. 
Higgin  &  Co.  agree  to  provide  a  cargo  at  the  above  shipping  places, 
to  be  taken  on  board  in  the  usual  manner,  in  time  for  July  convoy, 
provided  she  arrives  out  and  ready  by  the  25th  of  June,  and  the 
freight  to  be  at  the  current  rate  as  given  to  other  vessels  loading  at 
the  same  time  and  same  ports." 

The  declaration  alleged  that  the  plaintiff  did  immediately  de- 
spatch the  vessel  in  ballast  to  Jamaica,  and  that,  on  her  arrival  at 
Rio  Xova  Bay,  she  was  afterwards,  to  wit,  on  the  3d  of  July,  and 
from  th(;nc(!  for  a  long  space  of  time,  to  wit,  for  the  space  of  three 
montlis  from  thence  next  ensuing,  ready  to  receive  at  Rio  Nova  Bay, 
Salt  Gut,  and  St.  Ann's,  aforesaid,  a  full  and  complete  cargo  of 
produce,  according  to  the  form  and  ('fT(H't  of  the  said  agreement;  yet 
that  the  defendant  did  not  nor  would  provide  a  cargo  for  the  said 
vessel  at  the  above  sliipping  places,  or  any  or  either  of  them,  ac- 


SECT.    l]  SHADFORTH    V.    HIGGIN  469 

cording  to  the  form  and  eifect  of  the  said  agreement,  whereby  the 
said  ship  was  obliged  to  return  from  Jamaica  without  any  cargo 
being  loaded  on  board  thereof. 

The  ship  in  point  of  fact  did  not  reach  Jamaica  till  the  3d  of  July ; 
and  the  question  was,  whether  under  these  circumstances  the  defend- 
ant was  answerable  for  having  failed  to  furnish  her  with  a  full 
cargo. 

Garrow,  S.  G.,  for  the  plaintiif,  contended  that  the  defendant  was 
bound  to  furnish  a  full  cargo  for  the  ship  at  all  events.  Provided 
she  arrived  out  and  was  ready  by  the  25th  of  June,  this  was  to  be 
done  in  time  to  enable  her  to  sail  with  the  July  convoy.  The  condi- 
tion of  her  arriving  by  25th  June  only  applied  to  the  time  of  her 
departure  on  the  homeward  voyage.  If  by  any  accident  her  arrival 
was  delayed  beyond  the  day  specified,  she  was  still  entitled  to  a 
cargo  in  a  reasonable  time,  as  if  the  proviso  and  the  mention  of  the 
July  convoy  had  not  been  introduced  into  the  agreement.  It  could 
hardly  be  meant,  that  where  the  owner  was  absolutely  bound  to  de- 
spatch his  ship  to  Jamaica,  if  she  arrived  a  day  later  than  was  ex- 
pected, the  freighter  might  send  her  home  empty. 

LoED  Ellenbobough.  I  think  the  arrival  of  the  ship  by  the  25th 
June  was  a  condition  precedent.  The  freighter  might  know  that,  if 
she  arrived  by  that  day,  he  could  easily  provide  a  cargo  for  her; 
but  that  afterwards  it  might  be  impossible.  He  might  have  had 
goods  of  his  own,  which  it  was  essentially  necessary  should  be  shipped 
by  that  day,  and  which  he  was  therefore  compelled  to  load  on  board 
another  vessel.  It  would  be  a  great  hardship  upon  the  freighter,  if 
he  were  bound  to  provide  a  freight  for  a  vessel  which  arrives  at 
a  season  of  the  year  when  there  is  no  produce  ready  for  shipping  in 
the  island.  If  the  freighter  is  liable,  although  the  ship  does  not 
arrive  till  a  week  after  the  day  agreed  upon,  where  is  the  line  to 
be  drawn?  I  think  the  fair  interpretation  of  the  instrument  is  that, 
unless  the  ship  arrived  by  the  25th  June,  the  defendant's  liability 
was  to  be  at  an  end. 

The  plaintiff  likewise  failed  in  establishing  another  agreement  de- 
clared upon  for  the  loading  of  the  ship,  and  submitted  to  be  non- 
suited.^ 

1  Smith  V.  Dart,  14  Q.  B.  D.  105;    The  Austin  Friars,  71  L.  T.  27,  ace. 

In  the  Austin  Friars,  supra,  the  charterers  had  the  option  of  cancelling  "if  the 
steamer  does  not  arrive  at  port  of  loading,  and  be  ready  to  load  on  or  before  midnight 
of  10th  of  October."  The  vessel  arrived  at  11  p.m.  on  that  day,  but  no  one  could 
leave  or  visit  the  ship  until  the  health  officer  had  inspected  her  on  the  following 
morning.     It  was  held  that  the  charterers  were  justified  in  refusing  a  cargo. 


470  MORGAN    V.   BIRNIE  [CHAP.   V 

MORGAN  V.  BIRNIE 

In  the  Common  Pleas,  April  17,  1833 

[^Reported  in  9  Bingham,  672] 

This  was  an  action  on  a  builder's  contract,  by  which  it  was  stipu- 
lated, among  other  things,  that  all  the  proposed  erections  should  be 
done  in  a  good  and  workmanlike  manner,  and  with  good,  sound,  and 
well-seasoned  materials,  and  be  completed  to  the  reasonable  satis- 
faction of  A.  B.  Clayton,  or  other  the  architect  for  the  time  being 
of  the  defendant,  his  executors  or  administrators,  on  or  before  the 
twenty-ninth  day  of  October  next  ensuing  the  date  thereof,  or  such 
further  day  as  the  said  A.  B.  Clayton,  or  such  other  architect,  and 
the  said  plaintiff  should  mutually  agree  upon.  It  was  further  pro- 
vided, that  no  additions  or  alterations  should  be  admitted  unless  di- 
rected by  the  defendant,  his  executors  or  administrators,  or  his  or 
their  surveyor,  in  writing;  nor  should  any  addition  to  or  altera- 
tions of  the  works  thereby  contracted  for,  and  contained  in  the  par- 
ticulars therein  specified,  vitiate  or  vacate  the  contract  thereby  made, 
but  the  price  or  allowance  to  be  made  in  respect  of  any  agreed  addi- 
tions or  alterations  should  be  added  to  or  deducted  from  the  moneys 
that  should  become  payable  by  virtue  of  the  said  memorandum  of 
agreement  as  the  case  might  require,  such  price  or  allowance  being 
first  estimated  or  settled  by  the  surveyor  or  architect  of  the  said 
defendant,  who  should  be  sole  arbitrator  in  settling  such  price  or  al- 
lowance, and  all  disputes  that  should  or  might  arise  in  or  about  the 
premises :  And  the  defendant  thereby  promised  and  agreed,  in  con- 
sideration of  the  buildings  and  works  to  be  done  and  executed  by 
the  said  plaintiff,  in  manner  in  the  said  memorandum  of  agreement 
mentioned,  that  the  defendant  would  pay,  or  cause  to  be  paid,  to  the 
plaintiff,  the  sum  of  1,250^.  in  manner  following,  that  is  to  say, 
that  he  would  pay  or  cause  to  be  paid  such  a  sum  of  money  as  would 
be  equal  to  three-fourth  parts  of  the  price  of  the  works  thereby 
contracted  for,  which  should  have  been  executed  and  performed 
according  to  the  true  intent  and  meaning  of  the  said  memorandum 
of  agreement,  upon  receiving  a  certificate  in  writing  signed  by  the 
said  A.  B.  Clayton,  or  other  the  architect  of  the  defendant,  testifying 
that  the  flooring-joists  of  the  first  story  of  the  said  dwelling-house 
had  been  actually  laid,  and  his  approval  of  the  works  so  executed; 
such  further  sum  of  money  as  would  be  equal  to  three-fourth  parts 
of  the  price  or  value  of  the  further  works  that  should  have  been  done 
subsequently  to  the  date  of  the  architect's  said  certificate,  upon  the 
completion  of  the  carcase  of  the  dwelling-house;  and  the  balance 
or  sum  which  should  be  found  due  to  the  plaintiff,  after  deducting 
the  two  previous  payments,  within  two  calendar  months  after  re- 
ceiving the  said  architect's  certificate  that  the  whole  of  the  buildings 


SECT.    l]  MORGAN    V.    BIRNIE  471 

and  works  thereby  contracted  for  had  been  executed  and  completed 
to  his  satisfaction. 

The  work  having  been  completed,  the  plaintiff  sought  by  this  ac- 
tion to  recover  his  charges  for  some  additional  work  not  contained 
in  the  original  contract. 

At  the  trial  it  appeared  that  Mr.  Clayton,  the  architect,  had  ex- 
amined and  approved  of  the  plaintiff's  charges  for  the  buildings 
mwitioned  in  the  agreement,  and  had  written  the  following  letter  to 
the  defendant,  more  than  two  months  before  the  action :  — 

With  this  you  will  receive  Mr.  Morgan's  account.  My  private  statement,  show- 
ing the  variations  of  prices  and  qualities,  shall  be  copied  and  forwarded  to  you.  As 
regards  to  when  and  where  executed,  my  only  data  exist  in  my  measuring  book, 
which  shall  be  open  for  your  inspection  at  any  time  at  my  office.  I  also  forward  you 
the  drawings  marked  6  and  7,  and  the  original  elevation  and  plan  submitted  to  the 
commissioners  of  woods  and  forest. 

I  remain,  &c.  A.  B.  Clayton 

March  24,  1832. 

This  letter  contained  an  account,  headed,  "Final  statement  of 
extras  and  omissions  of  the  carcase  of  a  house  for  George  Birnie, 
Esq.,  by  T.  Morgan,  builder." 

A  letter  was  also  put  in,  addressed  to  Clayton  by  the  defendant, 
April  4,  1832,  in  which  he  asked  for  Clayton's  private  statement  of 
prices  and  quantities;  expressed  himself  anxious  to  have  the  matter 
speedily  settled,  and  made  no  objection  on  the  ground  of  not  having 
received  a  certificate.  But  as  it  did  not  appear  that  Mr.  Clayton 
had  ever  given  any  certificate  of  his  satisfaction  as  to  the  mode  in 
which  the  work  had  been  executed,  Tindal,  C.  J.,  directed  a  nonsuit, 
on  the  ground  that  the  delivery  of  such  a  certificate  was  a  condition 
precedent  to  the  plaintiff's  right  of  action. 

Spankie,  Serjt.,  now  moved  to  set  aside  this  nonsuit  on  the  ground 
that  the  agreement  did  not  require  the  certificate  touching  the  addi- 
tions to  be  in  writing ;  and  that  Mr.  Clayton's  allowance  of  the  plain- 
tiff's charges  must  be  deemed  an  implied  certificate,  for  he  could 
not  allow  the  charges  to  be  correct  without  implying  thereby  that 
the  building  had  been  executed  to  his  satisfaction.  Besides,  it  might 
be  doubtful  whether  any  certificate  were  requisite  with  respect  to 
charges  for  additional  work ;  the  certificate  was  to  apply  only  to  the 
building  as  originally  contracted  for,  and  the  defendant  had  never 
objected  to  pay  on  the  ground  that  a  proper  certificate  had  not  been 
rendered. 

TiNDAL,  C.  J.  I  was  of  opinion  at  the  trial,  and  am  still  of  opinion, 
that  the  production  of  a  certificate  from  Mr.  Clayton  was  a  condition 
precedent  to  the  bringing  this  action.  The  agreement  stipulates,  that 
the  price  of  additions  or  alterations  should  be  added  to  the  sum 
contracted  for  by  the  agreement,  such  price  being  first  settled  by  the 
architect  of  the  defendant,  who  should  be  sole  arbitrator  in  settling 
such  price,  and  all  disputes  that  should  arise  about  the  premises. 
Then  follows  the  stipulation  for  payment  in  proportion  to  the  work 


472  CLARKE    V.    WATSON  [CHAP.   V 

done  at  two  different  periods  upon  receiving  a  certificate  in  writing 
of  Mr.  Clayton's  approval,  and  for  payment  of  the  balance  of  the 
whole  within  two  calendar  months  after  receiving  the  said  architect's 
certificate  that  the  whole  of  the  buildings  contracted  for  had  been 
executed  to  his  satisfaction.  That  appears  to  involve  not  only  the 
original  but  the  additional  or  extra  works.  Unless  the  letter  and 
delivery  of  the  plaintiff's  account,  and  the  checking  that  account  by 
Clayton,  amount  to  a  certificate,  no  certificate  has  been  given.  It 
appears  to  me,  that  the  effect  of  a  certificate  would  be  altogether 
different;  applying  to  the  manner  in  which  the  work  has  been  done, 
while  the  checking  the  accounts  applies  only  to  the  propriety  of  the 
charges. 

The  rest  of  the  Court  concurring,  the  rule  was  Refused.^ 


CLARKE,  Assignee  of  the  Estate  and  Effects  of  Francis  Ayees, 
a  Bankrupt,  and  Others  v.  WATSOl^  and  Another 

In  the  Common  Pleas,  January  25,  1865 

[Reported  in  18  Common  Bench  Reports,  New  Series,  278] 

The  first  count  of  the  declaration  stated,  that  theretofore  and  be- 
fore the  said  Francis  Ayres  became  bankrupt,  to  wit,  on  the  9th  of 
October,  1862,  by  an  agreement  in  writing  then  made  and  entered 
into  between  the  said  Francis  Ayres,  William  Mallows,  and  William 
Johnson,  therein  called  "the  contractors,"  of  the  one  part,  and  the 
defendants  of  the  other  part,  the  said  contractors  agreed  with  the 
defendants  to  do  certain  works  therein  mentioned  in  conformity  with 
certain  plans,  drawings,  and  sections  therein  mentioned;  and  also  in 
conformity  with  certain  specifications  therein  mentioned,  as  well  as  to 
the  satisfaction  and  approval  of  the  engineer  to  a  certain  board  of 
health  for  the  time,  should  such  be  found  necessary,  at  or  for  312L 
15s.,  to  be  paid  as  follows:  156L  7s.  6d.  on  production  by  the  con- 
tractors to  the  defendants,  or  one  of  them,  of  the  certificate  of 
William  Lambert,  or  other  the  surveyor  for  the  time  of  the  defend- 
ants, that  they,  the  contractors,  had  duly  and  efficiently  performed 
and  completed  such  portion  of  the  work  as  according  to  the  judgment 
of  the  said  surveyor  should  not  be  less  than  three-fourths  parts  thereof 
in  extent  and  value;  78/.  3s.  9d.  on  the  production  by  the  said  con- 
tractors to  the  defendants,  or  to  one  of  them,  of  the  certificate  of 
the  said  surveyor  as  aforesaid,  that  the  whole  of  the  works  mentioned 
and  referred  to  in  the  said  plans,  drawings,  and  specifications,  had 
been  duly  and  efficiently  performed  and  completely  finished  to  his 
satisfaction,   and   also  to   the  satisfaction   of  the  said  engineer  for 

>  De  WormB  v.  Mfllior.  L.  R.  16  Eq.  564;  Hudson  v.  McCartney,  33  Wis.  331; 
Bannister  e.  Patty,  36  Wis.  215,  accord.    Compare  Wyckoff  v.  Meyers,  44  N.  Y.  143. 


SECT.    l]  CLARKE    f,   WATSON  473 

the  time  being  o£  the  local  board  of  health,  if  necessary;  and  the 
balance  of  78/.  3s.  9d.  at  the  expiration  of  four  months  from  the 
date  of  the  said  surveyor's  certificate  of  completion;  provided 
the  therein-mentioned  roads,  pathways,  drains,  and  culverts,  and 
every  part  thereof,  should  be  certified  by  the  said  surveyor  to  be 
in  good  repair  and  in  perfect  and  sound  condition  in  all  respects; 
it  being  thereby  intended  and  agreed  that  all  the  said  vs^orks  and 
materials  should  be  so  put  and  kept  in  good  repair  until  the  expira- 
tion of  such  four  months  from  completion  by  and  at  the  sole  cost 
and  expense  of  the  said  contractors;  and  the  defendants  thereby 
agreed  with  the  said  Francis  Ayres,  William  Mallows,  and  William 
Johnson,  in  consideration  of  the  due  performance  of  the  said  agree- 
ments therein  contained  on  their  part,  to  pay  to  them  the  sum  of 
312Z.  15s.  at  the  times  and  in  the  manner  thereinbefore  mentioned. 
Averment:  that  although  1561.  7s.  6d.,  part  of  the  said  sum  of  312L 
15s.,  had  been  paid,  and  all  things  necessary  on  the  part  of  the  said 
contractors  to  entitle  them  to  have  the  certificate  of  the  surveyor  of 
the  defendants,  that  the  whole  of  the  works  in  the  said  plans,  draw- 
ings, and  specifications  had  been  duly  and  efficiently  performed  and 
completed  to  his  satisfaction,  and  also  to  the  satisfaction  of  the  en- 
gineer of  the  said  local  board  of  health,  had  been  done  and  per- 
formed by  them ;  yet  the  said  surveyor  had  not  given  such  certificate, 
but  had  wrongfully  and  improperly  neglected  and  refused  so  to  do, 
nor  had  the  defendants  paid  the  said  sum  of  781.  3s.  9d.  payable  on 
such  certificate;  and  that,  although  more  than  four  months  since 
the  said  surveyor  ought  to  have  given  such  certificate  had  elapsed, 
and  although  all  things  had  been  done  by  the  said  contractors  on 
their  part  to  entitle  them  to  a  certificate  by  the  said  surveyor  that 
the  said  roads,  pathways,  drains,  culverts,  and  every  part  thereof, 
were  at  the  expiration  of  the  said  four  months  in  good  repair,  and 
in  perfect  and  sound  condition  in  all  respects,  yet  the  said  surveyor 
had  not  granted  such  certificate,  but  had  wrongfully  and  improperly 
neglected  and  refused  to  do  so,  and  the  defendants  had  not  yet  paid 
the  said  balance  of  78?.  3s.  9d. 

The  defendants  demurred  to  this  count,  and  the  plaintiffs  joined 
in  demurrer. 

Henry  James,  in  support  of  the  demurrer  argued  that  the  alle- 
gation that  the  surveyor  wrongfully  and  improperly  neglected  and 
refused  to  grant  his  certificate  would  be  satisfied  by  showing  that 
he  had  been  guilty  of  a  mere  error  in  judgment. 

Parry,  Serjt.,  contra,  argued,  "that  the  defendant  who  employs 
the  architect  does  contract  with  the  plaintiff  that  he  will  do  his  duty 
and  act  fairly." 

Eele,  C.  J.  I  am  of  opinion  that  the  judgment  in  this  case  ought 
10  be  for  the  defendants.  The  contract  which  they  entered  into  was, 
to  pay  to  the  contractors,  the  plaintiffs,  certain  sums  on  production 
by  them  to  the  defendants,  or  one  of  them,  of  the  certificate  of 


474  CLARKE    V.    WATSON  [CHAP.   V 

William  Lambert,  or  other  the  surveyor  for  the  time  of  the  defend- 
ants. Many  contracts  are  so  made.  Every  man  is  the  master  of  the 
contract  he  may  choose  to  make;  and  it  is  of  the  highest  importance 
that  every  contract  should  be  construed  according  to  the  intention  of 
the  contracting  parties.  And  it  is  important,  in  a  case  of  this  de- 
scription, that  the  person  for  whom  the  work  has  been  done  should 
not  be  called  upon  to  pay  for  it  until  some  competent  person  shall 
have  certified  that  the  work  has  been  properly  done,  according  to 
the  contract  and  specification.  Here  the  contract  is,  that  the  money 
shall  become  payable  on  production  by  the  plaintiffs  to  the  defendants 
of  the  certificate  of  their  (the  defendants')  surveyor,  that  the  con- 
tractors have  duly  and  efiiciently  performed  and  completed  the  work 
to  his  satisfaction.  No  such  certificate  has  been  produced.  But  it 
is  said  that  the  plaintiffs  have  done  all  things  necessary  to  entitle 
them  to  have  the  certificate  of  the  surveyor  that  the  works  had  been 
duly  performed  and  completed  to  his  satisfaction,  and  that  the  said 
surveyor  had  "wrongfully  and  improperly"  neglected  and  refused 
so  to  do.  That,  in  my  opinion,  is  not  sufficient.  If  it  had  been 
alleged  that  the  defendants  wrongfully  colluded  with  the  surveyor  to 
cause  the  certificate  to  be  withheld,  they  could  not  have  sheltered 
themselves  by  their  own  wrongful  act.  But  the  word  "wrongfully," 
as  used  here,  does  not  intimate  any  thing  of  that  sort.  If  the  plain- 
tiffs had  intended  to  rely  on  the  withholding  of  the  certificate  as 
a  wrongful  act  on  the  part  of  the  defendants,  they  should  have  stated 
how  it  was  wrongful.  This  is  in  effect  an  attempt  on  the  part  of 
the  plaintiffs  to  take  from  the  defendants  the  protection  of  their 
surveyor,  and  to  substitute  for  it  the  opinion  of  a  jury.  That  is  not 
the  contract  which  the  defendants  have  entered  into.  The  allega- 
tions on  the  part  of  the  plaintiffs  are  not  in  my  judgment  such  as 
to  entitle  them  to  succeed. 

Williams,  J.  I  am  of  the  same  opinion.  Notwithstanding  the 
surveyor  may  have  been  wrong  in  withholding  his  certificate,  the 
money  is  not  due. 

WiLLES,  J.  I  am  of  the  same  opinion.  Consistently  with  the  alle- 
gations in  this  declaration,  the  only  wrong  the  surveyor  has  been 
guilty  of  may  be  an  error  in  judgment,  or  he  may  have  refused  to 
exercise  any  judgment;  in  which  case  the  proper  course  would  have 
been  to  call  upon  the  defendants  to  appoint  some  other  surveyor  who 
will  do  his  duty. 

Keating,  J.,  concurred.  Judgment  for  the  defendants. 


SECT,   ij  BATTERBURY    V.    VYSE  475 


BATTEEBUKY  v.  VYSE 

In  the  Exchequer,  April  22,  1863 

[Reported  in  2  Hurlstone  &  Coltman,  42] 

Declaration.  For  that  heretofore,  to  wit,  on,  &c.,  the  plaintiff 
and  the  defendant  agreed  that  the  defendant  should  employ  the  plain- 
tiff to  do  and  provide  for  him,  and  that  the  plaintiff  should  do  for 
the  defendant  certain  specified  works,  and  provide  for  the  defendant 
certain  specified  materials,  at  ISTo.  125  Oxford  Street,  upon  the  fol- 
lowing terms  and  conditions,  that  is  to  say :  "All  the  works  herein- 
before described  (meaning  the  description  contained  in  a  certain 
specification  of  the  said  works)  are  to  be  executed  in  the  very  best 
and  most  workmanlike  manner,  with  the  very  best  quality  of  ma- 
terials of  every  description,  under  the  superintendence  and  to  the 
satisfaction  of  Mr.  Vyse  and  his  architect.  The  works  described  are 
intended  to  embrace  every  thing  that  may  be  necessary  for  the  per- 
fect completion  of  the  several  alterations.  If,  therefore,  through 
any  error  or  inadvertence,  any  matter  or  thing  which  may  be  deemed 
by  the  architect  as  essential  to  this  end  be  omitted,  it  is  to  be  sup- 
plied and  performed  by  the  contractor  in  like  manner  as  if  it  had 
been  particularly  specified ;  and  if  in  the  course  of  the  work  it  should 
be  found  necessary  to  make  any  addition  to  or  omission  from  the  said 
works  such  deviation  is  not  in  any  way  to  vitiate  the  contract,  but 
the  value  of  such  works  shall  be  estimated  by  the  architect,  and  'he 
value  thereof  added  to  or  deducted  from  the  contract  sum  as  the  case 
may  be,  the  decision  of  the  architect  being  final  and  conclusive  in 
all  matters  affecting  the  proposed  works.  The  amount  of  the  con- 
tract will  be  paid  by  instalments  equal  to  the  value  of  80L  per  cent 
of  the  value  of  the  works  executed,  the  balance  within  one  month 
after  final  completion  to  the  architect's  satisfaction,  but  no  pay- 
ment will  be  considered  due  unless  upon  production  of  the  archi- 
tect's certificate."  Then  followed  an  agreement  by  the  defendant  to 
execute  the  works  for  610?.  Averments:  That  pursuant  to  the  con- 
tract the  plaintiff  did  the  specified  works  and  provided  the  materials, 
with  the  exception  of  certain  omissions  which  were  duly  required 
by  the  defendant  and  his  architect;  and  that  he  also  did  divers  and 
very  many  additional  works  which  were  duly  required  to  be  done  by 
the  defendant  and  his  architect ;  and  that  the  value  of  the  said  works 
and  materials  amounted  to  a  large  sum,  to  wit,  1,000?.,  whereof  the 
defendant  had  due  notice;  and  although  the  defendant  paid  to  the 
plaintiff  600?.,  on  account  of  the  said  works,  leaving  a  large  balance, 
to  wit,  400?.,  of  the  fair  and  reasonable  value  of  the  said  works,  esti- 
mated according  to  the  said  contract,  unpaid;  and  although  the 
plaintiff  had  done  all  things  necessary  on  his  part  to  entitle  him  to 
have  the  value  of  the  said  extras  and  omissions  estimated  by  the 
said  architect,  and  to  entitle  him  to  the  said  architect's  certificate 


476  BATTERBURY    V.    VYSE  [CHAP.    V 

for  payment;  and  although  he  had  completed  the  said  works  to  the 
satisfaction  of  the  defendant's  architect;  and  although  more  than 
a  month  from  such  time  had  elapsed;  and  although  the  defendant 
and  his  architect  had,  at  all  times  since  the  doing  of  the  said  works 
and  the  providing  of  the  said  materials,  full  knowledge  that  the 
plaintiif  was  entitled  to  be  paid  by  the  defendant  a  large  sum  of 
money  over  and  above  the  money  so  paid;  and  although  a  reason- 
able time  for  the  said  architect  to  estimate  the  value  of  the  said 
additions  and  omissions,  and  to  certify  as  aforesaid,  and  for  the 
defendant  to  pay  for  the  said  works,  had  long  since  elapsed;  yet  the 
architect  had  not  estimated  the  value  of  the  said  additions  and 
omissions,  nor  had  he  certified  as  aforesaid,  but  wholly  neglected 
so  to  do,  and  had  unfairly,  improperly,  and  contrary  to  the  true 
intent  and  meaning  of  the  said  contract,  neglected  to  estimate  the 
value  of  the  said  additions  and  omissions,  and  neglected  to  certify 
as  aforesaid,  and  had  so  neglected  in  collusion  with  the  defendant 
and  by  his  procurement.  By  means  of  which  premises  the  plain- 
tiff has  been  unable  to  obtain  payment  of  the  balance  justly  due  to 
him  for  the  said  works,  and  the  said  balance  still  remains  wholly 
due  and  unpaid  to  the  plaintiff. 

Demurrer,  and  joinder  therein. 

Gates,  in  support  of  the  demurrer.  The  declaration  is  bad.  The 
production  of  the  architect's  certificate  is  a  condition  precedent  to 
the  plaintiff's  right  to  claim  any  payment.  [Martin,  B.  This  is, 
in  substance,  a  declaration  in  case  alleging  that  the  defendant,  acting 
in  collusion  with  the  architect,  procured  him  unfairly  and  improp- 
erly to  withhold  his  certificate.]  Treated  as  an  action  of  contract, 
the  plaintiff  cannot  recover,  because  he  has  not  complied  with  the 
condition  which  entitled  him  to  payment;  and  it  is  not  an  action 
on  the  case,  because  it  does  not  charge  fraud,  or  allege  any  duty 
on  the  part  of  the  defendant  which  he  has  neglected  to  perform. 
However  unreasonable  and  oppressive  a  stipulation  or  condition  may 
be,  a  court  of  law  is  bound  to  give  effect  to  the  terms  agreed  upon 
between  the  parties.  Stadhard  v.  Lee.^  [Bramwell,  B.  That  case 
does  not  touch  this.  Here  the  complaint  is  not  that  something  has 
been  done,  and  done  wrongly,  but  that  there  has  been  an  improper 
refusal  to  do  that  which  ought  to  have  been  done.]  The  opinion  of 
refusal  to  do  that  which  ought  to  have  been  done.]  The  opinion  of 
authority  that,  in  the  absence  of  fraud,  the  withholding  the  certifi- 
cate by  the  architect  affords  no  right  of  action  against  the  defendant, 
either  on  the  ground  of  a  waiver  of  the  condition,  or  the  substitu- 
tion of  a  new  contract,  or  on  the  ground  of  a  wrong.  This  is  an 
attempt  to  obtain  indirectly  that  which  the  plaintiff  is  not  entitled 
to  by  the  terms  of  his  contract.  If,  indeed,  the  certificate  was  with- 
held by  fraud,  the  plaintiff  might  have  a  remedy  by  action.  Milner 
V.  Field.     But  it  is  consistent  with  ov(!ry  allegation  in  this  declara- 

>  3  B.  A  B.  .304.  372.  »  1  Giff.  216.  223. 


SECT.    l]  NOLAN    V.    WHITNEY  477 

tion  that  the  architect  was  requested  by  the  defendant  not  to  certify, 
because  he  was  dissatisfied  with  the  work.  [Wilde,  B.  The  dec- 
laration contains  an  averment  that  the  plaintiif  had  done  all  things 
necessary  to  entitle  him  to  the  certificate,  and  that  he  had  completed 
the  works  to  the  satisfaction  of  the  defendant's  architect;  and  that, 
although  the  defendant  and  his  architect  had  knowledge  that  the 
plaintiff  was  entitled  to  be  paid,  the  architect  neglected  to  certify, 
"in  collusion  with  the  defendant  and  by  his  procurement."]  There 
is  no  allegation  that  the  works  were  done  to  the  satisfaction  of  the 
defendant.  [Wilde,  B.  There  is  an  averment  that  the  plaintiff  had 
done  all  things  necessary  to  entitle  him  to  the  certificate.]  The  word 
"collusion"  does  not  necessarily  imply  fraud.  [Pollock,  C.  B.  In 
Webster's  Dictionary  one  definition  of  "collusion"  is  "a  secret  agree- 
ment for  a  fraudulent  purpose."] 

/.  Brown  appeared  in  support  of  the  declaration,  but  was  not 
called  upon  to  argue.^ 

Pollock,  C.  B.  We  are  all  of  opinion  that  the  declaration  is  good, 
and  that  the  plaintiff  is  entitled  to  judgment. 

Martin,  B.,  and  Bramwell,  B.,  concurred. 

Judgment  for  the  plaintiff  ^ 


MICHAEL  NOLAN"  et  al.,  Eespondents,  v.  CORDELIA  C. 
WHITNEY,  Appellant 

New  York  Court  of  Appeals,  Pebruary  7-28,  1882 

[Reported  in  88  New  York,  648] 

In  July,  1877,  Michael  Nolan,  the  plaintiff's  testator,  entered  into 
an  agreement  with  the  defendant  to  do  the  mason  work  in  the  erec- 
tion of  two  buildings  in  the  City  of  Brooklyn  for  the  sum  of  $11,700, 

^  The  point  for  argument  was:  "That  the  defendant  who  employs  the  architect 
does  contract  with  the  plaintiff  that  he  will  do  his  duty  and  act  fairly." 

2  St.  Louis,  &c.  R.  R.  Co.  v.  Kerr,  153  111.  182;  Crawford  v.  Wolf,  29  la.  567;  Smith  ' 
V.  White,  5  Neb.  405;   Whelen  v.  Boyd,  114  Pa.  228;    MiUs  v.  Paul  (Tex.  Civ.  App.), 
30  S.  W.  Rep.  558,  ace. 

See  also  Linch  v.  Paris  Lumber  Co.,  80  Tex.  23;  Markey  v.  Milwaukee,  76  Wis. 
349. 

Fraud  or  refusal  to  exercise  an  honest  judgment,  though  without  collusion  of  the 
defendant,  has  also  been  held  an  excuse  for  failure  to  produce  a  certificate.  North 
American  Ry.  Const.  Co.  v.  R.  E.  McMath  Surveying  Co.,  116  Fed.  Rep.  169;  Utah 
Construction  Co.  v.  St.  Louis  &c.  Co.,  254  Fed.  321;  Hatfield  District  v.  Knight,  112 
Ark.  83;  Ferguson  v.  Christenson,  59  Colo.  42;  Michaelis  v.  Wolf,  136  111.  68;  Mc- 
Donald V.  Patterson,  186  111.  381;  Foster  v.  McKeown,  192  111.  339;  Hebert  v.  Dewey, 
191  Mass.  403;  Marsch  v.  Southern  New  Eng.  R.  Corp.,  230  Mass.  483;  Eldridge  v. 
Fuhr,  59  Mo.  App.  44;  Chism  v.  Schipper,  51  N.  J.  L.  1;  Bradner  v.  Roffsell,  57  N.  J.  L. 
32. 

See  also  Arnold  v.  Boumique,  144  111.  132;  Bean  v.  Miller,  69  Mo.  384;  Justice  v. 
Elwert,  28  Oreg.  460. 


478  NOLAN    V.    WHITNEY  [CHAP.   V 

to  be  paid  to  him  by  ber  in  instalments  as  the  work  progressed.  The 
last  instalment  of  $2,700  was  to  be  paid  thirty  days  after  completion 
and  acceptance  of  the  work.  The  work  was  to  be  performed  to  the 
satisfaction  and  under  the  direction  of  M.  J.  Morrill,  architect,  to 
be  testified  by  his  certificate,  and  that  was  to  be  obtained  before  any 
payment  could  be  required  to  be  made.  As  the  work  progressed,  all 
the  instalments  were  paid  except  the  last,  and  Nolan,  claiming  that 
he  had  fully  performed  his  agreement,  commenced  this  action  to 
recover  that  instalment.  The  defendant  defended  the  action  upon 
the  ground  that  Nolan  had  not  fully  performed  his  agreement  ac- 
cording to  its  terms  and  requirements,  and  also  upon  the  ground  that 
he  had  not  obtained  the  architect's  certificate,  as  required  by  the 
agreement. 

Upon  the  trial  the  defendant  gave  evidence  tending  to  show  that 
much  of  the  work  was  imperfectly  done,  and  that  the  agreement 
had  not  been  fully  kept  and  performed  on  the  part  of  Nolan;  the 
latter  gave  evidence  tending  to  show  that  the  work  was  properly 
done,  that  he  had  fairly  and  substantially  performed  his  agreement, 
and  that  the  architect  had  refused  to  give  him  the  certificate  which, 
by  the  terms  of  his  agreement,  would  entitle  him  to  the  final  pay- 
ment. The  referee  found  that  Nolan  completed  the  mason  work 
required  by  the  agreement  according  to  its  terms;  that  he  in  good 
faith  intended  to  comply  with,  and  did  substantially  comply  with, 
and  perform  the  requirements  of  his  agreement;  but  that  there  were 
trivial  defects  in  the  plastering  for  which  a  deduction  of  $200  should 
be  made  from  the  last  instalment,  and  he  ordered  judgment  in  favor 
of  Nolan  for  the  last  instalment,  less  $200. 

The  court  say :  "It  is  a  general  rule  of  law  that  a  party  must  per- 
form his  contract  before  he  can  claim  the  consideration  due  him 
upon  performance;  but  the  performance  need  not  in  all  cases  be 
literal  and  exact.  It  is  sufficient  if  the  party  bound  to  perform, 
acting  in  good  faith,  and  intending  and  attempting  to  perform  his 
contract,  does  so  substantially,  and  then  he  may  recover  for  his  work, 
notwithstanding  slight  or  trivial  defects  in  performance,  for  which 
compensation  may  be  made  by  an  allowance  to  the  other  party. 
Whether  a  contract  has  been  substantially  performed  is  a  question 
of  fact  depending  upon  all  the  circumstances  of  the  case  to  be  de- 
termined by  the  trial  court.  Smith  v.  Brady,  17  N.  Y.  189;  Thomas 
V.  Fleury,  26  id.  26;  Glacius  v.  Black,  ,50  id.  145;  Johnson  v.  De- 
Peyster,  50  id.  666;  Phillip  v.  Gallant,  62  id.  256;  Bowery  Nat. 
Bank  V.  The  Mayor,  63  id.  336.  According  to  the  authorities  cited 
urid(!r  an  allegation  of  substantial  performance  upon  the  facts  found 
by  the  referee,  Nolan  was  entitled  to  recover  unless  he  is  barred 
because  he  failed  to  get  the  architect's  certificate,  which  the  referee 
found  was  unreasonably  and  improperly  refused.  But  when  he  had 
substantially  ])f'rformed  his  contract,  tbe  architect  was  bound  to 
give  him  the  certificate,  and  his  refusal  to  give  it  was  unreasonable; 


SECT.    l]  NOLAN    V.    WHITNEY  479 

aud  it  is  held  that  an  unreasonable  refusal  on  the  part  of  an  archi- 
tect in  such  a  case  to  give  the  certificate  dispenses  with  its  necessity." 

Oscar  Frishie,  for  appellant. 

N.  H.  Clement,  for  respondent. 

Eabl,  J.,  reads  for  affirmance. 

All  concur.  Judgment  ajfirmed?- 

^  In  Vought  V.  Williams,  120  N.  Y.  253,  an  action  for  breach  of  a  contract  to  buy 
real  estate  which  provided  that  the  title  was  to  be  passed  upon  by  a  lawyer  or  convey- 
ancer to  be  designated  by  the  defendant,  the  court,  while  refusing  specific  performance 
on  the  ground  that  the  plaintiff's  title  was  defective,  said:  "The  provision  that  the 
title  was  to  be  passed  upon  by  the  defendant's  lawyer  or  conveyancer  did  not  make 
the  decision  of  the  conveyancer  that  the  title  was  good,  a  condition  precedent  to  the 
right  of  the  plaintiff  to  enforce  the  performance  of  the  contract.  If  a  decision  to  that 
effect  was  refused  unreasonably,  the  failure  to  obtain  it  would  not  defeat  a  recovery, 
and  it  would  have  been  unreasonably  refused  if,  in  fact,  beyond  all  dispute  the  title 
was  good.  Folliard  v.  Wallace,  2  Johns.  395;  Thomas  v.  Fleury,  26  N.  Y.  26;  City  of 
BrooUyn  v.  B.  C.  R.  R.  Co.,  47  N.  Y.  475;  B.  N.  Bank  v.  Mayor,  etc.,  63  N.  Y.  336; 
D.  S.  B.  Co.  V.  Garden,  101  N.  Y.  388;    DoU  v.  Noble,  116  N.  Y.  238." 

See  also  Van  Keuren  v.  Miller,  71  Hun,  68;  Anderson  v.  Imhoff,  34  Neb.  336; 
Thomas  v.  Stewart,  132  N.  Y.  580,  586;  Macknight  Fhntic  Stone  Co.  v.  Maj^or,  160 
N.  Y.  72,  86;  Whclen  v.  Boyd,  114  Pa.  228;  Sullivan  v.  Byrne,  10  S.  C.  122;  Norfolk, 
&c.  Ry.  Co.  V.  Mills,  91  Va.  613;  Washington  Bridge  Co.  v.  Land  &  River  Improve- 
ment Co.,  12  Wash.  272;  Bentley  v.  Davidson,  74  Wis.  420;  Wendt  v.  Vogel,  87  Wis. 
462. 

In  Van  Clief  v.  Van  Vechten,  130  N.  Y.  571,  the  court,  referring  to  a  building  con- 
tract, said:  "The  question  of  substantial  performance  depends  somewhat  on  the  good 
faith  of  the  contractor.  If  he  has  intended  and  tried  to  comply  with  the  contract  and 
has  succeeded,  except  as  to  some  slight  things  omitted  by  inadvertence,  he  will  be 
allowed  to  recover  the  contract  price,  less  the  amount  necessary  to  fully  compensate 
the  owner  for  the  damages  sustained  by  the  omission.  Woodward  v.  Fuller,  80  N.  Y. 
312;  Nolan  v.  Whitney,  88  id.  648;  Phillip  v.  GaUant,  62  id.  256,  264;  Glacius  v. 
Black,  50  id.  145;  s.  c.  67  id.  563,  566;  Johnson  v.  DePeyster,  50  id.  666;  Sinclair 
V.  Tallmadge,  35  Barb.  602.  But  when,  as  in  this  case,  there  is  a  wilful  refusal  by  the 
contractor  to  perform  his  contract  and  he  wholly  abandons  it,  and  after  due  notice 
refuses  to  have  anything  more  to  do  with  it,  his  right  to  recover  depends  upon  per- 
formance of  his  contract,  without  any  omission  so  substantial  in  its  character  as  to 
call  for  an  allowance  of  damages  if  he  had  acted  in  good  faith.  While  slight  and 
insignificant  imperfections  or  deviations  may  be  overlooked  on  the  principle  of  de 
minimis  non  curat  lex,  the  contract  in  other  respects  must  be  performed  according  to 
its  terms.  When  the  refusal  to  proceed  is  wilful  the  difference  between  substantial 
and  literal  performance  is  bounded  by  the  line  of  de  minimis.  Smith  v.  Bradj%  17 
N.  Y.  173;  Cunningham  v.  Jones,  20  id.  486;  Bonsteel  v.  Mayor,  etc.,  22  id.  162; 
Walker  v.  Millard,  29  id.  375;  Glacius  v.  Black,  50  id.  145;  Cathn  v.  Tobies,  26  id. 
217;  Husted  v.  Craig,  36  id.  221;  Flaherty  v.  Miner,  123  id.  382;  Hare  on  Contracts, 
569;    Leake  on  Contracts,  821." 

In  Chicago,  Santa  Fe  and  California  Railroad  Company  v.  Price,  138  U.  S.  185,  an 
action  for  breach  of  a  contract  to  pay  for  certain  construction,  the  court  said:  "The 
written  contract  between  the  parties  in  this  case  does  not  materially  differ  from  the 
one  before  this  court  in  Martinsburg  &  Potomac  Railroad  Co.  v.  March,  114  U.  S.  549, 
553.  In  that  case  the  contractor  did  not  allege  in  his  declaration  that  the  engineer 
ever  certified  in  writing  the  complete  performance  of  the  contract,  together  with  an 
estimate  of  the  work  done  and  the  amount  of  compensation  due  him  according  to  the 
prices  established  by  the  parties;  which  certificate  and  estimate  was  made  by  the 
agreement  a  condition  of  the  liability  of  the  company  to  pay  the  contractor  the  bal- 
ance, if  any,  due  him.  Nor  did  the  declaration  allege  any  facts  which,  in  the  absence 
of  such  certificate  by  the  engineer  whose  determination  was  made  final  and  conclusive, 
entitled  the  contractor  to  sue  the  company  on  the  contract.  It  was  held,  in  accord- 
ance with  the  principles  announced  in  Kihlberg  v.  United  States,  97  U.  S.  398,  and 
Sweeney  v.  United  States,  109  U.  S.  618,  that  the  declaration  was  fatally  defective  m 
that  it  contained  'no  averment  that  the  engineer  had  been  guilty  of  fraud,  or  had, 
made  such  gross  mistake  in  his  estimates  as  necessarily  implied  bad  faith,  or  had 
failed  to  exercise  an  honest  judgment  in  discharging  the  duty  imposed  upon  him.* 


480  THURNELL    V.    BALBIRNIE  [CHAP.   V 

THUENELL  v.  BALBIRN'IE 

In  the  Exchequer,  Trinity  Term^  1837 

[Reported  in  2  Meeson  &  Welsby,  786] 

The  first  count  of  the  declaration  stated,  that  before  and  at  the 
time  of  making  the  agreement  and  the  promise  and  undertaking  of 
the  defendant  thereinafter  mentioned,  the  defendant  held,  occupied, 
and  enjoyed,  at  his  request,  certain  rooms,  apartments,  and  premises 
of  the  plaintiff,  as  tenant  thereof  to  the  plaintiff,  the  same  then  being 
part  and  parcel  of  a  dwelling-house  of  the  plaintiff,  and  in  which 
there  were  certain  goods  and  fixtures  and  chattels,  to  wit,  &c.,  of 
the  plaintiff,  of  great  value,  to  wit,  of,  &c. ;  and  thereupon  hereto- 
fore, to  wit,  on  the  26th  of  December,  1836,  it  was  agreed  by  and 
between  the  plaintiff  and  the  defendant  in  manner  following,  that 
is  to  say :  the  plaintiff  then  agreed  to  sell  and  deliver  to  the  defendant, 
who  then  agreed  to  purchase  and  take  of  the  plaintiff,  the  said 
goods,  fixtures,  and  chattels,  at  a  valuation  to  be  made  by  certain 
persons,  to  wit,  Mr.  Newton  and  Mr.  Matthews,  or  their  umpire; 
and  the  plaintiff  said,  that  the  said  Mr.  Newton  was  appointed  by 
and  on  behalf  of  the  plaintiff,  and  the  defendant,  to  value  as  afore- 
said. The  declaration  then  averred  mutual  promises,  and  alleged 
that  Newton,  on  behalf  of  the  plaintiff,  was  ready  and  willing  to 
value  the  said  goods,  &c.,  and  at  the  request  and  by  the  authority  of 
the  plaintiff  requested  Matthews  to  value  the  same,  whereof  the  de- 
fendant   and    Matthews   had   notice;    but   that    the    defendant    and 

Some  observations  in  that  case  are  pertinent  in  the  present  one.  It  was  said:  'We 
are  to  presume  from  the  terms  of  the  contract  that  both  parties  considered  the  possi- 
bility of  disputes  arising  between  them  in  reference  to  the  execution  of  the  contract. 
And  it  is  to  be  presumed  that  in  their  minds  was  the  possibility  that  the  engineer 
might  err  in  his  determination  of  such  matters.  Consequently,  to  the  end  that  the 
interests  of  neither  party  should  be  put  in  peril  by  disputes  as  to  any  of  the  matters 
covered  by  their  agreement,  or  in  reference  to  the  quantity  of  the  work  to  be  done 
under  it,  or  the  compensation  which  the  plaintiff  might  be  entitled  to  demand,  it  was 
expressly  stipulated  that  the  engineer's  determination  should  be  final  and  conclusive. 
Neither  party  reserved  the  right  to  revise  that  determination  for  mere  errors  or  mis- 
takes upon  his  part.  Tht^y  chose  to  risk  his  estimates,  and  to  rely  upon  their  right, 
which  the  law  presumes  they  did  not  intend  to  waive,  to  demand  that  the  engineer 
should,  at  all  times,  and  in  respect  to  every  matter  submitted  to  his  determination, 
exercise  an  honest  judgment,  and  commit  no  such  mistakes  as,  under  all  the  circum- 
stances,  would  imply  bad  faith.'" 

In  r^hism  v.  Scliipper,  FA  N.  .1.  L.  1,  the  court,  while  holding  fraud  on  the  part  of  an 
architect  an  excuse  for  non-performance  of  a  condition  precedent  that  his  certificate 
shijiild  b(!  procun^d,  said:  "Nor  does  it  seem  to  me  that  by  the  adoption  of  the  fore- 
going theory  of  explication  these  arbitration  ohiuses  will  lie  shorn  of  any  beneficial 
efficacy.  Thf!  awards  aiithorizrid  by  thc^m  will,  for  all  useful  purposes,  be  in  truth 
finalities;  they  cannot  be  impcsached  for  want  of  skill  or  knowledge  of  the  arbiter,  nor 
on  the  ground  that  his  judgnKrnts  do  not  scpiare  with  the  judgments  of  other  persons; 
such  awards  can  be  vitiat<!d  by  fraud  alone,  and  which  must  be  i)roved  to  the  satis- 
faction of  a  jury  uufh^r  a  watchful  judicial  supervision." 

See  also  Kenrn^dy  v.  United  States,  24  Ct.  C\.  122;  Dingley  v.  Greene,  54  Cal. 
'.i'.V.i;  Fowler  v.  I)(;akman,  S4  III.  i:U);  Clilmore  v.  flourtnt^v,  15H  111.  4;r2;  Merrill  v. 
Gore,  2!)  Me.  .MC);  Baltimon!  &  Ohio  R.  R.  Co.  v.  Hrydon,  6.5  Md.  198;  Palmer  v. 
Clark,  10(1  Mass.  ,H7:i;  Heharrell  v.  Quimby,  102  Mass.  571;  Shaw  v.  First  Baptist 
Church,  44   Minn.  22. 


SECT.    l]  THURNELL   V.   BALBIRNIE  481 

Matthews  then  and  thence  continually  neglected  and  refused  so  to 
do.  And  the  plaintiff  further  said,  that  he,  the  plaintiff,  afterwards, 
to  wit,  on  the  2d  of  February,  1837,  gave  notice  to  the  defendant 
that  the  plaintiff's  said  appraiser  and  valuer,  the  said  Newton,  was 
ready  to  meet  the  defendant's  appraiser  and  valuer,  the  said 
Matthews,  or  any  other  person  he  might  think  proper  to  nominate 
for  the  purpose  on  the  defendant's  behalf,  at  any  time  within  ten 
days  from  the  said  2d  of  February  which  the  defendant  might  fix, 
to  value  the  said  goods,  &c.,  of  which  the  defendant  then  had  no- 
tice, but  then  and  thence  hitherto  wholly  neglected  and  refused  to 
appoint  any  day  for  his  appraiser,  the  said  Matthews,  to  value,  and 
wholly  neglected  and  refused  to  nominate  any  other  appraiser,  and 
during  all  that  time  has  wholly  refused  and  neglected  to  take  any 
steps  to  value  as  aforesaid,  or  to  cause  or  procure  the  same  to  be 
valued  according  to  his  said  agreement  and  promise,  and  has  during 
all  the  time  aforesaid  wholly  refused  to  value  the  said  goods,  &c., 
or  to  let  the  same  be  valued,  according  to  his  said  agreement  and 
promise.  And  thereupon  the  said  Mr.  N^ewton  afterwards,  and  after 
the  lapse  of  a  reasonable  period  of  time,  to  wit,  one  month  from 
the  day  and  the  year  last  aforesaid,  proceeded  to  value  and  did  then 
value  the  said  goods,  &c.,  and  the  price  thereof  upon  such  valuation 
reasonably  amounted  to  the  sum  of  500/.,  whereof  the  defendant  had 
notice,  and  was  requested  to  pay  the  same  to  the  plaintiff.  And  the 
plaintiff  further  says,  that  he  hath  always  from  the  time  of  making 
such  valuation  as  aforesaid  been  ready  and  willing  to  sell  and  deliver 
to  the  defendant  the  said  goods,  &c.,  and  to  receive  payment  by  him 
of  the  value  thereof,  whereof  the  defendant  hath  always  had  notice; 
yet  the  defendant,  not  regarding,  &c.,  did  not  nor  would,  although 
often  requested,  take  the  said  goods,  &c.,  so  agreed  by  him  to  be 
taken  as  aforesaid,  and  pay  the  plaintiff  the  value  thereof,  but  hath 
hitherto  wholly  neglected  and  refused  so  to  do,  whereby,  &c. 

There  were  also  counts  for  goods  and  fixtures  bargained  and  sold, 
and  on  an  account  stated. 

Special  demurrer  to  the  first  count  assigning,  amongst  other  causes, 
the  following:  that  the  count  does  not  sufficiently  allege  a  breach  of 
the  defendant's  promise  therein  mentioned,  for  that  it  does  not  al- 
lege that  the  defendant  hindered  or  prevented  the  said  persons  ap- 
pointed and  agreed  on  to  make  the  said  valuation,  or  either  of  them, 
from  making  such  valuation.  And  also  that  it  is  elleged  by  way  of 
breach  that  the  defendant  refused  to  take  the  goods,  &c.,  agreed  by 
him  to  be  taken,  and  that  he  also  refused  to  pay  to  the  plaintiff  the 
value  of  the  said  goods,  &c.,  and  no  agreement  or  promise  is  stated 
in  the  said  count  to  take  the  said  goods,  &c.,  at  their  value  generally, 
or  at  the  valuation  made  by  the  said  Mr.  ISTewton,  but  at  the  valu- 
ation only  of  the  said  IvTewton  and  Matthews,  or  their  umpire. 
Joinder  in  demurrer. 

Kelly,  in  support  of  the  demurrer.     There  are  many  objections  in 
16 


482  THURNELL    V.    BALBIRNIE  [CHAP.    V 

point  of  form  to  this  count;  but  the  substantial  question  is,  where 
two  persons  are  by  agreement  appointed  to  make  a  valuation  of 
goods,  and  one  refuses,  can  either  party  be  liable  for  a  breach  of  the 
agreement?  How  could  the  defendant  be  bound  to  take  or  pay  for 
the  goods  until  they  had  been  valued  according  to  the  agreement? 
[Gurnet,  B.  It  is  not  said  that  Matthews  omitted  to  value  by  the 
procurement  of  the  defendant.]  It  is  just  as  if  an  action  were 
brought  against  a  party  to  a  submission,  because  one  of  the  arbi- 
trators refuses  to  make  an  award.  , 

The  Court  here  called  upon 

Hoggin's,  to  support  the  declaration.  It  is  specifically  averred  in 
the  count  that  the  defendant  had  notice  that  the  plaintiff's  appraiser 
was  ready  to  value,  and  the  breach  assigned  is,  that  he  then  wholly 
refused  to  let  the  goods  be  valued  according  to  the  agreement.  It 
is  submitted  that  that  is  sufficient  to  render  him  liable  for  the  price. 
In  Hotham  v.  East  India  Company  it  was  held,  that  where  the  de- 
fendant by  his  neglect  and  default  prevented  the  performance  of  a 
condition  precedent  in  a  charter-party,  that  was  equivalent  to  a 
performance  by  the  plaintiffs.  In  Raynay  v.  Alexander,  where  the 
plaintiff  declared  in  assumpsit  for  non-delivery  of  fifteen  tods  of 
wool  purchased  by  him  out  of  seventeen,  of  which  the  defendant  was 
possessed,  the  declaration  was  held  bad  for  want  of  an  allegation 
that  the  plaintiff  had  selected  fifteen  tods  of  the  seventeen,  which  was 
an  act  to  be  first  performed  by  him;  but  the  Court  said  if  the  de- 
fendant would  not  have  permitted  the  plaintiff  to  see  the  wool,  that 
he  might  make  election,  that  had  excused  the  act  to  be  done  by  the 
plaintiff,  and  had  been  a  default  in  the  defendant.  If  these  cases  be 
law,  the  facts  alleged  in  this  declaration  make  the  defendant  liable 
as  for  goods  bargained  and  sold. 

Lord  Abinger,  C,  B.  I  am  of  opinion  that  this  count  is  bad. 
The  agreement  stated  is  an  agreement  to  purchase  goods  on  the 
valuation  of  JSTewton  and  Matthews.  There  is  no  distinct  allegation 
that  the  defendant  refused  to  permit  Matthews  to  value  on  his  part; 
but  only  an  obscure  statement  that  he  refused  to  appoint  any  day 
for  his  valuing,  or  to  take  any  steps  to  value  or  to  cause  and  procure 
the  goods  to  be  valued,  according  to  his  agreement,  and  that  he  has 
refused  to  value  the  goods  or  to  let  them  be  valued  according  to  his 
agreement;  all  which  comes  after  the  allegation  that  Matthews  had 
refused  to  value,  there  being  no  statement  that  he  had  changed  his 
mind  and  was  ready  and  willing  to  do  so,  but  that  the  defendant 
would  not  permit  him.  I  am  of  opinion,  therefore,  that  enough  is 
not  stated  to  render  the  defendant  liable  for  the  price  of  the  goods. 

BoLLAND,  B.,  concurred. 

Aldkkhon,  B.  I  should  refer  the  Avords  "or  to  lot  the  same  be 
valued,"  &c.,  to  the  defendant's  letting  the  goods  be  valued  hy  another 
appriiiser  instead  of  Matthews,  according  to  the  notice  which  the 
I>luintiff  says  he  gave  him. 


SECT.   I]  HAWKINS    V.   GRAHAM  483 

GuBNEY,  B.,  concurred. 

Leave  to  amend  on  'payment  of  costs;  otherwise  judgment  for  the 
defendant} 


GAKDNER  C.  HAWKINS  v.   JOHN  C.  GRAHAM 

Supreme  Judicial  Court  of  Massachusetts,  March  22-May  11, 

1889 

{^Reported  in  149  Massachusetts,  284] 

Contract  for  breach  of  an  agreement  in  writing,  which  was  as 
follows :  — 

Philadelphia,  December  21,  1885. 
Mr.  John  C.  Graham  : 

I  do  hereby  agree  that  for  and  in  consideration  of  the  sum  of 
fifteen  hundred  and  seventy-five  (1,575)  dollars,  to  be  paid  me  upon 
the  satisfactory  completion  of  the  following  system  of  heating  to  be 
established  in  your  new  mills  [the  system  is  here  described].  It 
is  further  declared,  and  distinctly  understood,  that  in  the  event  of 
my  not  being  able  to  properly  heat  every  portion  of  the  buildings 
as  hereinbefore  provided  for,  and  in  accordance  with  the  require- 
ments as  above  set  forth,  upon  a  ten  (10)  days'  notice  from  your- 
self to  the  effect  that  the  buildings  are  not  being  properly  and 
sufficiently  heated,  and  I  cannot  so  heat  it  in  ten  days  thereafter, 
I  shall  and  will  at  my  own  expense  remove  all  the  machines  and 
appurtenances  belonging  to  the  system,  leaving  the  entire  mill  in  a 
condition  equal  to  that  prior  to  the  introduction  of  the  same.  In 
this  event,  no  charges  of  any  kind  will  be  made  by  me  on  account 
of  any  of  the  aforesaid  work;  it  being  distinctly  understood  that  the 
providing  of  the  entire  system  is  to  be  done  at  my  own  risk  abso- 
lutely. In  the  event  of  the  system  proving  satisfactory,  and  con- 
forming with  all  the  requirements  as  above  provided  for,  the  sum 
of  $1,575  as  above  provided  for  to  be  paid  me,  after  such  acknowl- 
edgment has  been  made  by  the  owner  or  the  work  demonstrated. 

Gardner    C.    Hawkins. 

^  As  to  death  of  a  valuer  or  architect,  see  Firth  v.  Midland  Ry.  Co.,  L.  R.  20  Eq. 
100;    Hebert  v.  Dewey,  191  Mass.  403,  412;    Meacham  v.  Railroad  Co.,  211,  N.  Y,  346. 

In  insurance  policies  an  appraisal  or  valuation  of  the  injurj-  is  frequently  made  a 
condition  precedent  to  a  right  of  action.  In  Brock  v.  The  Dwelling  House  Ins.  Co. 
102  Mich.  583,  it  was  held  this  condition  was  excused  by  the  unreasonable  action  of 
the  appraiser  appointed  by  the  company.  The  court  say  (p.  593):  "It  is  well  settled 
that  where  the  conduct  of  the  company's  appraiser  in  refusing  to  agree  on  an  umpire 
is  inexcusable,  and  virtually  amounts  to  a  refusal  to  proceed  with  the  appraisement, 
the  fact  that  the  appraisement  was  not  concluded  before  suit  brought  will  not  bar  an 
action  on  the  policy.  McCuUough  v.  Insurance  Co.,  113  Mo.  606;  Bishop  v.  Insurance 
Co.,  130  N.  Y.  488;  Uhrig  Insurance  Co.,  101  id.  362;  Bradshaw  v.  Insurance  Co.,  137 
id.  137." 

Compare  Cooper  v.  Shuttleworth,  25  L.  J.  Ex.  114. 


484  HAWKINS    V.    GRAHAM  [CHAP.   V 

At  the  trial  in  the  Superior  Court,  before  Brigham,  C.  J.,  there 
was  evidence  that  the  plaintiff  made  the  offer  contained  in  the  above 
agreement,  and  that  the  defendant  accepted  such  offer. 

The  defendant  contended  that  all  the  words  of  the  contract  were 
to  be  taken  into  consideration  in  its  interpretation;  that,  in  addition 
to  the  other  requirements  of  the  contract,  the  system  of  heating 
must  prove  satisfactory  to  the  defendant;  and  the  defendant  offered 
evidence,  not  only  that  the  system  would  not  and  did  not  do  the 
heating  as  guaranteed,  but  that  it  did  not  prove  satisfactory  to  the 
defendant. 

The  judge  ruled  that  this  contract  did  not  come  within  the  scope 
of  the  case  of  Brown  v.  Foster,  113  Mass.  136,  and  similar  cases, 
and  that  if  the  plaintiff  had  fulfilled  his  contract  in  the  other  par- 
ticulars required,  he  was  entitled  to  recover,  notwithstanding  the 
dissatisfaction  of  the  defendant ;  that  under  the  contract  the  plaintiff 
was  not  bound  to  make  the  system  satisfactory  to  the  defendant,  and 
that  evidence  on  that  point  was  immaterial ;  and  that  the  trial  should 
proceed  on  the  theory  that  the  satisfaction  of  the  defendant  was 
substantially  eliminated  from  the  case. 

The  plaintiff's  evidence  showed  that  the  temperature  of  the  dif- 
ferent stories  of  the  defendant's  mill,  which  was  one  hundred  and 
ninety-six  feet  long  by  fifty  feet  wide,  and  seventy-five  feet  high, 
varied,  and  that  the  temperature  near  where  the  hot  air  entered  the 
rooms  was  higher  by  several  degrees,  in  some  instances  as  much  as 
ten  degrees,  than  in  the  more  remote  portions  of  the  rooms,  the  hot 
air  being  introduced  into  the  rooms  at  only  one  place,  at  the  end 
of  each  room. 

The  judge  gave  no  instructions  to  the  jury  on  the  question  of 
satisfaction. 

The  jury  returned  a  verdict  for  the  plaintiff;  and  the  defendant 
alleged  exceptions. 

A.  Hemenway  &  F.  L.  Wasliburn,  for  the  defendant. 

8.  Lincoln,  for  the  plaintiff. 

Holmes,  J.  The  only  question  in  this  case  is  whether  the  written 
agreement  between  the  parties  left  the  right  of  the  plaintiff  to  recover 
the  price  of  the  work  and  materials  furnished  by  him  dependent 
upon  the  actual  satisfaction  of  the  defendant.  Such  agreements 
usually  are  construed,  not  as  making  the  defendant's  declaration  of 
dissatisfaction  conclusive,  in  which  case  it  would  bo  difficult  to  say 
they  amounted  to  contracts  (Hunt  v.  Livermore,  5  Pick.  395,  397), 
but  as  requiring  an  honest  expression.  In  view  of  modern  modes  of 
business,  it  is  not  surprising  that  in  some  cases  eager  sellers  or  selling 
agents  should  be  found  taking  that  degree  of  risk  with  unwilling 
purchasers,  especially  where  taste  is  involved.  BroAvn  v.  Foster, 
113  Mass.  136;  Gibson  v.  Cranage,  39  Mich.  49;  Wood  Reaping  & 
Mowing  Machinf  Co.  v.  Smith,  50  Mich.  565;  Zaleski  v.  Clark,  44 
Conn.   218;   McClure  Bros.   v.  Briggs,  58  Vt.   82;   Exhaust  Venti- 


SECT.    l]  HAWKINS    V.    GRAHAM  485 

lator  Co.  V.  Chicago,  Milwaukee,  &  St.  Paul  Eailway,  66  "Wis.  218; 
Seeley  v.  Welles,  120  Penn.  St.  69.  Singerly  v.  Thayer,  108  Penn. 
St.  291;  Andrews  v.  Belfield,  2  C.  B.  (n.  s.)  779.^ 

Still,  when  the  consideration  furnished  is  of  such  a  nature  that 
its  value  will  be  lost  to  the  plaintiff,  either  wholly  or  in  great  part, 
unless  paid  for,  a  just  hesitation  must  be  felt,  and  clear  language 
required,  before  deciding  that  payment  is  left  to  the  will,  or  even 
to  the  idiosyncrasies,  of  the  interested  party.  In  doubtful  cases, 
courts  have  been  inclined  to  construe  agreements  of  this  class  as 
agreements  to  do  the  thing  in  such  a  way  as  reasonably  ought  to 
satisfy  the  defendant.  Sloan  v.  Hayden,  110  Mass.  141,  143;  Braun- 
stein  V.  Accidental  Death  Ins.  Co.,  1  B.  &  S.  782,  799;  Dallman  v. 
King,  4  Bing.  N.  C.  105. 

By  the  written  proposition  which  was  accepted  by  the  defendant 
the  plaintiff  agrees,  "in  consideration  of  the  sum  of  fifteen  hundred 
and  seventy-five  dollars,  to  be  paid  me  upon  the  satisfactory  com- 
pletion of  the  following  system  of  heating  ...  in  your  new  mills, 
...  to  furnish  and  set  up,  ...  in  complete  and  first-class  work- 
ing order,"  certain  things.  Then  follow  conditions,  tests,  and  other 
undertakings.  Then  "it  is  further  declared  ,  .  .  that  in  the  event 
of  my  not  being  able  to  properly  heat  every  portion  of  the  buildings 
...  in  accordance  with  the  requirements  as  above  set  forth,"  upon 
ten  days'  notice  "that  the  buildings  are  not  properly  and  sufficiently 
heated,  and  I  cannot  so  heat  it  in  ten  days  thereafter,"  the  plaintiff 
will  remove  the  machines  at  his  own  expense.  "In  this  event,  no 
charges  of  any  kind  will  be  made  by  me  on  account  of  any  of  the 
aforesaid  work;  it  being  distinctly  understood  that  the  providing 
of  the  entire  system  is  to  be  done  at  my  own  risk  absolutely.  In  the 
event  of  the  system  proving  satisfactory,  and  conforming  with  all 
the  requirements  as  above  provided  for,  the  sum  of  fifteen  hundred 
and  seventy-five  dollars  as  above  provided  for  to  be  paid  me,  after 
such  acknowledgment  has  been  made  by  the  owner  or  the  work 
demonstrated." 

The  last  words,  "or  the  work  demonstrated,"  offer  an  alternative 
to  the  owner's  acknowledgment.  They  imply  that,  if  the  work  is 
demonstrated,  it  is  satisfactory  within  the  meaning  of  the  contract, 
although  the  owner  has  not  acknowledged  it.  The  previous  words, 
"and  conforming  with  all  the  requirements,"  tend  the  same  way. 
The  ten  days'  notice  contemplated  is  not  a  notice  that  the  owner  is 

1  Andrews  v.  Belfield,  2  C.  B.  n.  s.  779;  Silsby  Mfg.  Co.  v.  Chico,  24  Fed.  Rep. 
893;  Campbell  Printing  Press  Co.  ■».  Thorp,  36  Fed.  Rep.  414;  Hallidie  v.  Sutter  St. 
Ry.  Co.  63  Cal.  575;  Goodrich  v.  Nortwick,  43  111.  445;  Buckley  v.  Meidroth,  93  lU. 
App.  460;  Piatt  v.  Broderick,  70  Mich.  577;  Fire  Alarm  Co.  v.  Big  Rapids,  78  Mich. 
67;  Housding  v.  Solomon,  127  Mich.  654;  McCormick  Machinery  Co.  v.  Chesrown, 
33  Minn.  32;  Magee  v.  Scott  Lumber  Co.,  78  Minn.  11;  Gwynne  v.  Hitchner,  66 
N.  J.  L.  97;  Hoffman  v.  Gallaher,  6  Daly,  42;  Tyler  v.  Ames,  6  Lans.  280;  Gray  v. 
Central  R.  R.  Co.,  11  Hun,  70;  Moore  v.  Goodwin,  43  Hun,  534;  Haven  v.  Russell,  34 
N.  Y.  Supp.  292;  Rossiter  x.  Cooper,  23  Vt.  522;  McClure  v.  Briggs,  58  Vt.  82;  Ex- 
haust Ventilator  Co.  v.  Chicago,  &c.  Ry.  Co.,  66  Wis.  218,  69  Wis.  454,  ace. 


486  DOLL    V.    NOBLE  [CHAP.   V 

dissatisfied,  but  that  the  buildings  "are  not  being  properly  and  suffi- 
ciently heated,"  and  the  right  to  give  it  is  conditioned  upon  the 
plaintiff's  "not  being  able  to  properly  heat  every  portion  of  the 
buildings,"  etc.  Taking  these  phrases  with  the  test  prescribed,  that 
the  system  is  "to  readily  as  well  as  easily  heat  or  raise  the  tempera- 
ture at  any  point  ...  to  the  temperature  of  seventy  degrees  (70°) 
Fahr.  in  the  coldest  weather  that  may  be  experienced,"  etc.,  we  are 
of  opinion  that  the  satisfactoriness  of  the  system  and  the  risk  taken 
by  the  plaintiff  were  to  be  determined  by  the  mind  of  a  reasonable 
man,  and  by  the  external  measures  set  forth  in  the  contract,  not  by 
the  private  taste  or  liking  of  the  defendant.    Exceptions  overruled. 


CHARLES  DOLL  et  al..  Respondents,  v.  WILLIAM  NOBLE, 

Appellant 

New  York  Court  of  Appeals,  June  26-October  8,  1889 

[Reported  in  116  New  York,  230] 

Brown,  J.  This  action  was  brought  to  recover  a  balance  due 
upon  a  written  contract,  by  which  the  plaintiffs  were  to  do  polishing, 
staining,  and  rubbing  on  the  woodwork  of  two  houses  owned  by  the 
defendant,  and  also  for  certain  extra  work  upon  the  same  houses. 
The  defendant  denied  that  the  contract  had  been  performed  by  the 
plaintiffs,  or  that  anything  was  due  from  him. 

The  contract  provided  that  the  work  was  to  be  done  "in  the  best 
workmanlike  manner,  under  the  supervision  of  William  Packard, 
superintendent,  and  to  the  entire  satisfaction  of  William  Noble, 
the  party  of  the  first  part,  owner."  The  court  submitted  the  case  to 
the  jury  under  a  general  charge,  to  which  no  exception  was  taken, 
and  which  in  substance  instructed  the  jury  that  "if  the  work  under 
the  contract  was  done  in  the  best  workmanlike  manner,  the  plaintiffs 
would  be  entitled  to  recover,  and  that  the  defendant  could  not  defeat 
such  recovery  by  unreasonably,  and  in  bad  faith,  saying  the  work 
was  not  done  to  his  satisfaction;"  that  while  the  contract  provided 
that  it  was  to  be  done  to  the  owner's  satisfaction,  that  clause  must 
be  regarded  as  qualified  by  the  other  provisions  of  the  contract  that 
it  was  to  be  done  in  the  best  workmanlike  manner;  and  that  was 
the  test  of  a  correct  and  full  performance  of  the  contract. 

The  evidence  was  conflicting  upon  the  question  whether  the  work 
under  the  contract  was  done  in  a  workmanlike  manner,  and  also 
as  to  tbe  extra  work.  The  jury,  however,  found  a  verdict  for  the 
full  amount  claimed,  and  we  must  assume  that  the  result  was  correct 
unlf'ss  the  court  erred  in  its  construction  of  the  written  agreement. 
While  no  exception  was  taken  to  the  charge  of  the  court  to  which 
I  havf!  referred,  the;  defendant  at  the  close  of  the  charge  requested 


SECT.    I]  DOLL   V.    NOBLE  487 

the  court  to  instruct  the  jury  that  the  defendant  was  entitled  under 
the  contract  to  have  plaintiffs  do  the  work  "to  his  entire  satisfac- 
tion before  the  plaintiffs  became  entitled  to  the  final  payment."  To 
which  the  court  responded,  "I  so  charge,  subject  to  the  qualification 
which  I  have  already  made.  He  must  not  attempt  to  defeat  a  just 
claim  by  arbitrarily  and  unreasonably  saying  he  is  not  satisfied.  The 
work  must  be  done  according  to  the  contract."  To  this  ruling  the 
defendant  excepted,  and  this  exception  presents  the  principal  ques- 
tion in  the  case. 

The  ruling  of  the  court  was  correct.  The  question  was  directly 
presented  in  the  case  of  Bowery  National  Bank  v.  Mayor,  &c.,  63 
IsT.  Y.  336.  In  that  case  the  certificate  of  the  "water  purveyor"  that 
the  stipulations  of  the  contract  were  performed  was  made  a  condition 
precedent  to  payment.  It  was  conceded  that  the  contract  was*  com- 
pleted and  performed,  but  the  "water  purveyor"  declined  to  give 
a  certificate.  The  plaintiff  was  defeated  in  the  Supreme  Court,  but 
in  this  court  the  judgment  was  reversed,  the  court  saying,  "It  was 
necessary  for  them  (the  plaintiffs)  either  to  prove  upon  the  trial 
the  making  of  such  certificate,  or  to  show  that  it  was  refused  un- 
reasonably and  in  bad  faith.  It  was  unreasonable  to  refuse  it  if  it 
ought  in  the  contemplation  of  the  contract  to  be  given.  In  such 
contemplation  it  ought  to  have  been  given,  when,  in  any  fact  and 
beyond  all  pretence  of  dispute,  the  state  of  things  existed  to  which  the 
water  purveyor  was  to  certify,  to  wit,  the  full  completion  of  the 
contract  in  each  and  every  one  of  its  stipulations." 

That  when  the  parties  have  made  the  certificate  of  a  third  person 
of  the  performance  of  the  work  a  condition  precedent  to  payment, 
such  certificate  must  be  produced  or  its  absence  explained  is  the 
general  rule.  Smith  v.  Briggs,  3  Denio,  74.  But  all  the  authorities 
recognize  the  exception  that  when  such  certificate  is  refused  in  bad 
faith  or  unreasonably  the  plaintiff  may  recover  upon  proof  of  per- 
formance of  the  contract.  Smith  v.  Brady,  17  N".  Y.  176;  Thomas 
V.  .Fleury,  26  id.  26 ;  Wyckoff  v.  Meyers,  44  id.  145 ;  Nolan  v.  Whit- 
ney, 88  id.  648;  United  States  v.  Robeson,  9  Peters,  328;  Smith  v. 
Wright,  4  Hun,  652;  Whiteman  v.  Mayor,  &c.,  21  id.  121. 

The  reason  for  the  exception  applies  with  much  greater  force  where 
the  Avork  is  to  be  done  to  the  satisfaction  of  the  party  himself  than 
to  cases  where  the  certificate  of  a  third  party  is  required.  A  party 
cannot  insist  on  a  condition  precedent  when  he  has  himself  defeated 
a  strict  performance.     Butler  v.  Tucker,  24  Wend.  449. 

In  this  case  Judge  Bronson  well  says :  "The  defendant  does  not 
set  up  that  part  of  the  covenant  which  requires  the  work  to  be  done 
to  his  satisfaction.  As  to  that  it  would  probably  be  enough  for  the 
plaintiff  to  aver  that  the  work  was  in  all  other  respects  completed 
in  pursuance  of  the  contract;  for  if  the  defendant  was  not  satisfied 
with  such  a  performance  it  would  be  his  own  fault."  See  also  Du- 
plex Safety  Boiler  Co.  v.  Gardner,  101  N.  Y.  387. 


488  WORK    V.    BEACH  [CHAP,   V 

I^one  of  the  cases  cited  by  the  appellant  hold  a  different  rule. 
Many  of  them  recognize  the  exception  I  have  pointed  out,  and  those 
that  do  not  are  easily  distinguishable  from  the  case  under  considera- 
tion.    It  is  not  deemed  necessary  to  refer  to  them  more  specifically. 

We  have  examined  the  other  questions  raised  by  the  exceptions, 
but  none  of  them  are  of  sufficient  importance  to  require  discussion. 

The  judgment  should  be  affirmed,  with  costs. 

All  concur.  Judgment  affirmed.^ 


WOEK  ET  AL  V.  BEACH 

!N"ew  Yokk  Supreme  Court,  General  Term,  March  13,  1891 

[Reported  in  13  New  York  Supplement,  678] 

Appeal  from  special  term,  JSTew  York  County. 

Action  by  Frank  Work,  William  E.  Strong,  George  Wood,  and 
Erank  K.  Sturgis  against  Miles  Beach.  Defendant  had  had  an  account 
with  plaintiffs,  who  were  stock-brokers,  arising  out  of  purchases  of 
stocks,  and  plaintiffs  brought  action  against  defendant,  alleging  that 
they  had  advanced  more  money  than  the  value  of  the  se- 
curities held  by  them.  Pending  the  action,  the  plaintiff  Sturgis  and 
defendant  had  an  interview,  in  which,  after  defendant  had  explained 
his  embarrassed  financial  condition,  Sturgis  proposed  that,  if  de- 
fendant would  authorize  plaintiffs  in  writing  to  sell  the  securities 
held  by  them  and  would  then  in  writing  admit  the  correctness  of 
the  debit  balance  on  that  account,  and  agree  to  pay  that  balance  when 
he  should  be  able  to  do  so,  plaintiffs  would  discontinue  the  action, 
would  sell  the  securities,  and  would  allow  the  account  to  stand  until 
defendant  should  be  able  to  pay  such  balance.  To  this  the  defendant 
agreed.  Plaintiffs  sold  the  securities,  and  sent  defendant  a  final 
statement  of  his  account,  showing  the  amount  due  them  as  $14,570.68; 
and  in  their  letter  to  him  inclosing  this  statement,  requested  the 
agreed  written  acknowledgment.  After  some  days  defendant  re- 
plied :  "I  have  received  your  final  statement  of  account,  showing 
balance  your  due,  in  accordance  with  our  agreement.  To  further 
complete  compliance,  I  write  to  say  that  I  will  pay  such  balance 
when  I  shall  be  able  to  do  so."  JSTearly  three  years  thereafter  plain- 
tiffs made  a  demand  on  defendant  for  payment,  and,  no  payment 
being  made,  brought  this  action.  The  original  complaint  contained 
no  averment  that  defendant  was  then  able  to  pay,  and  a  demurrer 
thereto  was  sustained.  See  former  decision,  6  N.  Y.  Supp.  27.  The 
complaint  was  amended,  and,  on  trial  by  the  court,  a  jury  having 

'  FuchH  ^  T.firiK  MfR.  Co.  v.  Kittrodpin,  242  HI.  88;  Schmand  v.  Jandorf,  175  Mich. 
88;  Boyd  v.  Tlallownll,  fJO  Minn.  225;  Barnntt  v.  Rworin-ren,  77  Mo.  App.  64;  Hum- 
nifl  B.  Sff^n,  lfi4  N.  Y.  00.''.;  Richcson  v.  M<-ad,  11  S.  Dak.  0;^,  arc.  Cf.  Crawford  v. 
Mail  &  ExproHH  Pub.  Co.  163  N.  Y.  404;  Diamond  o.  Mendelsohn,  166  N.  Y.  App.  D. 
636. 


SECT.  l]  WORK    V.    BEACH  489 

been  waived,  it  appeared  that  defendant,  at  the  time  the  promise  to 
pay  was  given,  and  continuously  since  that  time,  received  a  salary 
as  judge  of  $1,250  per  month,  out  of  which  he  saved  nothing.  Judg- 
ment was  rendered  for  defendant,  dismissing  the  complaint.  See 
decision,  12  I^.  Y.  Supp.  12.    From  this  judgment  plaintiffs  appeal.^ 

Argued  before  Van  Brunt,  P.  J.,  and  Daniels  and  O'Brien,  JJ. 

Henry  S.  Bennett,  for  appellants. 

Augustus  C.  Brown,  for  respondent. 

O'Brien^  J.  [after  stating  that  the  action  was  not  on  the  original 
debt,  but  on  the  conditional  promise  to  pay  it,  and  stating  some  au- 
thorities said]  : 

It  may  fairly  be  deduced  from  the  cases  that  the  plaintiffs 
were  bound  to  prove  the  defendant's  ability  to  pay  at  the  commence- 
ment of  the  action,  and  that  such  ability  could  be  shown  by  circum- 
stances as  well  as  by  direct  evidence.  Beyond  this  there  is  no  fixed 
rule.  Each  case  must  depend  upon  the  terms  of  the  contract,  read 
in  the  light  of  the  surrounding  circumstances.  Substantial  proof 
of  ability  within  the  intent  and  meaning  of  the  parties  must  be 
given;  and,  although  that  proof  may,  in  the  nature  of  things,  be 
difficult,  it  is  none  the  less  requisite.  By  taking  a  conditional  obli- 
gation —  the  condition  itself  being  founded  upon  a  valuable  con- 
sideration —  the  obligee  accepts  the  burden  imposed  upon  him  of 
establishing  the  fulfilment  of  the  condition  before  he  can  recover. 
.  .  .  The  understanding  undoubtedly  was  that  the  defendant 
should  be  required  to  pay  only  when  his  circumstances  were  changed 
for  the  better,  either  by  an  acquisition  of  fortune  or  a  decrease  of 
obligation."  12  IST.  Y.  Supp.  16.  It  was  therefore  correctly  ruled 
that  it  was  incumbent  on  plaintiffs  to  show  some  change  for  the 
better  in  defendant's  circumstances  at  a  period  subsequent  to  the 
time  when  the  promise  was  given.  Such  a  construction,  finding  sup- 
port, as  it  does,  both  upon  principle  and  authority,  was  given  to  the 
contract  between  the  parties  upon  the  trial.  JSTo  evidence  was  pre- 
sented to  warrant  the  conclusion  that  defendant's  circumstances  had 
improved,  or  showing  his  ability  to  pay.  He  was  in  receipt  of  his 
salary  as  judge  when  the  contract  was  made.  He  received  it  then, 
as  now,  monthly;  and  the  testimony  shows  that  out  of  it  he  saved 
nothing.  It  is  useless  to  speculate  as  to  what  defendant  could  or 
should  have  done;  the  question  being,  did  the  plaintiffs  prove  de- 
fendant's ability  to  respond  within  the  meaning  of  the  contract? 
The  conclusion  reached  was  justified  by  the  proof. ^ 

^  The  statement  of  facts  is  abbreviated. 

2  Cole  V.  Saxby,  3  Esp.  159;  Davies  v.  Smith,  4  Esp.  36;  Tell  City  Co.  v.  Nees, 
63  Ind.  245;  Stainton  v.  Brown,  6  Dana,  249;  Eckler  v.  Galbraith,  12  Bush,  71; 
Denney  v.  Wlieelwright,  60  Miss.  733;  Everson  v.  Carpenter,  17  Wend.  419;  Re 
Knab,  78  N.  Y.  Supp.  292;  Nelson  v.  Von  Bonnhorst,  29  Pa.  352;  Salinas  v.  Wright, 
11  Tex.  572,  ace. 

Kincaid  v.  Higgins,  1  Bibb,  396,  contra.  See  also  Nunez  v.  Dautel,  19  Wall.  562; 
Works  V.  Hershey,  35  la.  340;  De  Wolf  v.  French,  51  Me.  420;  Crooker  v.  Holmes^ 
65  Me.  195;   Lewis  v.  Tipton,  10  Ohio  St.  88;   Noland  v.  Bull,  24  Oreg.  479. 


490  MERCANTILE   TRUST   COMPANY    V.    HENSEY       [CHAP.   V 


MEKCAJSTTILE  TEUST  COMPANY  v.  HENSEY 

SuPKEME  Court  of  the  United  States,  March  15-April  8,  1907 

[Reported  in  205  United  States,  298] 

This  was  a  writ  of  error  to  the  Court  of  Appeals  of  the  District 
of  Columbia,  to  review  a  judgment  against  the  Mercantile  Trust 
Company  on  a  bond  executed  by  the  Company  as  surety  for  one 
Jones  in  a  building  contract  which  he  had  entered  into  with  the 
defendant  in  error.  The  builder's  compensation  was  made  conditional 
upon  his  receiving  an  architect's  certificate,  and  this  certificate  he 
duly  obtained,  but  the  defendant  in  error,  asserting  that  nevertheless 
the  work  was  improperly  done,  brought  this  action. 

Mk.  Justice  Peckham  :  We  do  not  think  this  certificate  was  con- 
clusive, and  it  did  not,  therefore,  bar  the  maintenance  of  this  action. 
The  language  of  the  contract,  upon  which  the  claim  is  based,  is  set 
out  in  the  foregoing  statement,  and  while  it  provides  that  the  work 
shall  be  completed  agreeably  to  the  drawings  and  specifications  made 
by  M.  D.  Hensey,  architect,  in  a  good,  workmanlike  and  substantial 
manner,  to  the  satisfaction  and  under  the  direction  of  Bates  Warren, 
or  the  architect  placed  in  charge  by  him,  to  be  testified  by  writing 
or  certificate  under  the  hand  of  Bates  Warren,  or  the  architect  placed 
in  charge  by  him,  it  omits  any  provision  that  the  certificates  shall 
be  final  and  conclusive  between  the  parties.  In  other  words,  the  con- 
tract provides  that  before  the  builder  can  claim  payment  at  all  he 
must  obtain  the  certificate  of  the  architect;  but  after  such  cer- 
tificate has  been  given,  there  is  no  provision  which  bars  the  plaintiff 
from  showing  a  violation  of  the  contract  in  material  parts,  by  which 
he  has  sustained  damage.  A  contract  which  provides  for  the  work 
on  a  building  to  be  performed  in  the  best  manner  and  the  materials 
of  the  best  quality,  subject  to  the  acceptance  or  rejection  of  an 
architect,  all  to  be  done  in  strict  accordance  with  the  plans  and  speci- 
fications, does  not  make  the  acceptance  by  the  architect  final  and 
conclusive,  and  will  not  bind  the  owner  or  relieve  the  contractor  from 
the  agreement  to  perform  according  to  plans  and  specifications. 
Glacius  V.  Black,  50  N.  Y.  145 ;  Fontano  v.  Bobbins,  22  App.  D.  C. 
253. 

There  is  also  in  the  contract  the  provision  in  regard  to  payments 


In  Donnoy  v.  WhoolwriRht,  60  Miss.  733,  744,  the  court  said:  "The  fault  of  [the 
iriHtniction]  nivnn  for  thn  plaintiffs  in  that  it  rofiuirod  the  defendants  to  prove  not 
only  that  the  condition  had  happened  upon  which  the  promises  of  the  plaintiffs  be- 
came abHohite,  hut  that  it  continued  up  to  the  commencement  of  the  suit.  If  the 
promise  of  the  plaintiffs  wa,q  to  i)ay  these  notes  when  or  if  they  Iiecame  able,  then  when 
they  hrTame  able  the  f)romise  became  absolute,  and  a  richt  of  action  existed  in  favor  of 
the  defendants  which  would  not  be  lost  by  the  subsequent  insolvency  or  inability  of 
the  phiintifTH  to  pay  Ihf  debt.  The  fpiestion  was  nf)t  whether  the  plaintiffs  were  at 
thf;  institution  of  flieir  suit  able  to  pay  the  debts,  l)ut  whether  at  any  time  after  their 
promi.se  it  becanu!  absolute  by  the  h.api)eninK  of  the  condition." 

See  also  Waters  v.  Thanet.  2  Q.  B.  757. 


SECT.    l]  REAGAN  V.  UNION  LIFE  INS.  CO.  491 

as  the  work  progressed,  which  showed  that  a  certificate  was  to  be 
obtained  from  and  signed  by  the  architect  in  charge,  before  the  con- 
tractor was  entitled  to  payment,  but  it  was  provided  that  the  cer- 
tificate should  "in  no  way  lessen  the  total  and  final  responsibility  of 
the  contractor;  neither  shall  it  exempt  the  contractor  from  liability 
to  replace  work,  if  it  be  afterwards  discovered  to  have  been  done  ill, 
or  not  according  to  the  drawings  and  specifications  either  in  execu- 
tion or  materials."  There  is  the  further  positive  agreement  of  the 
contractor  to  execute  and  complete  all  the  work  as  set  forth  in  the 
specifications  in  the  best  and  most  workmanlike  manner,  and  also 
that  final  payment  is  to  be  made  only  when  the  houses  are  completed 
in  accordance  with  the  agreement  and  the  plans  and  specifications 
prepared  therefor. 

The  whole  contract  shows,  in  our  opinion,  that  the  certificate 
that  the  houses  had  been  completed  according  to  the  contract  and 
its  plans  and  specifications  was  not  to  be  conclusive  of  the  question, 
and  the  plaintiff  was  not  thereby  precluded  from  showing  that  in 
fact  the  contractor  had  not  complied  with  his  contract,  and  the  plain- 
tiff had  thereby  sustained  damage. 

The  cases  in  the  opinion  of  the  court  below,  Fontano  v.  Robbins, 
22  App.  D.  C.  253;  Bond  v.  ^wark,  19  K  J.  Eq.  576;  Memphis 
etc.  R.  Co.  V.  Wilcox,  48  Pa.  St.  161;  Adlard  v.  Muldoon,  15  Til. 
193,  are  in  substance  to  this  effect.  To  make  such  a  certificate  con- 
clusive requires  plain  language  in  the  contract.  It  is  not  to  be 
implied.  Central  Trust  Co.  v.  Louisville  etc.  R.  Co.  70  Fed.  Rep. 
282,  284.  The  cases  of  Sweeney  v.  United  States,  109  U.  S.  618; 
Martiusburg  etc.  Railroad  Co.  v.  March,  114  U.  S.  549  Chicago  etc. 
Railroad  Co.  v.  Price,  138  U.S.  185;  Sheffield  etc.R.  R.  Co.  v.  Gordon 
151  U.  S.  285,  were  all  cases  in  which  the  contract  itself  provided 
that  the  certificate  should  be  final  and  conclusive  between  the 
parties.  Affirmed} 


ELLEN"  REAGAI^,  Administratrix  v.  UNION  MUTUAL  LIFE 
INSURANCE  CO. 

Supreme  Judicial  Court  of  Massachusetts,  October  25- 
December  1,  1905 

l^Reported  in  189  Massachusetts,  555] 

Knowlton,  C.  J.  This  is  an  action  of  contract  on  a  policy  of 
life  insurance  issued  to  the  plaintiff's  intestate.  The  defendant  an- 
swered that  the  policy  was  obtained  by  fraud  of  the  insured.  The 
policy  contains  a  clause  as  follows :  "Incontestability.  This  policy 
is  incontestable  from  date  of  issue  for  any  cause,  except  non-pay- 
ment of  premium."  The  defendant  then  offered  to  prove  that 
the  insured  made  material  false  and  fraudulent  representations  be- 

*  The  statement  of  facts  is  abbreviated  and  a  portion  of  the  opinion  omitted. 


492  REAGAN  V.  UNION  LIFE  INS.  CO.  [CHAP.   V 

fore  tlie  issuing  of  the  policy,  and  the  only  question  raised  is 
whether  the  evidence  of  such  fraud  is  admissible  in  defense  under 
such  a  policy. 

This  is  not  like  the  numerous  cases  in  which  the  policy  provides 
that  it  shall  be  incontestable  for  fraud  after  the  expiration  of  a 
specified  time,  which  is  not  unreasonably  short.  It  has  often  been 
held  that  a  provision  of  that  kind  is  valid  because  it  is  in  the  nature 
of  a  limitation  of  the  time  within  which  the  defendant  may  avoid 
the  policy  for  this  cause.  Such  a  provision  is  reasonable  and  proper, 
as  it  gives  the  insured  a  guaranty  against  possible  expensive  litiga- 
tion to  defeat  his  claim  after  the  lapse  of  many  years,  and  at  the 
same  time  gives  the  company  time  and  an  opportunity  for  investi- 
gation, to  ascertain  whether  the  contract  should  remain  in  force. 
It  is  not  against  public  policy,  as  tending  to  put  fraud  on  a  par 
with  honesty.  Wright  v.  Mutual  Benefit  Assoc.  118  IST.  Y.  237. 
Vetter  v.  Massachusetts  ]SJ"atioual  Assoc.  29  App.  Div.  (IST.  Y.)  72. 
Clement  v.  New  York  Ins.  Co.  101  Tenn.  22.  Goodwin  v.  Provident 
Assur.  Assoc.  97  Iowa,  226,  234.  Kline  v.  National  Benefit  Assoc. 
Ill  Ind.  462.  Murray  v.  State  Ins.  Co.  22  R.  I.  524.  Royal  Circle 
V.  Achterrath,  204  111.  549.  But  this  clause  purports  to  make  the 
policy  incontestable  for  any  cause,  from  the  date  of  issue.  We  must 
assume  that  the  defendant  issued  the  policy  on  the  faith  of  the  fraud- 
ulent representations,  without  discovering  the  fraud,  or,  so  far  as 
appears,  having  any  opportunity  to  discover  it  before  the  contract 
was  made.  It  is  true  that  it  might  have  declined  to  issue  a  policy 
until  it  should  take  time  to  investigate  the  matters  represented.  If 
it  had  postponed  making  the  contract  for  a  considerable  time,  and 
had  investigated  the  subjects  to  which  the  representations  related, 
and  had  then  issued  a  policy,  inserting  in  it  a  provision  that,  having 
made  an  examination  of  the  material  matters  stated  by  the  insured, 
it  was  so  far  convinced  of  the  truth  of  his  statements  that  it  would 
Avaive  its  rights  afterwards  to  set  up  fraud  as  a  defence  to  the  claim, 
a  different  question  would  have  been  presented.  It  then  might  ap- 
pear that  the  contract  was  not  induced  by  reliance  upon  fraudulent 
representations,  but  by  an  investigation  which  the  defendant  con- 
ducted, on  which  it  relied.  There  is  nothing  to  show  that  the  policy 
was  not  issued  immediately  upon  the  receipt  by  the  company  of  the 
report  containing  the  false  statement.  The  company  was  not  bound 
to  postpone  the  making  of  the  contract.  It  had  a  right  to  enter  into 
it,  relying  upon  the  report  which  was  founded  on  the  false  represen- 
tations. 

Will  the  court  enforce  an  agreement  never  to  set  up  fraud  in  de- 
fence to  a  contract^  when  the  contract  is  made  in  reliance  upon 
material  rtipresentations  that  may  be  true  or  false?  This  question 
has  l)Cf'(i  (•.(n\H\(U'.r('A  in  its  ai)j)li<'.ation  to  contracts  of  insurance.  In 
Wbfclton  r.  TTiirdisty,  H  El.  &  Bl.  232,  283,  Lord  Campbell  inter- 
preted a  provision  that  a  contract  should  bo  indefensible,  as  meaning 


SECT.    l]  REAGAN  V.  UNION  LIFE  INS.  CO.  493 

indisputable,  "subject  to  the  implied  exception  of  personal  fraud 
which  will  vitiate  every  contract."  In  Massachusetts  Benefit  Assoc. 
V.  Robinson,  104  Ga.  256,  the  court  said,  "A  policy  providing  gen- 
erally that  it  should  be  incontestable  from  its  death,  but  silent  on 
the  subject  of  defending  upon  grounds  originating  in  fraud,  would 
still  be  a  valid  contract;  the  waiver  of  the  right  to  defend  on  the 
ground  of  fraud  not  being  the  subject  of  express  stipulation,  the 
law  would  imply  that  the  insurer  intended  to  reserve  to  himself  the 
right  to  defend  upon  that  ground.  If,  however,  the  policy  stipulated 
that  it  should  be  incontestable  from  its  date,  and  the  insurer  should 
not  be  allowed  any  defences,  whether  originating  in  fraud  or  other- 
wise; or  if  it  were  clear  from  the  terms  of  the  contract  that  it  was 
the  intention  of  the  parties  that  fraud  should  not  be  defence,  then 
such  a  contract  would  be  void  as  being  opposed  to  the  policy  of  the 
law."  In  Welch  v.  Union  Central  Ins.  Co.  108  Iowa,  224,  230,  sub- 
stantially the  same  doctrine  is  clearly  stated.  To  the  same  effect  is 
Bliss  on  Ins.  (1st  ed.)  §  247,  (2d  ed.)  §§  254,  255.  All  the  cases  in 
the  first  group  of  the  above  citations  discuss  the  incontestability  of 
policies,  after  the  lapse  of  a  specified  time,  upon  grounds  that  imply 
the  existence  of  the  same  rule  of  law. 

The  reasons  for  the  enforcement  of  such  a  rule  are  particularly 
strong  when  one  of  the  contracting  parties  is  a  mutual  insurance 
company,  all  the  members  of  which  share  in  the  profits  and  losses. 

There  are  various  cases  which  forbid  companies  to  make  contracts 
of  life  insurance  that  are  against  the  policy  of  the  law.  In  Hitter 
V.  Mutual  Ins.  Co.  169  TJ.  S.  139,  it  was  held  that  a  contract  to  in- 
sure one  against  suicide  would  be  against  public  policy.  Mr.  Justice 
Harlan,  in  the  opinion,  said,  "A  contract,  the  tendency  of  which  is 
to  endanger  the  public  interests  or  injuriously  affect  the  public  good, 
or  which  is  subversive  of  sound  morality,  ought  never  to  receive  the 
sanction  of  a  court  of  justice  or  be  made  the  foundation  of  its  judg- 
ment." An  agreement  to  be  bound  by  a  contract  which  the  parties 
are  making,  in  spite  of  subsequently  discovered  fraud  by  which  it 
was  obtained,  would  be  subversive  of  sound  morality.  In  Hatch  v. 
Mutual  Ins.  Co.  120  Mass.  550,  this  court  held  that  there  could  be 
no  recovery  under  a  policy  of  life  insurance  when  the  insured  know- 
ingly and  voluntarily  exposed  her  life  by  submitting  to  a  criminal 
operation  which  proved  fatal.  For  similar  decisions  see  Amicable 
Society  v.  Bolland,  4  Bligh  (]^.  S.)  194,  and  Burt  v.  Union  Central 
Ins.  Co.  187  U.  S.  362. 

We  have  been  referred  to  no  decision  which  holds  valid  a  provision 
that  a  policy  of  life  insurance  shall  be  incontestable  for  fraud  from 
the  day  of  its  date.  The  only  case  that  we  have  discovered  in  which 
there  is  any  language  looking  in  that  direction  is  Patterson  v.  Nat- 
ural Premium  Ins.  Co.  100  Wis.  118,  and  in  that  the  ground  of  the 
decision,  as  we  understand  it,  is  that  there  was  no  evidence  on  which 
to  raise  the  question.  Verdict  set  aside} 

^  A  portion  of  the  opinion  is  omitted. 


494  LUMBER   UNDERWRITERS    V.   RIFE  [CHAP.    V 


LUMBER  UNDERWRITERS  OF  NEW  YORK  v.  RIFE 

SuPEEME  CouKT  OF  THE  United  States,  May  13-June  1,  1915 

[Reported  in  237  United  States,  605] 

Mr.  Justice  Holmes  delivered  the  opinion  of  the  court. 

This  is  a  suit  upon  a  policy  insuring  lumber  for  one  year  from 
May  22,  1909.  The  policy  contained  a  warranty  by  the  assured 
that  a  continuous  clear  space  of  one  hundred  feet  should  be  main- 
tained between  the  lumber  and  the  mill  of  the  assured  and  also  a 
provision  requiring  any  waivers  to  be  written  upon  or  attached  to 
the  instrument.  The  lumber  was  burned  during  the  year,  but  it  ap- 
peared by  the  undisputed  evidence  that  the  warranty  had  been  broken 
and  the  judge  directed  a  verdict  for  the  defendants.  It  appeared, 
however,  that  the  pohcy  was  endorsed  "No.  27868  Renewing  No. 
27566,"  and  the  plaintiffs  offered  to  prove  that  pending  the  earlier 
policy  the  defendants  had  the  report  of  an  inspection  that  informed 
them  of  the  actual  conditions,  showing  permanent  structures  between 
where  some  of  the  lumber  was  piled  and  the  mill,  that  made  the 
clear  space  in  this  direction  less  than  one  hundred  feet,  and  that 
with  that  knowledge  they  issued  the  present  policy  and  accepted  the 
premium.  This  evidence  was  excluded  subject  to  exception.  But  it 
was  held  by  the  Circuit  Court  of  Appeals  that  the  jury  should  have 
been  allowed  to  find  whether  the  defendants  had  knowledge  of  the 
conditions  and  reasonable  expectation  that  they  would  continue 
and  so  had  waived  the  warranty.  For  this  reason  the  judgment 
was  reversed.    204  Fed.  Rep.  32 ;  122  C.  C.  A.  346. 

When  a  policy  of  insurance  is  issued,  the  import  of  the  trans- 
action, as  every  one  understands,  is  that  the  document  embodies  the 
contract.  It  is  the  dominant,  as  it  purports  to  be  the  only  and 
entire  expression  of  the  parties'  intent.  In  the  present  case  this  fact 
was  put  in  words  by  the  proviso  for  the  endorsement  of  any  change 
of  terms.  Therefore  when  by  its  written  stipulation  the  document 
gave  notice  that  a  certain  term  was  insisted  upon,  it  would  be  con- 
trary to  the  fundamental  theory  of  the  legal  relations  established  to 
allow  parol  proof  that  at  the  very  moment  when  the  policy  was  de- 
livered that  term  was  waived.  It  is  the  established  doctrine  of  this 
court  that  such  proof  cannot  be  received.  Northern  Assurance  Co. 
V.  Grand  View  Building  Association,  183  U.  S.  308.  Northern 
A.ssurance  Co.  v.  Grand  View  Building  Association,  203  U.  S.  106, 
107.  Connecticut  Fire  Ins.  Co.  v.  Buchanan,  141  Fed.  Rep.  877, 
883.  Sw  Penman  v.  St.  Paul  Fire  &  Marine  Ins.  Co.,  216  U.  S. 
311.  ^:tna  Life  Ins.  Co.  v.  Moorc^,  231  U.  S.  543,  559.  There  is 
no  hardship  in  this  rule.  No  rational  theory  of  contract  can  be  made 
that  does  not  liold  the  assured  to  know  the  contents  of  the  instru- 
ment to  which  he  seeks  to  hold  the  other  party.     The  assured  also 


SECT.   l]  LUMBER   UNDERWRITERS    V.   RIFE  495 

knows  better  than  the  insurers  the  condition  of  his  premises,  even 
if  the  insurers  have  been  notified  of  the  facts.  If  he  brings  to  the 
making  of  his  contract  the  modest  intelligence  of  the  prudent  man 
he  will  perceive  the  incompatibility  between  the  requirement  of  one 
hundred  feet  clear  space  and  the  possibilities  of  his  yard,  in  a 
case  like  this,  and  will  make  a  different  contract,  either  by  striking 
out  the  clause  or  shortening  the  distance,  or  otherwise  as  may  be 
agreed.  The  distance  of  one  hundred  feet  that  was  written  into  this 
policy  was  not  a  fixed  conventional  formula  that  there  would  be 
trouble  in  changing,  if  the  insured  would  pay.  what  more,  if  any- 
thing, it  might  cost.  Of  course  if  the  insured  can  prove  that  he 
made  a  different  contract  from  that  expressed  in  the  writing  he 
may  have  it  reformed  in  equity.  What  he  cannot  do  is  to  take  a 
policy  without  reading  it  and  then  when  he  comes  to  sue  at  law 
upon  the  instrument  asks  to  have  it  enforced  otherwise  than  accord- 
ing to  its  terms.  The  court  is  not  at  liberty  to  introduce  a  short  cut 
to  reformation  by  letting  the  jury  strike  out  a  clause. 

The  plaintiffs  try  to  meet  these  recognized  rules  by  the  suggestion 
that  after  a  contract  is  made  a  breach  of  conditions  may  be  waived, 
void  only  meaning  voidable  at  the  option  of  the  insurers;  Grigsby  v. 
Russell,  222  U.  S.  149,  155;  that  this  policy  was  a  renewal  of  a 
former  one,  and  that  the  case  stands  as  if,  after  the  breach  of 
warranty  had  been  brought  to  the  notice  of  the  insurers,  a  premium 
had  been  paid  and  accepted  without  a  new  instrument.  But  what 
would  be  the  law  in  the  case  supposed  we  need  not  consider  as  in  our 
opinion  it  is  not  the  one  before  us.  The  policy  in  suit  is  a  document 
complete  in  itself.  The  endorsement  that  we  have  quoted  is 
probably  only  for  history  and  convenient  reference.  We  see  no 
ground  for  attributing  to  it  any  effect  upon  the  contract  made.  The 
fact  that  the  policy  has  a  provision  for  renewal  has  no  bearing,  and 
we  do  not  perceive  how  it  would  matter  if  the  previous  one  had  the 
same.  No  use  was  made  of  the  clause.  Therefore  in  our  opinion 
the  principles  that  we  have  laid  down  apply  to  the  present  case, 
Kentucky  Vermillion  Mining  &  Concentrating  Co.  v.  Norwich  Union 
Fire  Ins.  Soc,  146  Fed.  Rep.  695,  700,  and  the  action  of  the  District 
Court  was  right. 

Judgment  reversed. 

The  Chief  Justice,  Mb.  Justice  McKenna  and  Mr.  Justice 
Day  are  of  the  opinion  that  the  Circuit  Court  of  Appeals  properly 
disposed  of  the  case,  and  dissent. 


496  PANOUTSOS    V.   RAYMOND    HAD  LEY    CORP.       [CHAP.    V 


PANOUTSOS  V.   KAYMOND  HADLEY  CORPORATION  OF 

NEW  YORK 

In  the  Couet  of  Appeal,  June  13,  14,  1917 

[Reported  in  [1917]  2  K.  B.  473] 

By  a  contract  in  writing  the  Raymond  Hadley  Corporation  agreed 
to  sell  to  Panoutsos  4000  tons  of  flour.  The  contract  contained  this 
clause,  "Cash  against  Documents  in  New  York.  Payment  by  con- 
firmed bankers'  credit." 

A  credit  was  opened  but  it  was  not  irrevocable  and  therefore  was 
not  "a  confirmed  bankers'  credit."  The  sellers,  however,  made  sev- 
eral shipments  in  part  fulfilment  of  the  contract  on  October  21,  and 
again  on  October  27,  28,  29  and  30,  for  which  they  were  duly  paid 
by  the  New  York  bank  in  pursuance  of  the  credit  established.  Mean- 
while, on  October  27th  they  took  exception  to  the  character  of  the 
credit.  On  November  15th  they  requested  the  buyer  to  extend  the 
time  for  shipment  from  November  7th  to  November  30th,  and  to 
this  the  buyer  agreed.  On  November  25th,  the  sellers  notified  the 
buyer  that  because  of  the  lack  of  a  confirmed  credit  the  remainder 
of  the  contract  was  cancelled.  The  buyer  refused  to  accept  the  can- 
cellation and  the  dispute  was  referred  to  arbitration.  The  arbitrators 
found  in  favor  of  the  buyer  and  the  question  for  the  opinion  of  the 
Court  is  whether  or  not  there  was  any  evidence  on  which  the  arbi- 
trators could  properly  find  that  the  sellers  had  waived  the  term  in 
the  contract  that  payment  should  be  by  confirmed  bankers'  credit. 

Viscount  Reading,  C.  J.  It  was  admitted  that  there  was  no  con- 
firmed bankers'  credit,  but  the  buyer  contended  that  there  had  been 
a  waiver  of  that  condition  of  the  contract.  In  answer  to  that  the 
sellers  said  that  there  had  been  no  such  waiver,  and  if  there  had 
been  a  waiver  that  they  were  entitled  at  any  time  to  insist  upon  the 
condition  being  performed.  The  buyer  replied  that  no  doubt  the 
sellers  were  entitled  to  insist  upon  the  performance  of  the  condition, 
but  that,  having  waived  its  performance  hitherto,  they  must  give 
reasonable  notice  to  the  buyer  of  their  intention  to  insist  upon  its 
performance  in  the  future  so  as  to  give  him  an  opportunity  of  put- 
ting the  credit  right.  Bailhache  J.  held  that  the  sellers  must  be 
taken  to  have  waived  the  performance  of  the  condition,  that  the 
buyer  was  entitled  to  reasonable  notice,  and  that  such  notice  had 
not  in  fact  been  given.  He  therefore  answered  the  question  in 
favor  of  the  buyer. 

\  n  my  opinion  the  learned  judge  was  right.  It  is  open  to  a  party 
to  a  f'ontract  to  waive  a  condition  which  is  inserted  for  his  benefit. 
If  the  scllfrs  chose  to  ship  without  the  safeguard  of  a  confirmed 
bankers'  credit,  they  were  entitled  to  do  so,  and  the  buyer  performed 
his  part  of  the  contract  by  paying  for  the  goods  shipped,  though 


SECT.    l]  PANOUTSOS    V.    RAYMOND    HADLEY    CORP.  497 

there  was  no  confirmed  bankers'  credit,  inasmuch  as  that  condition 
had  been  waived.  If  at  a  later  stage  the  sellers  wished  to  avail  them- 
selves of  the  condition  precedent,  in  my  opinion  there  was  nothing 
in  the  facts  to  prevent  them  from  demanding  the  performance  of  the 
condition  if  they  had  given  reasonable  notice  to  the  buyer  that  they 
would  not  ship  unless  there  was  a  confirmed  bankers'  credit.  If  they 
had  done  that  and  the  buyer  had  failed  to  comply  with  the  condition, 
the  buyer  would  have  been  in  default,  and  the  sellers  would  have 
been  entitled  to  cancel  the  contract  without  being  subject  to  any 
claim  by  the  buyer  for  damages. 

In  Bentsen  v.  Taylor,  Sons  &  Co.^  Bowen  L.  J.  stated  the  law 
as  to  waiver  thus :  ''Did  the  defendants  by  their  acts  or  conduct  lead 
the  plaintiff  reasonably  to  suppose  that  they  did  not  intend  to  treat 
the  contract  for  the  future  as  at  an  end,  on  account  of  the  failure 
to  perform  the  condition  precedent  ?"  Reading  sellers  for  defendants 
and  buyers  for  plaintiff  in  that  passage,  it  applies  exactly  to  the 
present  case.  The  sellers  did  lead  the  buyer  to  think  so,  and  when 
they  intended  to  change  that  position  it  was  incumbent  on  them  to 
give  reasonable  notice  of  that  intention  to  the  buyer  so  as  to  enable 
him  to  comply  with  the  condition  which  up  to  that  time  had  been 
waived. 

The  case  of  In  re  Tyrer  &  Co.  and  Hessler  &  Co.^  was  cited  as  an 
authority  for  the  proposition  that  the  moment  the  sellers  chose  to 
avail  themselves  of  the  failure  to  perform  the  condition  precedent 
they  could  put  an  end  to  the  contract  without  giving  the  buyer  an 
opportunity  of  remedying  the  default  which  had  hitherto  been  waived. 
That  case  is  not  an  authority  for  that  proposition.  It  shows  that^ 
where  there  are  stipulated  times  in  a  charter  party  for  payment  of 
the  hire  of  a  ship  and  a  power  to  withdraw  the  ship  if  the  payment 
is  not  made  at  the  stipulated  time,  the  mere  fact  that  there  has  been 
default  in  payment  at  one  or  more  stipulated  times,  of  which  advan- 
tage has  not  been  taken,  does  not  entitle  the  party  in  default  at  a 
subsequent  time  to  a  notice  so  as  to  enable  him  to  comply  with  the 
condition  before  the  right  to  withdraw  arises.  That  is  a  totally 
different  case  from  the  present.  I  cannot  find  any  authority  to  sup- 
port the  proposition  that,  when  one  party  has  led  another  to  believe 
that  he  may  continue  in  a  certain  course'  of  conduct  without  any 
risk  of  the  contract  being  cancelled,  the  first-mentioned  party  can 
cancel  the  contract  without  giving  any  notice  to  the  other  so  as 
to  enable  the  latter  to  comply  with  the  requirement  of  the  contract. 
It  seems  to  me  to  follow  from  the  observations  of  Bowen  L.  J.  in 
Bentsen  v.  Taylor,  Sons  &  Co.  ^  that  there  must  be  reasonable  notice 
given  to  the  buyer  before  the  sellers  can  take  advantage  of   the 

»  C1893]  2  Q.  B.  283. 

2  6  Com.  Gas.  143;  7  Com.  Cas.  166. 

3  [1893]  2  Q.  B.  283. 


498  FOX    V.    L.    H.    GRANGE  [CHAP.   V 

failure  to  provide  a  confirmed  bankers'  credit.     That  is  the  decision 
of  Bailhache  J.^ 

LoKD  Cozens-Hakdy^  M.  E.,  and  Scrutton,  L.  J.,  agreed. 

Appeal  dismissed. 


NELLIE  FOX,  Appellant,  v.  L.  H.  GRAN^GE,  Appellee 
Illinois  Supreme  Court,  December  17,  1913 

[^Reported  in  261  Illinois,  116] 

On  July  20,  1907,  the  Appellee  agreed  to  sell  certain  real  estate 
to  the  appellant,  the  price  of  $1100  being  payable  in  instalments, 
$200  immediately  and  thereafter  $15  on  the  first  of  each  month 
until  the  entire  sum  with  6^  interest  was  paid.  It  was  provided 
that  time  was  of  the  essence,  and  in  case  of  the  appellant's  failure 
to  make  any  part  of  the  payments  the  contract  should,  at  the 
appellee's  option,  be  terminated  and  all  payments  previously  made 
should  be  forfeited.  The  appellee  agreed  to  remove  a  mortgage  on 
the  land,  and  this  had  not  been  done.  The  appellee  ac- 
cepted payments  in  amounts  and  at  times  not  in  accordance  with 
the  contract.  During  1912  the  appellee  told  the  appellant  several 
times  that  she  had  allowed  things  to  drag  along  and  that  he  was 
going  to  take  the  property  from  her  unless  she  made  her  payments. 

On  July  9  th,  1912,  the  appellee  served  a  notice  demanding  im- 
mediate possession,  and,  two  days  after,  began  an  action  of  forcible 
entry  and  detainer.  The  appellant's  attorney  thereupon  made  a 
tender  of  the  amount  supposed  to  be  due  to  the  appellee.  The  tender 
was  refused  on  the  ground  that  it  was  too  late,  and  the  appellant 
then  filed  this  bill  in  equity  asking  a  conveyance  on  payment  of  the 
amount  ascertained  to  be  due.  The  bill  was  dismissed  for  want  of 
equity,  and  Mrs.  Fox  appealed. 

Mr.  Justice  Cartwright.  By  the  terms  of  the  contract  time 
of  payment  was  of  the  essence  of  the  agreement,  and  a  forfeiture  was 
provided  for  if  Mrs.  Fox  should  fail  to  make  either  of  the  payments 
or  any  part  thereof,  or  to  perform  any  of  the  covenants  on  her  part. 
The  parties  were  competent  to  contract  and  the  agreement  was  law- 
ful, and  if  it  was  in  force  according  to  its  terms  at  the  time  the 
forf(;iture  was  declared,  a  court  of  equity  would  not  relieve  Mrs. 
Fox  from  the  consequences.  Grange,  however,  might  waive  the  pro- 
vision of  the  contract  as  to  time  of  payment,  and  a  habit  of  accepting 
payments  of  a  less  amount  or  after  the  time  stipulated  is  one  of 
the  usnal  ways  of  waiving  such  a  provision.  Wliether  a  provision 
of  that  kind  is  waived  depends  upon  the  facts  of  the  particular  case, 
and  it  does  not  necessarily  follow  that  there  has  been  a  waiver  merely 

■  Tho  Htatximcnt  of  factH  if  iibbrnviatod  and  a  portion  of  tho  opinion  in  which  it 
woH  \\<-\<l  that  th(!  notice  uivcn  l)y  the  sellers  was  unnsasonablo  is  omitted. 


SECT.    l]  FOX    V.    L.    H.    GRANGE  499 

because  some  payments  are  accepted  after  they  are  due,  (Phelps  v. 
Illinois  Central  Railroad  Co.  63  111.  468.)  The  parties  to  the  contract 
might  waive  or  temporarily  suspend  the  agreement  by  their  conduct, 
and  if  there  was  such  a  course  of  conduct  on  the  part  of  Grange  as 
to  show  that  the  provisions  had  been  waived  or  suspended  it  could 
only  be  restored  upon  definite  and  specific  notice.  (Monson  v.  Brag- 
don,  159  111.  61;  Eaton  v.  Schneider,  185  id.  508;  Kissack  v.  Bourke. 
224  id.  352.)  That  there  was  a  waiver  in  this  case  cannot  be  doubted. 
On  the  very  day  of  making  the  contract  the  cash  payment  was  $30 
less  than  the  amount  agreed  upon,  and  for  nearly  five  years  there  was 
never  a  payment  which  equaled  the  amount  due.  Perhaps  it  would 
not  be  just  to  Grange  to  deny  him  the  right  to  reinstate  or  restore 
the  waived  provision,  but  a  court  of  equity  ought  not  to  permit 
him  to  do  it  except  upon  definite  and  specific  notice  which  Mrs.  Fox 
would  understand  and  under  circumstances  of  perfect  fairness  on 
his  part.  The  question  would  be  whether  Grange,  having  waived 
the  provision  by  a  course  of  conduct  extending  over  nearly  five  years, 
could  again  put  it  into  operation  by  demanding  the  whole  amount 
at  once  and  when  he  had  not  removed  the  encumbrance  or  offered  to 
do  so.  It  is,  of  course,  manifest  that  a  woman  who  worked  for  her 
living  and  was  out  of  work  would  be  unable  to  raise  the  amount 
due  except  by  encumbering  the  lot,  and  she  could  only  do  that  with 
a  title  clear.  Grange  had  been  threatening  her  for  a  year  but  had 
done  nothing  toward  the  execution  of  his  threats,  and  it  appears  to 
us  that  Mrs.  Fox  had  a  right  to  suppose  what  he  said  before  attempt- 
ing a  forfeiture  was  of  the  same  character.  We  think  it  would 
violate  the  principles  on  which  courts  of  equity  act,  to  permit  for- 
feiture under  such  circumstances. 

The  amount  tendered  by  the  attorney  was  $536.27  and  at  the 
hearing  it  appeared  that  the  amount  due  when  the  tender  was  made 
was  $567.  Grange  refused  to  take  the  money,  not  because  of  the 
amount,  but  because  he  had  determined  to  stand  on  his  legal  rights 
under  the  forfeiture.  The  attorney  was  ready  and  willing  to  pay 
what  might  be  due,  which  was  difficult  of  ascertainment,  and  Grange 
absolutely  refused  to  have  anything  to  do  with  him.  As  Grange 
made  no  objection  to  the  amount  tendered  and  his  refusal  was  upon 
another  ground  the  offer  was  sufficient  as  a  basis  for  the  bill.  There 
were  also  objections  'to  some  other  matters  connected  with  the  tender, 
but  as  Grange  was  insisting  upon  the  forfeiture  and  denying  to 
Mrs.  Fox  any  right  whatever,  he  could  not  take  advantage,  in  a  court 
of  equity,  of  objections  which  he  might  have  made  but  did  not  point 
out. 

The  decree  is  reversed  and  the  cause  remanded. 

Reversed  and  remanded} 

'  The  statement  of  facts  is  abbreviated,  and  a  portion  of  the  opinion  omitted. 


500  GRAY    V.    GARDNER  [CHAP.   V 

B.  —  Conditions  Subsequent 


WILLIAM  GEAY  v.  OLIVEK  GAKDN'ER  and  Others 

Supreme  Judicial  Court  of  Massachusetts,  March  Term,  1821 

[^Reported  in  17  Massachusetts  Reports,  188] 

Assumpsit  on  a  written  promise  to  pay  the  plaintiff  $5,198.87, 
with  the  following  condition  annexed,  viz. :  "On  the  condition  that 
if  a  greater  quantity  of  sperm  oil  should  arive  in  whaling  vessels  at 
ISTantucket  and  JSTew  Bedford,  on  or  between  the  first  day  of  April 
and  the  first  day  of  October  of  the  present  year,  both  inclusive,  than 
arrived  at  said  places  in  whaling  vessels  on  or  within  the  same  term 
of  time  the  last  year,  then  this  obligation  to  be  void."  Dated  April 
14,  1819. 

The  consideration  of  the  promise  was  a  quantity  of  oil  sold  by  the 
plaintiff  to  the  defendants.  On  the  same  day  another  note,  uncon- 
ditional, had  been  given  by  the  defendants  for  the  value  of  the 
oil,  estimated  at  sixty  cents  per  gallon ;  and  the  note  in  suit  was  given 
to  secure  the  residue  of  the  price,  estimated  at  eighty-five  cents,  to 
depend  on  the  contingency  mentioned  in  the  said  condition. 

At  the  trial  before  the  Chief  Justice,  the  case  depended  upon  the 
question  whether  a  certain  vessel,  called  the  Lady  Adams,  with  a 
cargo  of  oil,  arrived  at  l^antucket  on  the  first  day  of  October,  1819, 
about  which  fact  the  evidence  was  contradictory.  The  judge  ruled 
that  the  burden  of  proving  the  arrival  within  the  time  was  on  the 
defendants ;  and  further  that,  although  the  vessel  might  have,  within 
the  time,  gotten  within  the  space  which  might  be  called  Nantucket 
Koads,  yet  it  was  necessary  that  she  should  have  come  to  anchor, 
or  have  been  moored,  somewhere  within  that  space  before  the  hour 
of  twelve  following  the  first  day  of  October,  in  order  to  have  arrived 
within  the  meaning  of  the  contract. 

The  opinion  of  the  Chief  Justice  on  both  these  points  was  objected 
to  by  the  defendants,  and  the  questions  were  saved.  If  it  was  wrong 
on  either  point,  a  new  trial  was  to  be  had;  otherwise  judgment  was 
to  be  rendered  on  the  verdict,  which  was  found  for  the  plaintiff. 

Whitman,  for  the  defendants.  As  the  evidence  at  the  trial  was 
contradictory,  the  question  on  whom  the  burden  of  proof  rested  be- 
came important.  We  hold  that  it  was  on  the  plaintiff.  This  was 
a  coiiditioTi  precedent.  Until  it  sliould  happen,  the  promise  did  not 
take  effect.  On  the  non-occurrence  of  a  certain  contingent  event,  the 
promise  was  to  be  binding,  and  not  otherwise.  To  entitle  himself 
to  enforce  the  promise,  the  plaintiff  must  show  that  the  contingent 
event  has  not  actually  occurred. 

On  the  other  point  saved  at  the  trial,  the  defendants  insist  that  it 


SECT.    l]  MOODY    V.    INSURANCE    COMPANY  501 

was  not  required  by  the  terms  of  this  contract  that  the  vessel  should 
be  moored.  It  is  not  denied  that  such  would  be  the  construction  of 
a  policy  of  insurance  containing  the  same  expression.  But  every 
contract  is  to  be  taken  according  to  the  intention  of  the  parties  to 
it,  if  such  intention  be  legal  and  capable  of  execution.  The  contem- 
plation of  parties  to  a  policy  of  insurance  is,  that  the  vessel  shall 
be  safe  before  she  shall  be  said  to  have  arrived.  So  it  is  in  some 
other  maritime  contracts.  But  in  that  now  in  question,  nothing  was 
in  the  minds  of  the  parties,  but  that  the  fact  of  the  arrival  of  so  much 
oil  should  be  known  within  the  time  limited.  The  subject-matter  in 
one  case  is  safety,  in  the  other  it  is  information  only.  In  this  case 
the  vessel  would  be  said  to  have  arrived,  in  common  understanding, 
and  according  to  the  meaning  of  the  parties. 

F.  C.  Gray,  for  the  plaintiff. 

Parker,  C.  J.  The  very  words  of  the  contract  show  that  there 
was  a  promise  to  pay,  which  was  to  be  defeated  by  the  happening 
of  an  event,  viz.,  the  arrival  of  a  certain  quantity  of  oil,  at  the  speci- 
fied places,  in  a  given  time.  It  is  like  a  bond  with  a  condition :  if 
the  obligor  would  avoid  the  bond,  he  must  show  performance  of  the 
condition.  The  defendants,  in  this  case,  promise  to  pay  a  certain 
sum  of  money,  on  condition  that  the  promise  shall  be  void  on  the 
happening  of  an  event.  It  is  plain  that  the  burden  of  proof  is  upon 
them;  and  if  they  fail  to  show  that  the  event  has  happened,  the 
promise  remains  good. 

The  other  point  is  equally  clear  for  the  plaintiff.  Oil  is  to  arrive 
at  a  given  place  before  twelve  o'clock  at  night.  A  vessel  with  oil 
heaves  in  sight,  but  she  does  not  come  to  anchor  before  the  hour  is 
gone.  In  no  sense  can  the  oil  be  said  to  have  arrived.  The  vessel 
is  coming  until  she  drops  anchor,  or  is  moored.  She  may  sink,  or 
take  fire,  and  never  arrive,  however  near  she  may  be  to  her  port. 
It  is  so  in  contracts  of  insurance;  and  the  same  reason  applies  to 
a  case  of  this  sort.  Both  parties  put  themselves  upon  a  nice  point 
in  this  contract;  it  was  a  kind  of  wager  as  to  the  quantity  of  oil 
which  should  arrive  at  the  ports  mentioned  before  a  certain  period. 
They  must  be  held  strictly  to  their  contract,  there  being  no  equity 
to  interfere  with  the  terms  of  it.  Judgment  on  the  verdict. 


MOODY  V.  INSURANCE  COMPANY 

Ohio  Supreme  Court,  October  16,  1894 

[^Reported  in  52  Ohio  State,  12] 

Williams,  J.^     The  policy  of  insurance  upon  which  the  plaintiff 
sought  to  recover  in  the  action  below,  provides,  among  its  many  con- 
ditions, that  "no  liability  shall  exist  under  this  policy  for  loss  or 
^  A  portion  of  the  opinion  is  omitted. 


502  MOODY    V.    INSURANCE    COMPANY  [CHAP.   V 

damage  m  or  on  vacant  or  unoccupied  buildings,  unless  consent  for 
such  vacancy  or  non-ocupancy  be  indorsed  hereon."  The  answer 
alleges  that  the  house  insured  by  the  policy  was  burned  while  it  was 
unoccupied;  and,  though  that  allegation  was  denied,  the  court  re- 
quired the  plaintiff  to  take  the  burden  of  proving  that  the  building 
was  occupied.  That  action  of  the  court  is  assigned  for  error,  and 
presents  the  first  question  for  consideration. 

The  court  went  upon  the  theory  that  the  provision  of  the  policy 
above  quoted  constitutes  a  condition  precedent,  the  performance  of 
which  was  put  in  issue  by  the  denial  of  the  averments  of  the  petition. 
In  an  action  on  a  policy  of  fire  insurance  the  plaintiff  may  plead 
generally,  as  was  done  in  this  case,  the  due  performance  of  all  the 
conditions  precedent,  on  his  part,  and  when  the  allegation  is  con- 
troverted the  burden  is  undoubtedly  upon  him  to  show  such  per- 
formance. But  we  do  not  understand  the  clause  of  the  policy  in 
question  to  be  a  condition  of  that  kind.  An  unexpired  policy  of  fire 
insurance,  which  has  been  regularly  issued,  and  remains  uncancelled, 
must,  in  the  absence  of  a  showing  to  the  contrary,  be  regarded  as  a 
valid  and  effective  policy,  upon  which  the  assured  is  prima  facie 
entitled  to  recover  when  the  loss  occurs,  and  the  steps  necessary  to 
establish  it  have  been  taken;  and  hence,  the  conditions  precedent  in 
such  a  policy  include  only  those  affirmative  acts  on  the  part  of  the 
assured,  the  performance  of  which  is  necessary  in  order  to  perfect 
his  right  of  action  on  the  policy,  such  as  giving  notice  and  making 
proof  of  the  loss,  furnishing  the  certificate  of  a  magistrate  when 
required  by  the  terms  of  the  policy,  and,  it  may  be,  in  some  cases, 
other  steps  of  a  like  nature.  Those  clauses  usually  contained  in 
policies  of  insurance,  which  provide  that  the  policy  shall  become 
void,  or  its  operation  defeated  or  suspended,  or  the  insurer  relieved 
wholly  or  partially  from  liability,  upon  the  happening  of  some  event, 
or  the  doing,  or  omission  to  do  some  act,  are  not  in  any  proper  sense 
conditions  precedent.  If  they  may  be  properly  called  conditions, 
they  are  conditions  subsequent,  and  matters  of  defence,  which,  to- 
gether with  their  breach,  must  be  pleaded  by  the  insurer  to  be  avail- 
able as  a  means  of  defeating  a  recovery  on  the  policy ;  and  the  burden 
of  establishing  the  defence,  if  controverted,  is,  of  course,  upon  the 
party  pleading  it.  This  precise  question  has  not  heretofore  received 
the  consideration  of  this  court,  but  it  lias  been  raised  in  other  states 
under  various  clauses  of  insurance  policies.  In  the  case  of  Louns- 
bury  V.  Insurance  Co.,  8  Conn.  459,  the  question  was  presented  in 
an  action  on  a  policy  of  fire  insurance  which  provided  "that  the 
insnrcrH  would  not  be  liable  for  loss  or  damage,  happening  by  means 
of  any  invasion,  insurrection,  riot,  or  civil  commotion,  or  of  any 
military  or  usurped  power;  also,  that  if  the  building  insured  should 
be  UHcd,  during  the  term  of  insurance,  for  any  occupation,  or  for  the 
j)iirj)f)Hf'  of  .storing  therein  any  goods,  dcnoininated  liazarclons  or  extra- 
hazardous in  flic  conditions  anii(!xed  to  the  policy  (unless  otherwise 


SECT.   I]  MOODY    V.   INSURANCE   COMPANY  503 

specially  provided  for),  the  policy  should  cease  and  have  no  effect." 
It  was  held,  these  were  not  conditions  precedent  to  the  plaintiff's 
right  of  recovery,  but  were  matters  of  defence  to  be  taken  advantage 
of  by  pleading.  The  court  in  that  case  say :  "All  these  conditions, 
if  such  they  may  be  called,  are  inserted  in  the  policy  by  way  of  pro- 
viso, and  not  at  all  as  conditions  precedent.  They  are  introduced 
for  the  benefit  of  the  defendants;  and  they  must  be  taken  advantage 
of,  if  at  all,  by  pleading."  In  N^ewman  v.  Insurance  Co.,  17  Minn. 
123,  it  is  held  that :  "Under  a  stipulation  in  a  policy,  that  if  the  risk 
be  increased  by  any  means  whatever,  within  the  control  of  the  in- 
sured, the  insurance  shall  be  void,  the  assured  is  not  to  plead  and 
prove,  affirmatively,  that  it  has  not  been  thus  increased,  but  if  it  has, 
it  is  a  matter  of  defence  to  be  alleged  and  proved  by  defendant." 
And  in  Daniels  v.  Insurance  Co.,  12  Cush.  426,  Chief  Justice  Shaw 
lays  down  the  rule  in  general  terms,  that  if  the  insurers  rely  "either 
upon  the  falsity  of  a  representation,  or  the  failure  to  comply  with  an 
executory  stipulation,  it  is  upon  them  to  prove  it ;  and  it  is  a  question 
of  fact  for  the  jury,  in  either  aspect." 

The  following  among  other  cases  hold  the  same  doctrine :  Insurance 
Co.  V.  Carpenter,  4  "Wis.  20;  Mueller  v.  Insurance  Co.,  45  Mo.  84; 
Insurance  Co.  v.  Crunk,  91  Tenn.  376;  Spencer  v.  Insurance  Associ- 
ation, 37  ISr.  E.  Eep.  617 ;  Insurance  Co.  v.  Sisk,  36  N.  E.  Kep.  659. 

Any  other  rule  would  be  highly  inconvenient,  if  not  impracticable. 
The  clause  of  the  policy  under  which  the  defendant  sought  to  be 
relieved  from  liability  is  but  one  of  a  great  number  of  conditions, 
for  the  violation  of  any  of  which  the  insurer  might  also  claim  to 
be  relieved;  and  if  the  issue  raised  by  the  denial  that  the  plaintiff 
performed  all  the  conditions  precedent  on  his  part,  imposed  upon 
him  the  burden  of  proving  there  had  been  no  violation  of  that  par- 
ticular clause,  it  also  imposed  upon  him  the  burden  of  proving  there 
was  no  breach  of  either  of  the  other  conditions,  and  for  want  of 
such  proof  as  to  either,  he  must  fail,  although  in  fact  neither  was 
the  subject  of  any  real  controversy.  This  would  be  an  unreasonable 
requirement,  not  only  operating  as  a  hardship  on  the  plaintiff,  but 
in  most  cases  unnecessarily  prolonging  the  trial.  Especially  should 
the  rule  be  as  we  have  stated  it,  under  our  code  system  of  pleading, 
a  prominent  object  of  which  to  so  simplify  the  issues,  that  the  evi- 
dence might  be  confined  to  the  real  matter  of  dispute,  thus  expedit- 
ing the  trial  of  causes  and  facilitating  the  business  of  the  courts. 
The  vacancy,  or  want  of  occupancy  of  a  building  is  as  much  an 
affirmative  fact  as  its  occupancy,  and  as  capable  of  proof;  and  the 
burden  upon  the  subject,  under  the  issues  in  this  case,  was,  we  think, 
upon  the  defendant. 


504  SEMMES    V.    HARTFORD   INS.    CO.  [CHAP.   V 


SEMMES  V.  HAETFOKD  Il^SURANCE  COMPANY 

SuPKEME  Court  of  the  United  States,  Decembee  Teem,  1871 

[Reported  in  13  Wallace,  158] 

In  error  to  the  Circuit  Court  for  the  District  of  Connecticut. 

Semmes  sued  the  City  Fire  Insurance  Company,  of  Hartford,  in 
the  court  below,  on  the  31st  of  October,  1866,  upon  a  policy  of  in- 
surance, for  a  loss  which  occurred  on  the  5th  day  of  January,  1860. 
The  policy  as  declared  on  showed  as  a  condition  of  the  contract,  that 
payment  of  losses  should  be  made  in  sixty  days  after  the  loss  should 
have  been  ascertained  and  proved. 

The  company  pleaded  that  by  the  policy  itself  it  was  expressly 
provided  that  no  suit  for  the  recovery  of  any  claim  upon  the  same 
should  be  sustainable  in  any  court  unless  such  suit  should  be  com- 
menced within  the  term  of  twelve  months  next  after  any  loss  or 
damage  should  occur;  and  that  in  case  any  such  suit  should  be  com- 
menced after  the  expiration  of  twelve  months  next  after  such  loss 
or  damage  should  have  occurred,  the  lapse  of  time  should  be  taken 
and  deemed  as  conclusive  evidence  against  the  validity  of  the  claim 
thereby  so  attempted  to  be  enforced.  And  that  the  plaintiff  did 
not  commence  this  action  against  the  defendants  within  the  said 
period  of  twelve  months  next  after  the  loss  occurred. 

To  this  plea  there  were  replications  setting  up,  among  other  things, 
that  the  late  civil  war  prevented  the  bringing  of  the  suit  within  the 
twelve  months  provided  in  the  condition,  the  plaintiff  being  a  resident 
and  citizen  of  the  State  of  Mississippi  and  the  defendant  of  Connec- 
ticut during  all  that  time. 

The  plea  was  held  by  the  court  below  to  present  a  good  bar  to  the 
action,  notwithstanding  the  effect  of  the  war  on  the  rights  of  the 
parties. 

That  court,  in  arriving  at  this  conclusion,  held,  first,  that  the 
condition  in  the  contract,  limiting  the  time  within  which  suit  could 
be  brought,  was,  like  the  statute  of  limitation,  susceptible  of  such 
enlargement,  in  point  of  time,  as  was  necessary  to  accommodate  itself 
to  the  precise  number  of  days  during  which  the  plaintiff  was  pre- 
vented from  bringing  suit  by  the  existence  of  the  war.  And  ascer- 
taining this  by  a  reference  to  certain  public  acts  of  the  political  de- 
partni(!Jits  of  the  government,  to  which  it  referred,  found  that  there 
was,  between  the  time  at  which  it  fixed  the  commencement  of  the 
war  and  the  date  of  the  plaintiff's  loss,  a  certain  number  of  days, 
which,  added  to  the  time  between  the  close  of  the  war  and  the  com- 
mencement of  the  action,  amounted  to  more  than  the  twelve  months 
allowed  by  the  condition  of  the  contract. 

.Tiul^rnf^nt  Innng  given  accordingly  in  favor  of  the  company  the 
plaintiff  brought  the  case  here. 


SECT,    l]  SEMMES    V.    HARTFORD   INS.    CO.  505 

The  point  chiefly  discussed  here  was  when  the  war  began  and 
when  it  ceased;  Mr.  W.  Hamersley,  for  the  plaintiff  in  error,  con- 
tending that  the  court  below  had  not  fixed  right  dates,  but  had  fixed 
the  commencement  of  the  war  too  late  and  its  close  too  early,  and 
he  himself  fixing  them  in  such  a  manner  as  that  even  conceding  the 
principle  asserted  by  the  court  to  be  a  true  one,  and  applicable  to 
a  contract  as  well  as  to  a  statute  of  limitation,  the  suit  was  still 
brought  within  the  twelve  months. 

The  counsel,  however,  denied  that  the  principle  did  apply  to  a 
contract,  but  contended  that  the  whole  condition  had  been  rendered 
impossible  and  so  abrogated  by  the  war,  and  that  the  plaintiff  could 
sue  at  any  time  within  the  general  statutory  term,  as  he  now  con- 
fessedly did. 

Mr.  R.  D.  Euhh'ard,  contra. 

Mr.  Justice  Miller  delivered  the  opinion  of  the  court. 
It  is  not  necessary,  in  the  view  which  we  take  of  the  matter,  to 
inquire  whether  the  Circuit  Court  was  correct  in  the  principle  by 
which  it  fixed  the  date,  either  of  the  commencement  or  cessation  of 
the  disability  to  sue  growing  out  of  the  events  of  the  war.  For  we 
are  of  opinion  that  the  period  of  twelve  months  which  the  contract 
allowed  the  plaintiff  for  bringing  his  suit  does  not  open  and  expand 
itself  so  as  to  receive  within  it  three  or  four  years  of  legal  disability 
created  by  the  war  and  then  close  together  at  each  end  of  that  period 
so  as  to  complete  itself,  as  though  the  war  had  never  occurred. 

It  is  true  that,  in  regard  to  the  limitation  imposed  by  statute,  this 
court  has  held  that  the  time  may  be  so  computed,  but  there  the  law 
imposes  the  limitation  and  the  law  imposes  the  disability.  It  is 
nothing,  therefore,  but  a  necessary  legal  logic  that  the  one  period 
should  be  taken  from  the  other.  If  the  law  did  not,  by  a  necessary 
implication,  take  this  time  out  of  that  prescribed  by  the  statute,  one 
of  two  things  would  happen :  either  the  plaintiff  would  lose  his  right 
of  suit  by  a  judicial  construction  of  law  which  deprived  him  of  the 
right  to  sue  yet  permitted  the  statute  to  run  until  it  became  a  com- 
plete bar,  or  else,  holding  the  statute  under  the  circumsances  to  be 
no  bar,  the  defendant  would  be  left,  after  the  war  was  over,  without 
the  protection  of  any  limitation  whatever.  It  was  therefore  nec- 
essary to  adopt  the  time  provided  by  the  statute  as  limiting  the  right 
to  sue,  and  deduct  from  that  time  the  period  of  disability. 

Such  is  not  the  case  as  regards  this  contract.  The  defendant  has 
made  its  own  special  and  hard  provision  on  that  subject.  It  is  not 
said,  as  in  a  statute,  that  a  plaintiff  shall  have  twelve  months  from 
the  time  his  cause  of  action  accrued  to  commence  suit,  but  twelve 
months  from  the  time  of  loss;  yet  by  another  condition  the  loss  is 
not  payable  until  sixty  days  after  it  shall  have  been  ascertained  and 
proved.  The  condition  is  that  no  suit  or  action  shall  be  sustainable 
unless  commenced  within  the  time  of  twelve  months  next  after  the 
^ss  shall  occur,  and  in  case  such  action  shall  be  commenced  after 


506  SEMMES    V.    HARTFORD   INS.    CO.  [CHAP.   V 

the  expiration  of  twelve  months  next  after  such  loss,  the  lapse  of 
time  shall  be  taken  and  deemed  as  conclusive  evidence  against  the 
validity  of  the  claim.  Now,  this  contract  relates  to  the  twelve  months 
next  succeeding  the  occurrence  of  the  loss,  and  the  court  has  no  right, 
as  in  the  case  of  a  statute,  to  construe  it  into  a  number  of  days  equal 
to  twelve  months,  to  be  made  up  of  the  days  in  a  period  of  five  years 
in  which  the  plaintiff  could  lawfully  have  commenced  his  suit.  So 
also  if  the  plaintiff  shows  any  reason  which  in  law  rebuts  the  pre- 
sumption, which,  on  the  failure  to  sue  within  twelve  months,  is,  by 
the  contract,  made  conclusive  against  the  validity  of  the  claim,  that 
presumption  is  not  revived  again  by  the  contract.  It  would  seem 
that  when  once  rebutted  fully  nothing  but  a  presumption  of  law 
or  presumption  of  fact  could  again  revive  it.  There  is  nothing  in 
the  contract  which  does  it,  and  we  know  of  no  such  presumptions 
of  law.  Nor  does  the  same  evil  consequence  follow  from  removing 
absolutely  the  bar  of  the  contract  that  w^ould  from  removing  abso- 
lutely the  bar  of  the  statute,  for  when  the  bar  of  the  contract  is  re- 
moved there  still  remains  the  bar  of  the  statute,  and  though  the 
plaintiff  may  show  by  his  disability  to  sue  a  sufficient  answer  to  the 
twelve  months  provided  by  the  contract,  he  must  still  bring  his  suit 
within  the  reasonable  time  fixe  by  the  legislative  authority,  that  is, 
by  the  statute  of  limitations. 

We  have  no  doubt  that  the  disability  to  sue  imposed  on  the  plain- 
tiff by  the  r/ar  relieves  him  from  the  consequences  of  failing  to  bring 
suit  Avithin  twelve  months  after  the  loss,  because  it  rendered  a  com- 
pliance with  that  condition  impossible  and  removes  the  presump- 
tion which  that  contract  says  shall  be  conclusive  against  the  validity 
of  the  plaintiff's  claim.  That  part  of  the  contract,  therefore,  presents 
no  bar  to  the  plaintiff's  right  to  recover. 

As  the  Circuit  Court  founded  its  judgment  on  the  proposition  that 
it  did,  the  judgment  must  be 

Reversed  and  the  case  remanded  for  a  new  trial} 

1  See  also  New  York  Life  Ins.  Co.  v.  Statham,  93  U.  S.  24;  Thompson  v.  Phenix 
Ins.  Co.,  1.36  U.  S.  287;  Steel  v.  Phenix  Ins.  Co.,  51  Fed.  Rep.  715  (C.  C.  A.);  Jack- 
son V.  Fidelity  Co.,  75  Fed.  Rep.  359  (C.  C.  A.);  Earnshaw  v.  Sun  Mut.  Aid  Soc.,  68 
Md.  465;  Eliot  Nat.  Bank  v.  Beal,  141  Mass.  566;  Mutual  Benefit  Life  Ins.  Co.  v. 
Hilly ard,  37  N.  J.  L.  444. 


SECT.  Il]  BROCAS'  CASE  507 


sectio:n^  II 

IMPLIED    CONDITIONS    AND    EFFECTS   OF    THE    PLAINTIFF'S 
FAILURE   TO    PERFORM   HIS    PROMISE 


AN^ONYMOUS 

In  the  King's  Bench,  Tkinity  Teem,  1500 
[Reported  in  Year  Book,  15  Henry  VII,  folio  10  b,  placitum  7] 

NoTA  PEK  FiNEUx,  C.  J.  If  One  covenant  with  me  to  serve  me 
for  a  year,  and  I  covenant  with  him  to  give  him  201.,  if  I  do  not 
say  for  said  cause,  he  shall  have  an  action  for  the  201.  although  he 
never  serves  me;  otherwise,  if  I  say  he  shall  have  201.  for  said 
cause.  So  if  I  covenant  with  a  man  that  I  will  marry  his  daughter, 
and  he  covenants  with  me  to  make  an  estate  to  me  and  his  daughter, 
and  to  the  heirs  of  our  two  bodies  begotten;  though  I  afterwards 
marry  another  woman,  or  his  daughter  marry  another  man;  yet  I 
shall  have  an  action  of  covenant  against  him,  to  compel  him  to  make 
this  estate;  but  if  the  covenant  be  that  he  will  make  the  estate  to 
,us  two  for  said  cause,  then  he  shall  not  make  the  estate  until  we  are 
married.  And  such  was  the  opinion  of  the  Court.  And  Rede,  J,,  said 
it  was  so  without  doubt. 


BROCAS'  CASE 

In  the  Queen's  Bench,  Michaelmas  Term,  1588 

[Reported  in  3  Leonard,  219] 

Brocas,  lord  of  a  manor,  covenanted  with  his  copyholder  to  as- 
sure to  him  and  his  heirs  the  freehold  and  inheritance  of  his 
copyhold.  And  the  said  copyholder,  in  consideration  of  the  same 
performed,  covenanted  to  pay  such  a  sum.  It  was  the  opinion  of  the 
whole  Court,  that  the  said  copyholder  is  not  tied  to  pay  the  said 
sum  before  the  assurance  made  and  the  covenant  performed.  But 
if  the  words  had  been,  in  consideration  of  the  said  covenant  to  he 
performed,  then  he  is  bounden  to  pay  the  money  presently,  and  to 
have  his  remedy  over  by  covenant. 


508  PORDAGE    V.    COLE  [CHAP.   V 


NICHOLS  V.  EAYNBKED 

HiLAKT  Term,  1615 

\_Reported  in  Hohart,  88] 

Nichols  brought  an  assumpsit  against  Eaynbred,  declaring  that 
in  consideration  that  Nichols  promised  to  deliver  the  defendant  to 
his  own  use  a  cow,  the  defendant  promised  to  deliver  him  fifty  shill- 
ings. Adjudged  for  the  plaintiff  in  both  courts,  that  the  plaintiff 
needed  not  to  aver  the  delivery  of  the  cow,  because  it  is  promise  for 
promise.^  Note,  here  the  promises  must  be  at  one  instant,  for  else 
they  will  be  both  nuda  pacta. 


POKDAGE  V.  COLE 

In  the  King's  Bench,  Michaelmas  Teem,  1669 

[Reported  in  1   Williams'  Saunders,  319] 

Debt  upon  a  specialty  for  774L  15s.  The  plaintiff  declares  that 
the  defendant  by  his  certain  writing  of  agreement  made  at,  &c.,  by 
the  plaintiff  by  the  name,  &c.,  and  the  defendant  by  the  name,  &c., 
and  brings  the  deed  into  court,  &c,,  it  was  agreed  between  the  plain- 
tiff and  defendant  in  manner  and  form  following,  viz..  That  the  de- 
fendant should  give  to  the  plaintiff  the  sum  of  775^.  for  all  his  lands, 
with  house  called  Ashmole-house  thereunto  belonging,  with  the  brew- 
ing vessels  remaining  in  the  said  house,  and  with  the  malt-mill  and 
wheelbarrow;  and  that  in  pursuance  of  the  said  agreement,  the  de- 
fendant had  given  to  the  plaintiff  5^.  as  an  earnest,  and  it  was  by 
the  said  writing  further  agreed  between  the  plaintiff  and  defendant, 
that  the  defendant  should  pay  to  the  plaintiff  the  residue  of  the 
said  sum  of  775Z.,  a  week  after  the  feast  of  St.  John  the  Baptist 
then  next  following  (all  other  movables,  with  the  corn  upon  the 
ground,  except).  And  although  the  defendant  has  paid  five  shillings, 
parcel,  &c.,  yet  the  said  defendant,  although  often  requested,  has  not 
paifl  the  residue,  to  the  damage,  &c.  The  defendant  prays  oyer 
of  the  specialty,  which  is  entered  in  hmc  verba,  to  wit.:  "11  May, 
1668.  It  is  agreed  between  Doctor  John  Pordage  and  Bassett  Cole, 
esquirf,  that  the  said  Bassett  Cole  sliall  give  unto  the  said  doctor 
775/.  for  all  his  lands,  with  Ashmole-house  thereunto  belonging,  with 
the  browing  vessels  as  they  are  now  remaining  in   the  said  house, 

'  CowcT  V.  r'iii)j)fT,  Crokf  Kl.  543;  BottiHworth  v.  Campion,  Yolv.  134;  Spanish 
AnihfWHfulor  V.  fiifTord,  1  RdIIc,  330;  Thorpo'H  Caso,  March,  75;  Ware  v.  Chappel, 
Hfylf,  \H();  C;il)honH  v.  IVcwdn,  Hardrcs,  102;  Hoany  v.  Tvirnor,  1  Lev.  103;  Cole  v. 
HhallKt.  3  Lev.  41;  LJlackwcll  v.  Naah,  1  Strange,  535;  Martindalc  v.  Fisher,  1  Wils. 
88,  Mc. 


SECT.    II  ]  PORDAGE    V.    COLE  509 

and  with  the  malt-mill  and  wheelbarrow.  In  witness  whereof  we 
do  put  our  hands  and  seals :  mutually  given  as  earnest  in  performance 
of  this  5s.;  the  money  to  be  paid  before  Midsummer,  1668;  all  other 
movables,  with  the  corn  upon  the  ground,  excepted."  And  upon 
oyer  thereof  the  defendant  demurs.  And  Withins,  of  counsel  with 
the  defendant,  took  several  exceptions  to  the  declaration.  1.  That 
the  demand  by  the  declaration  is  of  774:1.  16s.;  whereas  the  whole 
sum  is  775Z.;  and  the  55.  paid  for  earnest  shall  not  be  taken  as  part 
of  the  sum  of  7751.  Sed  non  allocatur;  for,  per  Curiam,  it  shall 
be  intended  as  part  of  the  sum.  2.  That  the  exception  of  the  residue 
of  the  movables  is  not  well  recited,  for  the  word  (except)  in  the  dec- 
laration is  not  good  for  want  of  sense.  Sed  non  allocatur,  for  it 
is  sensible  enough  in  the  declaration;  and  if  it  were  not,  the  declara- 
tion is  good;  for  an  insensible  clause  does  not  make  the  rest  of  the 
deed  vicious  which  is  sensible  in  itself.  3.  The  great  exception  was, 
that  the  plaintiff  in  his  declaration  has  not  averred  that  he  had 
conveyed  the  lands,  or  at  least  tendered  a  conveyance  of  them ;  for 
the  defendant  has  no  remedy  to  obtain  the  lands,  and  therefore  the 
plaintiff  ought  to  have  conveyed  them,  or  tendered  a  conveyance  of 
them,  before  he  brought  his  action  for  the  money.  And  it  was 
argued  by  Withins,  that  if  by  one  single  deed  two  things  are  to  be 
performed,  namely,  one  by  the  plaintiff  and  the  other  by  the  de- 
fendant, if  there  be  no  mutual  remedy,  the  plaintiff  ought  to  aver 
performance  of  his  part ;  Trin.  12  Jac.  I.  between  Holder  v.  Tayloe,^ 
Ughtred's  case,^  and  Sir  Eichard  Pool's  case  there  cited,  and  Gray's 
case,^  and  that  the  word  (pro)  made  a  condition  in  things  executory.* 
And  here  in  this  case  it  is  a  condition  precedent  which  ought  to  be 
performed  before  the  action  brought;  wherefore  he  prayed  judg- 
ment for  the  defendant. 

But  it  was  adjudged  by  the  Court  that  the  action  was  well  brought 
without  an  averment  of  the  conveyance  of  the  land;  because  it  shall 
be  intended  that  both  parties  have  sealed  the  specialty.  And  if  the 
plaintiff  has  not  conveyed  the  land  to  the  defendant,  he  has  also 
an  action  of  covenant  against  the  plaintiff  upon  the  agreement  con- 
tained in  the  deed,  which  amounts  to  a  covenant  on  the  part  of  the 
plaintiff  to  convey  the  land;  and  so  each  party  has  mutual  remedy 
against  the  other.  But  it  might  be  otherwise  if  the  specialty  had 
been  the  words  of  the  defendant  only,  and  not  the  words  of  both 
parties  by  way  of  agreement  as  it  is  here.  And  by  the  conclusion 
of  the  deed  it  is  said  that  both  parties  had  sealed  it;  and  therefore 
judgment  was  given  for  the  plaintiff,  which  was  afterwards  affirmed 
in  the  Exchequer  Chamber,  Trin.  22  of  King  Charles  the  Second.^ 

1  1  RoU.  Abr.  518  (C),  pi.  2,  3. 

2  7  Rep.  10. 

3  5  Rep.  78,  79;  8.  c.  Cro.  Eliz.  405. 

*  Co.  Lit.  204  a. 

*  In  a  note  to  this  case,  Mr.  Serjeant  Williams  states  the  following  rules  for  dis- 
tinguishing between  dependent  and  independent  covenants:    1.    If  a  day  be  appointed 


510  CALLONEL   V.   BRIGGS  [CHAP.   V 


CALLONEL  v.  BRIGGS 

At  N^isi  Peius,  coram  Holt,  C.  J.,  Trinity  Teem,  1703 

[Reported  in  1  Salkeld,  112] 

An  agreement  was,  that  the  defendant  should  pay  so  much  money 
six  months  after  the  bargain,  the  plaintiff  transferring  stock.  The 
plaintiff  at  the  same  time  gave  a  note  to  the  defendant  to  transfer 
the  stock,  the  defendant  paying,  &c.  Et  per  Holt,  C.  J.  K  either 
party  would  sue  upon  this  agreement,  the  plaintiff  for  not  paying, 
or  the  defendant  for  not  transferring,  the  one  must  aver  and  prove 
a  transfer  or  a  tender,  and  the  other  a  payment  or  a  tender;  for 
transferring  in  the  first  bargain  was  a  condition  precedent;  and 
though  there  be  mutual  promises,  yet  if  one  thing  be  the  considera- 
tion of  the  other,  there  a  performance  is  necessary  to  be  averred, 
unless  a  certain  day  be  appointed  for  performance.  1  Saund.  319. 
If  I  sell  you  my  horse  for  101.,  if  you  will  have  the  horse  I  must 
have  the  money;  or  if  I  will  have  the  money  you  must  have  the 
horse;  therefore  he  obliged  the  plaintiff  either  to  prove  a  transfer, 
or  a  tender  and  refusal  within  the  six  months. 


for  payment  of  money  or  part  of  it,  or  for  doing  any  other  act,  and  the  day  is  to  hap- 
pen, or  may  happen,  before  the  thing  which  is  the  consideration  of  the  money  or 
other  act  is  to  be  performed,  an  action  may  be  brought  for  the  money,  or  for  not 
doing  such  other  act  before  performance;  for  it  appears  that  the  party  relied  upon 
his  remedy,  and  did  not  intend  to  make  the  performance  a  condition  precedent;  and 
so  it  is  where  no  time  is  fixed  for  performance  of  that  which  is  the  consideration  of 
the  money  or  other  act.  2.  But  when  a  day  is  appointed  for  the  payment  of  money, 
&c.,  and  the  day  is  to  happen  after  the  thing  which  is  the  consideration  of  the  money 
&c.,  is  to  be  performed,  no  action  can  be  maintained  for  the  money,  &c.,  before  per- 
formance. 3.  Where  a  covenant  goes  only  to  part  of  the  consideration  on  both  sides, 
and  a  breach  of  such  covenant  may  be  paid  for  in  damages,  it  is  an  independent  cove- 
nant, and  an  action  may  be  maintained  for  a  breach  of  the  covenant  on  the  part  of 
the  defendant  without  averring  performance  in  the  declaration.  4.  But  where  the 
mutual  covenants  go  to  the  whole  consideration  on  both  sides,  they  are  mutual  con- 
ditions, and  performance  must  be  averred.  5.  Where  two  acts  are  to  be  done  at  the, 
same  time,  as,  where  A.  covenants  to  convey  an  estate  to  B.  on  such  a  day,  and  in 
consideration  thereof  B.  covenants  to  pay  A.  a  sum  of  money  on  the  same  day,  neither 
can  maintain  an  action  without  showing  performance  of,  or  an  offer  to  perform  his 
part,  though  it  is  not  certain  wliich  of  them  is  obliged  to  do  the  first  act;  and  this 
particularly  applies  to  all  cases  of  sale. 

In  Mattock  v.  Kinglake,  10  Ad.  &  E.  50,  Patteson,  .7.,  said:  "Pordage  v.  Cole  is 
direftly  in  point.  We  must  overrule  it  if  we  decided  in  favor  of  the  defendant,"  and 
since  a  time  was  fixed  for  payment  and  none  for  conveyance,  the  court  allowed  the 
piairitiff  to  recover  the  price  without  conve,\ing  or  offering  to  convey.  See  also  Sib- 
thor[)  ?'.  liniticl,  .H  Ex.  820;  Dicker  ?'.  .Jackson,  (>  C  B.  676;  Gibson  v.  Newman,  2 
Mi.sH.  341.  f'ompare,  however,  Wilks  v.  Smith,  10  M.  &  W.  365;  Marsden  v.  Moore, 
4  H.  &  N.  500. 


SECT.    II  ]  KINGSTON    V.   PRESTON  611 


KINGSTON  V.  PKESTON" 

In  the  King's  Bench,  Easter  Term,  1773 

[Reported  in  2  Douglas,  689.^] 

This  was  an  action  of  debt  for  non-performance  of  covenants  con- 
tained in  certain  articles  of  agreement  between  tbe  plaintiff  and  tbe 
defendant.  The  declaration  stated :  That,  by  articles  made  the  24th 
of  March,  1770,  the  plaintiff,  for  the  considerations  thereinafter 
mentioned,  covenanted  with  the  defendant  to  serve  him  for  one  year 
and  a  quarter  next  ensuing,  as  a  covenant  servant,  in  his  trade  of 
a  silk-mercer,  at  200?.  a  year,  and,  in  consideration  of  the  premises, 
the  defendant  covenanted  that,  at  the  end  of  the  year  and  a  quarter, 
he  would  give  up  his  business  of  a  mercer  to  the  plaintiff,  and  a 
nephew  of  the  defendant,  or  some  other  person  to  be  nominated  by 
the  defendant,  and  give  up  to  them  his  stock  in  trade,  at  a  fair  valu- 
ation; and  that,  between  the  young  traders,  deeds  of  partnership 
should  be  executed  for  fourteen  years,  and  from  and  immediately 
after  the  execution  of  the  said  deeds  the  defendant  would  permit 
the  said  young  traders  to  carry  on  the  said  business  in  the  defend- 
ant's house.  Then  the  declaration  stated  a  covenant  by  the  plaintiff, 
that  he  would  accept  the  business  and  stock-in-trade,  at  a  fair  valu- 
ation, with  the  defendant's  nephew,  or  such  other  person,  &c.,  and 
execute  such  deeds  of  partnership,  and,  further,  that  the  plaintiff 
should  and  would,  at  and  before  the  sealing  and  delivery  of  the  deeds, 
cause  and  procure  good  and  su:fficient  security  to  be  given  to  the 
defendant,  to  be  approved  of  by  the  defendant,  for  the  payment  of 
250Z.  monthly  to  the  defendant,  in  lieu  of  a  moriety  of  the  monthly 
produce  of  the  stock  in  trade,  until  the  value  of  the  stock  should 
be  reduced  to  4,000Z.  Then  the  plaintiff  averred  that  he  had  per- 
formed and  been  ready  to  perform  his  covenants,  and  assigned  for 
breach  on  the  part  of  the  defendant,  that  he  had  refused  to  surrender 
and  give  up  his  business  at  the  end  of  the  said  year  and  a  quarter. 
The  defendant  pleaded:  1.  That  the  plaintiff  did  not  offer  sufficient 
security ;  and,  2,  That  he  did  not  give  sufficient  security  for  the  pay- 
ment of  the  250/.,  &c.  And  the  plaintiff  demurred  generally  to  both 
pleas.  On  the  part  of  the  plaintiff,  the  case  was  argued  by  Mr. 
Buller,  who  contended  that  the  covenants  were  mutual  and  inde- 
pendent, and  therefore  a  plea  of  the  breach  of  one  of  the  covenants 
to  be  performed  by  the  plaintiff  was  no  bar  to  an  action  for  a  breach 
by  the  defendant  of  one  which  he  had  bound  himself  to  perform, 
but  that  the  defendant  might  have  his  remedy  for  the  breach  by  the 
plaintiff  in  a  separate  action.  On  the  other  side,  Mr.  Grose  insisted 
that  the  covenants  were  dependent  in  their  nature,  and  therefore 
performance  must  be  alleged.  The  security  to  be  given  for  the  money 
'  Also  reported  in  Lofft,  194. 


512  BOONE    V.    EYRE  [CHAP.   V 

was  manifestly  the  chief  object  of  the  transaction,  and  it  would  be 
highly  unreasonable  to  construe  the  agreement  so  as  to  oblige  the 
defendant  to  give  up  a  beneficial  business,  and  valuable  stock-in- 
trade,  and  trust  to  the  plaintiff's  personal  security  (who  might,  and 
indeed  was  admitted  to  be  worth  nothing),  for  the  performance  of 
his  part. 

In  delivering  the  judgment  of  the  Court,  Lord  Mansfield  ex- 
pressed himself  to  the  following  effect:  There  are  three  kinds  of 
covenants :  1.  Such  as  are  called  mutual  and  independent,  where 
either  party  may  recover  damages  from  the  other  for  the  injury  he 
may  have  received  by  a  breach  of  the  covenants  in  his  favor,  and 
where  it  is  no  excuse  for  the  defendant  to  allege  a  breach  of  the 
covenants  on  the  part  of  the  plaintiff.  2.  There  are  covenants  which 
are  conditions  and  dependent,  in  which  the  performance  of  one  de- 
pends on  the  prior  performance  of  another,  and  therefore,  till  this 
prior  condition  is  performed,  the  other  party  is  not  liable  to  an 
action  on  his  covenant.  3.  There  is  also  a  third  sort  of  covenants, 
which  are  mutual  conditions  to  be  performed  at  the  same  time;  and 
in  these,  if  one  party  was  ready  and  offered  to  perform  his  part, 
and  the  other  neglected  or  refused  to  perform  his,  he  who  was  ready 
and  offered  has  fulfilled  his  engagement,  and  may  maintain  an  action 
for  the  default  of  the  other  though  it  is  not  certain  that  either  is 
obliged  to  do  the  first  act.  His  lordship  then  proceeded  to  say,  that 
the  dependence  or  independence  of  covenants  was  to  be  collected  from 
the  evident  sense  and  meaning  of  the  parties,  and  that,  however  trans- 
posed they  might  be  in  the  deed,  their  precedency  must  depend  on 
the  order  of  time  in  which  the  intent  of  the  transaction  requires  their 
performance.  That,  in  the  case  before  the  Court,  it  would  be  the 
greatest  injustice  if  the  plaintiff  should  prevail.  The  essence  of 
the  agreement  was,  that  the  defendant  should  not  trust  to  the  per- 
sonal security  of  the  plaintiff,  but,  before  he  delivered  up  his  stock 
and  business,  should  have  good  security  for  the  payment  of  the 
money.  The  giving  such  security,  therefore,  must  necessarily  be 
a  condition  precedent.^  Judgment  was  accordingly  given  for  the 
defendant,  because  the  part  to  be  performed  by  the  plaintiff  was 
clearly  a  condition  precedent. 


BOOTEE  V.  EYRE 
In  the  King's  Bench,  Easter  Term,  1777 
IReported  in  1  Henry  Blachsfono,  273,  note'] 
Covenant  on  a  deed  whereby  the  plaintiff  conveyed  to  the  de- 
fendant the  equity  of  re<lemption  of  a  plantation  in  the  West  Indies, 
together   with    the   stock    of    necrroes   upon    it,    in    consideration    of 
1  Roberts  v.  Brett,  11  H.  L.  C.  337,  ace. 


SECT.   Il]  THE   DUKE   OF   ST.   ALBANS    V.    SHORE  513 

500Z.  and  an  annuity  of  IQOl.  per  annum  for  his  life;  and  covenanted 
that  he  had  a  good  title  to  the  plantation,  and  was  lawfully  pos- 
sessed of  the  negroes,  and  that  the  defendant  should  quietly  enjoy. 
The  defendant  covenanted  that,  the  plaintiff  well  and  truly  per- 
forming all  and  everything  therein  contained  on  his  part  to  be  per- 
formed, he  the  defendant  would  pay  the  annuity.  The  breach  as- 
signed was  the  non-payment  of  the  annuity.  Plea :  that  the  plaintifi 
was  not  at  the  time  of  making  the  deed  legally  possessed  of  the 
negroes  on  the  plantation,  and  so  had  not  a  good  title  to  convey. 

To  which  there  was  a  general  demurrer. 

Lord  Mansfield.  The  distinction  is  very  clear,  where  mutual 
covenants  go  to  the  whole  of  the  consideration  on  both  sides,  they 
are  mutual  conditions,  the  one  precedent  to  the  other.  But  where 
they  go  only  to  a  part,  where  a  breach  may  be  paid  for  in  damages, 
there  the  defendant  has  a  remedy  on  his  covenant,  and  shall  not 
plead  it  as  a  condition  precedent.  If  this  plea  were  to  be  allowed, 
any  one  negro  not  being  the  property  of  the  plaintiif  would  bar  the 
action.  Judgment  for  the  plaintiffs 


THE  DUKE  OF  ST.  ALBANS  v.  SHOKE 
In  the  Common  Pleas,  June  29,  1789 
[Reported  in  1  Henry  Blachstone,  270] 

Debt  for  500?.,  the  penalty  of  articles  of  agreement. 

The  declaration  stated  the  agreement  to  have  been  made  between 
the  plaintiff  and  defendant  on  the  30th  of  March,  1878,  by  which 
the  defendant  was  to  purchase  of  the  plaintiff  a  certain  farm  with 
the  appurtenances,  together  with  an  acre  and  half  of  boggy  land, 
at  the  price  of  2,594?.,  which  was  to  be  paid  at  Lady-day  then  next 
in  the  following  manner :  the  plaintiff  was  to  accept  of  a  conveyance 
and  surrender  of  certain  copyhold   and  leasehold   premises   of  the 

»  Ashhurst,  J.,  added,  according  to  a  statement  by  Lord  Kenyon  in  Campbell  v. 
Jones,  6  T.  R.  570,  573:  "There  is  a  difference  between  executed  and  executory  cov- 
enants; here  the  covenants  are  executed  in  part,  and  the  defendant  ought  not  to  keep 
the  estate,  because  the  plaintiff  has  not  title  to  a  few  nea:roes." 

Boone  v.  Eyre,  2  W.  Bl.  1312,  was  an  action  between  the  same  parties,  brought  for 
later  instalments  of  the  annuity.  The  defendant  pleaded  breaches  of  covenant  on  the 
part  of  the  plaintiff.  Walker,  for  the  plaintiff,  said,  "As  to  the  four  last  pleas,  the 
matter  contained  therein  is  clearly  matter  of  covenant,  for  which  (if  founded  in  fact) 
the  defendant  might  bring  his  action ;  but  it  is  a  known  rule  that  covenant  cannot  be 
pleaded  against  covenant."  Glyn,  for  the  defendant,  "would  not  deny  the  principle 
laid  down  by  Walker,  but  only  its  application  to  the  present  case.  This  is  not  a  case 
of  mutual  covenants,  where  one  is  a  consideration  for  the  other;  but  here,  the  per- 
formance of  the  plaintiff's  covenant  is  made  a  condition  precedent  to  the  performance 
of  those  of  the  defendant.  But  per  De  Grey,  C.  J.  Where  the  participle  'doing,' 
'performing,'  &c.,  is  prefixed  to  a  covenant  by  another  person,  it  is  clearly  a  mutual 
covenant,  and  not  a  condition  precedent:    Hunlocke  and  Blacklowe,  2  Saund.  155." 

See  also  Carpenter  v.  Cresswell,  4  Bing.  409;  Rose  v.  Poulton,  2  B.  &  Ad.  822; 
Fearon  v.  Aylesford,  14  Q.  B.  D.  792. 

17 


514  THE   DUKE   OF   ST.    ALBANS    V.    SHORE  [CHAP.   V 

defendant,  at  the  price  of  1,820/,  (to  be  deducted  from  the  before- 
mentioned  sum  of  2,594L),  the  defendant  to  convey  those  premises 
at  the  expense  of  the  plaintiff  unless  a  fine  should  be  necessary  the 
expense  of  which  the  defendant  was  to  pay;  and  the  plaintiff  to 
make  a  good  title  to  the  defendant  at  his  (the  defendant's)  expense 
unless  a  fine  or  recovery  should  be  necessary,  for  which  the  plain- 
tiff was  to  pay,  who,  on  executing  the  conveyances,  was  to  receive  the 
rest  of  the  purchase-money.  All  timber-trees,  elms,  and  willow- 
trees,  which  then  were  upon  any  of  the  above  estates,  to  be  fairly 
valued  by  two  appraisers,  and  the  prices  or  values  thereof  to  be 
paid  by  the  respective  purchasers  of  the  estates  at  the  time  before 
mentioned;  the  rents  of  the  respective  estates  to  be  received  by  the 
owners  till  the  24th  of  March  then  next.  It  was  also  agreed  that,  in 
case  the  plaintiff  should  not  be  enabled  to  make  a  good  title  to  the 
said  estate  before  the  said  24th  of  March,  that  agreement  should  be 
void.  And  although  the  plaintiff  had  done  and  performed  every 
thing  on  his  part,  &c.,  yet,  protesting  that  the  defendant  had  not 
done  any  thing  on  his  part,  &c.,  "in  fact,  the  said  duke  saith,  that 
he  the  said  duke  always  from  the  time  of  the  making  of  the  said 
articles  of  agreement,  until  and  upon  the  said  twenty-fourth  day  of 
March  next  ensuing  the  date  thereof,  and  always  since  hath  been, 
and  is,  capable,  ready,  and  willing  to  make  a  good  title  to  the  said 
"William  Shore  of  the  said  farm  and  premises,  and  boggy  land  so 
agreed  to  be  purchased  by  the  said  "William  Shore  as  aforesaid,  and 
to  execute  and  cause  to  be  executed  necessary  and  proper  convey- 
ances and  assurances  of  the  said  farm  and  premises,  and  boggy  lands, 
to  the  said  "William  Shore,  if  the  said  "William  Shore  would  have 
drawn  and  prepared  the  same  for  execution,  according  to  the  form 
and  effect  of  the  said  articles  of  agreement,  to  wit,  at  Hanworth 
aforesaid  :  And  the  said  duke  avers  that  he  the  said  duke,  before  the 
twenty-fifth  day  of  March,  being  Lady-day,  1788,  to  wit,  on  the 
twenty-second  day  of  March,  a.  d.  1788,  at  Hanworth  aforesaid,  gave 
notice  to  the  said  William  Shore,  that  he  the  said  duke  was  ready 
and  willing  at  any  time  to  make  a  good  title  to  the  said  "William 
Shore  of  the  said  farm  and  premises  and  land,  so  agreed  to  be  pur- 
chased by  the  said  "William  Shore,  and  to  execute  and  cause  to  be 
executed  proper  deeds,  conveyances,  and  assurances  for  the  purpose, 
if  the  said  William  Shore  would  prepare  the  same,  he  the  said  duke 
then  and  there  being,  and  still  beinf;.  enabled  to  make,  and  capable 
of  making,  a  good  title  to  the  said  William  Shore  of  the  said  farm 
and  premises  and  land,  according  to  the  form  and  effect  of  the  said 
articles:  yot  the  said  William  Slioro  did  not,  nor  would,  on  or  before 
the  said  twenty-fourth  day  of  March  next  ensuing  the  date  of  the 
said  articles  of  agreement,  nor  hath  he  at  any  time  hitherto,  drawn 
or  prepared,  or  caused  to  be  drawn  or  prepared  to  be  executed  any 
deed,  conveynnco.  or  assurance  whatsoever,  of  the  said  farm  and 
premises  and  lands  mentioned  in  the  said  articles  of  agreement,  and 


SECT.    Il]  THE   DUKE   OF   ST.    ALBANS    V.    SHORE  515 

SO  agreed  to  be  purchased  by  the  said  William  Shore  as  aforesaid, 
nor  did,  nor  would  pay  the  said  purchase-money  or  any  part  thereof, 
nor  did,  nor  would  accept  the  said  title  according  to  the  said  articles 
of  agreement;  but,  on  the  contrary  thereof,  the  said  William  Shore 
hath  wholly  neglected  and  refused,  and  still  doth  neglect  and  refuse, 
to  draw  or  prepare  any  deed,  conveyance,  or  assurance  of  the  said 
farm,  premises,  and  laud,  unto  the  said  William  Shore,  or  to  pay 
the  said  purchase-money  or  any  part  thereof,  or  in  any  wise  to  carry 
the  said  articles  into  execution,  contrary,"  &c. 

Plea :  "That  the  said  duke  was  not  capable,  ready,  and  willing 
to  make,  nor  could  he,  the  said  duke,  make  a  good  title  to  the  said 
William  of  the  said  farm  so  agreed  to  be  purchased,  according  to 
the  tenor  and  effect  of  the  said  agreement,  &c.  And  for  further  plea, 
&c.,  that  after  the  making  of  the  said  agreement,  and  before  Lady- 
day  then  next  following,  to  wit,  on  the  twentieth  of  March,  a.d. 
1788,  the  said  duke  cut  down  divers,  to  wit,  500  of  the  said  timber 
trees,  500  of  the  said  elms,  and  500  of  the  said  willow-trees,  in  the 
said  declaration  and  agreement  respectively  mentioned,  and  by  the 
said  agreement  agreed  to  be  valued  and  paid  for  as  in  the  said  agree- 
ment is  mentioned,  whereby  the  said  duke  disabled  himself  from 
performing,  and  it  became,  and  was  impossible,  for  him  to  perform 
and  fulfil  the  said  articles  of  agreement,  on  his  part,  &c. ;  for  which 
reason  he,  the  said  William,  declined  and  refused  to  carry  the  said 
articles  into  execution  on  his  part,  as  he  lawfully  might,"  &c. 

Replication:  Issue  on  the  first  plea,  and  general  demurrer  to  the 
second.    Joinder  in  demurrer. 

This  was  argued  in  Hilary  Term  last,  by  Lawrence,  Serjt.,  for 
the  plaintiff,  and  Bond,  Serjt.,  for  the  defendant,  and  a  second  time 
in  Easter  Term,  by  Le  Blanc,  Serjt.,  for  the  plaintiff,  and  Marshall, 
Serjt.,  for  the  defendant. 

On  this  day  the  following  judgment  of  the  Court  was  delivered 
by  Lord  Loughborough,  who,  having  stated  the  pleadings,  said :  — 
It  is  clear  in  this  case,  that  unless  the  plaintiff  has  done  all  that 
was  incumbent  on  him  to  do,  in  order  to  create  a  performance  by 
the  defendant  (if  I  may  use  the  expression),  he  is  not  entitled  to 
maintain  the  action.  If  he  has  not  set  forth  a  sufficient  title,  judg- 
ment must  be  against  him  whatever  the  plea  is,  and  if  the  plea  be 
a  good  bar,  the  same  consequence  must  follow.  It  was  argued  on 
the  part  of  the  plaintiff,  that  the  agreement  respecting  the  trees 
was  not  a  condition  precedent,  and  therefore  a  breach  of  that  agree- 
ment could  not  be  pleaded  in  bar  of  the  action.  In  support  of  this 
argument,  the  case  of  Boone  v.  Eyre  was  cited;  but  in  that  case, 
though  the  Court  of  King's  Bench  held  the  plea  insufiicient,  yet  they 
laid  down  a  clear  and  well  founded  distinction,  that  where  a  cove- 
nant went  to  the  whole  of  the  consideration  on  both  sides,  there  it 
was  a  condition  precedent;  but  where  it  did  not  go  to  the  whole, 
but  only  to  a  part,  there  it  was  not  a  condition  precedent,  and  each 


516  THE   DUKE   OF   ST.    ALBANS    V.    SHORE  [CHAP.   V 

party  must  resort  to  his  separate  remedy;  and  for  this  plain  and  ob- 
yious  reason,  because  the  damages  might  be  unequal.  The  cases  also 
of  Hunlocke  v.  Blacklowe,  2  Saund.  155,  and  Cole  v.  Shallett,  3 
Lev.  41,  were  cited  as  being  in  favor  of  the  plaintiff.  But  it  is  un- 
necessary to  enter  into  the  discussion  of  those  cases,  though  perhaps 
doubts  may  reasonably  be  entertained  of  the  doctrine  laid  down  in 
Saunders,  and  though  the  case  cited  by  him  in  his  argument  may 
deserve  full  as  much  consideration  as  that  which  was  the  subject  of 
the  determination  of  the  Court.  For  we  found  our  opinion  in  the 
present  case  on  the  ground  of  the  distinction  in  Boone  v.  Eyre,  which 
we  think  a  fair  and  sound  one.  Then  the  question  is,  Whether  the 
covenant  of  the  plaintiff  goes  to  the  whole  consideration  of  that  which 
was  to  be  done  by  the  defendant?  Now  the  duke  clearly  covenanted 
to  convey  an  estate  to  the  defendant,  in  which  all  the  timber  growing 
on  the  estate  was  necessarily  included.  The  timber  was  not  disjoined 
from  the  estate  by  the  separate  valuation  of  it.  It  was  expressly 
agreed  that  all  trees,  &c.,  which  then  were  upon  any  of  the  estates 
should  be  valued.  But  it  is  not  to  be  permitted  to  a  party  contracting 
to  convey  land,  which  includes  the  timber,  by  his  own  act  to  change 
the  nature  of  it  between  the  time  of  entering  into  the  contract  and 
that  of  performing  it.  There  may  be  cases  where  the  timber  growing 
on  an  estate  is  the  chief  inducement  to  a  purchase  of  that  estate. 
But  it  is  not  necessary  to  inquire  whether  it  be  the  chief  inducement 
to  a  purchase  or  not;  for  if  it  may  be  in  any  sort  a  consideration  to 
the  party  purchasing  to  have  the  timber,  the  party  selling  ought  not 
to  be  permitted  to  alter  the  estate  by  cutting  down  any  of  it.  This 
is  not  an  action  of  covenant  where  one  party  has  performed  his  part, 
but  is  brought  for  a  penalty,  on  the  other  party  refusing  to  execute 
a  contract.  But  to  entitle  the  party  bringing  the  action  to  a  penalty, 
he  ought  punctually,  exactly,  and  literally  to  complete  his  part.  We 
are  therefore  of  opinion  that  the  plea  is  a  good  bar  to  the  action, 
and  on  this  we  give  our  judgment.  My  brother  Marshall  made  some 
exceptions  to  the  declaration,  which  it  is  not  necessary  to  go  into, 
but  which,  speaking  for  myself,  I  think  material.  It  is  to  be  ob- 
served, that  this  is  not  a  contract  absolutely  and  at  all  events  to 
convey.  Where  a  man  undertakes  to  convey,  he  undertakes  to  convey 
by  a  good  title.  There  are  cases  where  a  court  of  equity  has  holden 
that  a  party  so  undertaking  might  make  a  title  by  procuring  an 
act  of  Parliament,  and  that  he  was  bound  to  purchase  in  all  out- 
standing terms  to  make  a  good  title.  But  in  this  case,  if  the  plain- 
tiff was  not  enabled  to  make  a  good  title  before  a  certain  day,  the 
agreement  was  to  be  at  an  end,  he  might  be  off  and  was  released  from 
his  engagement.  He  therefore  undertook  to  make  a  good  title  before 
a  given  time;  the  broach  assigniul  is,  that  the  defendant  refused  to 
accept  tbe  title.  But  what  title?  Wliat  exhibition  of  title?  What 
tith;  was  tendered  to  him?  What  was  there  for  him  to  accept?  This, 
porliaps,  is  rather  dehors  the  question,  though  it  might  be  material 


SECT.    Il]  GOODISSON    V.   NUNN  517 

if  it  were  necessary  to  take  it  into  consideration.^  But  the  ground 
of  our  determination  is,  that  the  plea  is  good,  as  I  before  stated, 
within  the  distinction  laid  down  by  the  Court  of  King's  Bench  in 
the  case  of  Boone  v.  Eyre.  Judgment  for  the  defendant.'^ 


GOODISSON  V.  NUNN 

In  the  King's  Bench,  June  19,  1792 

[Reported  in  4  Term  Reports,  761] 

This  was  an  action  of  debt  to  recover  21L  on  certain  articles  of 
agreement,  the  substance  of  which  was  stated  in  the  declaration.  The 
defendant  craved  oyer  of  the  agreement,  by  which  the  plaintiif 
agreed  that  he  would,  on  or  before  the  2d  of  September  then  next, 
"by  such  conveyances,  surrenders,  assurances,  ways,  and  means  in 
the  law,  shall  reasonably  devise,  advise,  or  require,^  well  and  suffi- 
ciently grant,  sell,  release,  assign,  and  surrender,  or  otherwise  con- 
vey to  the  defendant  all  that  copyhold  tenement,  lying,"  &c.  In 
consideration  whereof  the  defendant  covenanted  to  pay  to  the  plain- 
tiff the  sum  of  210/.  on  or  before  the  second  day  of  September  next 
ensuing;  on  failure  of  complying  with  the  before-mentioned  agree- 
ment the  defendant  was  to  pay  to  the  plaintiff  the  sum  of  21/.;  and 
if  the  plaintiff  did  not  deliver  the  estate  according  to  the 'before- 
mentioned  agreement,  then  he  was  to  pay  to  the  defendant  the  sum 

1  In  Phillips  V.  Fielding,  2  H.  Bl.  123,  the  declaration  was  held  bad  because  it  did 
not  set  out  the  title  of  the  plaintiff.  But  this  case  was  overruled  by  Martin  v.  Smith, 
6  East,  555.     See  also  Ferry  v.  Williams,  8  Taunt.  62. 

2  Behrman  v.  Newton,  103  Ala.  525,  530;   Smyth  v.  Sturges,  108  N.  Y.  495,  ace. 
See  Ames's  Cas.  Eq.  Jur.  I.  245,  as  to  the  jurisdiction  of  equity  to  compel  the 

vendee  to  take  with  compensation  property  slightly  varying  from  the  agreement. 

In  Poole  V.  Hill,  6  M.  &  W.  835,  an  action  of  covenant  by  the  vendor  for  the  failure 
of  the  vendee  to  complete  a  purchase  of  real  estate,  the  declaration  alleged  that  the 
plaintiff  was  ready  and  wUling  to  convey,  but  made  no  allegation  of  Render.  The 
defendant  demurred.  Lord  Abinger,  C.  B.,  in  delivering  the  judgment  of  the  court, 
said:  "We  were  at  first  disposed  to  think  that  the  averment  that  the  plaintiff  waa 
ready  and  willing  to  convey  was  insufficient;  but  after  hearing  the  point  discussed  by 
Mr.  Crompton,  we  are  satisfied  that  it  was  not  necessary  to  aver  more  than  this. 
On  a  contract  for  the  sale  of  lands,  unless  it  be  expressly  stipulated  otherwise,  the 
conveyance  is  to  be  at  the  expense  of  and  to  be  prepared  by  the  purchaser.  Here  it 
was  for  the  purchaser  to  make  out  the  conveyance  in  the  usual  course;  that  being 
done,  his  agreement  is  on  a  given  day  to  pay  the  purchase-money,  and  the  plaintiff's 
to  execute  the  conveyance  and  complete  the  title.  The  defendant  could  not  have 
maintained  an  action  for  the  non-completion  of  the  purchase,  without  averring  that 
he  had  tended  a  conveyance.  He  was  to  perform  the  initiative  before  the  plaintiff 
could  be  called  upon  to  offer  a  conveyance,  and  the  plaintiff  was  not  bound  to  execute 
a  conveyance  until  the  defendant  had  prepared  and  tended  it  for  execution.  The 
declaration  is  therefore  good,  and  the  judgment  will  be  for  the  plaintiff." 

In  the  United  States,  however,  the  duty  of  preparing  a  conveyance  devolves  upon 
the  vendor.  50  American  Decisions,  673 ;  2  Williston  Contracts,  §  924 ;  Leaird  v. 
Smith,  44  N.  Y.  618;  Raudabaugh  v.  Hart,  61  Ohio  St.  73,  87;  Boyd  v.  McCullough, 
137  Pa.  7. 

'  The  agreement  was  drawn  in  this  inaccurate  manner. 


518  GOODISSON    V.    NUNN  [CHAP.   V 

of  21/.  It  was  further  agreed  between  the  parties  that  the  plaintiff 
should  take  up  the  copyhold  as  follows,  that  is  to  say:  "That  the 
plaintiff  should  take  it  up  either  for  the  defendant  or  his  wife,  as 
they  should  agree  at  the  time;  that  the  plaintiff  should  take  it  up 
for  himself;  that  each  party  should  pay  share  and  share  alike 
towards  the  expenses  attending  the  taking  it  up."  The  defendant 
then  pleaded,  1st.  Non  est  factum.  2d.  That  the  plaintiff  did  not, 
on  or  before  the  second  day  of  September  next,  &c.,  by  such  convey- 
ances, assurances,  surrenders,  ways,  and  means  in  the  law,  reasonably 
devised,  advised,  and  required,  well  and  sufficiently  grant,  sell,  and 
release,  assign  and  surrender,  or  otherwise  convey  to  the  defendant 
the  said  premises  in  the  said  articles  of  agreement  mentioned,  &c. 
3d.  That  the  plaintiff  did  not  on  or  before  the  second  day  of  Sep- 
tember, &c.,  or  at  any  time  since,  well  and  sufficiently  grant,  sell, 
and  release,  assign  and  surrender,  or  otherwise  convey  to  the  defend- 
ant the  said  premises,  &c.  4th.  That  the  plaintiff,  at  the  time  of 
the  making  of  the  articles,  &c.,  had  nothing  in  the  said  premises, 
whereby  he  could  be  enabled  to  grant,  &c.,  to  the  defendant  the  said 
premises,  &c. 

To  the  three  last  pleas  the  plaintiff  demurred  generally. 

Lord  Kenton,  C  J.  This  case  is  extremely  clear,  whether  con- 
sidered on  principles  of  strict  law  or  of  common  justice.  The  plain- 
tiff engaged  to  sell  an  estate  to  the  defendant,  in  consideration  of 
which  the  defendant  undertook  to  pay  210/.;  and  if  he  did  not  carry 
the  contract  into  execution,  he  was  to  pay  21/.  And  now,  not  having 
conveyed  his  estate,  or  offered  to  do  so,  or  taken  any  one  step  towards 
it,  the  plaintiff  has  brought  this  action  for  the  penalty.  Suppose 
the  purchase-money  of  an  estate  was  40,000/.,  it  would  be  absurd 
to  say  that  the  purchaser  might  enforce  a  conveyance  without  pay- 
ment, and  compel  the  seller  to  have  recourse  to  him,  who  perhaps 
might  be  an  insolvent  person.  The  old  cases  cited  by  the  plaintiff's 
counsel  have  been  accurately  stated ;  but  the  determinations  in  them 
outrage  common  sense.  I  admit  the  principle  on  which  they  pro- 
fess to  go;  but  I  think  that  the  judges  misapplied  that  principle. 
It  is  admitted  in  them  all  that  where  they  are  dependent  covenants 
no  action  will  lie  by  one  party,  unless  he  have  performed  or  offered 
to  perform  his  covenant.^  Then  the  question  is  whether  these  are 
or  are  not  dependent  covenants?  I  think  they  are;  the  one  is  to 
depend  on  the  other;  when  the  one  ])arty  conveyed  his  estate,  he  was 
to  receive  the  purchase-money;  and  when  the  other  parted  with  his 
money,  he  was  to  have  the  estate.  They  were  reciprocal  acts  to  be 
performed  by  each  other  at  the  same  time.  It  seems,  from  the  case  in 
Strange,  that  the  judges  were  surprised  at  the  old  decisions;  and, 
in  order  to  get  rid  of  tbe  difficulty,  tboy  snid  that  a  tender  and  re- 

'  In  an  acAvm  at  law,  it  Ih  iinivorHally  concfrlcd  that  if  the  covenants  are  dependent 
the  plaintiff  cannot  rcrover  without  \)Tow\nv.  a  tender.  As  to  the  rule  in  equity,  se*' 
Ames's  Ha-s.  lOq.  .lur.  :i4'2;  'J   Wiiiiston,  Contracts,   §§  834,  844. 


SECT.    II  ]  MORTON    V.    LAMB  519 

fusal  would  amount  to  a  performance.  It  is  true  they  went  farther, 
and  said  that  "in  consideration  of  the  premises"  meant  only  in  con- 
sideration of  the  covenant  to  transfer,  and  not  in  consideration  of 
the  actual  transferring  of  the  stock;  but  to  the  latter  part  of  that 
judgment  I  cannot  accede.  It  is  our  duty,  when  we  see  that  prin- 
ciples of  law  have  been  misapplied  in  any  case,  to  overrule  it.  The 
principle  is  admitted  in  all  the  cases  alluded  to  that,  if  they  be  de- 
pendent covenants,  performance  or  the  offer  to  perform  must  be 
pleaded  on  the  one  part,  in  order  to  found  the  action  against  the 
other.  The  mistake  has  been  in  the  misapplication  of  that  prin- 
ciple in  the  cases  cited.  And  I  am  glad  to  find  that  the  old  cases 
have  been  overruled,  and  that  we  are  now  warranted  by  precedent 
as  well  as  by  principle  to  say  that  this  action  cannot  be  maintained. 

Judgment  for  the  defendant.^ 


MOETON  V.  LAMB 

In  the  King's  Bench,  February  1,  1797 

[^Reported  in  7  Term  Reports,  125] 

In  an  action  on  the  case,  the  plaintiff  declared  against  the  de- 
fendant, for  that  whereas,  on  the  10th  February,  1796,  at  Man- 
chester, in  the  county  of  Lancaster,  in  consideration  that  the  plaintiff, 
at  the  special  instance  and  request  of  the  defendant,  had  then  and 
there  bought  of  the  defendant  200  quarters  of  wheat,  at  5L  Os.  6d. 
per  quarter,  such  price  to  be  therefor  paid  by  the  plaintiff  to  the 
defendant,  he  the  defendant  undertook  and  then  and  there  promised 
the  plaintiff  to  deliver  the  said  corn  to  him  the  plaintiff  at  Shardlow, 
in  the  county  of  Derby,  in  one  month  from  that  time,  viz.,  of  the 
sale ;  and  then  he  alleged  that,  although  he  the  plaintiff  always,  from 
the  time  of  making  such  sale  for  the  space  of  one  month  then  next 
following  and  afterwards,  was  ready  and  willing  to  receive  the  said 
corn  at  Shardlow,  yet  the  defendant,  not  regarding  his  said  promise, 
&c.,  did  not  in  one  month  from  the  time  of  the  making  of  such  sale 
as  aforesaid,  or  at  any  other  time,  deliver  the  said  corn  to  the  plain- 
tiff, at  Shardlow  or  elsewhere,  although  he  the  defendant  was  often 
requested  so  to  do,  &c.  The  defendant  pleaded  the  general  issue; 
and  at  the  trial  the  plaintiff  recovered  a  verdict. 

Holroyd  obtained,  in  the  last  term,  a  rule  calling  on  the  plaintiff 
to  shew  cause  why  the  judgment  should  not  be  arrested,  because  it 
was  not  averred  that  the  plaintiff  had  tendered  to  the  defendant  the 
price  of  the  corn,  or  was  ready  to  have  paid  for  it  on  delivery.  He 
said  this  was  necessary  on  the  principle  established  in  many  cases, 

^  BuLLER  &  Grose,  JJ.  delivered  concurring  opinions.  Pead  v.  Trull,  173  Mass. 
450;   Ackley  v.  Elwell,  5  Halst,  304,  a£c. 


520  MORTON    V.    LAMB  [CHAP.   V 

particularly  in  Thorpe  v.  Thorpe,  Callonel  v.  Briggs,  Kingston  v. 
Preston,  Jones  v.  Barclay,  and  Goodisson  v.  Nunn,  that  when  some- 
thing is  to  be  done  by  both  parties  to  a  contract  at  the  same  time, 
as  in  this  case  the  tendering  of  the  money  and  the  delivery  of  the 
corn,  there  the  party  suing  the  other  for  non-performance  of  his 
part  must  aver  an  offer  at  least  at  the  same  time  to  perform  what 
was  to  be  done  by  himself. 

Law,  Wood  and  Scarlett  now  showed  cause. 

Lord  Ken  yon,  C.  J.  If  this  question  depended  on  the  technical 
niceties  of  pleading,  I  should  not  feel  so  much  confidence  as  I  do; 
but  it  depends  altogether  on  the  true  construction  of  this  agreement. 
The  defendant  agreed  with  the  plaintiff  for  a  certain  quantity  of 
corn,  to  be  delivered  at  Shardlow  within  a  certain  time;  and  there 
can  be  no  doubt  but  that  the  parties  intended  that  the  payment  should 
be  made  at  the  time  of  the  delivery.  It  is  not  imputed  to  the  defend- 
ant that  he  did  not  carry  the  corn  to  Shardlow,  but  that  he  did  not 
deliver  it  to  the  plaintiff;  to  this  declaration  the  defendant  objects, 
and  says,  "I  did  not  deliver  the  corn  to  you  (the  plaintiff),  because 
you  do  not  say  that  you  were  ready  to  pay  for  it;  and  if  you  were 
not  ready,  I  am  not  bound  to  deliver  the  corn;"  and  the  question  is, 
whether  that  should  or  should  not  have  been  alleged.  The  case  de- 
cided by  Lord  Holt,  in  Salk.  112.  if,  indeed,  so  plain  a  case  wanted 
that  authority  to  support  it,  shows  that  where  two  concurrent  acts 
are  to  be  done,  the  party  who  sues  the  other  for  non-performance 
must  aver  that  he  had  performed,  or  was  ready  to  perform  his  part 
of  the  contract.  Then  the  plaintiff  in  this  case  cannot  impute  to 
the  defendant  the  non-delivery  of  the  corn,  without  alleging  that 
he  was  ready  to  pay  the  price  of  it.  A  plaintiff,  who  comes  into  a 
court  of  justice,  must  show  that  he  is  in  a  condition  to  maintain  his 
action.  But  it  has  been  argued  that  the  delivery  of  the  corn  was  a 
condition  precedent,  and  some  cases  have  been  cited  to  prove  it; 
but  they  do  not  appear  to  me  to  be  applicable.  In  the  one  in  Saun- 
ders,^ the  party  was  to  pull  down  a  wall,  and  was  then  to  be  paid  for 
it;  there  is  no  doubt  but  that  the  pulling  down  of  the  wall  was  a  con- 
dition precedent  to  the  payment;  the  act  was  to  be  done,  and  then 
the  price  was  to  be  paid  for  it.  So  in  the  case  in  Salk.  171,  where 
work  was  to  be  done,  and  then  the  workman  was  to  be  paid.  And 
in  ordinary  cases  of  this  kind  the  work  is  to  be  done  before  the  wages 
are  earncf] ;  but  those  cases  do  not  apply  to  the  present,  where  both 
the  acts  are  to  be  done  at  the  same  time.  Speaking  of  conditions 
precedent  and  subsequent  in  other  cases  only  leads  to  confusion.  In 
tlie  case  of  Campbell  v.  Jones,  I  thought,  and  still  continue  of  that 
opinion,  that  whcither  covenants  be  or  be  not  indeptuident  of  each 
other  must  depcind  on  the  good  sense  of  the  case,  and  on  the  order 
in  which  the  several  things  arc  to  be  done;  but  here  both  things  — 
the  delivery  of  the  corn  by  one,  and  the  payment  by  the  other  —  were 

'  2  Saund.  250. 


SECT.    II  ]  WITHERS    V.   REYNOLDS  521 

to  be  done  at  the  same  time ;  and  as  the  plaintiff  has  not  averred  that 
he  was  ready  to  pay  for  the  corn,  he  cannot  maintain  this  action 
against  the  defendant  for  not  delivering  it. 

Rule  absolute.^ 


WITHERS  V.  EEYI^OLDS 

In  the  King's  Bench,  November  14,  1831 

\^Reported  in  2  Barnewall  &  Adolphus,  882] 

Assumpsit  for  not  delivering  straw  to  the  plaintiff  pursuant  to 
agreement.  At  the  trial  before  Lord  Tenterden,  C.  J.,  at  the  Sit- 
tings in  Middlesex  after  last  Hilary  Term,  the  agreement  proved  was 
as  follows :  — 

John  Reynolds  undertakes  and  agrees  to  supply  Joseph  Withers  with  wheat  straw 
of  good  quality  sufficient  for  his  use  as  a  stablekeeper,  and  delivered  on  his  premises 
as  above  (i.e.,  at  Long  Acre,  London),  till  the  24th  of  June,  1830,  at  the  sum  of  thirty- 
three  shillings  per  load  of  thirty-six  trusses,  to  be  delivered  at  the  rate  of  three  loads 
in  a  fortnight,  in  a  dry  state  and  without  damage.  And  the  said  J.  W.  hereby  agrees 
to  pay  to  the  said  J.  R.  or  his  order  the  sum  of  thirty-three  shUlings  per  load  for  each 
load  of  straw  so  delivered  on  his  premises  from  this  day  till  the  24th  of  June,  1830, 
according  to  the  terms  of  this  agreement. 

(Signed)  Joseph  Withers,  John  Reynolds. 

The  straw  was  regularly  sent  in  from  the  20th  of  October,  1829, 
when  this  agreement  was  made,  till  the  end  of  January,  1830.  At 
that  time,  the  plaintiff  being  in  arrear  for  several  loads  of  straw,  the 
defendant  called  upon  him  for  the  amount,  and  he  thereupon  ten- 
dered to  the  defendant  IIZ.  lis.,  being  the  price  of  all  the  straw  de- 
livered, except  the  last  load,  saying  that  he  should  always  keep  one 
load  in  hand.  The  defendant  objected  to  this,  but  was  at  length 
obliged  to  take  the  sum  offered;  and  he  then  told  the  plaintiff  that 
he  would  send  no  more  straw  unless  it  was  paid  for  on  delivery;  and 
accordingly  no  more  was  sent.  On  the  part  of  the  defendant  it  was 
submitted  that  there  must  be  a  nonsuit,  inasmuch  as  the  plaintiff,  on 
his  own  showing,  had  not  performed  his  own  part  of  the  contract, 
which  was,  in  effect,  to  pay  for  each  load  on  delivery.  Lord  Ten- 
terden, C  J.,  was  of  this  opinion,  but  directed  a  verdict  for  the  plain- 
tiff, reserving  the  point.  A  rule  nisi  was  afterwards  obtained  for 
entering  a  nonsuit. 

Campbell  and  R.  V.  Richards  now  showed  cause.  Two  things  in- 
dependent of  each  other  were  stipulated  by  this  contract  to  be  done 
by  the  respective  parties;  the  defendant  was  to  deliver  straw;  the 
plaintiff  to  pay  the  price.  No  time  of  payment  was  specified.  There 
appears  nothing  which  could  entitle  the  defendant  to  insist  on  re- 
ceiving his  money  till  the  whole  quantity  of  straw  was  delivered. 
Payment,  then,  was  not  a  condition  of  the  defendant's  performance 

'  Brennan  v.  Ford,  46  Cal.  7,  16;  Louisville  Packing  Co.  v.  Grain,  141  Ky.  379: 
Skillman  Hardware  Co.  v.  Davis,  53  N.  J.  L.  114;  Dunham  v.  Pettee,  8  N.  Y.  508,  ace. 
See  also  Rawson  v.  Johnson,  1  East,  203;   Uniform  Sales  Act,  Sec.  42. 


522  WITHERS    V.    REYNOLDS  [CHAP.    V 

of  his  contract.  His  promise  was  given  in  consideration  that  the 
plaintiff  promised  to  pay,  not  in  consideration  of  performance.  If 
the  plaintiff  was  bound  to  pay  for  each  load  on  delivery,  still  it  does 
not  follow  that  a  refusal  to  pay  for  one  load  excused  the  defendant 
from  any  future  performance  of  his  contract.  Weaver  v.  Sessions.^ 
And,  according  to  that  case,  he  ought  at  least  to  have  shown  that 
he  subsequently  made  a  tender  of  executing  his  part  of  the  agree- 
ment, which  the  plaintiff  rejected.  The  defendant,  therefore,  upon 
his  construction  of  the  agreement,  may  be  entitled  to  bring  a  cross- 
action,  but  has  no  defence  to  this. 

Piatt,  contra.  The  only  question  is  upon  the  construction  of  this 
agreement.  It  is  true,  no  time  of  payment  was  specified,  but,  in 
the  absence  of  any  express  stipulation,  the  money  would  be  payable 
on  demand  as  often  as  it  became  due;  and  here  the  words,  "to  pay 
thirty-three  shillings  per  load  for  each  load  so  delivered,"  intimate 
that  the  price  of  each  load  was  to  be  due  as  soon  as  it  was  delivered. 
(Here  he  was  stopped  by  the  Court.) 

Lord  Tentekden,  C  J.  I  am  of  opinion  that  the  plaintiff  is  not 
entitled  to  recover.  There  is,  I  think,  no  doubt  that  by  the  terms 
of  this  agreement  the  plaintiff  was  to  pay  for  the  loads  of  straw 
as  they  were  delivered.  If  that  were  not  so,  the  defendant  would  have 
been  liable  to  the  inconvenience  of  giving  credit  for  an  indefinite 
length  of  time,  and,  in  case  of  non-payment,  bringing  an  action  for  a 
very  large  sum  of  money,  which  does  not  appear  to  have  been  intended 
by  the  contract.  Then  the  only  question  is,  whether,  upon  the  plain- 
tiff's saying  "I  will  not  pay  for  the  goods  on  delivery"  (for  that  was 
the  effect  of  his  communication  to  the  defendant),  it  was  incumbent 
on  the  defendant  to  go  on  supplying  straw:  and  he  clearly  was  not 
obliged  to  do  so. 

Parke,  J.  The  substance  of  the  agreement  was,  that  the  straw 
should  be  paid  for  on  delivery.  The  defendant  clearly  did  not  con- 
template giving  credit.  When,  therefore,  the  plaintiff  said  that  he 
would  not  pay  on  delivery  (as  he  did  in  substance,  when  he  insisted 
on  keeping  one  load  in  hand),  the  defendant  was  not  obliged  to  go 
on  supplying  him. 

Taunton,  J.  The  contract  does  not  say  merely  that  so  much  straw 
shall  be  supplied  at  thirty-three  shillings  a  load,  but  it  adds  that 
the  plaintiff  shall  pay  that  sura  "for  each  load  of  straw  delivered  on 
his  jn-emises"  from  the  date  of  the  agreement  till  the  24th  of  June, 
]830.  That  prima  facie  imports  that  each  load  was  to  be  paid  for 
as  delivered. 

Pattkkson,  J.  If  the  plaintiff  had  merely  failed  to  pay  for  any 
particular  load,  that  of  itH<^lf  iniglit  not  have  been  an  excuse  to  the 
defendant  for  delivering  no  more  straw,  but  the  plaintiff  here  ex- 
pressly refuses  to  pay  for  the  loads  as  delivered;  the  defendant,  there- 
fore, is  not  liable  for  ceasing  to  perform  his  part  of  the  contract. 

Rule  absolute. 

»  6  Taunt.  154. 


SECT.    II ]  KANE    V.    HOOD  ^  523 

OLIVER  KANE  et  al.  v.  JOHN  HOOD 

Supreme  Judicial  Court  of  Massachusetts,  October  27,  1832 

[Reported  in  13  Pickering,  281] 

Assumpsit,  brought  by  the  executors  of  John  Innis  Clark.  Trial 
before  Shaw,  C.  J. 

The  plaintiffs  rely  upon  an  unsealed  contract  made  by  Clark  and 
Hood,  dated  October  28,  1803,  by  which  "it  is  mutually  agreed  that 
Hood  is  to  have  the  land,  &c.  (describing  certain  land  in  Somerset) 
in  consideration  of  which  the  said  Hood  is  to  pay  the  said  Clark 
$700,  $200  of  which  are  to  be  paid  in  ten  days,  half  the  remainder 
in  twelve  months,  and  the  other  half  in  two  years,  from  the  above 
date,  with  the  interest  annually;  and  the  deed  to  be  executed  at  the 
completing  of  the  last  payment." 

The  two  first  instalments  had  been  paid  and  received  before  the 
commencement  of  this  action. 

The  plaintiffs  neither  allege  nor  prove  that  they  ever  made  or  ten- 
dered or  offered  any  deed  or  conveyance  of  the  land,  but  they  aver 
that  Clark,  in  his  lifetime,  and  they,  in  their  capacity  of  executors, 
since  his  decease,  have  always  been  ready  to  convey  the  land  to 
Hood,  and  to  execute  to  him  a  good  and  sufficient  deed  thereof,  upon 
his  complying  with  the  terms  of  the  contract  on  his  part,  and  that 
they  are  here  in  court  ready  to  execute  such  deed  upon  his  complying 
with  those  terms. 

The  defendant  contends  that,  the  two  first  instalments  being  fully 
paid,  the  agreements  of  the  parties,  in  respect  to  the  last  instalment, 
are  mutually  dependent  and  conditional,  and  neither  is  bound  to 
perform  without  a  tender  of  performance  on  the  other  side,  to  be 
made  at  the  same  time. 

On  the  contrary,  the  plaintiffs  contend  that  the  promise  of  the 
defendant  is  independent,  and  that  he  was  bound  to  pay  at  the  time 
and  conformably  to  the  terms  of  the  contract,  in  consideration  of  the 
engagement  of  Clark,  without  any  tender  of  performance  on  the  part 
of  the  plaintiffs. 

The  plaintiffs  became  nonsuit,  subject  to  the  opinion  of  the  Court 
on  the  above  question. 

Cobh,  for  the  plaintiffs,  cited  Terry  v.  Duntz,  2  H.  Bl.  389;  1 
Wms.  Saund.  320,  note  4;  Gardiner  v.  Corson,  15  Mass.  500. 

W.  Baylies  and  Battelle,  for  the  defendant,  cited  Callonel  v. 
Briggs,  1  Salk.  112;  Thorpe  v.  Thorpe,  ibid.  171;  Jones  v.  Barkley^ 
2  Doug.  684;  Goodisson  v.  Nunn,  4  T.  R.  761;  Glazebrook  v.  Wood- 
row,  8  T.  R.  366;  Phillips  v.  Fielding,  2  H.  Bl.  123;  Martin  v. 
Smith,  6  East,  555;  Johnson  v.  Reed,  9  Mass.  78;  Cunningham  v. 
Morrell,  10  Johns.  203;  Couch  v.  Ingersoll,  2  Pick.  292;  Dana  v. 
King,  ibid.  155;  Hunt  v.  Livermore,  5  Pick.  395;  Bean  v.  Atwater^ 
4  Conn.  3;  Parker  v.  Parmele,  20  Johns.  130. 


524  KANE    V.    HOOD  [CHAP.   V 

Shaw,  C.  J.,  delivered  the  opinion  of  the  Court.  This  is  a  con- 
tract not  under  seal,  but  the  same  rules  govern  the  construction  of 
it  as  those  applicable  to  cases  of  covenant.  The  only  question  which 
would  seem  to  be  presented  by  the  fact  is,  whether,  in  a  contract  be- 
tween parties  relative  to  the  same  subject-matter,  some  stipulations 
may  be  mutual  and  independent,  and  others  dependent  and  mutually 
conditional;  and  this  question  was  settled  in  the  case  of  Couch  v. 
Ingersoll,  2  Pick.  292.  Indeed,  the  point  in  question  constituted  dis- 
tinctly the  ground  of  decision  in  that  case,  because  the  plaintiff,  with- 
out having  tendered  performance  on  his  part,  recovered  on  a  breach 
of  one  covenant  because  it  was  independent,  and  failed  on  the  other, 
because,  upon  the  construction  put  upon  it  by  the  Court,  it  was  in- 
dependent. 

In  the  present  case,  the  two  first  instalments  of  the  purchase-money 
were  to  be  paid  before  the  time  fixed  for  the  conveyance  of  the  land, 
and  therefore  it  is  very  clear  they  are  independent.  Had  a  suit  been 
brought  for  either  of  them,  no  tender,  offer,  or  averment  of  readi- 
ness, would  have  been  necessary,  and  no  defence  could  have  been 
made.  The  obligation  of  the  defendant  to  pay  the  money  at  the 
times  stipulated  was  absolute  and  unconditional.  But  it  is  shown 
by  the  facts,  that  the  two  first  instalments  were  fully  paid;  and 
though  payment  was  not  made  at  the  times  fixed,  yet  it  was  after- 
wards accepted,  and  the  plaintiffs  affirmed  the  contract  by  suing  on 
it.  Then  the  question  is,  whether  the  payment  of  the  last  instalment 
on  the  one  side,  and  the  execution  and  tender  of  the  deed,  upon  pay- 
ment being  made,  on  the  other,  were  not  dependent  and  conditional; 
and  we  think  they  were.  The  words  are,  "and  the  other  half  in  two 
years,  with  interest  annually,  and  the  deed  to  be  executed  at  the  com- 
pleting of  the  last  payment."  Suppose  the  whole  had  been  payable 
at  once,  instead  of  being  payable  by  instalments,  and  the  stipulation 
had  been  to  pay  seven  hundred  dollars  in  two  years,  the  deed  to  be 
executed  at  the  payment;  upon  this  statement  of  the  question,  is 
there  a  doubt  that  the  agreements  would  have  been  mutually  de- 
pendent and  conditional?  I  think  not.  The  intent  of  the  parties  is 
to  govern.  And  what  difference  is  there,  whether  the  final  payment 
is  the  whole  or  part,  the  remainder  of  the  purchase-money  having 
beemand  accepted?  Where  the  whole  purchase-money  is  to  be  paid 
at  once  and  the  deed  is  to  be  then  given,  the  covenant — are  held  to  be 
dopeiiflr-jit,  because  it  is  unrcasonabh^  to  presume  tliat  the  purchaser 
intc^iiflcd  to  pay  the  whole  consideration,  without  having  the  equiva- 
1(  tit  id  a  title  to  the  land  purchased.  The  same  reason  applies  to 
the  last  iiiHtnhnent.  An  obvious  reason  why  the  first  and  second  in- 
8tahn(riit.s  slioiild  be  paid  without  having  a  deed  is,  that  the  vendor 
was  to  wilhbold  the  title  as  a  security  for  the  purchase-money,  and 
the  vendee  was  content  to  rely  on  the  vendor's  contract  for  his  future 
title;  but  no  such  reason  applies  to  the  final  and  complete  payment 
of  the  purchase-moiKjy.     Whether,  therefore,  we  consider  the  par- 


SECT.    II  ]  ELLEN    V.    TOPP  525 

ticular  language  of  the  contract,  or  the  general  intent  of  the  parties, 
we  think  these  parts  of  the  contract  were  mutually  dependent  and 
conditional,  and  the  plaintiffs  cannot  recover  without  averring  per- 
formance or  an  offer  to  perform  on  their  part.    Plaintiff's  nonsuits 


ELLEN  V.  TOPP 

In  the  Exchequer,  April  15,  1851 

[Reported  in  6  Exchequer  Reports,  424] 

Covenant  on  an  indenture  of  apprenticeship  of  the  21st  of  July, 
1846,  by  the  master  against  the  father  of  the  apprentice,  the  father 
being  a  party  to  the  indenture.  The  material  parts  of  this  indenture 
(of  which  profert  was  made)  were  as  follows :  "This  indenture  wit- 
nesseth,  that  Eichard  Topp,  an  infant,  of  the  age  of  sixteen  years 
or  thereabouts,  by  and  with  the  consent  of  his  father,  George  Topp, 
of,  &c.,  farmer,  doth  put  himself  apprentice  to  Frederick  Ellen,  of, 
&c.,  auctioneer,  appraiser,  and  corn-factor,  to  learn  his  art,  and  with 
him  after  the  manner  of  an  apprentice  to  serve  from  the  1st  day  of 
July  now  last  past  unto  the  full  end  and  term  of  five  years  from 
thence  next  following,  to  be  fully  complete  and  ended;  during  which 
term  the  said  apprentice  his  master  faithfully  shall  serve,  his  secrets 
keep,  his  lawful  commands  everywhere  gladly  do."  The  indenture 
then  proceeded  to  state  that  the  apprentice  should  do  no  damage  to 
his  master,  &c.,  and  that  he  "shall  not  absent  himself  from  his 
master's  service  day  or  night  unlawfully,  but  in  all  things,  as  a 
faithful  apprentice,  he  shall  behave  himself  towards  his  said  master 
and  all  his  during  the  said  term.  And  the  said  Frederick  Ellen,  in 
consideration  of  the  sum  of  701.  to  him  in  hand  paid  by  the  said 
George  Topp  upon  the  execution  of  these  presents  (the  receipt  where- 
of the  said  Frederick  Ellen  doth  hereby  acknowledge),  doth  hereby 
covenant  and  agree  to  and  with  the  said  George  Topp,  his  execu- 
tors and  administrators,  and  also  the  said  Richard  Topp,  that  he, 
the  said  Frederick  Ellen,  his  executors  and  administrators,  his  said 

1  Bank  of  Columbia  v.  Hagner,  1  Pet.  455;  Hill  v.  Grigsby,  35  Cal.  656;  Sanford 
V.  Cloud,  17  Fla.  532;  Duncan  v.  Charles,  5  111.  561;  Runkle  v.  Johnson,  30  II.  332; 
Headley  v.  Shaw,  39  111.  354;  McCulloch  v.  Dawson,  1  Ind.  413;  Summers  v.  Sleeth, 
45  Ind.  598;  Clark  v.  Continental  Improvement  Co.,  57  Ind.  135;  Berry-hill  v.  Bying- 
ton,  10  Iowa,  223;  Courtright  v.  Deeds,  38  Iowa,  507;  Wadlington  v.  Hill,  18  Miss. 
560;  Eckford  v.  Halbert,  30  Mi.ss.  273;  Robinson  v.  Harbour,  42  Miss.  795;  Ackley 
V.  Elwell,  5  Halsted,  304;  Egbert  v.  Chew,  2  Green,  (N.  J.  L.)  446;  Shinn  v.  Roberts, 
1  Spencer,  435;  Johnson  v.  Wygant,  11  Wend.  48;  Glenn  v.  Rossler,  156  N.  Y.  161; 
Powell  V.  Dayton,  &c.  R.  R  Co.,  14  Oreg.  356,  ace.    See  also  Giles  v.  Giles,  9  Q.  B.  164. 

Weaver  v.  Childress,  3  Stew.  (Ala.)  361;  Hays  v.  HaU,  4  Port.  374,  387;  White  v. 
Beard,  5  Port.  94,  100;  Miller  v.  Wild  Cat  Road  Co.,  52  Ind.  51;  Clopton  v.  Bolton, 
23  Miss.  78;  McMath  v.  Johnson,  41  Miss.  439;  Morris  v.  Sliter,  1  Denio,  59;  Gale 
V.  Best,  20  Wis.  44;  Shenners  v.  Pritchard,  104  Wis.  287,  contra.  See  also  Loud  v. 
Pomona  Land  Co.,  153  U.  S.  564;   Gibson  v.  Newman,  2  Miss.  341. 


526  ELLEN    V.   TOPP  [CHAP.    V 

apprentice  in  the  art  of  an  auctioneer,  appraiser,  and  corn-factor, 
which  he  useth,  by  the  best  means  that  he  can,  shall  teach,  and  in- 
struct, or  cause  to  be  taught  and  instructed,  finding  unto  the  said 
apprentice  sufficient  meat,  drink,  and  lodging,  and  other  necessaries 
during  the  said  term,  except  wearing  apparel,  medical  attendance, 
and  pocket-money ;  and  the  said  George  Topp,  for  himself,  his  execu- 
tors and  administrators,  doth  hereby  covenant  and  agree  with  the 
said  Frederick  Ellen,  his  executors  and  administrators,  that  he  the 
said  George  Topp,  his  executors  and  administrators,  shall  and  will 
find  and  provide  his  said  son  Richard  Topp  with  wearing  apparel, 
medical  attendance,  washing,  and  pocket-money,  during  the  said 
term;  and  for  the  true  performance  of  all  and  every  the  said  cove- 
nants and  agreements,  either  of  the  said  parties  bindeth  himself  unto 
the  other  by  these  presents."  The  declaration  then  stated,  that  the 
said  Richard  Topp  afterwards,  to  wit,  on  the  said  21st  of  July,  1846, 
entered  and  was  then  received  into  the  service  of  the  plaintiff  as  such 
apprentice  as  aforesaid,  and  continued  in  such  service  under  and  by 
virtue  of  the  said  indenture  for  a  long  space  of  time,  to  wit,  from 
the  day  and  year  last  aforesaid  until  and  upon  the  22d  of  July,  1849; 
and  laid  as  a  breach  that  the  said  Richard  Topp  did  not  nor  would 
faithfully  serve  the  plaintiff  according  to  the  tenor  and  effect,  true 
intent  and  meaning  of  the  said  indenture,  but  on  the  contrary  thereof 
the  said  Richard  Topp,  during  the  said  term  of  five  years  in  the  said 
indenture  mentioned,  to  wit,  on  the  said  22d  of  July,  1849,  did  un- 
lawfully absent  himself  from  the  service  of  the  plaintiff,  and  hath 
from  thence  hitherto  remained  and  continued  absent  from  the  service 
of  the  plaintiff,  contrary  to  the  tenor  and  effect  of  the  said  indenture, 
and  of  the  said  covenant  of  the  defendant  in  that  behalf  made  as 
aforesaid,  to  the  plaintift"'s  damage,  &c. 

The  defendant,  after  setting  out  the  indenture  on  oyer,  pleaded 
that  the  plaintiff,  at  the  time  of  the  making  of  the  said  indenture 
as  in  the  declaration  mentioned,  exercised  the  art  and  carried  on 
the  business  of  an  auctioneer,  appraiser,  and  corn-factor,  as  therein 
mentioned ;  and  that  the  apprenticeshii:)  and  covenants  aforesaid  were 
made  with  the  plaintiff  as  such  auctioneer,  appraiser,  and  corn- 
factor,  and  not  otherwise,  and  that,  after  the  making  of  the  said  in- 
denture, and  before  the  accruing  of  the  cause  of  action,  &c,,  to  wit, 
on,  ^'c,  the  plaintiff  voluntarily  and  of  his  own  free  will  gave  up, 
relinquished,  abandoned,  and  ceased  to  exercise  and  carry  on,  and 
hath  not,  at  any  time  since,  exercised  and  carried  on  the  art  and 
busincHH  of  a  corn-factor  as  aforesaid.     Verification. 

Jieplication :  Tluit  the  i)laintiff  relinquished  liis  business  as  a 
corn-factor  aforesaid,  with  the  full  knowledge  and  consent  of  the  de- 
fendant in  that  behalf;  and  that,  from  the  time  of  such  relinquish- 
ment continually  until  the  accruing  of  the  cause  of  action  in  the 
declaration  nK'iitioiicd,  the  said  Richjird  Topp,  with  full  knowledge 
of  Hiich  rcdiiHiuishment  as  aforesaid,  continued,  with  the  consent  of 


SECT.    Il]  ELLEN    V.   TOPP  527 

the  defendant  in  that  behalf,  to  serve  the  plaintiff  under  the  said  in- 
denture.    Verification. 

Special  demurrer  to  the  replication,  inter  alia,  on  the  grounds  that 
the  consent  of  the  defendant  to  the  relinquishment  by  the  plaintiff 
of  his  business  of  a  corn-factor  aforesaid,  and  to  the  continuing  of 
the  said  Richard  Topp  to  serve  the  plaintiff  as  in  the  replication 
mentioned,  is  not  alleged  to  have  been  given  or  contained  by  or  in 
any  deed  or  instrument  under  the  seal  of  him  the  defendant,  and  that 
the  contract  in  the  declaration  mentioned  could  not  in  law  be  varied 
or  altered  by  parol,  or  by  any  consent  other  than  a  consent  given  or 
contained  in  some  deed  or  instrument  under  seal ;  and  that  the  repli- 
cation is  a  departure  from  the  declaration;  that  the  contract  relied 
upon  in  the  declaration  is  a  contract  to  employ  and  serve  in  the 
art  and  mystery  of  an  auctioneer,  appraiser,  and  corn-factor ;  and  the 
replication  sets  up  some  new  alleged  contract  to  employ  and  serve 
in  the  art  and  mystery  of  an  actioneer  and  appraiser  only. 

Joinder  in  demurrer. 

The  demurrer  was  argued  in  Easter  Term  last  (April  26,  1850), 
before  Pollock,  C.  B.,  Parke,  B.,  Rolfe,  B.,  and  Platt,  B.,  by 
Macnamara  for  the  defendant,  in  support  of  the  demurrer,  and  by 
Taprell  for  the  plaintiff;  and  the  Court  took  time  to  consider  their 
judgment;  but  afterwards  Pollock,  C.  B.,  said  that,  as  a  difference 
of  opinion  existed  among  certain  members  of  the  Court,  they  wished 
to  hear  the  case  re-argued.  The  case  was  accordingly  re-argued  in 
Hilary  Term  last  (Jan.  20),  before  Pollock,  C.  B.,  Paeke,  B.,  Al- 
DERSON^  B.,  and  Platt,  B.,  by 

Macnamara  for  the  defendant  in  support  of  the  demurrer. 

Taprell,  contra. 

The  judgment  of  the  Court  was  now  delivered  by 

Pollock,  C.  B.  This  was  an  action  on  an  indenture  of  appren- 
ticeship by  the  master  against  the  father  of  the  apprentice,  the  father 
having  been  party  to  the  indenture.  The  breach  assigned  is,  that 
the  apprentice  did  not  nor  would  faithfully  serve  the  plaintiff  ac- 
cording to  the  tenor  and  effect  of  the  indenture;  but  on  the  contrary 
did  on  the  22d  of  July,  1849,  unlawfully  absent  himself  from  the 
service  of  the  plaintiff,  and  has  henceforth  continued  absent  from 
such  service.  [The  Lord  Chief  Baron,  after  stating  the  pleadings, 
proceeded:]  On  the  part  of  the  plaintiff  it  was  scarcely  contended 
that  the  replication  could  be  supported.  It  is  obviously  bad.  Such 
parol  consent  cannot  entitle  the  plaintiff  to  maintain  an  action  of 
covenant  in  this  form,  which  is  founded  entirely  on  the  deed  under 
seal.^  The  case  therefore  resolves  itself  into  the  only  question  really 
argued  before  us,  which  was  whether  the  plea  was  good.  .  .  .  The 
objection  taken  by  Mr.  Taprell  was,  that  the  carrying  on  all  the 
three  trades  was  not  a  condition  precedent  to  the  plaintiff's  right  to 

*  But  see  Thomason  v.  Dill,  30  Ala.  444,  456;  Palmer  v.  Merlden  Britannia  Co., 
188  HI.  508;   Blagborne  v.  Hunger,  101  Mich.  375;    Stees  v.  Leonard,  20  Minn.  494. 


528  ELLEN    V.    TOPP  [CHAP.   V 

recover,  but  that  his  omission  or  refusal  to  carry  on  any  one  must 
be  the  subject  of  a  cross-action. 

This  objection  is  founded  on  one  of  the  rules  for  determining  when 
covenants  are  dependant  on  each  other  which  is  laid  down  in  Boone 
V.  Eyre,  and  followed  in  Campbell  v.  Jones  and  other  cases  collected 
in  the  note  to  1  Wms.  Saund,  320c.  That  rule  is,  that  when  a 
covenant  goes  to  part  of  the  consideration  on  both  sides,  that  is, 
forms  a  part  of  the  consideration  on  the  plaintiff's  side  for  the  de- 
fendant's covenant  on  the  other,  and  a  breach  of  such  covenant  may 
be  paid  for  in  damages,  and  the  whole  of  the  remaining  considera- 
tion has  been  had  by  the  defendant,  the  covenant  is  independent,  and 
the  performance  of  it  is  not  a  condition  precedent. 

"The  reason  of  the  decision  in  these  cases  is,"  as  is  observed  by 
the  learned  editor,  "that  where  a  person  has  received  a  part  of  the 
consideration  for  which  he  entered  into  the  agreement,  it  would  be 
unjust  that,  because  he  had  not  had  the  whole,  he  should,  therefore, 
be  permitted  to  enjoy  that  part  without  either  paying  or  doing  any 
thing  for  it.  Therefore  the  law  obliges  him  to  perform  the  agree- 
ment on  his  part,  and  leaves  him  to  his  remedy  to  recover  any  dam- 
ages he  may  have  sustained  in  not  having  received  the  whole  consid- 
eration." 

It  is  remarkable  that,  according  to  this  rule,  the  construction  of 
the  instrument  may  be  varied  by  matter  ex  post  facto;  and  that 
which  is  a  condition  precedent  when  the  deed  is  executed  may  cease 
to  be  so  by  the  subsequent  conduct  of  the  covenantee  in  accepting 
less :  as  in  the  cases  referred  to,  the  defendant,  in  the  first,  might 
have  objected  to  the  transfer,  if  the  plaintiff  had  no  good  title  to  the 
negroes,  and  refused  to  pay;  in  the  second,  he  might  have  objected 
to  the  payment  if  the  plaintiff  had  refused  to  transfer  the  patent, 
though  he  had  been  willing  to  teach  the  art  of  bleaching.  But  this 
is  no  objection  to  the  soundness  of  the  rule,  which  has  been  much 
acted  upon.  But  there  is  often  a  difficulty  in  its  application  to  par- 
ticular cases,  and  it  cannot  be  intended  to  apply  to  every  case  in 
which  a  covenant  by  the  plaintiff  forms  only  a  part  of  the  considera- 
tion, and  the  residue  of  the  consideration  has  been  had  by  the  de- 
fendant. That  residue  must  be  the  substantial  part  of  the  contract; 
and  if,  in  the  case  of  Boone  v.  Eyre,  two  or  three  negroes  had  been 
accepted,  and  the  equity  of  redomption  not  conveyed,  we  do  not 
apprelieiid  that  the  plaintiff  could  have  recovered  the  whole  stipu- 
lated price,  and  left  the  defendant  to  recover  damages  for  the  non- 
conveyance  of  it. 

Wbf'tlicr  tlic'  rule  can  be  applied  to  the  present  case  has  been  a 
matter  of  great  doubt  in  the  minds  of  somc^  of  us;  but,  after  much 
consideration,  we  agree  that  it  is  not  applicable.  If  this  had  been 
an  action  on  a  covenant  to  pay  an  apprentice  fee  at  the  end  of  the 
fr-rni,  and  tlic  apy)rr'ntice  had  served  tlic  whole  period,  and  had  had 
the  benefit  of  instruction  as  such  in  two  of  the  trades,  it  would,  we 


SECT.    II  ]  GRAVES    V.    LEGG  529 

are  disposed  to  think,  have  been  no  answer  to  the  action  that  the 
plaintiff  had  discontinued  one.  But  this  is  an  action  for  not  contin- 
uing to  serve  as  an  apprentice;  and  although  the  later  services  of 
an  apprentice  are  much  more  valuable  than  the  early,  and  are  in 
part  a  compensation  to  the  master  for  his  instruction  in  the  com- 
mencement of  the  apprenticeship,  and  so  are  analogous  in  some 
degree  to  an  apprentice  fee  payable  in  futuro,  yet  the  immediate 
cause  of  action  is  the  breach  of  the  contract  to  serve,  and  the  obli- 
gation to  serve  depends  upon  the  corresponding  obligation  to  teach 
as  an  apprentice;  and,  if  the  master  is  not  ready  to  teach  in  the 
very  trade  which  he  has  stipulated  to  teach,  the  apprentice  is  not 
bound  to  serve.  To  this  particular  covenant  to  serve,  the  relative 
duty  to  teach  seems  to  us  to  be  directly  a  condition  precedent;  and 
we  are  not  able  to  distinguish  between  the  three  trades  of  auctioneer, 
appraiser,  and  corn-factor,  so  as  to  say  that  one  is  more  the  sub- 
stantial part  of  the  contract  than  another. 

As  the  plaintiff  by  his  own  fault  has  disabled  himself  from  acting 
as  a  master  in  all  the  three  trades,  he  has  no  right  to  complain  of 
the  defendant's  son  refusing  to  continue  to  serve  in  any. 

Our  judgment  will,  therefore,  be  for  the  defendant. 

Judgment  for  the  defendant} 


GEAVES  V.  LEGG  and  Another 

In  the  Exchequek,  May  9,  1854 

[Reported  in  9  Exchequer  Reports,  709] 

The  declaration  stated,  that  it  was  on  the  19th  of  May,  1853, 
through  Messrs.  H.  &  E.,,  brokers  at  Liverpool,  agreed  between  the 
plaintiff  and  defendants  in  manner  following,  that  is  to  say,  the 
plaintiff  then  agreed  to  sell  to  the  defendants,  and  the  defendants 
to  buy  of  the  plaintiff,  about  300  to  350  bales  white  washed  Donskoy 
fleece  wool,  to  arrive,  at  lOY^d.  per  pound,  laid  down  either  at  Liver- 
pool, Hull,  or  London,  deliverable  at  Odessa  during  August  then 
next,  old  style,  to  be  shipped  with  all  despatch,  warranted  fair  average 
quality,  but,  should  they  prove  otherwise,  to  be  taken  with  a  fair 
allowance,  which  it  was  mutually  agreed  between  buyer  and  seller 

^  Compare  the  following  apprenticeship  cases.  Winstone  v.  Linn,  1  B.  &  C.  460; 
Wise  V.  WUson,  1  C.  &  K.  662;  Phillips  v.  Clift,  4  H.  &  N.  168;  Raymond  v.  Minton, 
L.  R.  1  Ex.  244;  Learoyd  v.  Brook,  [1891]  1  Q.  B.  431;  United  States  v.  Scholfield, 
1  Cranch  C.  C.  255;  Gusty  v.  Diggs,  2  Cranch  C.  C.  210;  Warner  v.  Smith,  8  Conn. 
14;  M'Grath  v.  Hemdon,  4  T.  B.  Mon.  480;  Powers  v.  Ware,  2  Pick.  451;  Common- 
wealth V.  Linker,  8  Phila.  455;  Commnwealth  v.  Edwards,  6  Binney,  203;  Common- 
wealth V.  Deacon,  6  S.  &  R.  526.  Promises  in  other  partly  bilateral  contracts  were 
held  dependent  in  Allen  v.  Saunders,  7  B.  Mon.  593;  Jones  v.  Marsh,  22  Vt.  144. 


530  GRAVES    V.    LEGG  [CHAP.   V 

should  be  assessed  by  the  said  Messrs.  H.  &  R. ;  subject  to  the  safe 
arrival  of  the  wool  in  good  condition  at  any  of  the  ports  stated,  and 
the  names  of  the  vessels  to  be  declared  as  soon  as  the  wools  were 
shipped;  customary  allowances,  payment,  cash  in  fourteen  days,  less 
1^  per  cent  discount,  from  the  date  of  finishing  loading.  Which 
agreement  being  made,  afterwards  the  said  wool,  being  333  bales  of 
wool  of  the  quality  and  description  in  the  said  agreement  mentioned, 
was,  during  the  said  month  of  August,  old  style,  delivered,  to  wit, 
by  the  growers  thereof  at  Odessa,  to  wit,  to  the  agents  of  the  plain- 
tiff in  that  behalf,  and  was  with  all  despatch  then  shipped  there  on 
board  a  certain  vessel  called  the  Science,  which  said  vessel  then 
sailed  from  Odessa  with  the  said  wool  on  board  thereof,  and  after- 
wards, to  wit,  on  the  22d  of  ISTovember,  1853,  arrived  at  Liverpool 
with  the  said  wool  on  board  safe  and  in  good  condition,  and  ac- 
cording to  the  terms  of  the  said  contract;  and  the  plaintiff  says, 
that  the  defendants  have  had  notice  of  all  the  said  premises,  and 
that  a  reasonable  time  for  the  defendants  to  accept  the  said  wools 
after  the  same  arrived,  and  to  fulfil  their  part  of  the  contract,  and 
pay  for  the  said  wools,  has  long  since  elapsed,  and  that  he  the  plain- 
tiff has  at  all  times  performed  and  fulfilled,  and  been  ready  and 
willing  to  perform  and  fulfill,  all  conditions  precedent  to  his  right 
to  have  the  said  wools  accepted  and  paid  for,  and  to  his  right  to 
maintain  this  action.  Yet  the  defendant  would  not  at  any  time 
accept  nor  pay  for  the  said  wools,  or  any  part  thereof. 

Plea:  that  the  defendants  agreed  with  the  plaintiff  to  buy  the 
said  wool  in  the  declaration  mentioned,  for  the  purpose  of  reselling 
the  same  in  the  way  of  their,  the  defendants',  trade  and  business  of 
wool-dealers,  and  thereby  acquiring  gains  and  profits.  And  further, 
that  wool  is  an  article  that  fluctuates  greatly  in  price  in  the  market ; 
and  that  the  defendants  could  only  resell  the  said  wool  as  aforesaid 
when,  and  not  before,  the  defendants  had  notice  of  the  same  being 
shipped,  and  when  and  not  before  the  name  of  the  vessel  in  which  it 
was  so  shipped  had  been  declared,  according  to  the  said  contract  in 
the  declaration  mentioned ;  of  all  which  premises  the  plaintiff,  at 
the  time  of  the  making  of  the  said  agreement,  had  notice;  and  further 
that,  although  the  plaintiff  had  such  notice,  yet  the  plaintiff  did 
not  declare  to  the  defendants,  or  either  of  them,  the  name  of  the 
vessel  in  which  the  said  wool  was  shipped,  or  within  the  time  at  or 
within  which  he  was  by  the  agroomont  bound  to  declare  the  same, 
that  is  to  say,  as  soon  as  such  wool  was  so  shipped,  but  omitted  so 
to  do  and  delayed  and  omitted  so  to  declare  the  name  of  the  said 
vessel  in  wbich  the  said  wool  was  so  shipped  as  in  the  said  declara- 
tion mfintioned,  or  to  give  the  defendants  any  notice  of  the  same  being 
so  8hipj)fd,  for  a  long  and  unroasoniibh;  time  after  the  same  was 
80  shippec];  and  the  defendants  had  not  notice  of  the  shipment  of 
the  said  wool,  or  of  the  name  of  the  vessel  in  which  the  same  had 
been  shipped,  until  after  the  expiration  of  a  long  and  unreasonable 


SECT.   II  ]  GRAVES    V.    LEGG  531 

time  after  the  same  had  been  so  shipped,  and  after  the  plaintiff 
was  bound  and  ought  to  have  given  and  declared  the  same,  and 
might  and  could  have  done  so;  and  further,  that  between  the  time 
when  the  name  of  the  said  vessel  ought  to  have  been  declared  ac- 
cording to  the  said  agreement  in  the  said  declaration  mentioned,  and 
the  time  when  it  was  first  declared  to  the  defendants,  or  when  they 
first  had  any  notice  of  the  said  ship  having  sailed  with  the  said  wool 
on  board  thereof,  the  price  of  wool  in  the  market  had  greatly  fallen, 
and  the  said  wool  thence  continually  remained  so  fallen  in  price, 
and  the  same,  when  the  name  of  the  said  vessel  was  first  declared, 
and  when  the  defendants  first  had  notice  or  knowledge  of  the  same 
having  been  so  shipped,  would  sell  or  could  be  sold  only  for  a  much 
less  sum  of  money  than  it  would  have  done  at  the  time  when  the 
plaintiff  ought  to  and  could  have  declared  the  name  of  the  said 
vessel,  or  given  the  defendants  such  notice  as  aforesaid.  Wherefore 
the  defendants  did  not  nor  would  accept  or  pay  for  the  said  wool, 
as  in  the  said  declaration  mentioned. 

Demurrer  and  joinder. 

The  case  was  argued  in  the  present  Term  (May  3),  by 

Blackburn,  in  support  of  the  demurrer. 

C.  E.  Pollock,  contra. 

The  judgment  of  the  Court  was  now  delivered  by 

Parke,  B.  The  pleadings  in  this  case  are  these  (his  lordship 
stated  them,  and  proceeded)  :  The  question  raised  by  these  pleadings 
is  whether  the  provision,  that  the  names  of  the  vessels  should  be  de- 
clared as  soon  as  the  wools  were  shipped,  was  a  condition  precedent 
to  the  defendants'  obligation  to  accept  and  pay  for  the  wools  accord- 
ing to  the  contract  stated  in  the  declaration,  and  under  the  circum- 
stances stated  in  the  plea. 

This  contract,  we  think,  is  to  be  construed  with  reference  to  some 
of  those  circumstances.  It  is  stated  in  the  plea,  that  the  wool  was 
bought,  with  the  knowledge  of  both  parties,  for  the  purpose  of  re- 
selling it  in  the  course  of  the  defendants'  business;  that  it  is  an  ar- 
ticle of  fluctuating  value,  and  not  salable  until  the  names  of  the 
vessels  in  which  it  was  shipped  should  have  been  declared  according 
to  the  contract. 

The  declaration  having  averred,  according  to  the  57th  section  of 
the  Common  Law  Procedure  Act,  the  performance  of  conditions 
precedent  generally,  the  defendant  proceeds  in  this  plea  to  specify 
this  condition  of  declaring  the  names  of  the  vessels,  as  one  on  the 
breach  of  which  he  insists.  The  loss  which  he  avers  to  have  sus- 
tained by  that  breach  is  immaterial.  The  only  question  is,  whether 
the  performance  of  the  agreement  was  a  condition  precedent  or  not 
to  the  defendants'  contract  to  accept  and  pay  for  the  goods. 

In  the  numerous  cases  on  the  subject,  in  which  it  has  been  laid 
down  that  the  general  rule  is  to  construe  covenants  and  agreements 
to  be  dependent  or  independent  according  to  the  intent  and  meaning 


532  GRAVES    V.    LEGG  [CHAP.   V 

of  tlie  parties  to  be  collected  from  the  instrument,  and  of  course  to 
the  circumstances  legally  admissible  in  evidence  with  reference  to 
which  it  is  to  be  construed,  one  particular  rule  well  acknowledged 
is,  that  where  a  covenant  or  agreement  goes  to  part  of  the  considera- 
tion on  both  sides,  and  may  be  compensated  in  damages,  it  is  an 
independent  covenant  or  contract,  and  an  action  might  be  brought 
for  the  breach  of  it  without  averring  performance  in  the  declaration, 
under  the  old  system  of  pleading;  and  under  the  new,  the  denial  of 
such  performance  would  be  bad;  and  the  cases  of  Campbell  v. 
Jones  and  Boone  v.  Eyre^  are  instances  of  the  application  of  the 
rule.  But  then  it  appears,  as  Mr.  Serjt.  Williams  observes  in  1 
Saund.  320  d  (atfd  the  Lord  Chief  Baron,  in  delivering  the  judg- 
ment of  this  Court  in  Ellen  v.  Topp,  adopts  the  observation),  the 
reason  of  the  decision  in  that  and  similar  cases,  besides  the  inequality 
of  damages,  seems  to  be,  that  where  a  person  has  received  part  of 
the  consideration  for  which  he  entered  into  the  agreemnt,  it  would 
be  unjust  that,  because  he  had  not  the  whole,  he  should  therefore 
be  permitted  to  enjoy  that  part  without  either  payment  or  doing  any 
thing  for  it.  Therefore  the  law  obliges  him  to  perform  the  agree- 
ment on  his  part,  leaving  him  to  his  remedy  to  recover  any  damage 
he  may  have  sustained  in  not  having  received  the  whole  considera- 
tion. Mr.  Serjt.  Williams  goes  on  to  observe  that  it  must  appear 
upon  the  record  that  the  consideration  was  extended  in  part.  This 
may  appear  by  the  instrument  declared  on  itself,  whereby  a  valuable 
right,  part  of  the  consideration,  is  conveyed,  as  in  Campbell  v.  Jones 
or  Boone  v.  Eyre,  or  by  averment  in  pleading.  When  that  appears, 
it  is  no  longer  competent  for  the  defendant  to  insist  upon  the  non- 
performance of  that  which  was  originally  a  condition  precedent;^ 
and  this  is  more  correctly  expressed,  than  to  say  it  was  not  a  con- 
dition precedent  at  all. 

In  this  case,  if  the  stipulation  that  the  names  of  the  vessels  should 
be  stated  as  soon  as  the  wools  were  shipped  was  originally  a  con- 
dition precedent,  it  is  so  still.  No  other  benefit  was  taken  under 
the  contract  itself,  as  the  consideration  for  the  promise  to  pay  the 
money,  than  the  shipment  and  delivery  of  the  goods  by  the  named 
vessels;  nor  was  any  subsequently  received  by  the  acceptance  of  the 
goods  or  any  part  thereof.  After  such  acceptance,  the  defendants 
would  have  been  bound  to  pay  the  price,  or  the  residue  of  it,  and 
could  not  have  insisted  on  the  neglect  to  name  in  due  time,  but,  if 
tlierr;  liad  been  any  such  neglect,  would  nevertheless  have  had  their 
remorly  for  the  damage  by  cross-action  on  the  contract  to  declare 
the  names.  In  the  state  of  things  on  tliis  record,  the  simple  question 
is,  wh(!ther  this  contract  was   originally  a  condition  precedent  or 

1  2  Black.  Rep.  1312,  1315. 

«  Scr-  Wliitr.  7).  n.fton,  7  TI.  ft  N.  42;  Kauffmnn  v.  Racdor,  108  Fod.  Rop.  (C.  C.  A.) 
171;  Kcllor  v.  Reynolds,  12  Ind.  App.  383;  Swobt;  v.  Now  Omaha  Electric  Light,  39 
Nob.  580. 


SECT.    II  ]  OLLIVE    V.    BOOKER  533 

not.  Looking  at  the  nature  of  the  contract,  and  the  great  impor- 
tance of  it  to  the  object  with  which  the  contract  was  entered  into 
with  the  knowledge  of  both  parties,  we  think  it  was  a  condition 
precedent,  quite  as  much  indeed  as  the  shipping  of  the  goods  at 
Odessa,  with  all  despatch,  after  the  end  of  August.  And  with  respect 
to  the  shipment  itself,  Mr.  Blackburn  did  not  venture  to  contend  that 
the  performance  of  the  plaintiff's  contract  in  that  respect  was  not 
a  condition  precedent. 

The  defendants,  therefore,  have  a  right  to  object  to  fulfil  the  con- 
tract on  their  part,  as  the  plaintiff  did  not  fulfil  his,  though  they 
could  no  longer  object  to  the  plaintiff's  non-performance  had  they 
afterwards  taken  any  benefit  under  the  contract. 

Judgment  for  the  defendants} 


OLLIVE  V.  BOOKER 

In  the  Exchequer,  November  13,  1847 

[Reported  in  1  Exchequer  Reports,  416] 

Assumpsit  to  recover  damages  for  breach  of  a  contract  of  charter- 
party,  which  was  in  the  following  terms:  "London,  24th  December, 
1844.  Charter-party.  It  is  this  day  mutually  agreed  between  Messrs. 
Ollive,  Nephew,  &  Co.,  original  charterers  of  the  good  ship  or  vessel 
called  the  Dove,  A  1,  of  the  measurement  of  149  tons  or  thereabouts, 
now  at  sea,  having  sailed  three  weeks  ago,  and  Messrs.  Booker  & 
Co.,  merchants,  that  the  said  ship,  being  tight,  staunch,  and  strong, 
and  every  way  fitted  for  the  voyage,  shall  with  all  convenient  speed 
sail  and  proceed  to  Marseilles  (after  having  delivered  her  cargo  at 
Genoa  for  ship's  account),  or  so  near  thereunto  as  she  may  safely 
get,  and  there  load  from  the  factors  of  the  said  charterers  a  full 
cargo  of  linseed  or  other  goods,  which  the  said  merchants  bind  them- 
selves to  ship,  not  exceeding  what  she  can  reasonably  stow  and  carry 
over  and  above  her  tackle,  apparel,  provisions,  and  furniture;  and, 
being  so  loaded,  shall  therewith  proceed  to  one  safe  port  in  the  United 

*  "The  right  of  a  party  to  enforce  a  contract  will  not  be  forfeited  or  lost  by  reason 
of  technical,  inadvertent,  or  unimportant  omissions  or  defects.  A  substantial  perform- 
ance must  be  established,  in  order  to  entitle  the  party  claiming  the  benefit  of  the  con- 
tract to  recover;  but  this  does  not  mean  a  literal  compliance  as  to  details  that  are 
unimportant.  There  must  be  no  wilful  or  intentional  departure,  and  the  defects  of 
performance  must  not  pervade  the  whole,  or  be  so  essential  as  substantially  to  defeat 
the  object  which  the  parties  intended  to  accomplish.  Whether,  in  any  case,  such 
defects  or  omissions  are  substantial,  or  merely  unimportant  mistakes  that  have  been 
or  may  be  corrected,  is  generally  a  question  of  fact."  Miller  v.  Benjamin,  142  N.  Y. 
613,  617.  Applications  of  this  principle  to  cases  where  a  partial  breach  was  held  fatal 
may  be  found  in  Glazebrook  v.  Woodrow,  8  T.  R.  366;  H.  D.  Williams  Cooperage 
Co.  V.  Schofield,  115  Fed.  Rep.  (C.  C.  A.)  119;  Worthington  v.  Gwin,  119  Ala.  44; 
Leopold  V.  Salkey,  89  111.  412;  Lake  Shore,  &c.  Ry.  Co.  v.  Richards,  152  111.  59;  Bal- 
lance  v.  Vanuxem,  191  III.  319;  Davis  v.  Jeffris,  6  S.  Dak.  362;  McLean  v.  Brown, 
15  Ont.  313,  16  Ont.  App.  106. 


534  OLLIVE    V.    BOOKER  [CHAP.   V 

Kingdom,  calling  at  Cork  or  Falmouth  for  orders,  which  are 
to  be  given  in  due  course  of  post,  or  so  near  thereunto  as  she  may 
get,  and  deliver  the  same  on  being  paid  freight  at  and  after  the  rate 
of  55.  6d.  per  imperial  quarter  for  linseed,  or  other  goods  in  full  pro- 
portion, according  to  the  London  printed  rates  delivered,  the  act  of 
God,  restraints  of  princes  and  rulers,  the  Queen's  enemies,  fire,  and 
all  and  every  other  dangers  and  accidents  of  the  seas,  rivers,  and 
navigation,  of  whatever  nature  and  kind  soever,  during  the  said 
voyage,  always  excepted.  The  freight  to  be  paid  on  unloading  and 
right  delivery  of  the  cargo,  one-third  in  cash,  and  the  remainder 
by  an  approved  bill  on  London  at  three  months'  date.  Thirty  work- 
ing days  are  to  be  allowed,  Sundays  excepted,  the  said  merchant  (if 
the  ship  is  not  sooner  despatched)  for  loading  the  said  ship  at  Mar- 
seilles, and  unloading  at  the  return  port;  mats  and  bulkheads  to  be 

found  by  the  charterers,  and  dunnage  by  the  ship,  and days  on 

demurrage,  over  and  above  the  said  laying  days,  at  4Z.  per  day;  the 
penalty  for  the  non-performance  of  this  agreement,  400L/  the  vessel 
to  be  consigned  to  the  freighters'  agents  at  Marseilles;  cash  for  usual 
disbursements  at  Marseilles,  free  of  interest  and  commission  but  the 
insurance.  Bills  of  lading  to  be  signed  for  more  or  less  freight, 
without  prejudice  to  the  charter-party.  Per  proc.  Booker  &  Co., 
Thomas  Booker,  jun. ;  Ed.  Ollive,  jSTephew,  &  Co. ;  John  Aitkin,  wit- 
ness to  the  signature  of  Messrs.  Booker  &  Co.,  and  of  Messrs.  Ed. 
Ollive  &  Co.  The  commission  on  this  charter-party  is  at  51.  per 
cent,  due  ship  lost  or  not  lost.  The  vessel  to  be  addressed  to  Alex- 
ander Howden  or  his  agents  at  the  port  of  discharge." 

The  first  count  of  the  declaration,  after  setting  forth  the  provisions 
of  the  charter-party,  averred  mutual  promises,  and  performance  on 
the  part  of  the  plaintiff,  and  assigned  as  a  breach  that  "the  defendant 
did  not  nor  would,  within  the  space  of  the  said  thirty  working  days 
in  the  said  last-mentioned  charter-party,  ship  a  full  cargo  of  linseed 
or  other  goods,  according  to  the  terms  of  the  said  last-mentioned 
charter-party,  in  or  on  board  the  said  ship  or  vessel,  according  to 
the  tenor  and  effect  of  the  said  last-mentioned  charter-party  and  of 
his  said  promise  aforesaid,  but  on  the  contrary  the  defendant  both 
neglected,"  &c. 

The  eighth  plea  to  the  first  count,  after  setting  out  the  charter- 
party  verbatim,  proceeded  as  follows :  And  the  defendant  avers  that 
upon  the  making  of  the  said  charter-party,  time  was  an  essential  and 
material  part  of  the  contract,  and  that  the  probable  situation  of 
the  vessel,  with  reference  to  the  dat(!  of  her  sailing,  was  also  a  ma- 
terial and  essential  part  of  the  contract,  to  wit,  with  reference  to  the 
object  of  the  said  voyage  and  the  distance  of  the  said  port  of  Mar- 
s(ril]es,  and  the  nature  of  the  said  intended  cargo  and  the  time  of 
year  at  wliich  the  said  charter-party  was  made.  And  the  defendant 
further  says,  that  in  point  of  fact  at  the  time  of  the  making  of  the 
said  charter-party  the  said  vessel  had  not  sailed  three  weeks  before^ 


SECT.    II ]  OLLIVE    V.    BOOKER  535 

but  on  the  contrary  had  sailed  at  a  materially  and  unreasonably 
later  time,  to  wit,  one  week  later,  which  the  plaintiff  at  the  time  of 
the  making  of  the  said  charter-party  knew,  and  whereof  the  defendant 
had  no  notice  or  knowledge;  wherefore  the  defendant  wholly  de- 
clined to  accept  or  employ  the  said  vessel  under  the  said  charter- 
party,  to  wit,  immediately  upon  learning  and  knowing  that  the 
said  vessel  had  not  sailed  as  in  the  said  charter-party  set  forth,  to 
wit,  upon  the  1st  of  February,  1845,  and  wholly  neglected  and  re- 
fused to  load  any  cargo  on  board  her,  to  wit,  upon  the  day  and  year 
last  aforesaid,  as  he  lawfully  might  for  the  cause  aforesaid.  Veri- 
fication.   Replication,  de  injuria.^ 

At  the  trial,  at  the  Sittings  after  last  Hilary  Term,  before  the 
Lord  Chief  Baron,  a  verdict  was  found  for  the  plaintiff  upon  all  the 
issues,  except  those  raised  by  the  eighth,  ninth,  and  eleventh  pleas, 
and  upon  these  issues  the  defendant  had  a  verdict;  leave  being  re- 
served to  the  plaintiff  to  move  to  enter  a  verdict  upon  them  also. 

Crowder  having  obtained   a  rule  nisi  accordingly,   and  also  for 
judgment  non  obstante  veredicto  upon  the  eighth  plea. 
Watson  and  Greenwood  now  showed  cause. 

Parke,  B.  I  am  of  opinion  that  the  rule  for  judgment  non  ob- 
stante veredicto  on  the  eighth  plea  ought  to  be  discharged.  It  seems 
to  me  that  the  averment  in  the  plea,  that  at  the  time  of  entering 
into  the  charter-party  the  plaintiff  knew  that  the  vessel  had  sailed 
a  materially  and  unreasonably  later  time  than  that  which  was  stipu- 
lated for,  is  an  immaterial  averment,  and  might  be  struck  out.  The 
main  question,  however,  in  the  construction  of  this  plea,  is,  whether 
the  allegation  in  the  charter-party,  of  the  vessel  being  "now  at  sea, 
having  sailed  three  weeks  ago,"  is  a  warranty  or  a  representation. 
In  the  construction  of  agreements,  as  in  the  case  of  contracts  under 
seal,  we  should  endeavor  to  discover  the  intention  of  the  parties. 
Here  it  is  stated  that  the  vessel  was  now  at  sea,  having  sailed  three 
weeks;  and,  if  time  is  of  the  essence  of  the  contract,  no  doubt  it  is 
a  warranty  and  not  a  representation.  Such  also  is  the  case  in 
policies  of  insurance.  It  appears  to  me  that  it  is  a  warranty,  and 
not  a  representation,  that  the  vessel  had  sailed  three  weeks.  It  is, 
therefore,  a  condition  precedent.  The  rule  depends  upon  each  par- 
ticular contract,  and  here  time  was  of  the  essence  of  the  contract, 
as  much  so  as  the  statement  that  she  was  a  sound  vessel.  This  being 
a  condition  precedent,  and  not  performed,  the  defendant  was  not 
bound  to  load  the  vessel.  If  he  had  loaded  her,  the  breach  of  the 
condition  would  have  been  waived,  and  he  would  have  been  liable 
for  the  full  freight.  I  entirely  agree  with  the  reasoning  of  Tindal, 
C.  J.,  in  the  case  of  Glaholm  v.  Hays,  which  I  think  applies  to  the 
present  case.  There  the  stipulation  was  held  to  be  a  condition  prece- 
dent. The  defendant  was  entitled  to  say  that  he  was  not  bound  to 
load  the  vessel,  as  the  condition  had  not  been  performed,  and  that 
*  The  statement  of  the  pleadings  has  been  materially  abbreviated. 


536  THOMPSON    V.    GILLESPY  [CHAP,   V 

the  case  was  tlie  same  as  if  the  vessel  had  not  proved  to  be  A  1,  as 
she  was  warranted  to  be.  I  think,  therefore,  that  the  plea  affords 
a  good  answer,  and  that  the  rule  for  judgment  non  obstante  veredicto 
ought  to  be  discharged. 

Aldeeson,  B.  I  am  of  the  same  opinion.  The  words  which 
describe  the  ship  as  being  A  1  amount  to  a  warranty,  and  the  state- 
ment that  she  had  sailed  for  three  weeks  is  equally  so.  The  ques- 
tion, whether  these  words  amount  to  a  condition  precedent  has  been 
decided  by  Glaholm  v.  Hays;  the  reasonings  there  are  applicable 
to  the  present  case,  and  I  am  unable  to  distinguish  the  two  cases. 

RoLFE,  B.  I  am  of  the  same  opinion.  The  stipulation  in  the 
present  case  is  not  collateral  matter,  but  is  a  part  of  the  contract. 
I  agree  with  the  rest  of  the  Court,  that  the  case  in  the  Common 
Pleas  governs  this.  There  the  stipulation  was  that  the  vessel  should 
sail,  but  that  makes  no  difference.  The  condition  was  founded  upon 
the  object  that  she  should  load  her  cargo  in  a  certain  time;  and  if 
it  had  been  that  she  should  load  in  six  weeks,  that  being  the  length 
of  the  voyage,  that  would  be  the  same  as  a  condition  that  she  should 
load  in  the  ordinary  time,  of  which  she  had  already  been  three  weeks 
at  sea.  I  think  the  case  is  governed  by  that  in  the  Common  Pleas, 
which  is  consistent  with  common  sense  and  reason.  The  rule,  there- 
fore, for  judgment  non  obstante  veredicto  must  be  discharged. 

Rule  discharged.^ 


THOMPSON  AND  Others  v.  GILLESPY 

In  the  Queen's  Bench,  June  1,  1855 

{^Reported  in  5  Ellis  &  BlacTcburn,  209] 

The  first  count  of  the  declaration  alleged  that  a  charter-party  was 
made  and  entered  into  by  and  between  plaintiffs  and  defendant,  of 
which  the  following  is  a  copy:  "London,  14th  October,  1854.  —  It 

»  See  also  Glaholm  v.  Hayes,  2  M.  <fe  G.  257;  Behn  v.  Burness,  3  B.  &  S.  751;  Cork- 
ling  V.  Massey,  L.  R.  8  C.  P.  395;  Oppenheim  v.  Fraser,  34  L.  T.  524;  Bentsen  v. 
Taylor,  [1893]  2  Q.  B.  274;  Lowber  v.  Bangs,  2  Wall.  728;  Davison  v.  Von  Lingen, 
113  U.  S.  40-  Deshon  v.  Fosdick,  1  Woods,  286;  The  Orsino,  24  Fed.  Rep.  918;  The 
March,  25  Fed.  Rep.  106;  Pedersen  v.  PaKcnstccher,  32  Fed.  Rep.  841;  Gray  v. 
Mooro,  37  Fed.  Rep.  266;  The  B.  F.  Bmcc,  50  Fed.  Rep.  123;  Olsen  v.  Hunter-Benn, 
54  Fefl.  Rep.  530;  Holmes,  Common  Law,  328.  In  Behn  v.  Burness,  Williams,  J., 
said:  "With  respect  to  statements  in  a  contract  descriptive  of  the  subject-matter  of 
it,  or  of  some  in.'itcrial  incident  thereof,  the  true  doctrine,  established  by  principle  as 
well  as  autliority,  appears  to  be,  Kenerally  spcakinir,  that  if  such  descri[)tive  statement 
was  int<;nd('d  to  Ix;  a  substantive  part  of  the  contract,  it  is  to  be  regarded  as  a  warranty, 
that  is  to  say,  a  condition,  on  the  failure  or  non-performance  of  which  the  other  party 
may,  if  he  is  so  minded,  repudiate  the  contract  in  toto,  and  so  be  relieved  from  perform- 
inK  his  part  of  it,  provided  it  has  not  been  partially  executed  in  his  favor.  If,  indeed, 
he  has  r<'Cc'ived  the  whoh;  or  any  substantial  part  of  the  consideration  for  the  promise 
on  hia  r)art,  the  warranty  losses  the  character  of  a  condition,  or,  to  s[)eak  perhaps  more 
properly,  ceases  to  be  available  as  a  condition,  and  becomes  a  warranty  in  the  narrower 
Bcnw!  of  tli«;  word,  viz.,  a  stii)uiation  by  way  of  aKnjement,  for  the  breach  of  which  a 
oompensation  muut  be  douKht  in  damages."  This  test  was  approved  in  Bentsen  v. 
Taylor. 


SECT.    Il]  THOMPSON    V.    GILLESPY  537 

is  this  day  mutually  agreed  between  Messrs.  R.  Thompson  &  Sons, 
owners  of  the  good  ship  or  vessel  called  the  Mary  Graham,  whereof 
is  master,  of  the  measurement,"  &e.,  "now  at  Sunder- 
land, and  Thomas  Gillespy,  of  London,  merchant,  that  the  said  ship, 
being  tight,  staunch,  and  strong,  and  every  way  fitted  for  the  voyage, 
shall,  with  all  convenient  speed,  at  Sunderland,  load  from  the  factors 
of  the  said  merchant,  in  the  customary  manner  and  in  regular  turn, 
a  full  and  complete  cargo  of  Londonderry  or  Lambton's  Wallsend 
coals,  whichever  is  readiest;  which  the  said  merchant  binds  himself 
to  ship,  not  exceeding  what  she  can  reasonably  stow  and  carry  over 
and  above  her  tackle,"  &c.  "And,  being  so  loaded,  shall  therewith 
proceed  to  Constantinople  for  orders,  to  deliver  there,  or  Stenea  or 
Beicos  Bay,  or  at  Varna,  or  a  safe  place  in  the  Black  Sea,  or  so  near 
thereunto  as  she  may  safely  get,  and  deliver  the  same,  in  her  regular 
turn,  into  craft,  steamer,  or  depot  ship,  at  any  wharf  or  pier  where 
she  may  safely  lie,  as  may  be  directed  by  the  consignee,  being  paid 
freight  on  the  quantity  delivered  in  the  manner  after  mentioned  at 
the  rate  of  34/.  per  kiel  of  21^  tons,  if  discharges  at  Constantinople, 
Stenea,  or  Beicos,"  &c.  (other  rates  for  a  discharge  elsewhere),  "in 
full  of  all  port  charges,  consulages,  pilotages,  Ramsgate  and  Dover 
dues;  the  act  of  God,"  &c.,  excepted.  "The  balance  of  freight  to 
be  paid  by  an  approved  bill  on  London,  at  three  months'  date  from 
the  production  of  the  consignee's  certificate  of  the  right  delivery  of 
the  cargo  at  as  aforesaid,  agreeably  to  bills  of  lading,  or  in  cash 
equal  thereto,  at  charterer's  option."  Then  followed  stipulations  as 
to  rate  of  unloading,  running  days  for  the  same,  and  demurrage  for 
excess;  and  other  clauses  not  now  material.  "One-fourth  of  the 
freight  to  be  advanced  to  the  owner's  agent  in  London,  on  the  ship 
having  sailed,  less  five  per  cent  thereon  for  insurance,  interest,  and 
commission:  penalty  for  non-performance  of  this  agreement,  the 
estimated  amount  of  freight."  Signed  by  defendant  and  plaintiffs. 
Averment :  That  the  persons  in  the  said  charter-party  mentioned  and 
described  as  Messrs.  E.  Thompson  &  Sons,  were  and  are  plaintiffs, 
and  that  the  person  therein  mentioned  and  described  as  Thomas 
Gillespy  was  and  is  defendant.  That  defendant  caused  the  ship  to 
be  loaded  with  a  full  and  complete  cargo  of  coals,  to  wit,  pursuant 
to  the  said  charter-party;  and  that  the  said  ship,  being  so  loaded, 
sailed,  to  wit,  for  Constantinople,  pursuant  to  the  said  charter-party. 
That  plaintiffs  did,  and  were  ready  to  do,  all  things  necessary  on 
their  part,  and  that  all  things  necessary  happened  and  were  done, 
to  entitle  plaintiffs,  to  wit,  by  their  agent  in  London,  to  receive,  and 
to  render  defendant  liable  to  pay  to  their  agent  in  London,  the  one- 
fourth  part  of  the  said  freight,  by  the  said  charter-party  agreed  to 
be  advanced  to  the  plaintiff's  agent  in  London  on  the  ship  having 
sailed,  less  5L  per  cent  thereon  for  insurance  and  commission.  That 
the  said  one-fourth  part  of  the  freight,  less  5?.  per  cent  as  aforesaid, 
amounted  to  a  large,  &c.,  to  wit,  214/.     Yet  defendant  hath  not 


538  THOMPSON    V.    GILLESPY  [CHAP,   V 

paid  the  same,  or  any  part  thereof,  to  plaintiffs,  or  to  their  agent  in 
London. 

Second  count,  for  money  payable  by  defendant  to  plaintiffs  for 
freight  for  the  conveyance  by  plaintiffs  for  defendant,  at  his  request, 
of  goods  in  ships;  and  for  money  found  to  be  due  from  defendant  to 
plaintiffs  on  accounts  stated  between  them. 

Pleas :  1.  To  the  first  count :  That  the  said  ship  did  not  sail  as 
alleged. 

2.  To  the  first  count :  That  the  said  ship  was  not,  at  the  commence- 
ment of  the  said  voyage,  tight,  staunch,  and  strong,  and  every  way 
fitted  for  the  voyage;  and  that,  by  reason  of  the  premises,  the  said 
ship  and  the  said  cargo  of  coal  were  wholly  lost. 

3.  To  the  first  count :  That  the  plaintiff  not  only  wrongfully  and 
negligently  sent  the  said  ship,  so  loaded  as  in  the  said  first  count 
mentioned,  out  to  sea  in  an  unseaworthy  state,  and  without  a  proper 
and  sufficient  crew  to  navigate  her  on  the  said  voyage,  and  when 
she  was  not  fitted  for  the  said  voyage,  and  at  a  time  when  it  was 
very  dangerous  for  the  said  ship  to  proceed  to  sea ;  but  the  defendant 
says  that,  after  the  said  ship  had  been  so  as  aforesaid  sent  to  sea, 
and  while  she  was  on  the  high  seas  near  to  the  sea-shore,  the  plain- 
tiffs wrongfully  and  negligently  caused  and  permitted  the  master  of 
the  said  ship  to  leave  the  said  ship,  and  go  ashore,  and  wrongfully 
and  improperly  caused  and  permitted  the  said  ship  to  be  left  there, 
to  wit,  on  the  high  seas,  near  to  the  sea-shore,  for  a  great  length  of 
time,  without  a  master,  without  a  proper  and  sufficient  crew  to 
manage  and  navigate  her :  during  which  time  the  said  ship,  by  reason 
of  the  premises,  sunk  and  was  wholly  lost;  and  the  said  cargo  of 
coals  was  also,  by  reason  of  the  premises,  wholly  lost. 

4.  To  the  residue  of  the  declaration:  ISTever  indebted. 

The  plaintiffs  joined  issue  on  all  four  pleas,  and  also  demurred 
to  the  second  and  third. 

Joinder  in  demurrer. 

The  demurrer  was  argued  in  last  Easter  Term. 

Atherton,  for  the  plaintiffs.  As  to  the  second  plea.  The  question 
on  this  demurrer  is  not  whether  the  facts  there  stated  afford  ground 
for  an  action  by  defendant  against  plaintiffs,  but  whether  they  con- 
stitute a  defence  in  this  action.  Now  the  first  averment,  that  the 
ship  was  not  seaworthy  at  the  commencement  of  the  voyage,  is  no 
answer  to  an  action  for  freight,  inasmuch  as  whether  seaworthy  or 
not  she  might  still  perform  the  voyage  and  earn  freight;  and  the 
rules  applicable  to  an  ordinary  action  for  freight  must  be  applicable 
to  an  action  like  this  for  a  portion  of  the  freight.  But  then  does 
the  additional  averment  that  the  ship  was  lost  by  reason  of  the  un- 
Sf-awortliincHs  aid  the  defence?  Wlun-e  a  defoidant  sets  up  damage 
to  binisflf  as  an  answer  to  a  declaration,  he  must  at  least  show  clear 
damage;  on  his  side  equivalent  to  the  damage  sustained  by  the  plain- 
tiff.   "A  cause  of  action  against  a  fdaintifT  will  be  no  bar  to  an  action 


SECT.    II ]  THOMPSON    V.    GILLESPY  539 

by  liim  for  avoiding  circuity  of  action,  when  the  recovery  in  both 
actions  is  not  equal."  Note  (2)  to  Turner  v.  Davies.^  [Alanisty, 
who  was  for  the  defendant,  mentioned  Charles  v.  Altin.^  Lord 
Campbelll,  C.  J.  The  litigation  is  not  put  an  end  to  unless  the 
damages  are  equivalent.]  Here  the  damage  sustained  by  the  loss 
of  the  cargo  might  be  greater  or  less  than  the  freight.  It  might 
happen  that  the  cargo,  on  arriving  at  Constantinople,  from  the 
state  of  the  market  or  other  circumstances,  was  not  worth  the  freight. 
[Erle,  J.  Suppose  the  contract  to  be,  if  I  give  you  a  straw  you 
shall  give  me  1,000/. :  the  giving  of  the  straw  is  a  condition  precedent 
to  getting  the  1,000Z.  I  think  that  is  the  rule  applied  to  such  mutual 
contracts  as  this.]  That  would  be  to  construe  this  charter-party  as 
making  the  contract  to  pay  the  freight  in  advance  dependent  on  the 
fulfilment  of  a  warranty.  There  are  three  cases :  first,  where  the 
act  of  one  party  is  a  condition  precedent  to  his  calling  on  the  other 
to  act :  secondly,  where  there  are  simply  mutual  stipulations ;  thirdly, 
where  the  performance  of  the  two  acts  is  to  be  simultaneous.  The 
utmost  that  can  be  said  is,  that  this  is  a  case  of  the  third  kind;  but 
how  can  the  right  to  the  advance  of  freight  be  simultaneous  with  a 
right  to  have  the  use  of  the  ship  during  the  whole  voyage  which  is 
to  ensue?  [Erle,  J.  The  case  seems  to  me  to  fall  within  the  class 
of  simultaneous  acts;  and  if  the  sailing  were  illusory,  the  plaintiff's 
right  would  not  arise.]  The  defendant  might  raise  that  point  on  a 
traverse  of  the  sailing,  [Lord  Campbell,  C.  J.  There  is  a  great 
difficulty  in  resting  the  defence  upon  the  ground  of  avoiding  circuity; 
but  it  is  a  question  whether  the  freight  was  ever  earned.  Erle,  J. 
Suppose  the  owner  of  the  cargo  had  said,  "I  insist  on  the  ship  not 
sailing,  for  she  is  not  seaworthy."  I  do  not  think  the  actual  loss 
makes  any  difference.]  Suppose  the  vessel  to  have  sailed  on  the  1st 
of  January,  and  not  to  have  been  lost  till  the  1st  of  March;  would 
not  the  plaintiffs  be  entitled  to  recover  the  advanced  freight  ?  [Erle, 
J.  I  am  not  prepared  to  answer  in  the  affirmative :  the  loss  is  only 
evidence  of  the  unseaworthiness.]  According  to  that,  the  slightest 
want  of  completeness  would  be  an  answer  ?  [Erle,  J.  The  question 
may  be  as  to  a  substantial  non-performance,  as  illustrated  by  the 
language  of  Lord  Ellenborough  in  Havelock  v.  Geddes.^  The  con- 
dition precedent  seems  to  be  here  a  complex  idea ;  the  ship  is  to  sail, 
being  staunch,  &c.]  Suppose  the  action  to  have  been  brought  the 
day  after  the  ship  had  sailed,  and  the  plea  to  have  been  that  she 
did  not  sail,  being  staunch,  &c.,  throwing  the  loss  out  of  the  question. 
[Crompton,  J.  There  is  an  old  case  in  Shower  *  which  seems  to 
show  that  where  freight  is  advanced,  if  the  ship  be  afterwards  lost, 
the  freighters  cannot  have  their  money  back.] 

The  third  plea  shows  only  neglect  after  the  vesting  of  the  right 

1  2  Wms.  Saund.  150  b.  '  See  Graves  v.  Legg,  9  Exch.  709,  716. 

*  15  Com.  B.  46.  *  Probably  the  Anonymous  Case  in  2  Show.  283. 


540  THOMPSON    V.    GILLESPY  [CHAP.   V 

of  action.  That,  at  most,  can  be  ground  only  for  a  cross-action. 
Manisty,  contra.  As  to  the  second  plea.  The  contract  was  that 
the  ship  should  sail  in  a  state  reasonably  fit  for  the  voyage.  The 
quarter  of  the  freight  was  to  be  advanced,  subject  to  a  deduction  in 
respect  of  the  insurance,  interest,  and  commission,  which  would  fall 
on  the  defendant.  But  the  insurance  would  be  worthless  unless  the 
ship  was  seaworthy  when  she  sailed.  [Lokd  Campbell,  C.  J.  It 
has  been  held  that  an  advance  like  this  may  be  insured  under  the 
name  of  freight,  though  it  is  not  strictly  freight.^  You  suggest  that 
the  contract  contemplates  the  defendant's  keeping  up  a  contract  of 
insurance.]  Yes :  the  deduction  is  partly  for  the  purpose  of  enabling 
the  defendant  to  insure.  [Lord  Campbell,  C.  J.  Or  to  stand  as  his 
own  insurer.]  That  would  be  the  same  thing,  so  far  as  relates  to  the 
construction  of  the  contract.  The  contract  therefore  must  be  under- 
stood to  contain  a  warranty  by  the  plaintiffs  that  the  ship  would 
sail  in  a  proper  state.  [Erle,  J.  Perhaps,  according  to  a  distinction 
which  has  been  drawn,  it  is  not  so  much  a  warranty  as  an  element 
of  the  contract.]  Even  in  the  case  of  an  action  for  the  price  of 
goods  sold,  it  is  competent  to  show  that  there  is  nothing  recoverable 
because  of  the  breach  of  a  warranty.  If  it  be  necessary  to  inquire 
whether  the  plea  is  good  for  prevention  of  circuity  of  action,  it  is 
to  be  observed  that  Charles  v.  Altin  is  distinguishable.  It  was  there 
held  that  a  plea,  in  order  to  show  a  defence  by  way  of  avoiding  cir- 
cuity of  action,  must  show  that  the  cross-claim  was  for  the  same  sum 
as  that  which  the  plaintiff  demands.  But  that  is  so  here;  for  the 
loss  of  the  quarter  freight  to  the  defendant  is  that  which  the  plain- 
tiff, in  respect  of  the  identical  contract,  would  have  to  make  good 
in  an  action  for  sailing  with  the  ship  in  an  unseaworthy  state;  and 
to  make  two  cross-actions  necessary  for  the  adjustment  of  this  claim 
would  be  to  incur  what  Lord  Denman,  in  Walmesley  v.  Cooper,^ 
calls  "the  scandal  and  absurdity  of  allowing  A.  to  recover  against  B. 
in  one  action,  the  identical  sum  which  B.  has  a  right  to  recover  in 
another  against  A."  That  something  additional  might  be  recovered 
in  the  cross-action  can  make  no  difference.  [Ckompton,  J.  What 
you  would  recover  in  the  cross-action  would  be  the  value  of  the 
goods.]  The  jury  would  be  bound  to  give  the  amount  of  the  loss 
accruing  from  the  payment  of  the  quarter  freight.  [Lord  Campbell, 
C.  J.  That  comes  to  a  case  of  unliquidated  damages;  where  the  cir- 
cuity of  action  principle  applies,  the  cross-demand  ordinarily  sounds 
in  debt.  I  Not  invariably,  as  in  the  case  of  a  covenant  not  to  sue, 
or  a  f'oiitract  to  indemnify.  [Loud  Campbell,  C.  J.  It  is  certainly 
a  reproach  to  our  procedure  that  we  cannot,  as  is  done  in  other  coun- 
tries, always  bring  cross-demands  to  l)e  settled  at  once.]  Connop  v. 
Levy^  furiiishf'S  a  good  instance  of  the  dofenco  which  a  contract  to 
indemnify  supplies. 

>  Son  Hsill  w.  Jfinaon,  4  K.  Sc  B.  500,  509.  '  11  Q.  B.  7G9. 

2   11  A.  &  E.  216,  221,  222. 


SECT.   Il]  THOMPSON    V.    GILLESPY  541 

The  principle  of  avoiding  circuity  of  action  applies  to  the  third 
plea  as  well  as  to  the  second. 

Atherton,  in  reply.  The  amount  sought  by  the  plaintiff  here 
possibly  might,  but  need  not  necessarily,  be  the  same  as  that  which 
the  defendant  would  recover  in  a  cross-action.  Where  that  is  so, 
the  principle  of  avoiding  circuity  does  not  apply.  As  to  the  other 
point,  the  sailing  in  a  proper  condition  was  not  a  condition  prece- 
dent, but  was  the  subject  of  a  mutual  stipulation :  the  quarter  freight, 
if  it  had  been  paid  on  the  ship  sailing,  could  not  have  been  recovered 
back  on  its  being  discovered,  before  the  loss  of  the  ship  was  known, 
that  she  had  sailed  in  an  unseaworthy  state.  The  only  argument 
that  can  be  raised  from  the  deduction  in  respect  of  insurance  is, 
that  both  parties  took  for  granted  that  the  ship  would  be  seaworthy 
at  the  time  of  sailing;  but  that  does  not  make  the  seaworhiness  a 
condition  precedent.  The  sailing  is  a  condition  precedent,  but  not 
the  sailing  in  any  particular  state  of  fitness.  Cur.  adv.  vuU. 

Lord  Campbell,  C.  J.,  now  delivered  the  judgment  of  the  Court. 

This  was  an  action  by  the  owners  of  a  ship  on  a  charter-party, 
whereby  it  was  agreed  between  them  and  the  defendant  that  the 
ship,  being  tight,  staunch,  and  strong,  and  every  way  fitted  for  the 
voyage,  should  at  Sunderland  load  from  the  factors  of  the  defendant 
a  full  cargo  of  coals,  and,  being  so  loaded,  should  therewith  proceed 
to  Constantinople  for  orders,  and  deliver  the  cargo  there  or  at  some 
port  in  the  Black  Sea,  being  paid  freight  on  the  quantity  delivered 
at  certain  stipulated  rates :  "one-fourth  of  the  freight  to  be  advanced 
to  the  owner's  agent  in  London,  on  the  ship  having  sailed,  less  5 
per  cent  thereon  for  insurance,  interest,  and  commission."  The  dec- 
laration alleged  that  the  defendant  caused  the  ship  to  be  loaded  with 
a  cargo  of  coals,  and  "that  the  said  ship,  being  so  loaded,  sailed,  to 
wit,  for  Constantinople,  pursuant  to  the  said  charter-party;"  and 
that,  although  the  plaintiffs  had  done  every  thing  to  entitle  them  to 
an  advance  of  one-fourth  of  the  freight,  amounting  to  2141.,  the  de- 
fendant had  not  paid  the  same  or  any  part  thereof  to  their  agent  in 
London. 

The  second  plea  was,  "That  the  said  ship  was  not,  at  the  com- 
mencement of  the  said  voyage,  tight,  staunch,  and  strong,  and  every 
way  fitted  for  the  voyage;  and  that  by  reason  of  the  premises, 
the  said  ship  and  the  said  cargo  of  coals  were  wholly  lost."  To  this 
plea  there  was  a  demurrer. 

Upon  the  argument  before  us,  in  last  Easter  Term,  the  doctrine 
of  circuity  of  action  was  relied  upon.  But  we  do  not  think  it  appli- 
cable, for  the  reasons  stated  in  Charles  v.  Altin.  We  are  of  opinion, 
however,  that  this  plea  is  a  bar  to  the  action,  on  the  ground  that  it 
shows  that  the  advance  of  freight  had  never  become  payable. 

Freight,  generally  speaking,  is  not  payable  till  the  goods  have 
been  delivered  at  the  port  of  destination.  Here,  by  special  stipula- 
tion, one-quarter  of  the  amount  was  to  be  paid  in  advance  on  a 


542  THOMPSON    V.    GILLESPY  [CHAP.   V 

certain  event,  viz.,  the  ship  having  sailed  from  Sunderland  for  Con- 
stantinople, in  pursuance  of  the  charter-party.  The  charter-party 
required  that  when  she  sailed,  she  should  be  "tight,  staunch,  and 
strong,  and  every  way  fitted  for  the  voyage."  If  she  sailed  on  the 
voyage  in  a  seaworthy  condition,  the  merchant  was  to  advance  one- 
fourth  of  the  freight,  which  he  could  not  recover  back  if  the  ship, 
having  so  sailed,  should  afterwards  be  lost  by  the  perils  of  the  sea 
without  having  delivered  any  part  of  her  cargo.  Pro  tanto  the  risk 
was  transferred  from  the  shipowners  to  the  merchant;  and  the  ar- 
rangement between  them  was  that  the  amount  to  be  advanced  was 
to  be  insured  by  him,  as  appears  clearly  from  the  deduction  of  5 
per  cent  for  insurance,  interest,  and  commission.  By  a  policy  of 
insurance,  the  merchant  was  to  be  indemnified  to  the  extent  of  the 
sum  he  was  to  advance.  But  he  could  not  have  the  benefit  of  this 
indemnity  unless,  at  the  commencement  of  the  voyage,  the  ship  was 
seaworthy.  He  must  be  considered  to  have  promised  to  pay  one- 
fourth  of  the  freight  in  advance,  if,  when  the  ship  sailed,  she  was 
in  such  a  condition  as  that  a  policy  of  insurance  on  the  freight  would 
attach,  and  enable  him  to  recover  the  money  back  in  case  of  a  sub- 
sequent loss.  But  the  plea  avers  that  the  ship  was  not  seaworthy  at 
the  commencement  of  the  voyage,  and  that,  by  her  unseaworthiness, 
the  cargo  of  coals  was  wholly  lost.  It  was  argued,  for  the  plaintiff, 
that  the  loss  after  the  sailing  is  for  this  purpose  immaterial,  and 
that,  although  unseaworthy  when  she  sailed,  she  might  have  com- 
pleted the  voyage  and  delivered  the  cargo  in  safety.  In  that  case  the 
full  freight  certainly  would  have  been  earned,  and  would  have  been 
payable :  but  still  the  conjuncture  never  would  have  arisen  upon  which 
a  part  of  the  freight  was  to  be  paid  in  advance.  For  these  reasons 
we  think  that  the  second  plea  is  sufficient. 

There  is  a  third  plea,  upon  which,  as  it  is  demurred  to,  we  are 
bound  to  give  our  opinion.  This  plea  has  some  introductory  obser- 
vations about  the  ship  having  been  sent  to  sea  in  an  unseaworthy 
state,  but  it  contains  no  allegation  to  that  effect,  and  we  consider 
the  substance  and  gist  of  the  plea  to  be  that,  after  the  ship  sailed 
and  while  she  was  on  the  high  seas,  the  plaintiffs  were  guilty  of  neg- 
ligent and  improper  conduct  with  regard  to  the  management  of  the 
ship,  by  reason  whereof  the  ship  and  cargo  were  wholly  lost.  This 
plea,  we  think,  is  bad,  as  it  admits  that  the  ship  sailed  on  the  voyage 
from  Sunderland  in  pursunnce  of  the  charter-party.  If  this  be  true, 
one-fourth  of  the  freight  t]iereu])on  became  payable  in  advance;  and 
any  subsequent  default  or  misconduct  of  the  plaintiffs  would  only  be 
the  subject  of  a  cross-action. 

Judf/ment  for  defendant  on  the  second  plea;  for  the  plaintiffs  on 
the  tliiivl.' 

'  Sf.o  Work  V.  Loathor.s,  97  U.  S.  379;  Stronp:  v.  United  States,  154  U.  S.  632;  The 
Giles  I.oririK.  48  VcA.  Ri-.p.  403;    The  Director,  34  Fed.  Rep.  57. 


SECT.   II]  ROCHESTER  DISTILLING   CO.    V.   GELOSO  543 

THE  ROCHESTER  DISTILLING  COMPAJSTY  v. 
GIOVANNI  GELOSO 

SuPEEME  CouKT  OF  CONNECTICUT,  June  6-July  6,  1917 

[^Reported  in  92  Connecticut,  43] 

Wheeler,  J.  The  plaintiff,  a  wholesale,  and  the  defendant,  a 
retail,  liquor  dealer,  on  June  3d,  1915,  entered  into  a  contract  of 
sale  of  fifteen  barrels  of  whiskey,  by  the  terms  of  which  contract  the 
plaintiff  agreed  to  sell  to  the  defendant  the  whiskey  in  bond  and  to 
deliver  the  same  by  three  certificates,  certifying  that  the  whiskey 
was  stored  in  bond  subject  to  the  order  of  the  defendant.  The  plain- 
tiff further  agreed  to  pay  the  storage  insurance  on  the  same,  and  to 
send  to  the  defendant  various  articles  of  advertising  matter,  including 
six  watches,  and  agreed  that  if  these  were  not  received  the  defendant 
should  have  the  right  to  cancel  the  notes  which  the  defendant  agreed 
to  give  as  part  of  his  consideration  for  the  purchase. 

The  defendant,  in  consideration  of  the  agreements  of  the  plaintiff, 
agreed  to  pay  $108.98  in  cash,  and  to  give  to  the  plaintiff  eighteen 
notes,  each  for  $30,  payable  serially,  thirty  days  from  date,  sixty  days 
from  date,  and  so  on,  until  the  last  note  in  the  series  became  payable. 

The  certificates  and  notes  were  duly  delivered  and  the  $108.98  in 
cash  paid,  and  thereon  the  contract  became  executed  and  complete, 
except  as  to  the  delivery  of  the  advertising  matter. 

The  purpose  of  the  advertising  matter  was  to  call  the  attention 
of  the  public  to  the  fact  that  this  particular  brand  of  whiskey  which 
the  defendant  advertised  was  on  sale  by  him. 

No  time  was  agreed  upon  for  the  delivery  of  this  advertising  ma- 
terial. In  the  absence  of  an  agreement  as  to  the  time,  the  parties 
concur  in  the  opinion  that  the  law  implies  the  delivery  of  the  adver- 
tising material  in  a  reasonable  time.  What  would  be  a  reasonable 
time  for  such  delivery  depends  upon  the  terms  of  the  sale  and  the 
circumstances  surrounding  the  sale ;  and  this  ordinarily  is  a  question 
of  fact,  and  the  conclusion  of  the  trial  court  conclusive,  unless  the 
time  found  to  have  been  reasonable  was  so  short  or  so  long  that  a 
court  must  hold  as  matter  of  law  the  finding  erroneous.  Loomis 
V.  Norman  Printers  Supply  Co.,  81  Conn.  343,  347,  71  Atl.  358. 

Shortly  after  the  contract  was  entered  into  the  plaintiff  began 
the  preparation  of  the  advertising  material  for  shipment  and  placed 
its  order  for  the  manufacture  of  the  watches  with  the  manufacturer. 
It  is  the  plaintiff's  custom  to  ship  to  a  customer  all  of  the  advertising 
material  agreed  to  be  furnished  him,  when  the  order  is  substantially 
complied  with.  It  is  also  its  custom  to  ship  this  material  as  soon 
as  it  is  notified  that  the  retail  dealer  has  withdrawn  any  of  the 
whiskey  from  bond,  although  sometimes  the  shipment  is  made  at  an 
earlier  date.  The  defendant  did  not  at  any  time  withdraw  any  of 
the  whiskey  from  bond. 


544  ROCHESTER   DISTILLING    CO.    V.    GELOSO  [CHAP.    V 

On  July  3d,  1915,  the  first  of  the  notes  was  presented  for  payment 
and  the  same  refused.  At  this  time  none  of  the  advertising  matter 
had  been  delivered  to  the  defendant.  On  July  8th,  1915,  the  de- 
fendant notified  the  plaintiff  that  by  reason  of  the  failure  of  the 
plaintiff  to  deliver  the  advertising  matter  he  cancelled  the  notes 
and  asked  for  the  return  of  the  remaining  notes  and  the  $108.98, 
and  he  thereupon  returned  to  the  plaintiff  the  three  certificates  for 
whiskey  in  bond. 

On  July  14th,  1915,  the  plaintiff  shipped  all  of  the  advertising 
matter  except  the  watches  to  the  defendant,  but  upon  tender  to  him 
he  refused  to  accept  it.  At  the  date  of  maturity  of  the  first  note 
the  watches  were  in  process  of  manufacture;  and  at  the  date  of 
maturity  of  the  second  note,  on  August  3d,  1915,  and  at  the  time 
of  the  institution  of  this  action,  the  watches  had  not  been  completed 
by  the  manufacturer. 

In  his  brief  the  defendant  says :  "The  appeal  presents  a  single 
question,  whether  or  not,  according  to  the  specific  terms  of  this 
written  contract,  the  defendant  did  not  have  the  right  to  refuse  to 
pay  any  of  the  notes  he  had  given  for  the  purchase  of  the  whiskey 
if  the  material  described  in  the  memorandum  was  not  delivered  until 
after  the  maturity  of  the  first  note."  The  right  to  cancel  the  notes 
at  the  maturity  of  the  first  note  would  be  undoubted,  provided  the 
failure  to  deliver  the  advertising  material  prior  to  that  time  was 
unreasonable.  There  is  no  relation  between  the  period  of  delivery 
of  the  advertising  material  and  the  maturity  of  the  first  note,  so 
far  as  the  finding  informs  us.  The  defendant  did  not  deem  this  de- 
livery essential  to  the  beginning  of  the  contract,  for  he  paid  in 
$108.98  at  its  execution,  when  he  must  have  known  some  time  would 
elapse  before  he  received  this  material.  The  defendant  had  no 
occasion  to  make  use  of  the  advertising  material  prior  to  the  institu- 
tion of  this  action,  since  at  no  time  did  he  withdraw  any  of  the 
Avhiskey  in  bond.  He  at  no  time  requested  the  delivery  of  the  adver- 
tising material.  So  far  as  appears,  up  to  the  time  when  this  action 
was  begun,  the  plaintiff  had  done  everything  that  could  be  reasonably 
expected  of  it  to  procure  the  watches. 

Tlie  conclusion  of  the  trial  court,  that  the  defendant  was  not 
legally  justified  in  refusing  to  accept  these  articles  and  that  the 
plaintiff  was  entitled  to  a  judgment  for  the  amount  of  said  notes, 
necessarily  involved  a  finding  that  the  failure  to  deliver  all  of  the 
advertisiiig  matter  prior  to  the  maturity  of  the  first  note,  and  the 
failure;  to  deliver  the  watches  prior  to  tlio  in.stitution  of  this  action, 
w.'iH  tiot  unreasonable. 

Ill  oiir  view  the  finding  of  the  trial  court  cannot  be  said  to  be 
uriwarraT)t(!d  in  law. 

Tlicrc  is  no  error. 

In  this  opinion   the  otlua-  judges  (;oiicurred. 


SECT.    II  ]  STEWART    V.    NEWBURY  545 


ALEXANDER  STEWART,  Respondent,  v.  HERBERT  A. 
NEWBURY,  ET  AL.,  Appellants 

New  Yobk  Court  of  Appeals,  March  13-27,  1917 

[^Reported  in  220  New  York,  379] 

Crane,  J.  The  defendants  are  partners  in  the  pipe-fitting  busi- 
ness, and  the  plaintiff  is  a  contractor  and  builder.  The  plaintiff 
made  a  bid  by  letter  for  certain  concrete  work  in  a  building  in  course 
of  erection  by  the  defendants.  The  defendants  accepted  by  letter 
this  bid. 

Nothing  was  said  in  writing  about  the  time  or  manner  of  pay- 
ment. The  plaintiff,  however,  claims  that  after  sending  his  letter 
and  before  receiving  that  of  the  defendant  he  had  a  telephone  com- 
munication with  Mr,  Newbury,  and  said :  "I  will  expect  my  pay- 
ments in  the  usual  manner,"  and  Newbury  said,  "All  right,  we  have 
got  the  money  to  pay  for  the  building."  This  conversation  over  the 
telephone  was  denied  by  the  defendants. 

The  custom,  the  plaintiff  testified,  was  to  pay  85%  every  thirty 
days  or  at  the  end  of  each  month,  15%  being  retained  till  the  work 
was  completed. . 

In  July  the  plaintiff  commenced  work  and  continued  until  Sep- 
tember 29th,  at  which  time  he  had  progressed  with  the  construction 
as  far  as  the  first  floor.  He  then  sent  a  bill  for  the  work  done  up 
to  that  date  for  $896.35.  The  defendants  refused  to  pay  the  bill 
and  work  was  discontinued. 

The  plaintiff  claims  that  the  defendants  refused  to  permit  him  to 
perform  the  rest  of  his  contract,  they  insisting  that  the  work  already 
done  was  not  in  accordance  with  the  specifications.  The  defendants 
claimed  upon  the  trial  that  the  plaintiff  voluntarily  abandoned  the 
work  after  their  refusal  to  pay  his  bill. 

On  October  5,  1911,  the  defendants  wrote  the  plaintiff  a  letter 
containing  the  following:  "Notwithstanding  you  promised  to  let  us 
know  on  Monday  whether  you  would  complete  the  job  or  throw  up 
the  contract,  you  have  not  up  to  this  time  advised  us  of  your  inten- 
tion. .  .  .  Under  the  circumstances  we  are  compelled  to  accept 
your  action  as  being  an  abandonment  of  your  contract  and  of  every 
effort  upon  your  part  to  complete  your  work  on  our  building.  As 
you  know,  the  bill  which  you  sent  us  and  which  we  declined  to  pay 
is  not  correct,  either  in  items  or  amount,  nor  is  there  anything  due 
you  under  our  contract  as  we  understand  it  until  you  have  completed 
your  work  on  our  building." 

To  this  letter  the  plaintiff  replied  the  following  day.     In  it  he 

makes  no  reference  to  the  telephone  communication  agreeing,  as  he 

testified,  to  make  the  usual  payments,"  but  does  say  this :  "There  is 

nothing  in  our  agreement  which  says  that  I  shall  wait  until  the  job 

18 


546  STEWAET    V.    NEWBURY  [CHAP.   V 

is  completed  before  any  payment  is  due,  nor  can  this  be  reasonably 
imjdied.  .  .  .  As  to  having  given  you  positive  date  as  to  when  I 
should  let  you  know  what  I  proposed  doing,  I  did  not  do  so;  on  the 
contrary  I  told  you  that  I  would  not  tell  you  positively  what  I  would 
do  until  I  had  visited  the  job,  and  I  promised  that  I  would  do  this 
at  my  earliest  convenience  and  up  to  the  present  time  I  have  been 
unable  to  get  up  there." 

The  defendant  Herbert  Newbury  testified  that  the  plaintiff  "ran 
away  and  left  the  whole  thing."  And  the  defendant  F,  A.  !N"ewbury 
testified  that  he  was  told  by  Mr.  Stewart's  man  that  Stewart  was 
going  to  abandon  the  job;  that  he  thereupon  telephoned  Mr.  Stewart, 
who  replied  that  he  would  let  him  know  about  it  the  next  day,  but 
did  not. 

In  this  action,  which  is  brought  to  recover  the  amount  of  the  bill 
presented,  as  the  agreed  price,  and  $95.68  damages  for  breach  of  con- 
tract, the  plaintiff  had  a  verdict  for  the  amount  stated  in  the  bill, 
but  not  for  the  other  damages  claimed,  and  the  judgment  entered 
thereon  has  been  affirmed  by  the  Appellate  Division. 

The  appeal  to  us  is  upon  exceptions  to  the  judge's  charge.  The 
court  charged  the  jury  as  follows :  "Plaintiff  says  that  he  was  ex- 
cused from  completely  performing  the  contract  by  the  defendants' 
unreasonable  failure  to  pay  him  for  the  work  he  had  done  during 
the  months  of  August  and  September.  .  .  .  Was  it  understood  that 
the  payments  were  to  be  made  monthly  ?  If  it  was  not  so  understood 
the  defendants'  only  obligation  was  to  make  payments  at  reasonable 
periods,  in  view  of  the  character  of  the  work,  the  amount  of  work 
being  done  and  the  value  of  it.  In  other  words,  if  there  was  no 
agreement  between  the  parties  respecting  the  payments,  the  defend- 
ants' obligation  was  to  make  payments  at  reasonable  times.  .  .  . 
But  whether  there  was  such  an  agreement  or  not,  you  may  consider 
whether  it  was  reasonable  or  unreasonable  for  him  to  exact  a  pay- 
ment at  the  time  and  in  that  amount. 

The  court  further  said,  in  reply  to  a  request  to  charge :  "I  will 
say  in  that  connection,  if  there  was  no  agreement  respecting  the 
time  of  payment,  and  if  there  was  no  custom  that  was  understood 
by  both  parties,  and  with  respect  to  which  they  made  the  contract, 
then  the  plaintiff  was  entitled  to  payments  at  reasonable  times. 

The  defendants'  counsel  thereupon  made  the  following  request, 
which  was  refused :  "T  ask  your  TTonor  to  instruct  the  jury  that  if  the 
circumstances  existed  as  your  TToiior  stated  in  your  last  instruction, 
then  the  plaintiff  was  not  entith^d  to  any  payment  until  the  contract 
was  completed." 

The  jury  was  plainly  told  llwit  if  there  were  no  agreement  as  to 
paymr-nts,  yet  the  plaintiff  would  ]h\  entitled  to  part  payment  at 
reasonable  times  as  the  work  progressed,  and  if  such  payments  were 
refused  he  could  abandon  the  work  and  recover  the  amount  due  for 
the  work  performed. 


SECT.    II  ]  GAIL    V.    GAIL  547 

This  is  not  the  law.  Counsel  for  the  plaintiff  omits  to  call  our 
attention  to  any  authority  sustaining  such  a  proposition  and  our 
search  reveals  none.  In  fact  the  law  is  very  well  settled  to  the  con- 
trary. This  was  an  entire  contract.  (Ming  v.  Cor  bin,  142  N.  Y. 
334,  340,  341.)  Where  a  contract  is  made  to  perform  work  and  no 
agreement  is  made  as  to  payment,  the  work  must  be  substantially 
performed  before  payment  can  be  demanded.  (Gurski  v.  Doscher 
112  App.  Div.  345;  affd.,  190  N.  Y.  536;  Cunningham  v.  Jones,  20 
K  Y.  486;  People  ex  rel.  Cross  v.  Grout,  179  N.  Y.  417,  426; 
Delehanty  v.  Dunn,  151  App.  Div.  695;  Smith  v.  Brady,  17  N".  Y. 
173,  187,  188;  Catlin  v.  Tobias,  26  N.  Y.  217;  Cronin  v.  Tebo,  71 
Hun,  59,  61;  affd.,  144  N".  Y.  660;  Coburn  v.  Hartford,  38  Conn. 
290;  Poland  v.  Thomaston  F.  &  O.  B.  Co.,  100  Me.  133;  Thompson 
V.  Phelan,  22  N".  H.  339;  Freidman  v.  Schleuter,  105  Ark.  580.) 

This  case  was  also  submitted  to  the  jury  upon  the  ground  that 
there  may  have  been  a  breach  of  contract  by  the  defendants  in  their 
refusal  to  permit  the  plaintiff  to  continue  with  his  work,  claiming 
that  he  had  departed  from  the  specifications,  and  there  was  some 
evidence  justifying  this  view  of  the  case,  but  it  is  impossible  to  say 
upon  which  of  these  two  theories  the  jury  arrived  at  its  conclusion. 
The  above  errors,  therefore,  canot  be  considered  as  harmless  and 
immaterial.  (Stokes  v.  Barber  Asphalt  Paving  Co.,  207  !N^.  Y. 
252,  257;  Condran  v.  Park  &  Tilford,  213  K  Y.  341;  Clarke  v. 
Schmidt,  210  IST.  Y.  211,  215.)  As  the  verdict  was  for  the  amount 
of  the  bill  presented  and  did  not  include  the  damages  for  a  breach 
of  contract,  which  would  be  the  loss  of  profits,  it  may  well  be  pre- 
sumed that  the  jury  adopted  the  first  ground  of  recovery  charged  by 
the  court  as  above  quoted  and  decided  that  the  plaintiff  was  justified 
in  abandoning  work  for  non-payment  of  the  instalment. 

The  judgment  should  be  reversed,  and  a  new  trial  ordered,  costs 
to  abide  the  event. 

HiscocK,  Ch.  J.,  Collin,  Cardozo,  Pound  and  Andrews,  JJ., 
concur;  Cuddeback,  J.,  absent. 

Judgment  reversed,  etc?- 


MAEY    T.    GAIL    V.    ADELBEET    D.    GAIL 

!N"ew  York  Supreme  Court,  Appellate  Division,  July  7,  1908 

[Reported  in  127  Neiv  Yorh  Appellate  Division,  892] 

A  contract  was  made  on  June  29,  1904,  between  the  plaintiff,  a 
widow,  and  her  son,  the  defendant,  whereby  she  agreed  to  release 
and  quitclaim  her  inherited  interest  in  all  the  real  property  owned 
by  her  husband,  and  to  execute  all  papers  necessary  for  the  purpose, 
in  consideration  of  which  the  son  agreed  to  pay  her  an  annuity  of 

^  The  statement  of  facts  in  the  opinion  is  abbreviated. 


548  GAIL    V.   GAIL  [chap.   V 

$50  a  month  beginning  June  6,  1904.  The  contract  did  not  fix  a  date 
for  the  conveyances.  This  annuity  was  paid  regularly  from 
that  date  to  December  1906.  Since  that  time  the  son  has 
made  no  payment ,  and  this  action  is  brought  to  recover  nine 
monthly  instalments  accruing  thereafter.  The  plaintiff  had 
conveyed  to  the  defendant  prior  to  his  cessation  of  perform- 
ance her  interest  in  the  real  estate  left  by  her  husband  in  New 
York;  but,  because  of  a  dispute  as  to  whether  certain  real  estate 
in  California  was  included  within  the  terms  of  the  agreement,  had  not 
conveyed  and  refused  to  convey  her  interest  in  this  California 
property.  It  was  for  this  reason  that  the  defendant  ceased  to  pay  the 
annuity.  The  lower  court  gave  judgment  for  the  plaintiff  on  the 
ground  that  no  time  was  fixed  by  the  contract  for  the  conveyances,  and 
that  therefore  making  them  could  not  be  a  condition  precedent  to  the 
defendant's  obligation.  The  payment  of  the  annuity  for  two  years 
was  held  evidence  of  the  correctness  of  this  construction. 

EoBsoN,  J.  [After  holding  that  by  the  terms  of  the  agreement 
the  plaintiff  was  bound  to  convey  her  interest  in  the  California 
realty,  continued.] 

Neither  can  we  at  present  yield  assent  to  the  further  claim  of  plain- 
tiff that,  even  if  she  is  bound  by  her  agreement  to  convey  to  defendant 
her  interest  in  the  California  real  estate,  yet  her  right  to  re- 
cover of  defendant  under  the  agreement  for  monthly  payments  to  her 
is  not  dependent  upon  her  performance  of  her  part  of  the  agree- 
ment. It  may  be  incidentally  observed  that  in  her  complaint  she 
alleges  full  performance  of  the  contract  on  her  part;  and  we  are 
of  the  opinion  that  this  allegation  of  her  complaint  was  properly 
included  therein  as  an  allegation  of  fact  to  be  established  in  prov- 
ing her  cause  of  action.  That  she  could  not  have  established  this 
fact  we  have  already  concluded.  But  whether  or  not  this  was  a 
necessary  allegation  to  be  pleaded  in  her  complaint,  and,  if  contro- 
verted by  the  answer,  established  by  proof  on  the  trial,  we  must 
hold  that  (the  issue  having  been  tendered  by  the  answer,  as  it  clearly 
is  in  this  case  that  plaintiff  has  not  completed  her  agreement,  upon 
which,  as  is  further  claimed  in  defendant's  answer,  her  right  to 
insist  on  the  performance  by  defendant  of  his  part  of  the  agree- 
ment by  paying  her  the  monthly  sum  which  he  has  agreed  to  pay, 
depends),  it  was  incumbent  upon  her  to  show  such  performance  of 
the  agreement  on  her  part.  It  is  said  in  Ewing  /'.  Wightman 
(\()7  N.  Y.  107,  113)  that  the  rule  to  be  .applied  in  the  construction 
of  Huch  contracts,  as  stated  in  T3ank  of  Columbia  v.  Hagner  (1  Pet. 
[26  U.  S.]  455,  404),  is  firmly  settled  in  our  jurisprudence.  This 
rule  is  that  "in  contracts  of  this  description  the  undertakings  of 
the  respective  parties  are  always  considered  dependent,  unless  a  con- 
trary intention  clenrly  appears,  A  diff(>rcnt  construction  would 
in  many  cases  learl  to  the  greatest  injustice  and  a  purchaser  might 
have  payment  of  the  consideration  money  enforced  upon  him,  and 


SECT.    II  ]  GAIL    V.   GAIL  549 

yet  be  disabled  from  procuring  the  property  for  which  he  paid  it." 
It  is  also  true  that  whether  or  uot  the  mutual  and  reciprocal  agree- 
ments of  parties  to  a  contract  are  dependent  or  independent  is  de- 
termined by  the  order  of  time  in  which  by  the  terms  and  mean- 
ing of  the  contract  their  performance  is  required.  (Grant  v.  John- 
son, 5  N.  Y.  247;  Glenn  v.  Kossler,  156  id.  161,  167.)  If  it  appears 
that  their  performance  is  to  be  concurrent,  then  they  are  dependent. 
If  the  performance  of  the  whole  or  a  part  of  the  agreement  of  one 
party  to  the  contract  is  to  precede  in  time  the  performance  by  the 
other  party  of  that  part  of  the  contract  which  the  former  seeks  to 
enforce,  then  the  right  of  the  former  to  enforce  as  against  the  latter 
performance  of  the  contract  is  dependent  upon  his  prior  performance 
of  his  part  of  the  contract  or  tender  thereof.  (Grant  v.  Johnson, 
supra. ) 

The  agreement  now  before  us  provides  that  the  payment  by 
defendant  to  the  plaintiff  of  the  monthly  instalments  referred  to 
therein  shall  be  secured  by  a  mortgage  given  by  defendant  upon  a 
part  of  the  real  estate  as  to  which  plaintiff  agreed  to  release  her 
dower.  This  mortgage  has  been  given.  We  think  the  execution 
of  this  mortgage,  which  in  effect  secured  to  plaintiff  payment  of  the 
purchase  price  of  the  interests  in  real  estate  which  plaintiff  by  the 
10th  clause  of  the  contract  agreed  to  convey  to  defendant,  was 
intended  by  the  parties  to  be  concurrent  with  the  performance  by 
plaintiff  of  her  part  of  the  agreement  embodied  in  that  clause.  If 
this  be  true,  then,  she  having  accepted  the  mortgage  security,  her 
right  to  enforce  the  monthly  payments  thereby  secured  is  dependent 
upon  her  transferring,  as  she  has  agreed,  the  interests  in  real  estate 
to  secure  the  purchase  price  of  which  she  had  accepted  the  mort- 
gage. But  whether  this  be  the  true  construction  of  the  contract  or 
not,  it  is  certain  that  the  transfer  of  plaintiff's  interest  must  be  made 
by  her  within  a  reasonable  time  after  the  execution  of  the  contract, 
or  certainly  within  a  reasonable  time  after  demand  by  defend- 
ant. It  appears  that  she  has  already  released  as  the  contract 
provides  her  dower  interest  in  the  New  York  real  estate,  but  has 
continuously  refused  to  comply  with  defendant's  demands,  made 
many  times  before  he  ceased  paying  the  monthly  instalments,  that 
she  convey  to  him  her  interest  in  the  California  property.  The 
time  at  which  she  was  to  comply  with  and  perform  her  part  of  the 
agreement  had,  therefore,  arrived  before  defendant's  default  in  his 
payments  to  her  of  which  she  now  complains.  Her  right  to  insist 
on  further  performance  by  defendant  of  his  part  of  the  agreement 
was  dependent,  therefore,  on  her  doing  as  she  had  agreed. 

It  is  also  urged  that  defendant  by  paying  the  monthly  instal- 
ments, as  he  did,  without  requiring  of  plaintiff  the  transfer  of  her 
interest  in  the  California  real  estate,  as  well  as  in  that  in  New 
York,  operated  as  a  waiver  of  his  right  afterwards  to  insist  on  such 
transfer  as  a  condition  of  further  payments.    It  may  be  that  it  was 


550  BANK   OF   SEATTLE    V.    GIDDEN  [CHAP.   V 

such  waiver  as  to  each  payment  actually  made  by  him;  but  to  hold 
that  it  also  operated  as  a  waiver  o£  this  right  as  to  all  future  pay- 
ments would  result  in  manifest  injustice  to  him,  in  appearing  that 
he  at  all  times  insisted  that  he  was  entitled  to  a  transfer  of  plain- 
tiff's interest  in  all  the  real  estate.  A  waiver  as  to  future  pay- 
ments by  defendant  cannot  be  construed  from  facts,  like  these.^ 

All  concurred. 


FIRST  l^ATION'AL  BANK   OF   SEATTLE,   Appellant, 
Respondent,    v.    HERMAN    M.    GIDDEN",    Respondent, 

Appellant 

New  York  Supreme  Court,  Appellate  Division,  December  29,  1916 

\_Reported  in  175  Neiu  York  Appellate  Division,  563] 

McLaughlin,  J. :  The  plaintiff  appeals  from  a  dismissal  of  the 
complaint  and  defendant  from  a  dismissal  of  his  counterclaim. 

Gorman  &  Co.  of  Seattle  in  performance  of  a  contract  with  the 
defendant  shipped  5000  cases  of  salmon,  drawing  a  draft  for  the 
price  thereof  (with  bill  of  lading  for  the  salmon  attached  thereto),  to 
the  order  of  the  plaintiff,  payable  on  the  arrival  of  the  salmon.  This 
draft  with  bill  of  lading  attached  was  sold  to  the  plaintiff  which 
credited  Gorman  &  Co.  with  its  full  amount.  The  draft  with 
the  bill  of  lading  was  forwarded  by  the  plaintiff  to  the  Irving 
National  Bank  of  New  York  for  collection.  That  bank  presented 
the  draft  to  the  defendant  for  payment,  which  was  refused,  but  after 
some  discussion  the  defendant  wrote  an  acceptance  on  the  bill  dated 
November  30th,  making  it  payable  on  or  before  December  23d  in 
instalments  as  the  salmon  was  wanted.  The  salmon  was 
meanwhile  stored  in  a  warehouse,  and  the  warehouse  receipt 
attached  to  the  draft  in  substitution  for  the  bill  of  lading.  On 
December  23d,  the  defendant  sent  to  the  bank  by  messenger  a  cer- 
tified check  for  the  amount  of  the  draft  and  offered  the  check  to  the 
bank,  simultaneously  requesting  the  surrender  of  the  warehouse  re- 
ceipt. This  could  not  be  found  at  the  moment,  and  the  defendant's 
representative  left  without  paying  the  draft  or  tendering  uncon- 
ditionally the  certified  check.  In  the  afternoon  of  the  same  day 
thf  receipt  was  found  nnd  the  defendant's  office  was  notified  thereof  by 
tfle[)}ione.  On  the  following  day  the  draft  with  the  warehouse 
receipt  was  presented  at  the  defendant's  office  and  payment  was 
demanded.  The  defendant  refused  payment,  saying  that  he  had 
intended  to  ship  part  of  the  salmon  to  Porto  Rico,  but  because  he 
fcinld  not  get  tbe  wareliouse  I'eceipt  in  time  on  the  previous  day,  he 
had  beon  nnablf  to  niakf  the  shipment.  Subsequejitly  the  salmon 
was   sold    and    tlic   proceeds   applied    in    pnrt   payment   of  tlie   draft. 

'  Thf  Htritcmoiit  of  the  f.-isc  lin.s  I)ccn  iil)t)r<'vi;itf'fl  from  tho  stiit(>tncnt  in  tho  opinion 
of  the  rourt,  und  a  portion  of  the  opinion  hua  been  omitted. 


SECT.    Il]  BANK   OF   SEATTLE    V.    GIDDEN  551 

This  action  was  brouglit  to  recover  the  unpaid  balance  of  the  draft 
with  interest.  The  defendant  as  a  defence  set  up  his  offer  to  pay 
the  draft  on  December  23d,  and  the  fact  that  he  had  an  order  for 
2000  cases  of  salmon  which  he  could  not  fill  by  reason  of  his  not 
having  the  warehouse  receipt.  As  a  counterclaim  he  set  up  the 
amount  of  freight  paid. 

The  bill  of  lading  and  warehouse  receipt  subsequently  substi- 
tuted for  it  were  held  by  plaintiff  as  collateral  security  for  the  pay- 
ment of  the  draft  which  it  had  cashed  for  Gorman  &  Co.  It  was 
the  ordinary  transaction  of  collateral  to  secure  the  payment  of  a 
bill  of  exchange,  collateral  security  and  nothing  else.  (Dows  v. 
National  Exchange  Bank,  91  U.  S.  618.)  When  the  defendant 
accepted  the  draft  he  thereupon  became  obligated  to  pay  it  irrespec- 
tive of  the  collateral  which  had  been  given  to  secure  its  payment. 
(2  Kand.  Com.  Paper  [2d  ed.],  §  1070;  N'eg.  Inst.  Law  [Consol. 
Laws,  chap.  38;  Laws  of  1909,  chap.  43],  §§  112,  130.)  It  is  not 
even  suggested  in  the  record  that  at  the  time  the  defendant  accepted 
the  draft  there  was  any  condition  imposed  upon  the  acceptance  re- 
lating to  the  delivery  of  the  warehouse  receipt  other  than  that  im- 
plied by  law  where  collateral  accompanies  such  instrument.  It  is  true 
there  was  a  special  arrangement  permitting  the  defendant  to  make 
partial  payments  and  receive  partial  deliveries  of  the  salmon,  but  he 
did  not  take  advantage  of  such  agreement;  on  the  contrary,  he 
waited  until  the  whole  amount  of  the  draft  was  due,  and  then  simply 
by  informing  the  bank  that  he  had  a  certified  check  for  its  payment, 
because  the  draft  and  warehouse  receipt  were  not  at  once  delivered, 
it  is  contended  he  was  absolutely  relieved  from  liability.  Obviously, 
he  could  not  discharge  his  obligation  to  pay  the  draft  in  that  way. 
Even  though  the  draft  and  warehouse  receipt  were  not  delivered 
he  still  remained  liable  to  the  bank  upon  his  acceptance,  and  his 
obligation  was  to  pay  the  amount  called  for  with  interest.  Upon 
payment  of  the  draft  plaintiff  of  course  was  bound  to  surrender  the 
warehouse  receipt,  as  it  would  have  been  to  surrender  any 
other  collateral  upon  payment  of  the  debt  for  which  it  was  pledged. 
But  a  failure  to  surrender  the  warehouse  receipt  did  not  constitute  a 
defense  to  an  action  on  the  acceptance.  It  may  be  conceded  that 
tender  of  the  amount  due  discharged  the  plaintiff's  lien  on  the  salmon, 
and  defendant  could  have  replevied  the  same;  or,  if  damages  had 
been  sustained,  interposed  a  counterclaim,  or  maintained  an  action 
for  conversion.  (Cass  v.  Higenbotam,  100  N.  Y.  248;  Keusens  v. 
Arkenburgh,  135  App.  Div.  75.)  But  the  fact  that  the  collateral 
was  not  surrendered  when  a  tender  of  payment  was  made  of  the  draft 
did  not  relieve  the  defendant  from  his  obligation  to  pay.  That  obliga- 
tion continued.  It  was  not  affected  by  the  tender  or  by  plaintiff's 
neglect  to  return  the  collateral.  While  defendant  set  up  facts 
showing  a  tender,  no  affirmative  relief  was  asked  upon  that  ground  — 
the  only  relief  sought  being  a  recovery  of  the  freight  paid. 


552  POUSSARD    V.    SPIERS   AND   POND  [CHAP.   V 

There  are  numerous  authorities  to  the  effect  that  where  the  drawee 
of  a  negotiable  bill  of  exchange  has  accepted  it,  he  is  bound  to 
pay  in  accordance  with  the  terms  of  acceptance,  and  having  paid, 
even  under  a  mistake  of  fact,  he  cannot  recover  back  the  money  paid, 
though  the  bills  of  lading  accompanying  the  draft,  and  upon  which 
he  relied  in  accepting  it,  subsequently  prove  to  be  fictitious  and  the 
goods  are  never  received.  (Hoffman  &  Co.  v.  Bank  of  Milwaukee, 
12  Wall.  181;  Goetz  v.  Bank  of  Kansas  City,  119  U.  S.  551;  First 
National  Bank  v.  Burkham,  32  Mich.  328.) 

Xor  was  the  defendant  entitled  to  recover  on  his  counterclaim. 
Under  the  agreement  with  Gorman  &  Co.  the  defendant  obligated 
himself  to  pay  the  freight  on  the  salmon  and  in  making  such  pay- 
ment he  was  simply  carrying  out  his  agreement  with  that  firm. 

My  conclusion  is  that  the  appeal  taken  by  defendant  from  so 
much  of  the  judgment  as  dismissed  the  counterclaim  should  be 
affirmed,  and  the  appeal  by  plaintiff  from  so  much  of  the  judgment 
as  dismissed  the  complaint  should  be  reversed  and,  there  being  no 
dispute  as  to  the  facts,  judgment  should  be  directed  in  favor 
of  the  plaintiff  for  the  amount  of  the  draft,  less  the  proceeds  derived 
from  the  sale  of  the  salmon,  with  interest  and  costs  in  this  court 
and  the  court  below. 

Clarke,  P.  J.,  Lafghlin,  Scott  and  Dowling,  JJ.,  concurred. 


POUSSARD  V.  SPIERS  and  POKD 

In  the  High  Court  of  Justice,  April  25,  1876 

l^Reported  in  1  Queen  s  Bench  Division,  410] 

Declaration  on  an  agreement  by  the  defendants  to  employ  the 
plaintiff's  wife  to  sing  and  play  in  an  opera  at  the  defendants' 
theatre.  Breach :  that  the  defendants  refused  to  allow  the  plaintiff's 
wife  to  perform  according  to  the  agreement. 

Pleas:  1.  That  defendants  did  not  agree  as  alleged.  2.  That  plain- 
tiff's wife  was  not  ready  and  willing  to  perform.  3.  That  plaintiff 
rescinded  the  contract  before  breach.     Issue  joined. 

At  the  trial  before  Field,  J.,  at  the  Middlesex  Michaelmas  Sit- 
tings, 1875,  judgment  was  entered  for  the  defendants,  with  leave  to 
move  to  enter  judgment  for  the  plaintiff  for  837. 

A  notice  of  motion  was  given  accordingly,  and  a  cross  order  was 
obtained  by  the  defendants  for  a  new  trial,  on  the  ground  that  the 
verdict  was  ;igninst  the  weight  of  evidence,  and  that  the  damages 
were  excessive. 

The  faets  proved  and  tbe  course  of  the  trial  are  fully  given  in 
the  judgment  of  the  Court. 


SECT.    Il]  POUSSAKD    V.    SPIERS   AND   POND  553 

Feb.  21.  Percy  Gye,  for  the  plaintiff,  cited  Cuckson  v.  Stones/ 
Simpson  v.  Crippin,  Tilley  v.  Thomas.^ 

Parry,  Serjt.,  (with  him  F.  H.  Lewis),  for  the  defendants,  cited 
Bettini  v.  Gye,  and  Graves  v.  Legg.  Cur.  adv.  vult. 

April  25.  The  judgment  of  the  Court  (Blackburn,  Quain,  and 
Field,  JJ.)  was  delivered  by 

Blackbukn,  J.  This  was  an  action  for  the  dismissal  of  the  plain- 
tiff's wife  from  a  theatrical  engagement.  On  the  trial  before  my 
brother  Field  it  appeared  that  the  defendants,  Messrs.  Spiers  & 
Pond,  had  taken  the  Criterion  Theatre,  and  were  about  to  bring  out 
a  French  opera,  which  was  to  be  produced  simultaneously  in  London 
and  Paris.  Their  manager,  Mr.  Kingston,  by  their  authority,  made 
a  contract  with  the  plaintiff's  wife,  which  was  reduced  to  writing  in 
the  following  letter:  — 

Criterion  Theatre,  Oct.  16th.  1874. 
To  Madame  Pottssard. 

On  behalf  of  Messrs.  Spiers  &  Pond  I  engage  you  to  sing  and  play  at  the  Criterion 
Theatre  on  the  following  terms: 

You  to  play  the  part  of  Friquette  in  Lecocq's  opera  of  Les  Pres  Saint  Gervais, 
commencing  on  or  about  the  fourteenth  of  November  next,  at  a  weekly  salary  of 
eleven  pounds  (IIL),  and  to  continue  on  at  that  sum  for  a  period  of  three  months, 
providing  the  opera  shall  run  for  that  period.  Then,  at  the  expiration  of  the  said 
three  months,  I  shall  be  at  liberty  to  re-engage  you  at  my  option,  on  terms  then  to 
be  arranged,  and  not  to  exceed  fourteen  pounds  per  week  for  another  period  of  three 
months.  Dresses  and  tights  requisite  for  the  part  to  be  provided  by  the  management, 
and  the  engagement  to  be  subject  to  the  ordinary  rules  and  regulations  of  the  theatre. 

E.  P.  Kingston,  Manager. 
Ratified: 

Spiers  &  Pond. 

Madame  Poussard,  46,  Gunter  Grove,  Chelsea. 

The  first  performance  of  the  piece  was  announced  for  Saturday, 
the  28th  of  ISTovember.  No  objection  was  raised  on  either  side  as 
to  this  delay,  and  Madame  Poussard  attended  rehearsals,  and  such 
attendance,  though  not  expressed  in  the  written  engagement,  was 
an  implied  part  of  it.  Owing  to  delays  on  the  part  of  the  com- 
poser, the  music  of  the  latter  part  of  the  piece  was  not  in  the  hands 
of  the  defendants  till  a  few  days  before  that  announced  for  the  pro- 
duction of  the  piece,  and  the  latter  and  final  rehearsals  did  not  take 
place  till  the  week  on  the  Saturday  of  which  the  performance  was 
announced.  Madame  Poussard  was  unfortunately  taken  ill,  and 
though  she  struggled  to  attend  the  rehearsals,  she  was  obliged  on 
Monday,  the  23d  of  N^ovember,  to  leave  the  rehearsal,  go  home  and 
go  to  bed,  and  call  in  medical  attendance.  In  the  course  of  the 
next  day  or  two  an  interview  took  place  between  the  plaintiff  and  Mr. 
Leonard  (Madame  Poussard's  medical  attendant)  and  Mrs.  Liston, 
who  was  the  defendants'  stage  manager,  in  reference  to  Madame 
Poussard's  ability  to  attend  and  undertake  her  part,  and  there  was 
a  conflict  of  testimony  as  to  what  took  place.  According  to  the  de- 
fendants' version,  Mrs.  Liston  requested  to  know  as  soon  as  possible 
1  1  E.  &  E.  248.  2  Law  Rep.  3  Ch.  Ap.  61. 


554  POUSSARD    V.    SPIERS   AND   POND  [CHAP.   V 

what  was  the  prospect  of  Madame  Poussard's  recovery,  as  it  would 
be  very  difficult  on  such  short  notice  to  obtain  a  substitute ;  and  that 
in  the  result  the  plaintiff  wrote  stating  that  his  wife's  health  was 
such  that  she  could  not  play  on  the  Saturday  night,  and  that  Mrs, 
Listen  had  better,  therefore,  engage  a  young  lady  to  play  the  part; 
and  this,  if  believed  to  be  accurate,  amounted  to  a  rescission  of  the 
contract.  According  to  the  evidence  of  the  plaintiff  and  the  doctor, 
Mrs.  Listen  told  them  that  Madam  Poussard  was  to  take  care  of 
herself  and  not  come  out  till  quite  well,  as  she,  Mrs.  Listen,  had 
procured,  or  would  procure,  a  temporary  substitute;  and  Madame 
Poussard  could  resume  her  place  as  soon  as  she  was  well.  This,  it 
was  contended  by  the  plaintiff,  amounted  to  a  waiver  by  the  de- 
fendants of  a  breach  of  the  condition  precedent,  if  there  was  one. 

The  jury  found  that  the  plaintiff  did  not  rescind  the  contract,  and 
that  Mrs.  Listen,  if  she  did  waive  the  condition  precedent  (as  to 
which  they  were  not  agreed),  had  no  authority  from  the  defendants 
so  to  do. 

These  findings,  if  they  stand,  dispose  of  those  two  questions. 

There  was  no  substantial  conflict  as  to  what  was  in  fact  done  by 
Mrs.  Listen.  Upon  learning,  on  the  Wednesday  (the  25th  of  No- 
vember), the  possibility  that  Madame  Poussard  might  be  prevented 
by  illness  from  fulfilling  her  engagement,  she  sent  to  a  theatrical 
agent  to  inquire  what  artistes  of  position  were  disengaged,  and  learn- 
ing that  Miss  Lewis  had  no  engagement  till  the  25th  of  December, 
she  made  a  provisional  arrangement  with  her,  by  which  Miss  Lewis 
undertook  to  study  the  part  and  be  ready  on  Saturday  to  take  the 
part,  in  case  Madame  Poussard  was  not  then  recovered  so  far  as  to 
be  ready  to  perform.  If  it  should  turn  out  that  this  labor  was 
thrown  away.  Miss  Lewis  was  to  have  a  douceur  for  her  trouble.  If 
Miss  Lewis  was  called  on  to  perform,  she  was  to  be  engaged  at  15L 
a  week  up  to  the  25th  of  December,  if  the  piece  ran  so  long.  Madame 
Poussard  continued  in  bed  and  ill,  and  unable  to  attend  either  the 
subsequent  rehearsals  or  the  first  night  of  the  performance  on  the 
Saturday,  and  Miss  Lewis's  engagement  became  absolute,  and  she 
performed  the  part  on  Saturday,  Monday,  Tuesday,  Wednesday,  and 
up  to  the  close  of  her  engagement,  the  25  th  of  December.  The  piece 
proved  a  success,  and  in  fact  ran  for  more  than  three  months. 

On  Thursday,  the  4th  of  December,  Madame  Poussard,  having  re- 
covered, offered  to  take  her  place,  but  was  refused,  and  for  this 
refusal  the  action  was  brought. 

On  the  21d  of  January  Madame  Poussard  left  England. 

My  brothfir  Field,  at  the  trial,  expressed  his  opinion  that  the 
failure  of  Madame  Poussard  to  bo  ready  to  perform,  under  the  cir- 
(■•nm.stances,  went  so  much  to  the  root  of  the  consideration  as  to  dis- 
charge the  defendants,  and  that  he  should  therefore  enter  judgment 
for  the  defendants;  ])ut  he  asked  the  jury  five  questions. 

The  first  three  related  to  the  supposed  rescission  and  waiver.    The 


SECT.    II  ]  POUSSARD    V.    SPIERS   AND   POND  555 

other  questions  were  in  writing  and  were:  4.  Whether  the  non- 
attendance  on  the  night  of  the  opening  was  of  such  material  con- 
sequence to  the  defendants  as  to  entitle  them  to  rescind  the  contract? 
To  which  the  jury  said,  ''J^o."  And,  5,  Was  it  of  such  consequence 
as  to  render  it  reasonable  for  the  defendants  to  employ  another 
artiste,  and  whether  the  engagement  of  Miss  Lewis,  as  made,  was 
reasonable?  To  which  the  jury  said,  ''Yes."  Lastly,  he  left  the 
question  of  damages,  which  the  jury  assessed  at  83/. 

On  these  answers  he  reserved  leave  to  the  plaintiff  to  move  to 
enter  judgment  for  83Z. 

A  cross  rule  was  obtained  on  the  ground  that  the  verdict  was 
against  evidence  and  that  the  damages  were  excessive. 

We  think  that,  from  the  nature  of  the  engagement  to  take  a  lead- 
ing, and,  indeed,  the  principal,  female  part  (for  the  prima  donna 
sang  her  part  in  male  costume  as  the  Prince  de  Conti)  in  a  new 
opera  which  (as  appears  from  the  terms  of  the  engagement)  it  was 
known  might  run  for  a  longer  or  shorter  time,  and  so  be  a  profitable 
or  losing  concern  to  the  defendants,  we  can,  without  the  aid  of  the 
jury,  see  that  it  must  have  been  of  great  importance  to  the  defendants 
that  the  piece  should  start  well,  and  consequently  that  the  failure  of 
the  plaintiff's  wife  to  be  able  to  perform  on  the  opening  and  early 
performances  was  a  very  serious  detriment  to  them. 

This  inability  having  been  occasioned  by  sickness  was  not  any 
breach  of  contract  by  the  plaintiff,  and  no  action  can  lie  against  him 
for  the  failure  thus  occasioned.  But  the  damage  to  the  defendants 
and  the  consequent  failure  of  consideration  is  just  as^reat  as  if  it 
had  been  occasioned  by  the  plaintiff's  fault,  instead  of  by  his  wife's 
misfortune.  The  analogy  is  complete  between  this  case  and  that  of 
a  charter-party  in  the  ordinary  terms,  where  the  ship  is  to  proceed 
in  ballast  (the  act  of  God,  &c.,  excepted)  to  a  port,  and  there  load 
a  cargo.  If  the  delay  is  occasioned  by  excepted  perils,  the  shipowner 
is  excused.  But  if  it  is  so  great  as  to  go  to  the  root  of  the  matter, 
it  frees  the  charterer  iVom  his  obligation  to  turnish  a  cargo:  see 
per  Bramwell,  B.,  delivering  the  judgment  of  the  majority  of  the 
Court  of  Exchequer  Chamber  in  Jackson  v.  Union  Marine  Insurance 
Co.^ 

And  we  think  that  the  question,  whether  the  failure  of  a  skilled 
and  capable  artiste  to  perform  in  a  new  piece  through  serious  ill- 
ness is  so  important  as  to  go  to  the  root  of  the  consideration,  must 
to  some  extent  depend  on  the  evidence;  and  is  a  mixed  question  of 
law  and  fact.  Theoretically,  the  facts  should  be  left  to  and  found 
separately  by  the  jury,  it  being  for  the  judge  or  the  Court  to  say 
whether  they,  being  so  found,  show  a  breach  of  a  condition  precedent 
or  not.  But  this  course  is  often  (if  not  generally)  impracticable; 
and  if  we  can  see  that  the  proper  facts  have  been  found,  we  should 
act  on  these  without  regard  to  the  form  of  the  questions. 

1  Law  Rep.  10  C.  P.  at  p.  141.     See  Storer  v.  Gordon.  3  M.  &  S.  308. 


556  POUSSARD    V.    SPIERS   AND   POND  [CHAP.   V 

!N"ow,  in  the  present  case,  we  must  consider  what  were  the  courses 
open  to  the  defendants  under  the  circumstances.  They  might,  it 
was  said  on  the  argument  before  us  (though  not  on  the  trial),  have 
postponed  the  bringing  out  of  the  piece  till  the  recovery  of  Madame 
Poussard,  and  if  her  illness  had  been  a  temporary  hoarseness  in- 
capacitating her  from  singing  on  the  Saturday,  but  sure  to  be  re- 
moved by  the  Monday,  that  might  have  been  a  proper  course  to 
pursue.  But  the  illness  here  was  a  serious  one,  of  uncertain  duration, 
and  if  the  plaintiff  had  at  the  trial  suggested  that  this  was  the  proper 
course,  it  would,  no  doubt,  have  been  shown  that  it  would  have  been 
a  ruinous  course;  and  that  it  would  have  been  much  better  to  have 
abandoned  the  piece  altogether  than  to  have  postponed  it  from  day 
to  day  for  an  uncertain  time,  during  which  the  theatre  would  have 
been  a  heavy  loss. 

The  remaining  alternatives  were  to  employ  a  temporary  substi- 
tute until  such  time  as  the  plaintiff's  wife  should  recover;  and  if  a 
temporary  substitute  capable  of  performing  the  part  adequately  could 
have  been  obtained  upon  such  a  precarious  engagement  on  any  rea- 
sonable terms,  that  would  have  been  a  right  course  to  pursue;  but 
if  no  substitute  capable  of  performing  the  part  adequately  could  be 
obtained,  except  on  the  terms  that  she  should  be  permanently  en- 
gaged at  higher  pay  than  the  plaintiff's  wife,  in  our  opinion  it  fol- 
lows, as  a  matter  of  law,  that  the  failure  on  the  plaintiff's  part  went 
to  the  root  of  the  matter  and  discharged  the  detendant^. 

We  think,  therefore,  that  the  litth  question  put  to  the  jury,  and 
answered  by  them  in  favor  of  the  defendants,  does  find  all  the  facts 
necessary  to  enable  us  to  decide  as  a  matter  of  law  that  the  defendants 
are  discharged. 

The  fourth  question  is,  no  doubt,  found  by  the  jury  for  the  plain- 
tiff; but  we  think  in  finding  it  they  must  have  made  a  mistake  in 
law  as  to  what  was  a  sufficient  failure  of  consideration  to  set  the 
defendants  at  liberty,  which  was  not  a  question  for  them. 

This  view  taken  by  us  renders  it  unnecessary  to  decide  any  thing 
on  the  cross  rule  for  a  new  trial. 

The  motion  must  be  refused  with  costs. 

Motion  refused  with  costs.^ 

*  Greene  v.  Linton,  7  Porter,  133;  Giohan  v.  Dailey's  Adm.,  4  Ala.  336;  Remy  v. 
Olds,  34  Fac.  Rep.  (Cal.)  210;  Hickman  v.  Rayl,  55  Ind.  551;  Camors  v.  Union 
Marine  Ins.  Co.,  104  La.  349;  John.son  v.  Walker,  155  Mass.  253;  Powell  v.  Newell, 
59  Minn.  406;  Hubbard  v.  Belden,  27  Vt.  645;  Green  v.  Gilbert,  21  Wis.  395,  ace; 
Asplund  V.  Mattson,  15  Wash.  328,  contra.  Temporary  illness  of  an  employee,  which 
does  not  go  to  the  root  of  the  contract,  will  not  pr(!vent  liim  from  enforcing  the  con- 
tract. Cuckson  V.  Stones,  1  E.  &  E.  248;  Warren  v.  Whittingham,  18  T.  L.  R.  508: 
Ryan  v.  Dayton,  25  Goim.  191;  Gaynor  v.  Jones,  104  N.  Y.  App.  D.  35.  Or  wrongful 
but  alight  default.     Fillieul  v.  Armstrong,  7  Ad.  &  E.  667. 


SECT.    II  ]  BETTINI    V.   GYE  557 

BETTIISri  V.  GYE 

In  the  High  Court  of  Justice,  January  25,   1876 

[Reported  in  1  Queens  Bench  Division,  183] 

Thikd  count,  that  the  defendant  was  and  is  the  director  of  the 
Royal  Italian  Opera  in  Loudon,  and  the  plaintiff  was  and  is  a  dram- 
atic artist  and  professional  singer,  and  thereupon  it  was  agreed  by 
and  between  the  plaintiff  and  the  defendant,  in  parts  beyond  the  seas, 
to  wit,  at  Milan,  in  Italy,  by  an  agreement  in  writing  in  the  French 
language,  of  which  the  translation  is  as  follows :  — 

Royal  Italian  Opera, 

Covent  Garden,  London. 
Year  1875. 

The  undersigned,  Mr.  Frederick  Gye,  gentleman,  and  director  of  the  Royal  Italian 
Opera  in  London,  of  the  one  part,  and  Mr.  Bettini,  dramatic  artist,  on  the  other  part, 
have  agreed  as  follows: 

1.  Mr.  Bettini  undertakes  to  fill  the  part  of  primo  tenor  assoluto  in  the  theatres, 
halls,  and  drawing-rooms,  both  public  and  private,  in  Great  Britain  and  in  Ireland, 
during  the  period  of  his  engagement  with  Mr.  Gye. 

2.  This  engagement  shall  begin  on  the  30th  of  March,  1875,  and  shall  terminate 
on  the  13th  of  July,  1875. 

3.  The  salary  of  Mr.  Bettini  shall  be  150Z.  per  month,  to  be  paid  monthly. 

4.  Mr.  Bettini  shall  sing  in  concerts  as  well  as  in  operas,  but  he  shall  not  sing  any- 
where out  of  the  theatre  in  the  United  Kingdom  of  Great  Britain  and  Ireland,  from 
the  1st  of  January  to  the  31st  of  December,  1875,  without  the  written  permission  of 
Mr.  Gye,  except  at  a  distance  of  more  than  fifty  miles  from  London,  and  out  of  the 
season  of  the  theatre. 

5.  Mr.  Gye  shall  furnish  the  costumes  to  Mr.  Bettini  for  his  characters,  according 
to  the  ordinary  usage  of  theatres. 

6.  Mr.  Bettini  will  conform  to  the  ordinary  rules  of  the  theatre  in  case  of  sickness, 
fire,  rehearsals,  &c. 

7.  Mr.  Bettini  agrees  to  be  in  London  without  fail  at  least  six  days  before  the 
commencement  of  his  engagement,  for  the  purpose  of  rehearsals. 

8.  In  case  Mr.  Gye  shall  require  the  services  of  Mr.  Bettini  at  a  distance  of  more 
than  ten  miles  from  London,  he  shall  pay  his  travelling  expenses. 

9.  Mr.  Bettini  shall  not  be  obhged  to  sing  more  than  four  times  a  week  in  opera. 
Mr.  Bettini,  in  order  to  assist  the  direction  of  Mr.  Gye,  will  sing,  upon  the  request 
of  Mr.  Gye,  in  the  same  characters  in  which  he  has  already  sung,  and  in  other  charac- 
ters of  equal  position.  In  case  of  the  sickness  of  other  artists,  Mr.  Bettini  agrees  to 
replace  them  in  their  characters  of  first  tenor  assoluto. 

10.  Mr.  Gye  shall  have  the  right  to  prolong  the  period  limited  above  upon  the 
same  conditions,  provided  that  the  period  does  not  go  beyond  the  end  of  the  month 
of  August. 

F.  Gye,  MUan,  14  Dec.  1874. 

That  the  plaintiff  did  not  sing  anywhere  out  of  the  said  theatre 
in  the  United  Kingdom  of  Great  Britain  and  Ireland,  from  the  1st 
of  January,  1875,  to  the  date  of  the  commencement  of  this  action, 
without  the  written  permission  of  the  defendant,  except  at  a  distance 
of  more  than  fifty  miles  from  London,  and  out  of  the  season  of  the 
said  theatre.  That  the  plaintiff  was  prevented  by  temporary  ill- 
ness from  being  in  London  before  the  28th  of  March,  1875,  but  he 
did  arrive  in  London  on  that  day;  and,  save  as  aforesaid,  the  plain- 
tiff has  always  performed  his  said  agreement,  and  was  and  is  ready 


558  BETTINI    V.    GYE  [CHAP.   V 

and  -willing  to  perform  his  part  of  the  said  agreement,  of  all  which 
the  defendant  had  notice,  and  all  things  were  done  and  happened, 
and  all  conditions  were  fulfilled  and  all  times  elapsed  necessary  to 
entitle  the  plaintiff  to  a  performance  by  the  defendant  of  the  said 
agreement  and  to  maintain  this  action.  Yet  the  defendant  did  not 
nor  would  receive  the  plaintiff  into  his  said  service,  but  wholly  re- 
fused so  to  do,  and  wrongfully  exonerated  and  discharged  the  plain- 
tiff from  his  said  agreement,  and  from  the  performance  of  the  said 
agreement  on  the  plaintiff's  part,  and  wrongfully  put  an  end  to  and 
determined  the  said  agreement,  whereby  the  plaintiff  was  damnified. 

The  defendant  pleaded,  ninthly,  to  the  third  count,  that  the  plain- 
tiff was  not  in  London  six  days  before  the  commencement  of  the 
said  engagement  for  the  purpose  of  rehearsals,  nor  had  the  defendant 
notice  before  the  said  six  days  of  the  plaintiff's  inability  to  be  in 
London,  or  that  he  would  not  be  in  London  six  days  before  the  com- 
mencement of  his  engagement,  for  the  purpose  of  rehearsals,  nor 
was  the  plaintiff  ready  and  willing  to  attend  such  rehearsals,  al- 
though it  was  necessary  for  him  to  do  so;  wherefore  the  defendant 
did  not  nor  would  receive  the  plaintiff  into  his  service  in  the  capacity 
and  on  the  terms  aforesaid,  which  is  the  breach  complained  of. 

Demurrer  to  the  ninth  plea,  and  joinder. 

1875.  Dec.  15.  Murphy,  Q.  C.  (with  him  A.  L.  Smith),  for  the 
plaintiff,  in  support  of  the  demurrer,  contended  that  the  stipulation 
as  to  the  attendance  of  the  plaintiff  at  rehearsals  six  days  before 
the  commencement  of  the  engagement  was  not  a  condition  precedent, 
inasmuch  as  the  plaintiff  was  to  sing  during  the  engagement  at  con- 
certs as  well  as  in  operas;  moreover,  the  plaintiff  was  not  to  sing  in 
London  from  the  1st  of  January,  and  he  had  abstained  from  doing 
so.     He  cited  Robinson  v.  Davidson^,  and  MacAndrew  v.  Chappie. 

Arthur  Wilson  (with  him  Percy  Gye)  for  the  defendant,  con- 
tended that  the  stipulation  was  a  condition  precedent.  He  cited 
Atkinson  v.  Bell,^  Graves  v.  Legg,  Bradford  v.  "Williams,  Tilley  v. 
Thomas,''  Jackson  v.  Union  Marine  Insurance  Company.* 

Murphy,  Q.  C,  in  reply.  Cur.  adv.  vult. 

1876.  Jan.  25.  The  judgment  of  the  Court  (Blackburn,  Quain, 
and  Archibald,  JJ.)   was  delivered  by 

Blackburn,  J.  In  this  case  the  parties  have  entered  into  an 
agreement  in  writing,  which  is  set  out  on  the  record. 

Tbe  Court  must  ascertain  the  intention  of  the  parties,  as  is  said 
by  Parke,  B.,  in  delivering  the  judgment  of  the  Court  in  Graves  v. 
Legg,  "to  be  collected  from  the  instrument  and  the  circumstances 
legally  admissible  in  evidence  with  reference  to  which  it  is  to  be 
constnu'd."     He  adds:  "One  particular  rule  well  acknowledged  is, 

«  Law  Rop.  0  Ex.  269.  »  Law  Rep.  3  Ch.  61. 

*  8  B.  A  C.  277,  283.  «  Law  Rep.  10  C.  P.  125. 


SECT.    II  ]  BETTINI    V.   GYE  559 

that  where  a  covenant  or  agreement  goes  to  part  of  the  consideration 
on  both  sides,  and  may  be  compensated  in  damages,  it  is  an  inde- 
pendent covenant  or  contract."  There  was  no  averment  of  any 
special  circumstances  existing  in  this  case,  with  reference  to  which 
the  agreement  was  made,  but  the  Court  must  look  at  the  general  na- 
ture of  such  an  agreement.  By  the  7th  paragraph  of  the  agreement, 
"Mr.  Bettini  agrees  to  be  in  London  without  fail  at  least  six  days 
before  the  commencement  of  his  engagement,  for  the  purpose  of 
rehearsals."  The  engagement  was  to  begin  on  the  30th  of  March, 
1875.  It  is  admitted  on  the  record  that  the  plaintiff  did  not  arrive 
in  London  till  the  28th  of  March,  which  is  less  than  six  days  before 
the  30th,  and  therefore  it  is  clear  that  he  has  not  fulfilled  this  part 
of  the  contract. 

The  question  raised  by  the  demurrer  is,  not  whether  the  plaintiff 
has  any  excuse  for  failing  to  fulfil  this  part  of  his  contract,  which 
may  prevent  his  being  liable  in  damages  for  not  doing  so,  but  whether 
his  failure  to  do  so  justified  the  defendant  in  refusing  to  proceed 
with  the  enp^agement,  and  fullil  hiSj  the  defendant's  part.  And  the 
answer  to  that  question  depends  on  whether  this  part  of  the  contract 
is  a  condition  precedent  to  the  defendant's  liability,  or  only  an  in- 
dependent agreement,  a  breach  of  which  will  not  justify  a  repudi- 
ation of  the  contract,  but  will  only  be  a  cause  of  action  for  a  com- 
pensation in  damages. 

This  is  a  question  which  has  very  often  been  raised  and  the  nu- 
merous cases  on  the  subject  are  collected  in  the  first  volume  of  Sir  E. 
V.  Williams'  ISTotes  to  Saunders,  p.  554,  in  the  notes  to  Pordage  v. 
Cole,  and  in  the  second  volume,  p.  742,  notes  to  Peeters  v.  Opie. 

We  think  the  answer  to  this  question  depends  on  the  true  con- 
struction of  the  contract  taken  as  a  whole. 

Parties  may  think  some  matter,  apparently  of  very  little  impor- 
tance, essential;  and  if  they  sufiiciently  express  an  intention  to  make 
the  literal  fulfilment  of  such  a  thing  a  condition  precedent,  it  will 
be  one;  or  they  may  think  that  the  performance  of  some  matter, 
apparently  of  essential  importance  and  prima  facie  a  condition  prece- 
dent, is  not  really  vital,  and  may  be  compensated  for  in  damages, 
and  if  they  sufficiently  expressed  such  an  intention,  it  will  not  be 
a  condition  precedent. 

In  this  case,  if  to  the  7th  paragraph  of  the  agreement  there  had 
been  added  words  to  this  effect :  "And  if  Mr.  Bettini  is  not  there  at 
the  stipulated  time,  Mr.  Gye  may  refuse  to  proceed  further  with 
the  agreement;"  or  if,  on  the  other  hand,  it  had  been  said,  "And 
if  not  there,  Mr.  Gye  may  postpone  the  commencement  of  Mr.  Bet- 
tini's  engagement  for  as  many  days  as  Mr.  Bettini  makes  default, 
and  he  shall  forfeit  tvidce  his  salary  for  that  time,"  there  could  have 
been  no  question  raised  in  the  case.  But  there  is  no  such  declaration 
of  the  intention  of  the  parties  either  way.  And  in  the  absence  of 
such  an  express  declaration,  we  think  that  we  are  to  look  to  the 


560  BETTINI    V.    GYE  [CHAP.   V 

whole  contract,  and  applying  the  rule  stated  by  Parke,  B.,  to  be 
acknowledged,  see  whether  the  particular  stipulation  goes  to  the 
root  of  the  matter,  so  that  a  failure  to  perform  it  would  render  the 
performance  of  the  rest  of  the  contract  by  the  plaintiff  a  thing  dif- 
ferent m  substance  from  what  the  defendant  has  stipulated  for;  or 
whether  it  merely  partially  affects  it  and  may  be  compensated  for 
in  damages.  Accordingly  as  it  is  one  or  the  other,  we  think  it  must 
be  taken  to  be  or  not  to  be  intended  to  be  a  condition  precedent. 

If  the  plaintiff's  engagement  had  been  only  to  sing  in  operas  at 
the  theatre,  it  might  very  well  be  that  previous  attendance  at  re- 
hearsals with  the  actors  in  company  with  Avhom  he  was  to  perform 
was  essential.  And  if  the  engagement  had  been  only  for  a  few  per- 
formances, or  for  a  short  time,  it  would  afford  a  strong  argument 
that  attendance  for  the  purpose  of  rehearsals  during  the  six  days 
immediately  before  the  commencement  of  the  engagement  was  a 
vital  part  of  the  agreement.  But  we  find,  on  looking  to  the  agree- 
ment, that  the  plaintiff  was  to  sing  in  theatres,  halls,  and  drawing 
rooms,  both  public  and  private,  from  the  30th  of  March  to  the  13th 
of  July,  1875,  and  that  he  was  to  sing  in  concerts  as  well  as  in  operas, 
and  was  not  to  sing  any^vhere  out  of  the  theatre  in  Great  Britain 
or  Ireland  from  the  1st  of  January  to  the  31st  of  December,  1875, 
without  the  written  permission  of  the  defendant,  except  at  a  distance 
of  more  than  fifty  miles  from  London. 

The  plaintiff,  therefore,  has,  in  consequence  of  this  agreement,  been 
deprived  of  the  power  of  earning  anything  in  London  from  the  1st 
of  January  to  the  30th  of  March;  and  though  the  defendant  has, 
perhaps,  not  received  any  benefit  from  this,  so  as  to  preclude  him 
from  any  longer  treating  as  a  condition  precedent  what  had  originally 
been  one,  we  think  this  at  least  affords  a  strong  argument  for  saying 
that  subsequent  stipulations  are  not  intended  to  be  conditions  prece- 
dent, unless  the  nature  of  the  thing  strongly  shows  they  must  be  so. 

And,  as  far  as  we  can  see,  the  failure  to  attend  at  rehearsals  dur- 
ing the  six  days  immediately  before  the  30th  of  March  could  only 
affect  the  theatrical  performances  and,  perhaps,  the  singing  in  duets 
or  concerted  pieces  during  the  first  week  or  fortnight  of  this  en- 
gagement, which  is  to  sing  in  theatres,  halls,  and  drawing-rooms, 
and  concerts,  for  fifteen  weeks. 

We  think,  therefore,  that  it  does  not  go  to  the  root  of  the  matter 
so  as  to  require  us  to  consider  it  a  condition  precedent. 

The  defendant  must,  therefore,  we  think,  seek  redress  by  a  cross- 
claim  for  damages. 

Judgment  must  be  given  for  the  plaintiff. 

Judgment  for  the  plaintiff. 


SECT.   II  ]  WELLS    V.    CALNAN"  561 


EDWAED  H.  WELLS  v.  WILLIAM  CALN"A]!^ 

Supreme  Judicial  Court  of  Massachusetts,  September  1,  1871 

[Reported  in  107  Massachusetts  Reports^  414] 

Contract  on  a  written  agreement  dated  December  22,  1868,  by 
which  the  plaintiff  agreed  to  sell  and  the  defendant  to  buy  "the 
farm  now  occupied  by"  the  plaintiff  "and  his  father  "  (describing  it 
by  metes  and  bounds),  for  $3,250,  which  the  defendant  agreed  to 
pay  on  April  10,  1869,  and  it  was  provided  that  "no  wood  should 
be  cut  and  removed  from  the  premises  save  firewood  for  use  in  the 
house,"  that  the  plaintiff  on  receiving  payment  should  execute  and 
deliver  to  the  defendant  a  proper  deed  for  the  conveying  and  as- 
suring to  him  of  "the  fee  simple  of  the  said  premises,"  and  that  for 
the  due  performance  of  the  agreement,  each  party  was  bound  to  the 
other  in  the  sum  of  $500,  "which  said  sum  is  to  be  taken  as  liquidated 
damages."  The  declaration  alleged  the  making  of  the  agreement, 
and  that  the  plaintiff  executed  a  good  and  proper  deed  for  conveying 
and  assuring  to  the  defendant  in  fee  simple  "the  premises  described 
in  said  agreement,"  and  tendered  said  deed  to  the  defendant  on  April 
10,  1869,  and  demanded  payment  of  the  $3,250  of  the  defendant,  but 
that  the  defendant  refused  to  pay  the  same,  and  also  refused  to  pay 
the  $500  as  liquidated  damages;  and  that  the  defendant  owed  the 
plaintiff  $500.  The  answer  admitted  the  making  of  the  agreement, 
but  denied  the  making  or  tender  of  a  good  and  sufficient  deed,  and 
all  the  other  allegations  of  the  declaration. 

At  the  trial  in  the  Superior  Court,  before  Pitman,  J.,  it  appeared 
that  the  plaintiff  tendered  a  deed  in  due  form  on  April  10,  1869; 
that  the  farm-house  and  out-buildings  on  the  land  were  burned  on 
the  preceding  day;  that  the  defendant  for  that  reason  refused  to 
accept  the  deed  or  pay  the  price^;  that  the  estate  at  tlie  time  of  the 
contract  was  worth  at  least  $3,250,  but  after  the  fire  was  worth  not 
more  than  $2,000 ;  and  that  the  plaintiff  had  obtained  insurance  upon 
the  buildings  in  the  sum  of  $2,000 ;  and  had  received  of  the  insurance 
company,  in  settlement  of  his  claim  against  them,  the  sum  of  $1,600. 

The  defendant  offered  to  show  that  the  insurance  company,  be- 
fore the  commencement  of  this  action,  offered  the  plaintiff  to  take 
from  him  a  quitclaim  deed  of  the  estate,  and  pay  him  the  full  con- 
tract price.     But  the  judge  excluded  the  evidence  as  immaterial. 

The  plaintiff  contended  that  he  was  entitled  to  the  $500  as  liqui- 
dated damages,  while  the  defendant  contended  that  it  was  to  be 
treated  as  a  penal  sum.  But  the  judge  ruled  "that  this  question  was 
of  no  importance,  because,  if  the  plaintiff  was  entitled  to  demand 
payment  of  the  contract  price  notwithstanding  the  loss  of  the  build- 
ings, he  had  sustained  damage  to  a  larger  amount  by  the  defendant's 
refusal." 


562  WELLS    V.    CALNAN  [CHAP.    V 

The  defendant  requested  the  court  to  instruct  the  jury  that  they 
might  consider  the  amount  received  by  the  plaintiff  from  the  in- 
surance company  in  their  estimate  of  his  damages,  and  might  re- 
turn a  verdict  for  nominal  damages  only,  but  the  judge  instructed 
them  to  the  contrary. 

The  jury  returned  a  verdict  for  the  plaintiff  in  the  sum  of  $546.83, 
being  the  amount  claimed,  with  interest;  and  the  case  was  reported 
to  this  Court;  if  error  appeared  in  the  rulings,  the  verdict  to  be 
set  aside  and  a  new  trial  had;  otherwise,  judgment  to  be  entered  on 
the  verdict. 

IF.  G.  Bates,  for  the  defendant. 

H.  Morris  &  N.  T.  Leonard,  for  the  plaintiff. 

Gkay,  J.  The  principles  of  law,  upon  which  the  rights  of  the 
parties  to  this  case  depend,  appear  to  have  been  overlooked  at  the 
trial. 

"When  property,  real  or  personal,  is  destroyed  by  fire,  the  loss  falls 
upon  the  party  who  is  the  owner  at  the  time;  and  if  the  owner  of 
a  house  and  land  agrees  to  sell  and  convey  it  upon  the  payment  of 
a  certain  price  which  the  purchaser  agrees  to  pay,  and  before  full 
payment  the  house  is  destroyed  by  accidental  fire,  so  that  the  vendor 
cannot  perform  the  agreement  on  his  part,  he  cannot  recover  or  re- 
tain any  part  of  the  purchase-money. 

For  these  reasons,  in  Thompson  v.  Gould,  20  Pick.  134,  where, 
after  the  making  of  an  oral  agreement  for  the  sale  and  purchase  of 
a  house  and  land,  and  the  purchaser's  entry  into  possession  and  pay- 
ment of  part  of  the  price,  but  before  delivery  or  tender  of  the  deed, 
the  house  was  destroyed  by  fire,  it  was  held  by  this  Court,  in  an 
elaborate  judgment  delivered  by  Mr.  Justice  Wilde,  that  he  was 
entitled  to  recover  back  the  money  paid,  on  the  ground  of  a  failura 
of  the  consideration. 

In  Bacon  v.  Simpson,  3  M.  &  W.  78,  the  plaintiff  had  agreed  lo 
sell,  and  the  defendant  to  purchase,  a  lease  for  years  of  a  dwelling- 
house  at  a  certain  price,  and  the  furniture,  tenant's  fixtures,  and 
other  property  therein  at  a  valuation  to  be  made  by  appraisers.  Be- 
fore fulfilment  of  the  agreement,  or  delivery  of  possession  to  the 
defendant,  the  greater  part  of  the  house  and  the  property  therein 
was  consumed  by  fire.  The  plaintiff  brought  an  action  on  the  agree- 
ment, averring  readiness  to  perform  from  the  time  of  making  the 
agreement  and  ever  since,  which  was  traversed  by  the  defendant.  It 
was  lifld  by  the  Court  of  Exchequer  that  by  reason  of  the  fire  the 
plaintiff  could  not  perform  the  agreement,  and  therefore  eould  not 
maintain  the  action. 

Tn  Taylor  v.  Caldwell,  3  B.  &  S.  826,  by  a  written  contract  one 
party  agrcerl  to  give  the  other  the  use  of  a  certain  music  hall  on 
four  spf'C'ifif'fl  days,  for  the  ])urpose  of  holding  concerts,  with  no 
express  stipulation  for  the  event  of  its  destruction  by  fire.  The 
Court  of  Queen's  Bench  held  that  upon  the  destruction  of  the  build- 


SECT.    II  ]  WELLS    V.    CALNAN  563 

ing  on  an  earlier  day,  by  an  accidental  fire,  both  parties  were  excused 
from  the  performance  of  the  contract;  and,  while  recognizing  as 
undoubted  the  rule  that  one  who  makes  a  positive  contract  to  do  a 
thing  not  in  itself  unlawful  must  perform  it  or  pay  damages  for 
not  doing  so,  declared  it  to  be  also  well  settled  that  that  rule  is  only 
applicable  where  the  contract  is  positive  and  absolute,  and  not  sub- 
ject to  any  condition,  express  or  implied;  and  that  where,  from  the 
nature  of  the  contract,  it  appears  that  the  parties  must  from  the 
beginning  have  contemplated  the  continuing  existence  of  some  par- 
ticular specified  thing  as  the  foundation  of  what  was  to  be  done, 
there,  in  the  absence  of  any  express  or  implied  warranty  that  the 
thing  shall  exist,  the  contract  is  not  to  be  construed  as  a  positive 
contract,  but  as  subject  to  an  implied  condition  that  the  parties  shall 
be  excused  in  case,  before  breach,  performance  becomes  impossible 
from  the  accidental  perishing  of  the  thing  without  the  fault  of 
either  party. 

The  doctrine  as  there  stated  has  been  approved  in  the  later  Eng- 
lish cases.  Appleby  v.  Meyers,  Law  Rep.  1  C  P.  615;  s.  c.  Law 
Eep.  2  C.  P.  651;  Boast  v.  Firth,  Law  Rep.  4  C.  P.  1;  Robinson  v. 
Davison,  Law  Rep.  6  Exch.  269.  And  it  is  illustrated  by  the  previ- 
ous decisions  of  this  Court,  by  which  it  has  been  held  that  a  person 
who  agrees  to  build  a  house  on  the  land  of  another  is  not  discharged 
by  the  destruction  of  the  house  by  fire  before  its  completion;  but 
that,  where  one  agrees  to  repair  another's  house  already  built,  such 
destruction  of  the  house  puts  an  end  to  the  contract.  Adams  v. 
Mchols,  19  Pick.  275;  Lord  v.  Wheeler,  1  Gray,  282. 

In  the  present  case,  the  agreement  between  the  parties  manifestly 
contemplates  the  conveyance  of  the  buildings  already  upon  the  land 
as  an  important  part  of  the  subject-matter  of  the  contract.  It  de- 
scribes the  property  to  be  conveyed  as  the  farm  occupied  by  the 
vendor  and  his  father,  and  contains  a  provision  that  until  the  day 
appointed  for  the  delivery  of  the  deed  no  wood  shall  be  cut  and  re- 
moved from  the  premises,  save  firewood  for  use  in  the  house.  The 
vendor  agrees  to  execute  and  deliver  a  proper  deed  for  the  convey- 
ing and  assuring  to  the  purchaser  of  the  fee-simple  "of  the  said 
premises."  The  price  stipulated  to  be  paid  is  an  entire  sum;  and 
the  report  states  that  it  appeared  in  evidence  at  the  trial  that  the 
estate  at  the  time  of  the  contract  was  worth  at  least  that  sum,  and 
after  the  fire  was  not  worth  two-thirds  as  much. 

The  case  differs  from  those  in  which  a  lessee  is  held  liable  to  pay 
rent  or  make  repairs  according  to  his  covenants,  notwithstanding  the 
destruction  of  the  buildings  by  fire  or  other  accident  during  the 
term.  There  the  lessor,  by  the  execution  and  delivery  of  the  lease, 
has  fully  performed  the  contract  on  his  part;  and  the  lessee,  having 
thereby  become  the  owner  of  the  leasehold  interest,  must  bear  the 
same  risk  of  fire  or  casualty  as  any  other  owner  of  property,  and 
is  not  excused  from  performing  his  own  express  covenants.     Fowler 


564  DONLAN    V.    CITY   OF   BOSTON  [CHAP.   V 

V.  Bott,  6  Mass.  63;  Kramer  v.  Cook,  7  Gray,  550;  Leavitt  v. 
Fletcher,  10  Allen,  119,  But  in  the  case  at  bar  the  defendant  has 
only  agreed  to  pay  the  purchase-money  upon  tender  of  a  deed  of 
the  whole  estate  contracted  for,  including  the  buildings  as  well  as 
the  land;  and,  the  buildings  having  been  wholly  destroyed  by  fire 
on  the  day  before  that  appointed  for  the  conveyance,  the  plaintiff 
did  not  and  could  not  tender  such  a  conveyance  as  he  had  agreed  to 
make  or  as  the  defendant  was  bound  to  accept,  and  was  not  therefore 
entitled  to  maintain  any  action  against  the  defendant  upon  the  agree- 
ment. 

It  was  contended  at  the  argument  that  this  defence  was  not  open 
under  the  pleadings.  But  the  declaration  alleges  that  the  plaintiff 
tendered  to  the  defendant  a  good  and  proper  deed  for  the  conveying 
and  assuring  to  the  defendant  the  premises  described  in  the  agree- 
ment; and  this  allegation  is  met  by  a  direct  denial  in  the  answer. 

The  result  is,  that  the  rulings  of  the  Superior  Court  were  erro- 
neous, because  inapplicable  to  the  case;  that  there  has  been  a  mis- 
trial, and  that  the 

Verdict  must  be  set  aside,  and  a  new  trial  had} 


ESTHER  G.  DONLAN,  Executrix,  v.  CITY  OF  BOSTON" 

Supreme  Judicial  Court  of  Massachusetts 

January  19-March  3,  1916 

[Reported  in  223  Massachusetts,  285] 

Bealey,  J.  The  plaintiff's  testatrix  died  while  in  the  employment 
of  the  defendant  as  a  teacher  of  manual  training  in  the  public  schools 
under  a  contract  at  a  fixed  yearly  salary,  and  this  action  is  brought 
to  recover  the  balance  which  would  have  been  due  if  she  had  sur- 
vived the  period.  It  is  settled  that  as  performance  by  her  depended 
upon  her  personal  judgment,  ability  and  efforts,  there  was  an  im- 
plied condition  to  which  the  contract  was  subject  that  she  should 
be  living  and  physically  able  to  do  the  work.  Marvel  v.  Phillips, 
162  Mass.  399,  401.  The  contract  therefore  was  terminated  by  her 
death  before  the  year  had  ended.  Browne  v.  Fairhall,  213  Mass. 
290,  294.     Johnson  v.  Walker,  155  Mass.  253. 

But  as  the  testatrix  died  during  the  summer  vacation  leaving 
only  one  month  of  the  school  year  unpaid  for,  the  plaintiff  contends 
that  this  amount,  being  one  twelftl)  of  the  salary,  is  collectible  on 
the  basis  of  the  payments  she  had  received  each  month  as  shown  by 
her  signature  on  the  pay  rolls.  The  contract  nevertheless  was  en- 
tire,   althoiurh    the   payments   were   made   by   monthly   instalments. 

'  Thn  authoritiVs  aro  collnctod  in  2  Williflton,  Contracts,  §027  et  seq.  The  doc- 
trinr-  of  th»'  T'lvil  TiHw  is  fliHoiBsnrl,  id.  §047  rl  srq.  Sfo  also  German  Civ.  Code,  §446; 
Titze,  Umnoglichkeit,  25&-2G4;    Coviello,  Caao  Fortuito,  137  et  seq.:    240  et  seq. 


SECT.    II ]  TICHNOR   BROTHERS    V.  EVANS  565 

Fullam  V.  Wright  &  Colton  Wire  Cloth  Co.  196  Mass.  474,  476. 
Clark  V.  Gulesian,  197  Mass.  492.  Moffat  v.  Davitt,  200  Mass.  452, 
458.  And  full  payment  having  been  made  of  all  that  was  due  when 
her  death  occurred,  and  further  payments  being  conditional  upon  the 
continuance  of  the  contract  and  not  upon  whether  she  was  excused 
from  the  rendition  of  services  during  the  succeeding  month,  the  ac- 
tion cannot  be  maintained.  Johnson  v.  Walker,  155  Mass.  253,  255. 
Pollock  on  Contracts  (Wald's  ed.)  543,  548. 

By  the  terms  of  the  report  judgment  is  to  be  entered  for  the  de- 
fendant. 8o  ordered. 


TICHNOR  BROTHEES  v.  JOSEPH  EVANS 

Vermont  Supreme  Court,  February  25,  1918 

{^Reported  in  92  Vermont,  278] 

Powers,  J.  In  the  spring  of  1914,  the  plaintiffs,  through  their 
traveling  salesman.  Pierce,  sold  the  defendant  a  bill  of  goods 
which  included  the  post  card  sets  here  in  controversy.  At  the  time 
of  the  sale.  Pierce  told  the  defendant  that  if  he  would  buy  the  sets 
at  the  price  named,  he.  Pierce,  would  not  sell  like  sets  to  any  one  else 
in  the  town.  Upon  this  assurance,  the  defendant  made  the  purchase. 
The  plaintiffs  did  not  keep  this  agreement,  but  at  sometime  during 
the  following  winter,  they  sold  similar  sets  to  one  of  the  defendant's 
competitors  doing  business  on  the  same  street.  The  defendant  learned 
of  this  about  the  first  of  June,  1915,  but  said  or  did  nothing  about 
it  until  some  two  years  later  and  just  before  the  trial  below.  The 
suit  is  brought  to  recover  the  balance  due  on  the  goods  sold,  and  is 
defended  on  the  ground  that  the  plaintiffs,  having  broken  the  con- 
tract in  the  particular  named,  are  not  entitled  to  recover  anything 
under  it. 

The  trial  below  was  by  the  court,  and  it  is  recited  in  the  findings 
that  there  was  no  evidence  from  which  a  determination  could  be 
made  as  to  the  amount  of  damage  the  defendant  had  suffered 
by  the  above  mentioned  breach  of  the  contract  by  the  plaintiffs. 
Therefore,  the  court  assessed  such  damage  at  one  dollar,  deducted 
it  from  the  amount  due  the  plaintiffs,  and  rendered  judgment  for  the 
latter  for  the  balance,  with  interest  thereon.  To  this  the  defendant 
excepted.  So  the  only  question  before  us  is :  Were  the  plaintiffs 
entitled  to  recover  anything  on  the  facts  found? 

The  defence  is  predicated  upon  the  doctrine,  frequently  approved 
by  this  Court,  that  a  breach  that  goes  to  the  essence  of  the  contract 
operates  as  a  discharge  of  it.  This  rule  will  not  avail  the  defendant. 
It  is  not  every  breach  that  goes  to  the  essence.  It  gives  rise  to  an 
action  for  damages,  but  it  does  not  necessarily  justify  a  refusal  to 
perform.    Where,  as  here,  the  stipulation  goes  only  to  a  part  of  the 


566      LEISTON  GAS   CO.    V.   URBAN   DISTRICT   COUNCIL       [CHAP.   V 

consideration,  and  may  be  compensated  for  in  damages,  its  breach 
does  not  relieve  the  other  party  fro  mj)erformance.  In  such  cases, 
the  broken  promise  is  an  independant  undertaking  and  not  a  con- 
dition precedent.  Kauffman  v.  Kaeder,  108  Fed.  171,  47  C.  C.  A. 
278,  54  L.  E.  A.  247 ;  Lowber  v.  Bangs,  2  Wall.  728,  17  L.  ed.  768. 
See  Rioux  v.  Eyegate  Brick  Co.,  72  Vt.  at  p.  155,47Atl.406.  In  order 
to  operate  as  a  discharge  or  give  rise  to  a  right  of  rescission,  the  par- 
tial failure  to  perform  must  go  to  the  very  root  of  the  contract. 
Chamberlin  v.  Booth,  135  Ga.  719,  70  S.  E.  569,  35  L.  E.  A.  (N.S.) 
1223.  Keenan  v.  Brown,  21  Vt.  86,  is  a  case  of  partial  failure  of 
performance,  and  it  was  held  that  the  defendant  therein  was  not 
absolved  thereby,  and  was  only  entitled  to  recover  his  damages. 

Moreover,  when  a  contract  has  been  partly  performed  by  one 
party,  and  the  other  has  derived  a  substantial  benefit  therefrom,  the 
latter  cannot  refuse  to  comply  with  its  terms  simply  because  the 
former  fails  of  complete  performance.  Kauffman  v.  Eaeder,  supra; 
13  C.  J.  569.  "Where  a  person  has  received  a  part  of  the  considera- 
tion for  which  he  entered  into  the  agreement,"  says  Mr.  Serjt. 
Williams,  "it  would  be  unjust  that,  because  he  has  not  had  the  whole, 
he  should  therefore  be  permitted  to  enjoy  that  part  without  either 
paying  or  doing  anything  for  it."  I  Saund.  320d.  Hammond  v. 
Buckmaster,  22  Yt.  375,  is  a  case  of  this  class,  and  it  was  therein 
held  that,  inasmuch  as  each  party  had  received  a  partial  benefit  from 
the  contract  and  could  not  be  placed  in  statu  quo,  the  defendant 
would  have  to  perform  the  contract,  seeking  his  damages  for  the 
plaintiff's  breach  by  cross  action.  These  holdings  are  decisive  of  the 
case  in  hand.  The  stipulation  in  question  was  only  a  part  of  the 
consideration  of  the  defendant's  undertaking;  was  subordinate  and 
incidental  to  its  main  purpose ;  its  breach  is  compensable  in  damages ; 
and  the  defendant  obtained  and  now  holds  a  substantial  benefit  under 
the  contract.  Other  questions  argued  need  not  be  considered.  The 
judgment  below  is  without  error   and   is  Affirmed.^ 


LEISTON  GAS  COMPANY  v.  LEISTON-CUM-SIZEWELL 
UEBAN  DISTEICT  COUNCIL 

In  the  Kino's  Bench  Division,  January  22-Eebruary  1,  1916 

[Reported  in  [1916]  2  King's  Bench,  428] 

ScHUTTON,  J.  An  action  was  brought  by  the  Leiston  Gas  Com- 
pany, Limited,  whom  T  call  "the  gas  company,"  against  the  Leiston 
Urban  District  Council,  whom  I  call  "the  council,"  to  recover  157L 
15.9.,  being  three  quarterly  payments  dnc  from  the  council  under  an 

'  RcnalHo  Wilfloyr.  Now  Standard  Conomtnitor  Co.,  164  Fed.  421  (C.  C.  A.);  Mark 
T.  Stuart-Howl  and  C(>.,  220  Mass.  35;  Rosenthal  Paper  Co.  v.  National  Folding  Box 
&  Paper  Co.,  220  N.  Y.  .'^1.3. 


SECT.    IlJ       LEISTON   GAS    CO.    V.    URBAN    DISTRICT   COUNCIL      567 

agreement  dated  June  2,  1911.  The  defendants  alleged  that  the 
agreement  was  for  the  supply  of  lighted  gas  lamps,  and  that,  under 
Orders  from  a  competent  military  authority  acting  under  the  De- 
fence of  the  Realm  Act  and  Kegulations,  such  lamps  could  not  be 
lighted  for  more  than  half  the  first  quarter,  and  for  the  whole  of 
the  second  and  third  quarters  sued  for.  Low,  J.,  held  this  was  no 
defence  and  gave  judgment  for  the  plaintiffs,  the  gas  company.  The 
defendants,  the  council,  appeal  to  this  Court.  The  case  raises  ques- 
tions of  general  importance  and  some  difficulty.  It  is  necessary 
first  to  appreciate  exactly  what  the  agreement  sued  under  provides. 
It  is  a  contract  to  last  for  five  years  from  August  1,  1911,  and  there- 
after till  determined  by  six  months'  notice  terminating  on  July  31 
of  any  year  after  and  including  1916.  The  gas  company  are  to 
provide  105  gas  standards  and  burners  with  automatic  lighters,  which 
remain  their  property,  and  to  connect  them  with  their  mains,  and 
to  supply  gas  and  incandescent  mantles  and  chimneys  for  and  light, 
extinguish,  clean,  repair,  paint,  and  maintain  the  said  lamps.  The 
lamps  are  to  be  lit  every  night  between  certain  hours  varying  with 
sunset  and  sunrise  except  on  bright  moonlight  nights.  The  council 
is  not  to  pay  in  proportion  to  gas  supplied,  but  pays  an  annual  rate 
for  each  of  the  lamps  con tr acted  for,  reduced  on  a  scale  if  the  gas 
company  reduce  their  charge  for  gas.  The  annual  sum  is  payable 
quarterly.  The  quarterly  payment,  therefore,  does  not  immedi- 
ately  depend  on  gas  supplied ;  it  is  the  same  in  the  winter  and  summer 
quarters,  and  the  same  whether  the  quarter  contains  many  or  few 
bright  moonlight  nights.  It  includes  an  unapportioned  sum  for  sup- 
ply and  maintenance  of  plant.  The  gas  company  are  liable  for 
damages  or  penalty  (both  words  are  used)  for  each  lamp  they  fail 
to  light  on  any  night  when  it  ought  to  be  lit  unless  the  failure  is  due 
to  circumstances  beyond  their  control;  and  the  parties  provide  that 
if  there  is  delay  in  starting  the  lamps  on  August  1,  1911,  the  penalty 
shall  not  apply,  but  the  quarterly  payment  shall  be  reduced  pro 
rata.  They  make  no  express  provision  for  any  reduction  from  the 
quarterl:S--Xtaynient  in  case  oi  failure  tolight  fromcauses  beyond 
the  ^as  company's  control ;  nor  do  they  say  whether  the  company  are 
to  suffer  a  reduction  of  payment  as  well  as  damages  in  the  case  of 
failure  to  light  from  causes  within  their  control. 

At  first  sight  it  is  very  tempting  to  say  "This  is  a  contract  to  pro- 
vide illumination,  and  the  person  who  does  not  provide  illumination 
cannot  ask  to  be  paid  for  it."  But  when  the  consequences  come  to  be 
more  closely  looked  into  it  is  not  so  easy  to  follow  them.  The  gas 
company  supplies  lighted  gas  for  half  the  first  quarter;  is  then  pre- 
vented by  causes  beyond  its  control  from  supplying  lights  till  the 
middle  of  the  second  quarter,  when  the  impediment  is  removed  and 
the  supply  of  light  recommences.  What  is  the  consequence?  Can 
the  council  refuse  payment  for  the  first  quarter  and  for  the  second 
quarter  because  a  full  quarter's  gas  is  not  supplied  in  either  case; 


568      LEISTON   GAS    CO.    V.    URBAN   DISTRICT   COUNCIL      [CHAP.   V 

but  does  tlie  contract  remain  in  existence,  the  company  being  bound 
to  go  on  as  soon  as  tlie  impediment  is  removed?  Or  is  there  to  be 
an  apportionment  of  the  quarter's  payments  according  to  the  time 
during  which  lighted  gas  is  supplied,  the  time  of  darkness  being 
written  out  of  the  contract  ?  Does  the  contract  come  to  an  end  when 
the  supply  of  lighted  gas  has  ceased  for  so  long  a  time  as  to  go  to 
the  root  of  the  contract,  to  adopt  the  language  of  Blackburn  J.  in 
Bettini  v.  Gye,^  citing  with  approval  Parke  B.  in  Graves  v.  Legg,^ 
or  to  defeat  the  commercial  purpose  of  the  adventure,  in  the  lan- 
guage of  Bramwell  B.  in  Jackson  v.  Union  Marine  Insurance  Co.  ?  ^ 
The  attempt  to  answer  these  questions  suggests  that  the  Court  may 
really  be  being  asked  to  make  an  agreement  for  the  parties  in  a 
matter  which  they  have  not  thought  of  or  expressly  dealt  with.  Since 
the  time  of  Paradine  v.  Jane  * — see  also  per  Willes  J.  in  Lord  Clif- 
ford V.  Watts,^  when  the  question  was  discussed  whether  a  loyal 
Englishman  need  pay  rent  to  his  landlord  when  the  house  he  rented 
had  been  destroyed  by  the  King's  enemies,  the  "wild  Scots"  —  the 
distinction  has  been  taken  between  duties  or  charges  imposed  by  the 
law,  where  the  party  cannot  perform  it  by  events  occurring  without 
any  default  in  him,  in  which  case  he  is  excused  by  the  impossibility,, 
and  duties  created  by  the  agreement  of  the  party,  when  he  is  "bound 
to  make  good,  notwithstanding  any  accident  by  inevitable  necessity, 
because  he  might  have  provided  against  it  by  his  contract."  Since 
then  the  Courts  have  steadily  refused  to  make  contracts  for  parties, 
which  they  might  have,  and  have  not,  made  for  themselves,  unless 
the  term  is  so  obvious  and  necessary  that  it  must  be  implied  as  a 
matter  of  business  in  such  contract :  The  Moorcock.*'  It  is  said 
that  the  supply  of  lighted  gas  has  become  illegal.  This  is  true  for 
an  uncertain  time;  at  any  moment  the  illegality  may  be  removed 
by  peace  or  changed  conditions  of  war.  But  the  payment  of  the 
quarterly  sum  has  not  become  illegal,  and  part  of  it  is  not  for  light 
supplied,  but  for  plant  which  has  been  supplied  and  of  which  the 
council  has  had  the  benefit.  To  excuse  themselves  from  breaking 
the  contract  to  pay,  not  being  an  illegal  contract,  the  council  must, 
I  think,  satisfy  the  Court  of  one  of  two  things.  Either  they  must 
establish  that  the  performance  of  the  contract  to  supply  lighted  gas 
is  a  condition  precedent  of  the  necessity  to  observe  the  contract  to 
make  a  quarterly  payment,  so  that  the  two  contracts  are  "dependent" 
and  not  "independent,"  to  use  the  language  of  Pordage  v.  Cole,''  and 
of  Lord  Mansfield  in  Kingston  v.  Preston,  cited  in  Jones  v.  Barkley;^ 
in  which  case  the  company,  not  having  supplied  lighted  gas  for 
the  whole  of  throe  quarters  respectively,  cannot  sue  for  payment;  or 
the  coniifil   Tnnst  satisfy  the  Court  tliat,  though  a  mere  failure  ta 

'  1  Q.  B.  D.  183.  188.  "  flWO]  L.  R.  5  C.  P.  577,  686. 

*  9  Ex.  709,  710.  »  ri«W)]  14  P.  D.  64.  68. 

«  L.  R.  If)  r.  V.  125.  7  1  WrriH.  Saiind.,  7th  cd.,  p.  649. 

*  [1670]  AJeyn,  26.  «  [1781]  2  Doug.  684,  689. 


SECT.    II ]       LEISTON   GAS    CO.    V.    URBAN    DISTRICT   COUNCIL      569 

supply  lighted  gas  for  a  short  time  will  not  relieve  them  from  pay- 
m.ent,  there  is  iii  this  case  such  an  extensive  and  permanent  failure 
to  supply  as  "goes  to  the  root  of  the  matter,  so  that  the  performance 
of  the  rest  of  the  contract  by  the  plaintiffs  is  rendered  a  different 
thing  in  substance  from  what  the  defendant  has  stipulated  for" : 
Blackburn  J.,  in  Bettini  v.  Gye.^  First,  can  it  be  said  that  any  failure 
to  supply  lighted  gas,  beyond  these  trifling  failures  to  which  the 
maxim  "De  minimus"  might  apply,  prevents  the  company  from  re- 
covering payment  in  respect  of  the  quarter  in  which  the  failure 
occurs?  Counsel  for  the  defendants,  I  think,  argued  that  it  was 
so;  and  though  I  think  they  argued  that  a  subsequent  acceptance  by 
the  council  of  lighted  gas  after  the  failure  might  waive  the  breach, 
they,  as  I  understood  them,  contended  that  a  fortnight's  or  a  month's 
failure  not  waived  in  this  way  annulled  the  whole  contract.  I  can- 
not take  the  view  that  such  a  failure  by  itself  annuls  the  contract, 
or  that  the  contract  might  be  treated  as  twenty  quarterly  separate 
contracts,  one  of  Avhich  might  be  cancelled  or  blotted  out  while  the 
rest  remained.  The  payment  is  a  flat  rate  payment,  not  a  payment 
by  meter  for  gas  supplied;  and  it  includes  something  for  plant  sup- 
plied and  still  available.  For  certain  kinds  of  failure  to  supply 
light  the  parties  have  provided  a  remedy  in  damages,  and  in  other 
cases  a  deduction  from  the  quarterly  payment.  They  have  not  ex- 
pressly provided  for  the  case  of  a  failure  to  supply  light  owing  to 
causes  beyond  the  company's  control,  and  I  do  not  think  the  Court 
ought  to  make  such  a  contract  for  them,  when  the  consideration  for 
the  payment  claimed  has  not  wholly  failed. 

There  remains  the  question  whether,  though  a  mere  failure  to 
supply  will  not  by  itself  be  sufficient  to  relieve  from  payment,  a 
failure  of  such  a  lengthy  and  permanent  character  as  substantially 
to  alter  the  mode  of  performance  of  the  contract  will  have  this  effect 
and  terminate  the  contract.  I  think  this  must  be  so,  even  if  the 
contract  is  one  for  a  fixed  time.  I  put  to  the  counsel  concerned  the 
case  of  an  Act  of  Parliament  being  passed,  after  the  agreement  had 
been  in  operation  for  a  quarter,  prohibiting  lighting  the  gas  for 
four  years,  and  asked  whether  the  agreement  would  remain  alive  or 
would  be  in  force  for  the  last  nine  months  only  when  the  operation 
of  the  Act  had  ceased.  I  think  the  agreement  would  be  annulled 
for  the  reason  that  a  supply  of  gas  for  a  year  in  two  broken  periods 
would  be  a  totally  different  thing  from  the  five  years'  supply  which 
the  council  bargained  for,  and  that  the  obligation  to  supply  gas  for 
three  months,  and  again  four  years  later  for  nine  months,  for  four 
quarterly  payments  would  be  a  totally  different  contract  from  that 
which  the  company  entered  into.  If  this  principle  is  granted  the 
question  is  then  one  of  fact.  Is  the  period  from  the  first  total  failure 
to  supply  on  January  26  to  the  issue  of  the  writ  on  November  10, 
that  is  nine  and  a  half  months,  sufficient  to  annul  a  contract  which 
1  1  Q.  B.  D.  183,  188,  2  G  2. 


570  PEAD    V.    TRULL  [CHAP.    V 

is  to  last  for  at  least  five  years,  perhaps  more,  and  of  which  the 
council  has  already  had  the  benefit  for  three  and  a  half  years  ?  These 
questions  of  degree  are  always  diificult,  but,  treating  it  as  a  ques- 
tion of  fact,  I  should  hold  that  there  had  not  at  the  issue  of  the  writ 
been  sufficient  change  of  character  in  performance  to  destroy  the 
contract.  For  these  reasons  I  arrive  at  the  same  result  as  Low,  J., 
and  think  that  the  appeal  should  be  dismissed  with  costs.^ 


JOJTN  W.  PEAD  V.  LARKII^  T.   TRULL,  Administbatoe 

Supreme  Judicial  Court  of  Massachusetts,  April  1-May  19,  1899 

[Reported  in  173  Massachusetts,  450] 

Holmes,  J.  This  is  an  action  of  contract  upon  an  indenture  by 
which,  in  consideration  of  the  plaintiif  Pead's  covenant,  Whitman 
covenanted  to  convey  certain  land  to  Pead  within  forty-five  days, 
and  Pead,  in  consideration  of  Whitman's  covenant,  covenanted  to 
convey  certain  land  to  Whitman  M^thin  forty-five  days,  and  further 
covenanted  to  pay  him  fifteen  hundred  dollars  upon  receiving  a  deed 
of  Whitman's  land;  and  to  give  Whitman  a  note  for  three  thousand 
dollars  secured  by  second  mortgage  on  the  Whitman  land  and  to 
assume  and  pay  a  first  mortgage  with  interest  from  the  date  of  the 
conveyance  to  him.  Then  followed  mutual  covenants  to  pay  five 
hundred  dollars  as  indemnity  and  liquidated  damages  in  case  of  fail- 
ure to  perform  the  agreement.  Before  the  forty-five  days  elapsed 
Whitman  died,  and  on  the  last  day,  no  administrator  having  been 
appointed,  the  plaintifi^,  to  save  his  rights,  tendered  performance  on 
his  side  to  the  widow  of  Whitman  and  to  the  defendant  Trull,  who 
had  been  Whitman's  attorney  in  other  matters  and  who  afterwards 
was  appointed  administrator,  but,  apart  from  other  technical  diffi- 
culties, the  deed  tendered  by  the  plaintiff  ran  to  Whitman,  the  dead 
man. 

It  appears  to  us  that  the  covenants  ought  to  be  construed  as  mu- 
tually dependent.  There  is  some  little  suggestion  of  independence 
to  be  drawn  from  them,  but  nothing  on  the  whole  strong  enough  to 
overcome  the  presumption  that  in  an  exchange  performance  on  the 
two  sides  is  to  be  concurrent.  Goodisson  v.  ISTunn,  4  T.  R.  461.^  In 
actions  upon  such  covenants  the  plaintiff  must  show  performance 
on  his  side,  or  readiness  to  perform,  and  a  refusal  by  the  other 
party.  Brown  r.  Davis,  138  Mass.  458;  TIapgood  v.  Shaw,  10.5  Mass. 
276,  279;  Smith  v.  Boston  &  Maine  Railroad,  6  Allen,  262,  273. 
Bnt  in  a  case  like  the  present,  under  our  statutes  the  administrator 
was  the  natural  and  proper  person  to  perform  the  contract,  as  he 

'  I>ord  Readino,  C.  J.  and  Warrinoton,  J.,  aluo  dflivomd  opinions  for  affirmance. 
*  Sunim«TH  V.  Sleeth,  45  Ind.  598,  ace. 


SECT.    II  ]        NATIONAL   TOOL   CO.    V.    STANDARD    SHOE    CO.  571 

was  the  one  to  receive  the  money  from  the  plaintiff.  Pub.  Sts.  c. 
142,  §  1.  It  was  impossible  to  demand  performance  of  him,  or  to 
offer  it  to  him  within  the  forty-five  days,  and  therefore  the  plaintiff 
was  not  in  default  for  not  having  done  so,  and  the  contract  was  not 
discharged  at  the  end  of  that  time.  Of  course  the  contract  was  not 
discharged  by  the  death  of  a  party. 

The  plaintiff's  tender,  although  defective  as  such,  is  evidence  that 
he  was  ready  and  willing  to  perform  and  that  the  administrator  knew 
that  he  was.  But  it  did  not  put  the  administrator  in  default.  All 
that  appears  is  that  the  latter  has  not  caused  the  land  to  be  conveyed 
to  the  plaintiff.  It  does  not  appear  that  he  ever  has  repudiated  the 
agreement.  On  the  other  hand,  it  does  not  appear  that  the  plain- 
tiff ever  has  renewed  his  offer  since  the  administrator  was  appointed. 
Assuming  as  we  do  that  the  plaintiff  had  a  right  to  demand  perform- 
ance within  a  reasonable  time  after  the  appointment  of  an  adminis- 
trator, it  does  not  appear  that  the  jvidge  has  not  found  that  he  suffered 
more  than  a  reasonable  time  to  elapse,  and  so  lost  his  rights.  We 
are  compelled  by  the  terms  of  the  report  to  direct  a  judgment  on 
the  finding.  If  in  fact  the  finding  was  based  solely  on  the  ground 
that  the  plaintiff  had  lost  his  rights  at  the  end  of  forty-five  days,  that 
ground  is  insufficient,  and  the  rescript  of  this  court  will  not  prevent 
an  application  to  the  judge  who  heard  the  case  to  reopen  the  cause, 
or  to  enter  what  judgment  he  deems  proper  under  this  decision. 
Piatt  V.  Justices  of  the  Superior  Court,  124  Mass.  353,  355;  Ken- 
erson  v.  Colgan,  164  Mass.  166.  Judgment  on  the  finding.^ 


N'ATIOWAL  MACHINE  AND  TOOL  COMPANY  v. 
STANDARD  SHOE  MACHINERY  COMPANY 

Supreme  Judicial  Court  of  Massachusetts,  November  21,  1901- 

May  19,  1902 

[Reported  in  181  Massachusetts,  275] 

Holmes,  C.  J.  This  is  an  action  of  contract  upon  one  or  two 
small  claims  and  for  the  breach  of  a  contract  made  in  March,  1900, 
by  certain  letters,  in  which  the  plaintiff  undertook  to  manufacture 
certain  portions  of  a  patented  machine,  according  to  a  schedule  at- 
tached to  the  defendant's  order.  This  last  is  the  main  source  of 
trouble.  With  regard  to  payment  the  plaintiff  wrote :  "If  you  should 
favor  us  with  an  order  for  a  considerable  number  of  these  parts,  we 
would  bill  them  up  to  you  as  they  were  finished,  and  would  merely 
ask  that  the  bills  be  settled  promptly  as  they  came  to  you."  At  a 
later  stage  of  the  negotiation  the  plaintiff  wrote  that  it  should  expect 

1  It  is  often  said,  in  contrasting  the  procedure  of  law  and  equity,  that  in  actions  at 
law  time  is  always  of  the  essence,  whereas  equity  frequently  grants  specific  perform- 
ance in  spite  of  delay.     See  2  Williston,  Contracts,  §  846,  et  seq. 


572  NATIONAL   TOOL    CO.    V.    STANDARD    SHOE    CO.      [CHAP.   V 

tlie  defendant  "to  arrange  it  so  that  the  bills  would  be  approved 
promptly,  and  payment  made  on  same  at  once,  so  that  we  may  expect 
payments  coming  in  rapidly  after  we  have  got  well  started  on  the 
contract,  thus  preventing  us  from  having  too  large  an  amount  of 
money  tied  up  in  the  work."  In  this  letter  the  plaintiff  also  wrote 
that  it  expected  the  defendant  "to  fully  protect  us  from  any  suits  that 
might  be  brought  against  us  while  we  are  on  this  work,  on  account 
of  patents."  It  is  denied  that  this  letter  was  a  part  of  the  contract. 
We  see  no  sufficient  reason  for  the  denial. 

About  May  1,  1^00,  the  plaintiff  was  sued  and  demanded  a  bond 
with  surety,  as  protection  under  its  agreement.  The  defendant  agreed 
to  give  a  bond,  but  on  May  21  declined  to  furnish  a  surety,  and  this 
is  relied  on  by  the  plaintiil  as  one  breach  of  the  defendant's  under- 
taking. We  think  it  so  plain  that  the  defendant  was  not  bound  to 
give  a  surety  that  we  dismiss  this  part  of  the  case  without  further 
mention. 

On  May  17,  1900,  the  plaintiff  having  finished  one  item  on  the 
defendant's  order,  of  sixty  adjusting  screws,  sent  a  bill  for  the  price, 
$90.  The  bill  bore  a  stamped  notice  that  "all  claims  for  correc- 
tions in  this  bill  must  be  made  within  ten  days  from  date."  It  was- 
understood  by  the  plaintiff  that  if  the  bill  was  approved  by  the 
proper  man  it  would  be  sent  on  to  New  York  to  be  paid.  Three  or 
four  days  later  there  was  a  conversation  in  the  defendant's  Boston 
office,  it  was  suggested  that  this  bill  ought  to  be  paid  immediately 
on  presentation,  and  complaint  was  made  with  regard  to  another 
overdue  account  of  nearly  seven  hundred  dollars  ($697.23).  There 
were  apologies  and  further  delays,  complaints,  and  explanations,  the 
defendant's  representative  always  explaining  the  delay  as  accidental, 
and  finally,  on  May  28,  stating  that  the  check  was  ready  but  had 
been  retained  for  entry  as  the  bookkeeper  was  away.  This  last  seems 
to  have  been  true.  On  May  29  the  plaintiff,  hearing  that  a  check 
had  not  come  on,  notified  the  defendant  that  "as  you  have  not  lived 
up  to  your  agreement  with  us  in  relation  to  the  work  we  are  doing 
for  you,  we  shall  stop  all  of  your  work  to-day,"  and  stopped.  JLater 
efforts  to  come  to  an  understanding  failed. 

The  plaintiff  when  it  stopped  work  had  finished  another  small 
item  of  $24,  and  on  May  31  offered  to  deliver  these  goods  as  well 
as  those  for  which  the  bill  for  $90  had  been  sent,  but  the  defendant 
declined  to  receive  them.  May  31  was  the  date  of  the  writ,  and  the 
plaintiff  very  candidly  says  that  the  offer  was  made  after  suit  was 
bronglit.  The  plaintiff  seeks  to  recover  as  damages  for  the  defend- 
ant's allegcfl  breach  the  cost  of  the  finished  parts,  and  also  the  value 
of  stock  and  castings  and  a  large  amount  of  work  upon  parts  never 
delivered  or  completed. 

The  case  was  sent  to  an  auditor.  Tie  found  that  the  defendant 
did  not  repudiate  the  contract,  and  that  the  delay  in  payment  did 
not  justify  tlie  plaintiff  in  sto[)piiig  work.    The  judge  of  the  Superior 


SECT.    II ]        NATIONAL   TOOL    CO.    V.    STANDARD    SHOE    CO.  573 

Court  adopted  his  rulings  and  findings,  although  finding  in  addition 
that  the  provision  for  prompt  payment  of  bills  for  finished  work  was 
material,  and  that  payment  was  not  made  promptly,  and  expressing 
a  doubt  whether  the  plaintiff,  was  not  justified  in  refusing  to  proceed. 

Although  the  contract  was  not  repudiated  by  the  defendant,  we 
are  of  opinion,  notwithstanding  Winchester  v.  Newton,  2  Allen,  492, 
which  perhaps  was  not  intended  to  establish  a  different  general  rule 
(see  also  Newton  v.  Winchester,  16  Gray,  208),  that  there  might 
have  been  such  a  breach  by  failure  to  pay,  as,  however  honest  and 
however  little  it  expressed  a  repudiation,  would  warrant  a  refusal  to 
go  on  with  the  work.  Bloomer  v.  Bernstein,  L.  R.  9  C.  P.  588.  See 
Stephenson  v.  Cady,  117  Mass.  6.  There  is  nothing  to  the  contrary 
in  Daley  v.  People's  Building,  Loan  &  Saving  Association,  178  Mass. 
13,  18.  What  is  said  there  refers  to  an  attempt  to  avoid  a  contract 
ah  initio  for  a  refusal  to  pay  money  due  upon  an  executed  considera- 
tion, when  to  make  that  payment  is  all  that  remains  to.  be  done  on 
that  side. 

We  may  say  further  that  for  the  purposes  of  this  decision  it  is 
not  necessary  to  consider  Lord  Selborne's  somewhat  sweeping  sug- 
gestion in  Mersey  Steel  &  Co.  v.  Naylor,  9  App.  Cas.  434,  439,  that 
when  delivery  of  an  instalment  of  goods  under  an  entire  contract  is 
to  precede  payment  for  the  goods  delivered,  as  payment  cannot  be 
a  condition  precedent  of  the  entire  contract,  it  cannot  be  a  condition 
precedent  to  the  deliveries  remaining  to  be  made,  at  least  without 
express  words.  See  Norrington  v.  Wright,  115  U.  S.  188,  210.  In 
this  case  both  parties  have  assumed  that  the  plaintiff  could  put  the 
defendant  in  default  without  delivery  merely  by  sending  a  bill  for 
an  item  when  it  was  finished,  so  that  Lord  Selborne's  logical  diffi- 
culty, if  there  is  anything  in  it,  does  not  apply. 

The  question  before  us  therefore  is  whether  the  defendant's  failure 
to  pay  $90  promptly  was  a  breach  going  to  the  root  of  the  contract,  — 
a  breach  so  important  as  to  warrant  the  plaintiff  in  refusing  to  go 
on  without  defeating  his  own  right  to  recover  upon  it  or  rescinding 
the  contract.  My  Brother  Loring  and  I  have  not  been  able  to  reach 
a  clear  conviction  that  it  was  such  a  breach,  in  view  of  the  small- 
ness  of  the  sum,  the  indefiniteness  of  the  terms  of  the  contract  as  to 
the  time  for  payment  (see  Harnden  v.  Milwaukee  Mechanics'  Ins. 
Co.,  164  Mass.  382;  Parker  v.  Middlesex  Mut.  Ass.  Co.,  179  Mass. 
528,  531),  the  shortness  of  the  delay,  and  some  other  circumstances. 
Of  course  not  every  trifling  breach  of  contract  excuses  the  other  side 
from  further  performance.  Honck  v.  Muller,  7  Q.  B.  D.  92,  100; 
Mersey  Steel  &  Iron  Co.  v.  ISTaylor,  9  App.  Cas.  434,  444 ;  Dubois  v. 
Delaware  &  Hudson  Canal  Co.,'^4  Wend.  285,  289 ;  Wright  v.  Haskell, 
45  Maine,  489,  492 ;  Weintz  v.  Hafner,  78  111.  27,  29 ;  Worthington 
V.  Gwin,  119  Ala.  44,  54. 

But  my  brethren  are  of  opinion,  and  I  dare  say  wisely,  upon  the 
findings,  that  the  plaintiff  was  warranted  in  its  course.     The  plain- 


574  NATIONAL   TOOL    CO.    V.    STANDARD   SHOE    CO.       [CHAP.   V 

tiff's  contract  necessitated  a  considerable  preliminary  outlay,  and 
would  necessitate  further  expenditures  in  carrying  out  its  part.  At 
the  time  it  was  paying  nearly  seventy  dollars  a  day.  Prompt  pay- 
ment for  goods  as  finished  took  the  place  of  payments  on  account. 
The  plaintiff  was  sensitive,  and  had  a  right  to  be  so,  at  any  appear- 
ance of  uncertainty  as  to  the  stipulated  payments  being  made.  It 
had  a  further  ground  of  anxiety  in  the  suits  brought  against  it  for 
infringement  of  patents,  when  it  had  only  the  defendant's  personal 
guaranty  to  protect  it.  Under  such  circumstances,  the  failure  to  pay 
the  other  bill  for  nearly  seven  hundred  dollars,  gave  a  character  to 
the  failure  to  pay  the  smaller  sum  which  was  due,  and  imparted  a 
significance  to  the  delay  that  otherwise  it  might  not  have  had.  A 
failure  to  pay  a  small  sum  promptly  because  of  difficulty  in  raising 
the  money  is  not  the  same  thing  as,  and  may  have  a  greater  effect 
than,  a  similar  failure  simply  because  of  the  absence  of  a  book- 
keeper or  of  some  misunderstanding  between  the  defendant's  Boston 
and  N'ew  York  houses. 

The  first  count  was  upon  a  claim  for  $209.38  outside  the  contract 
thus  far  discussed.  The  auditor  finds  for  the  plaintiff,  but  for 
$129.15  only.  The  plaintiff  demands  the  larger  sum,  notwithstand- 
ing the  finding,  on  the  ground  that  when  seeking  to  reduce  the  plain- 
tiff's attachment  the  defendant  expressed  a  willingness  to  pay  for 
all  work  that  had  been  completed,  that  the  plaintiff's  counsel  stated 
what  that  work  amounted  to  so  far  as  he  knew,  that  thereupon  the 
judge  made  an  order  dissolving  the  attachment  upon  the  payment  of 
that  amount  to  the  sheriff  and  the  giving  of  a  bond  for  $5,000  more, 
and  that  the  defendant  paid  the  sum,  which  included  the  item  of 
$209.38.  This  transaction  was  not  a  tender,  and  did  not  fall  within 
the  rule  laid  down  in  Currier  v.  Jordan,  117  Mass.  260,  and  Bouve 
V.  Cottle,  143  Mass.  310,  315.  It  would  seem  to  have  been  only  a 
substitution  of  securities  in  the  sheriff's  hands,  and  to  have  left  the 
correctness  of  the  figures  open  to  trial  with  the  rest  of  the  case. 

The  second  count  also  was  for  items  outside  the  contract,  and  only 
one  of  them  was  disputed.  This  was  for  some  articles  not  finished 
because  the  defendant,  after  the  plaintiff  refused  to  go  on  with  its 
contract,  took  away  jigs  and  tools  which  it  had  furnished  the  plaintiff 
under  the  contract,  and  also  the  unfinished  articles.  There  is  nothing 
in  the  report  which  necessarily  implies  that  the  failure  to  finish  the 
articles  was  due  to  the  plaintiff's  fault,  or  indeed  to  any  other  cause 
than  the  defendant's  removal  of  them.  Therefore  we  cannot  say 
that  the  auditor's  finding  was  wrong. 

A  part  of  the  damages  to  be  recovered  by  the  plaintiff  on  the  larger 
contract  will  be  for  work  done  under  it.  Goodman  v.  Pocock,  15 
Q.  B.  576,  580.  Therefore  one  other  question  requires  a  few  words. 
The  defendant  made  a  tender  on  May  31  of  the  amount  then  due, 
inclnrling  tlie  $00  claimed  under  the  contract,  which  was  refused. 
But  this  tender  has  not  been  pleaded  or  kept  good,  even  if,  as  does 


SECT.   Il]  GREEN    V.    EDGAR  575 

not  appear  very  clearly,  it  embraced  the  sums  now  recovered.  There- 
fore it  does  not  prevent  the  recovery  of  interest  and  costs.  The 
answer  was  a  general  denial.  Brickett  v.  Wallace,  98  Mass.  528, 
529;  Grover  v.  Smith,  165  Mass.  132.  See  Noble  v.  Fagnant,  162 
Mass.  275,  286.  The  payment  to  the  sheriff  was  not  a  payment  into 
court  or  an  admission  that  the  sum  paid  was  due,  as  we  have  said 
and  as  the  plaintiif  contends.  In  Suffolk  Bank  v.  Worcester  Bank, 
5  Pick.  106,  the  amount  tendered  was  deposited  in  a  bank  to  the 
order  of  the  plaintiff,  and  in  Goff  v.  Rehoboth,  2  Cush.  475,  the 
defendant  was  a  town,  and  the  treasurer  might  be  presumed  to  have 
kept  the  money  on  hand  in  obedience  to  the  order  of  the  selectmen. 
In  both  the  tender  was  set  up  and  the  money  brought  into  court. 
See  Pub.  Sts.  c.  168,  §  23;  Town  v.  Trow,  24  Pick.  168,  169;  Sanders 
V.  Bryer,  152  Mass.  141.  There  was  another  tender  after  suit  brought, 
but  that  did  not  comply  with  Pub.  Sts.  c.  168,  §  24,  and  is  not  relied 
upon.  Case  to  stand  for  assessment  of  damages.^ 


HEI^RY  W.  GREEN,  Respondent,  v.   THOMAS  EDGAR  and 
Others,  Appellants 

New  York  Supreme  Court,  General  Term,  June  Term,  1880 
[Reported  in  21  Hun,  414] 

Judgment  reversed,  and  new  trial  ordered  before  another  referee, 
costs  to  abide  event.  Held,  that  a  servant  may  be  discharged  by 
the  master  from  his  employment,  provided  a  sufficient  cause  actually 
exists,  whether  the  same  was  known  to  or  assigned  by  the  master 
at  the  time  of  the  discharge  or  not;  and  that  the  special  findings 
show  that  sufficient  grounds  for  the  discharge  existed  at  the  time  of 
the  discharge.^ 

J  See  also  Eastern  Forge  Co.  v.  Corbin,  182,  Mass.  590.  Compare  Franklin  v. 
MiUer,  4  Ad.  &  E.  599. 

2  Baillie  v.  Kell,  4  Bing.  N.  C.  638;  Spotswood  v.  Barrow,  5  Ex.  110;  Willets  «, 
Green,  3  C.  &  K.  59;  Boston  Deep  Sea  Fishing  Co.  v.  AnseU,  39  Ch.  D.  339;  Abend- 
post  Co.  V.  Hertel,  67  II.  App.  501;  Odeneal  v.  Henry,  70  Miss.  172;  Allen  v.  Ayles- 
worth,  58  N.  J.  Eq.  349;  Arkush  v.  Hanan,  60  Hun,  518;  Mclntyre  v.  Hockin,  16 
Ont.  App.  501;  Tozer  ».  Hutchison,  12  N.  B.  548,  ace.  But  see  Cussons  v.  Skinner,  11 
M.  &  W.  161;   Strauss  v.  Meertief,  64  Ala.  299,  310. 

In  Higgins  v.  Eagleton,  155  N.  Y.  466,  472,  an  action  by  one  entitled  to  a  convey- 
ance of  real  estate,  the  court  said:  "The  plaintiff,  on  the  law  day,  having  made  specific 
objections  to  the  title,  which  were  unfounded,  could  not  subsequently  raise  a  new 
objection,  even  if  it  was  valid  where,  as  in  this  case,  it  was  one  that  could  have  been 
obviated  by  the  defendant.  Benson  v.  Cromwell,  6  Abb.  Pr.  Cas.  83,  85."  See  also 
Paisley  v.  Wills,  18  Ont.  App.  210. 


576  BAKER    V.    HIGGINS  [CHAP.   V 

BAKER  V.  HIGGINS 

New  York  Court  of  Appeals,  June,  1860 

IRe'ported  in  21  N.  Y.  397] 

Appeal  from  the  Supreme  Court.  Action  to  recover  for  brick  sold 
and  delivered.  The  trial  was  before  a  referee,  who  received  parol 
evidence  of  a  contract  for  the  sale  of  the  brick.  It  substantially  ap- 
pearing that  the  contract  was  put  in  in  writing,  the  defendant  moved 
that  the  parol  evidence  of  its  tenor  should  be  stricken  out.  To  the 
referee's  refusal  to  strike  out  the  evidence,  and  to  his  refusal  to  non- 
suit the  plaintiff,  the  defendant  took  exceptions.  The  referee,  in  his 
finding  of  facts,  found,  in  accordance  with  the  parol  evidence,  that 
the  defendant  agreed  to  pay  for  the  brick  as  fast  as  delivered.  Judg- 
ment for  the  plaintiff,  upon  his  report,  having  been  affirmed  at  gen- 
eral term,  in  the  third  district,  the  defendant  appealed  to  this  court. 

Roswell  A.  Parmenter,  for  the  appellant. 

John  B.  Bronk,  for  the  respondent. 

Welles,  J.  On  the  trial  before  the  referee,  the  plaintiff  gave 
evidence  tending  to  show  that,  by  the  contract  between  him  and 
the  defendant  for  the  sale  and  delivery  of  the  brick  in  question  by 
the  former  to  the  latter,  the  brick  was  to  be  paid  for  as  they  were 
delivered.  It  also  appeared,  on  the  part  of  the  plaintiff,  that,  at 
the  close  of  the  conversation  between  the  parties  by  which  the  con- 
tract was  negotiated,  the  plaintiff  wrote  something  on  a  piece  of 
paper  and  handed  it  to  the  defendant,  upon  which  the  parties  sep- 
arated. None  of  the  plaintiff's  witnesses  were  able  to  state  what  the 
writing  contained.  The  defendant  produced  and  identified  the  paper, 
which  turned  out  to  be  as  follows :  "I  will  deliver  John  Higgins 
25,000  pale  brick,  on  the  dock  at  East  Troy,  for  $3  per  M,  and 
50,000  hard  brick,  at  the  same  place,  at  $4  per  M,  cash.  E.  W.  Baker, 
Coxsackie."  This,  I  think,  was  a  valid  agreement,  and  must  be 
deemed  and  taken  as  the  agreement  then  made  between  the  parties 
in  relation  to  the  brick,  and  under  which  a  part  was  afterwards  de- 
livered. 

Not  long  after  this  agreement,  the  plaintiff  delivered  to  the  de- 
fendant, at  Troy,  under  the  written  contract,  a  cargo  of  brick,  con- 
sisting of  10,500  hard  and  10,500  pale  bricks,  and  demanded  pay- 
ment for  that  quantity,  which  the  defendant  refused  until  the  whole 
was  delivered.  This,  I  think,  he  had  a  right  to  do.  The  contract 
was  entire,  to  deliver  75,000  bricks;  and  the  plaintiff  was  not  entitled 
to  pay  for  any  part  until  the  whole  was  delivered,  or  until  he  was 
ready  and  offered  to  deliver  the  balance,  which  the  plaintiff  has  not 
done.  The  action  was  brought  for  the  contract  price  of  the  21,000 
bricks  df^livered;  and  the  referee  found,  contrary  to  the  legal  import 
of  the  written  agreement,  that  the  l)rick  was  payable  on  delivery,  as 
the  same  should  be  delivered.     For  this  error  the  judgment  should 


SECT.   11  ]  HOARE    V.   RENNIE  577 

be  reversed,  and  a  new  trial  directed  in  the  court  below,  with  costs 
to  abide  the  event. 

Selden,  Clekke,  and  Weight,  JJ.,  dissented;  all  the  other  judges 
concurring.  Judgment  reversed,  and  new  trial  ordered.^ 


HOAEE  AND  Others  v.  REISTWIE  and  Anothee 

In  the  Exchequer,  ISTovember  14  &  16,  1859 

[Re'ported  in  5  Hurlestone  &  Norman,  19] 

Declaration.  First  count:  That,  on  the  21st  of  April,  a.d.  1857, 
the  defendants  agreed  to  buy  of  the  plaintiffs,  and  the  plaintiffs  then 
agreed  to  sell  to  the  defendants,  about  667  tons  of  hammered  Swede 
bar  iron  of  certain  sizes,  then  agreed  on  between  the  plaintiffs  and 
the  defendants,  the  said  iron  to  be  shipped  from  Sweden  in  the 
months  of  June,  July,  August,  and  September  next,  and  in  about 
equal  portions  each  month,  at  15?.  10s.  per  ton,  delivered  in  good 
condition  ex  ship,  on  arrival  in  the  port  of  London;  and  it  was 
thereby  then  further  agreed,  amongst  other  things,  that  no  shipment 
should  exceed  150  tons,  which  should  be  in  proportionate  quantities 
of  each  size;  but  that,  if  any  variation  therein,  it  should  not  exceed 
one  ton,  and  such  variation  to  be  corrected  in  subsequent  shipments; 
that  sellers  should  have  the  option  of  commencing  shipments  in  May, 
1857,  and  also  of  completing  the  whole  by  the  end  of  July,  1857; 
that  ships'  names  should  be  declared  as  soon  as  known  to  the  sellers; 
that  if  any  should  be  lost  on  the  voyage  the  quantity  lost  should  be 
null  and  void;  and  that  there  should  be  discount  at  the  rate  of  two 
and  a  half  per  cent  for  cash  against  each  delivery.  Averments :  That 
plaintiffs  had  done  all  things  necessary  on  their  part  to  be  done,  &c. ; 
and  though  all  things  had  happened  and  all  times  had  elapsed  to 
entitle  them  to  have  the  said  iron  accepted,  yet  the  defendants  have 
wholly  refused  to  accept  the  said  iron  or  any  part  thereof,  or  to  pay 
for  the  same  according  to  the  terms  of  the  said  agreement,  whereby 
the  plaintiffs  lost  divers  profits,  «fec. 

Second  count :  That  on  the  21st  of  April,  a.d.  1857,  the  plaintiffs 

'  First  Nat.  Bank  v.  Perris  Irrigation  District,  107  Cal.  55;  Haslack  v.  Mayers,  26 
N.  J.  L.  284;  Catlin  v.  Tobias,  26  N.  Y.  397;  Nightingale  v.  Eiseman,  121  N.Y.  288; 
Witherow  v.  Witherow,  16  Ohio,  238;  Easton  v.  Jones,  193  Pa.  147,  ace.  See  also 
Hamilton  o.  Thrall,  7  Neb.  210;  2  Williston,  Contracts,  §  862. 

Compare  Aultman  &  Taylor  Co.  v.  Lawson,  100  Iowa,  569;  Gill  v.  Johnstown  Lum- 
ber Co.,  151  Pa.  534;    McLaughlin  v.  Hess,  164  Pa.  570. 

Contracts  of  service  for  a  specified  term  are  held  severable  when  the  wages  can 
be  construed  as  payable  at  specified  shorter  periods.  Taylor  v.  Laird,  1  H.  &  N.  266; 
Button  V.  Thompson,  L.  R.  4  C.  P.  330;  Davis  v.  Preston,  6  Ala.  83;  Jones  v.  Dunton, 
7  111.  App.  580;  White  v.  Atkins,  8  Cush.  367;  Chamblee  v.  Baker,  95  N.  C.  98;  Mark- 
ham  V.  Markham,  110  N.  C.  356;  Matthews  v.  Jenkins,  80  Va.  463;  La  Coursier  v. 
RusseU,  82  Wis.  265. 

Compare  Decamp  v.  Stevens,  4  Blackf.  24;   Davis  v.  Maxwell,  12  Met.  286;   Lantry 
V.  Parks,  8  Cow.  63;    Mocell  v.  Burns,  4  Denio,  121;   Larkin  v.  Buck,  11  Ohio  St.  561; 
Diefenback  v.  Stark,  56  Wis.  462. 
19 


578  HOARE    V.   RENNIE  [CHAP.   V 

agreed  to  sell  to  the  defendants,  and  the  defendants  agreed  to  buy  of 
the  plaintiffs,  about  667  tons  of  hammered  iron,  upon  the  terms  in 
the  first  count  mentioned;  and  that  from  the  time  of  the  making  the 
agreement  continually  until  after  the  refusal,  notice,  and  discharge 
hereinafter  mentioned,  the  plaintiffs  did  and  performed  all  condi- 
tions precedent,  and  all  things  were  done,  and  all  times  elapsed,  nec- 
essary to  entitle  them  to  the  performance  of  the  agreement  on  the 
part  of  the  defendants;  and  that  at  and  after  the  refusal,  notice,  and 
discharge  hereinafter  mentioned,  they  were  ready  and  willing  to  per- 
form the  agreement  on  their  part;  and  although  the  plaintiffs,  in 
part  performance  of  the  said  agreement,  did,  in  June,  a.d.  1857,  ship 
a  certain  portion  of  the  said  iron,  and  did,  in  further  performance  of 
such  agreement,  and  within  a  reasonable  time  after  such  shipment, 
tender  to  the  defendants,  and  offered  to  deliver  to  them  the  said 
portion  of  iron  so  shipped  as  aforesaid,  yet  the  defendants  refused 
to  accept  the  said  portion  of  iron  so  tendered  and  offered,  and  thence- 
forth wholly  refused  to  accept  the  same  or  any  of  the  residue  of  the 
said  iron,  and  gave  notice  to  the  plaintiffs  that  they  would  not  accept 
the  residue  of  the  said  iron;  and  the  defendants  thenceforth  wholly 
refused  to  observe  the  agreement  on  their  part,  and  wholly  discharged 
the  plaintiffs  from  the  further  execution  and  performance  of  the 
agreement  by  them;  and  wholly  waived  such  execution  and  perform- 
ance; whereby,  &c. 

Third  plea  to  the  first  count :  That  the  plaintiffs  did  not  avail 
themselves  of  the  option  given  to  them  by  the  agreement  of  com- 
mencing shipments  of  the  iron  in  the  month  of  May;  and  that  the 
plaintiffs  in  the  month  of  June  shipped  from  Sweden,  on  board  a 
certain  vessel,  a  quantity  of  the  said  iron  so  contracted  for,  to  wit, 
21  tons,  6  cwt.,  1  qr.,  being  a  much  less  quantity  than  was  required 
to  be  shipped  during  the  said  month  of  June  according  to  the  terms 
of  the  said  contract,  and  gave  notice  to  the  defendants  that  the  said 
iron  was  to  be  part  of  the  iron  so  agreed  to  be  sold  as  aforesaid; 
that  tbe  plaintiffs  failed  to  complete  the  shipment  for  the  month 
of  June,  according  to  the  terms  of  the  contract,  and  were  never  ready 
and  willing  to  deliver  to  the  defendants  such  a  quantity  of  iron, 
shipped  from  Sweden  in  June,  as  is  specified  in  the  said  contract, 
although  none  of  the  iron  was  lost  during  the  voyage;  and  were  not 
ready  and  willing  to  deliver  to  the  defendants  the  said  small  quantity 
of  iron  which  had  been  shipped  durijig  the  month  of  June,  until  after 
the  month  of  June  had  elapsed,  and  until  after  the  defendants  had 
notice,  that  the  plaintiffs  were  not  ready  and  willing,  and  were  unable 
to  fulfil  th(;ir  part  of  the  said  agreement  with  reference  to  the  quan- 
tity of  iron  to  be  shipped  in  June;  and  that  the  defendants,  having 
notice  of  all  tbe  premises  in  this  plea  mentioned,  did  afterwards  re- 
fuse to  receive  the  said  quantity  of  iron  so  shipped  as  aforesaid 
during  tin;  montli  of  June,  and  did  give  notice  to  the  plaintiffs  that 
they  refused  to  receive  the  residue  of  the  said  iron. 


SECT.    Il]  HOARE   V.   RENNIE  579 

The  sixth  plea,  to  the  second  count,  was  similar  to  the  third  plea. 

The  plaintiffs  demurred  to  the  third  and  sixth  pleas,  and  the  de- 
fendants joined  in  demurrer. 

Pollock,  C.  B.  We  are  all  agreed  that  the  defendants  are  entitled 
to  judgment  upon  the  pleas.  The  foundation  of  my  opinion  is  shortly 
this,  that  a  man  has  no  right  to  say  that  which  is  a  breach  of  an 
agreement  is  a  performance  of  it.  On  that  ground,  this  case  is  dis- 
tinguishable from  almost  every  other  which  has  been  cited.  It  does 
not  turn  upon  any  question  of  condition  precedent.  The  only  ques- 
tion is  whether,  if  a  man  who  is  bound  to  perform  his  part  of  a  con- 
tract does  not  do  so,  he  can  enforce  the  contract  against  another 
party.  The  plaintiffs  contracted  with  the  defendants  to  ship  a  large 
quantity  of  iron  in  June,  July,  August,  and  September,  about  one- 
fourth  part  in  each  month;  but  instead  of  shipping  about  160  tons 
in  June,  as  •  they  should  have  done,  they  shipped  little  more  than 
twenty  tons,  as  a  performance  of  the  contract.  The  first  count  states 
that  the  plaintiffs  performed  all  things  necessary  on  their  part  to 
be  performed,  that  they  were  ready  and  willing  to  do  all  things 
which  according  to  agreement  it  was  necessary  they  should  be  willing 
to  do,  and  that  all  things  happened  to  entitle  the  plaintiffs  to  a  per- 
formance of  the  agreement  on  the  part  of  the  defendants.  This  is 
denied  by  the  plea.  The  second  count  states  that  the  plaintiffs,  in 
part  performance  of  the  contract,  shipped  a  certain  portion  of  the 
iron,  and  in  further  performance  of  the  agreement  tendered  and 
offered  to  deliver  the  said  portion  so  shipped,  yet  defendants  refused 
to  accept  the  same.  The  pleas  raise  the  question  whether  the  de- 
fendants were  bound  to  accept  and  pay  for  what  was  sent  and  ten- 
dered; the  plaintiffs  having,  in  June,  shipped  from  Sweden  a 
quantity  much  less  than  they  were  bound  to  have  shipped,  and  the 
defendants  having  insisted  that  this  was  a  breach  of  the  contract, 
and  given  notice  that  they  refused  to  accept  the  residue.  The  pleas 
eKpressly  state  that  the  plaintiffs  were  not  ready  to  deliver  such 
a  quantity  of  iron  shipped  from  Sweden  in  June  as  is  specified  in 
the  contract,  and  were  not  ready  and  willing  to  deliver  the  small 
quantities  shipped  until  after  the  month  of  June  had  elapsed,  and 
until  after  the  defendants  had  notice  that  the  plaintiffs  were  not 
ready  and  willing  to  perform  their  part  of  the  agreement.  The  only 
question  we  have  to  deal  with  is  whether,  on  a  contract  like  this,  if 
the  sellers  at  the  outset  send  a  less  quantity  than  they  are  bound  to 
send,  so  as  to  begin  with  a  breach,  they  can  compel  the  purchasers 
to  accept  and  pay  for  that  the  sending  of  which  was  a  breach  and 
not  a  performance  of  the  agreement.  The  argument  on  the  part  of 
the  plaintiffs  is  that  this  was  not  a  condition  precedent.  I  do  not 
think  that  is  the  test.  It  was  said  that  if  the  plaintiffs  had  sent  the 
one-hundredth  part,  instead  of  one-fourth  part,  in  June,  the  defend- 
ants' remedy  would  have  been  by  a  cross-action.  The  case  was  put 
of  the  plaintiffs  sending  a  short  quantity  after  one  shipment  had  been 


580  FREETH    V.    BURR  [CHAP.   V 

accepted.  Possibly  that  might  have  made  a  difference.  Where  a 
person  has  derived  a  benefit  from  a  contract  he  cannot  rescind  it,  be- 
cause the  parties  cannot  be  put  in  statu  quo.  Probably,  therefore,  in 
such  case  the  defendants  could  not  have  repudiated  the  contract,  and 
must  have  been  left  to  their  cross-action.  Here,  however,  the  defend- 
ants refused  to  accept  the  first  shipment,  because,  as  they  say,  it  was 
not  a  performance,  but  a  breach  of  the  contract.  Where  parties  have 
made  an  agreement  for  themselves,  the  courts  ought  not  to  make  an- 
other for  them.  Here  they  say  that  in  the  events  that  have  happened 
one-fourth  shall  be  shipped  in  each  month,  and  we  cannot  say  that 
they  meant  to  accept  any  other  quantity.  At  the  outset,  the  plain- 
tiffs failed  to  tender  the  quantity  according  to  the  contract:  they 
tendered  a  much  less  quantity.  The  defendants  had  a  right  to  say 
that  this  was  no  performance  of  the  contract,  and  they  were  no  more 
bound  to  accept  the  short  quantity  than  if  a  single  delivery  had  been 
contracted  for.     Therefore  the  pleas  are  an  answer  to  the  action. 

Judgment  for  the  defendants.^ 


FREETH  AND  Another  v.  BURR 

In  the  Common  Pleas,  January  14,  1874 

[Reported  in  Law  Reports,  9  Common  Pleas,  208] 

.  .  .  ^This  cause  was  tried  before  Brett,  J,,  at  the  Sittings  in 
London  after  last  Hilary  Term.  The  plaintiffs  and  the  defendant 
were  iron-merchants  and  manufacturers.  In  ISTovember,  1871,  the 
plaintiffs  agreed  to  buy  of  the  defendant  250  tons  of  pig-iron,  and 
on  the  28th  of  that  month  bought  and  sold  notes  were  exchanged. 
The  bought-note,  signed  by  the  plaintiffs,  was  as  follows :  — 

London,  28th  November,  1871. 
Bought  of  Messrs.  D.  M.  Burr  &  Co.  two  hundred  and  fifty  tons  of  pig-iron,  at  fifty- 
six  shillings  per  ton  alongside  our  wharf,  Millwall.  'Half  to  be  delivered  in  two  weeks, 
remainder  in  four  weeks.    Payment,  net  cash  14  days  after  delivery  of  each  parcel. 

The  market  was  rising,  and  early  in  February  the  plaintiffs  wrote 
to  the  defendant,  remonstrating  with  him  for  not  having  delivered 
any  of  the  iron.  About  the  3  5th  of  that  month  10|  tons  were  sent 
alongside  the  plaintiffs'  wharf;  and  on  the  20th  the  plaintiffs  wrote 
to  the  defendant  as  follows :  — 

Wo  are  much  mirprisod  you  shoulfl  have  sent  such  a  paltry  lot  as  10  tons  on  account 
of  contract  for  250  tons  which  should  have  boon  dolivcrod  last  December.  We  must 
requcHt  you  will  give  us  a  definite  time  for  delivery  of  at  least  50  tons,  which  must  be 
delivered  at  once,  or  we  shall  have  again  to  buy  against  you. 

On  the  17th  of  May,  1872,  the  defendants  wrote  to  the  plaintiffs 
as  follows :  — 

Wc  are  informed  that  the  lighter  which  we  sent  with  .30  tons  Krntletlge  pig-iron 
to  your  wharf  f)n  the  10th  instant  is  still  lying  thcrt,'  unloaded,  and  that  this  has  arisen 
*  Watson  and  Channell  B.  B.  delivered  concurring  opinions. 


SECT.    Il]  FREETH    V.    BURR  581 

through  an  undue  preference  being  allowed  by  you  to  other  barges  in  discharging,  or 
from  some  other  cause  for  which  you  are  to  blame.  We  have,  therefore,  to  intimate 
that  we  shall  hold  you  Uable  for  demurrage  from  and  after  13th  instant. 

On  the  18th  the  plaintiffs  wrote  to  the  defendant:  — 

In  answer  to  yours  of  the  17th  instant,  your  barge  has  been  discharged  some  days. 
Do  you  intend  to  deUver  the  remainder,  or  shall  we  buy  against  you? 

To  this  the  defendant  replied  on  the  21st :  — 

It  is  our  intention  to  deliver  remainder  of  pig-iron,  and  do  not  wish  you  to  buy 
against  us.     We  inclose  invoice  of  last  lot. 

On  the  29th  of  May,  126  tons  in  all  having  by  that  time  been 
delivered,  the  defendant  wrote  to  the  plaintiffs :  — 

Would  you  kindly  forward  us  cheque  in  payment  of  the  ballast  iron  we  have  de- 
livered to  you,  and  we  shall  proceed  at  once  to  send  on  the  remainder. 

The  plaintiffs,  under  an  erroneous  impression  that  they  were  en- 
titled to  set  off  against  the  defendant's  claim  any  loss  which  they 
might  incur  in  case  the  defendant  should  fail  to  deliver  the  re- 
mainder of  the  iron  contracted  for,  refused  to  pay  for  the  125  or 
126  tons  which  had  been  delivered;  and  their  attorney,  in  reply  to 
a  letter  from  the  defendant's  attorney  demanding  payment,  put  for- 
ward a  claim  for  2501.,  being  27.  per  ton  on  the  125  tons  undelivered. 

On  the  12th  of  June,  the  defendant's  attorneys  wrote  to  the  plain- 
tiffs' attorney :  — 

We  hardly  think  it  necessary  to  refer  to  your  clients'  claim  for  2501.,  as  it  is  purely 
hypothetical  and  could  not  possibly  arise,  as  your  cUents  by  their  own  default  have 
obliged  our  cUent  to  refuse  to  make  any  further  delivery  of  iron.  We  must  request 
your  clients'  immediate  attention  to  the  settlement  of  amount  (3521.  15s.  lOii.)  men- 
tioned in  our  letter  of  the  5th  instant. 

The  plaintiffs  paid  ultimately  (but  not  until  after  an  action  had 
been  brought  for  it)  for  the  first  125  tons  of  iron;  and  this  action 
was  brought  against  the  defendant  for  the  breach  of  his  contract  in 
refusing  to  deliver  the  second  125  tons. 

On  the  part  of  the  defendant,  it  was  contended  that  the  plaintiffs' 
refusal  to  pay  for  the  first  parcel  of  the  iron  amounted  to  an  aban- 
donment of  the  contract  by  them,  and  absolved  the  defendant  from 
his  obligation  further  to  perform  it  on  his  part.  Hoare  v.  Rennie 
was  relied  on. 

The  learned  judge  ruled  that  the  mere  refusal  by  the  plaintiffs  to 
pay  for  the  first  125  tons  did  not  exonerate  the  defendant  from  his 
obligation  under  the  contract  to  deliver  the  second  125  tons,  and  con- 
sequently that  the  plaintiffs  were  entitled  to  recover  such  damages 
as  they  had  sustained  from  the  non-delivery ;  and  he  directed  a  verdict 
to  be  entered  for  the  plaintiffs  for  1487.  16s.,  reserving  leave  to  the 
defendant  to  move  to  enter  a  nonsuit,  if  the  Court  should  be  of 
opinion  that  the  refusal  by  the  plaintiffs  to  pay  for  the  iron  delivered 
amounted  to  an  abandonment  of  the  contract. 


582  FREETH    V.    BURR  '  [CHAP.    V 

Garth,  Q.  C,  in  Easter  Term  last,  obtained  a  rule  nisi  accordingly, 

Wathin  Williams,  Q.  C,  and  E.  Clarke,  who  appeared  to  show 
cause,  were  stopped  by  the  Court. 

Garth,  Q.  C,  and  Philhrick,  in  support  of  the  rule.  The  iron  was 
not  delivered  according  to  the  strict  terms  of  the  contract;  but  the 
correspondence  shows  that  the  time  for  delivery  had  been  extended 
by  mutual  consent.  The  whole  of  the  first  parcel  having  been  de- 
livered, the  defendant  was  entitled  to  payment  for  that  parcel  in 
fourteen  days.  Payment  was  demanded  and  refused.  The  defend- 
ant had  then  a  right,  according  to  the  principle  laid  down  in  Hoare 
V.  Rennie,  to  treat  that  refusal  as  a  breach,  and  to  rescind  the  con- 
tract. In  that  case  the  plaintiffs  had  undertaken  to  deliver  to  the 
defendants  667  tons  of  iron,  to  be  shipped  from  Sweden  in  the  months 
of  June,  July,  August,  and  September,  and  in  about  equal  portions 
each  month.  In  June  the  plaintiffs  delivered  twenty-one  tons  only; 
whereupon  the  defendants  gave  them  notice  that  they  would  receive 
no  more;  and  the  Court  of  Exchequer  held  that  they  were  justified 
in  considering  the  contract  as  at  an  end.  Pollock,  C.  B.,  in  delivering 
judgment,  said :  "At  the  outset,  the  plaintiffs  failed  to  tender  the 
quantity  according  to  the  contract;  they  tendered  a  much  less  quan- 
tity. The  defendants  had  a  right  to  say  that  this  was  no  performance 
of  the  contract,  and  they  were  no  more  bound  to  accept  the  short 
quantity  than  if  a  single  delivery  had  been  contracted  for."  So, 
here,  the  non-performance  by  the  plaintiffs  of  the  stipulation  as 
to  payment  for  the  first  parcel  entitled  the  defendant  to  assume  that 
they  repudiated  the  contract.  In  Withers  v.  Reynolds  the  refusal 
by  the  buyer  to  perform  his  part  of  the  contract  by  paying  for  each 
load  of  straw  as  delivered,  was  held  to  entitle  the  seller  to  rescind 
the  contract. 

[Denman,  J.  There  the  plaintiff  did  acts  and  said  things  which 
amounted  to  a  declaration  on  his  part  that  he  did  not  mean  to  per- 
form the  contract.] 

Hoare  v.  Rennie  was  distinctly  recognized  in  Bradford  v.  Williams, 
though  somewhat  reflected  U])on  in  Simpson  v.  Crippin. 

[Denman,  J.,  referred  to  Jonassohn  v.  Young.] 

Lord  Coleridge,  C.  J.  The  question  in  this  case  arises  upon  a 
contract  for  the  sale  of  iron  entered  into  between  the  plaintiffs  and 
the  defendant  on  the  28tli  of  November,  1871,  in  the  following  terms: 
"Bought  of  Messrs.  D.  M.  Burr  &  Co.  250  tons  of  pig-iron,  at  565. 
per  ton  alongside  our  wharf,  Millwall.  Half  to  be  delivered  in  two 
weeks,  remainder  in  four  weeks.  Payment,  net  cash  fourteen  days 
after  delivery  of  eacli  parcel."  Tlio  nunterial  facta  were  these:  There 
was  no  dc]iv(!ry  in  the  terms  of  the  contract  of  either  parcel  of  the 
iron.  In  point  of  fact,  the  delivery  of  the  first  125  tons  was  by 
mutual  arrangement  delayed,  and  the  last  delivery  of  that  parcel  did 
not  take  plafc  until  tlm  12th  of  May,  1872.  There  was  a  correspond- 
ence between  the  parties,  pressure  by  the  purchasers  for  delivery,  and 


SECT.    II]  FREETH    V.    BURR  583 

excuses  by  the  vendor  for  the  nou-delivery.  That  the  former  were 
anxio^is  for  the  completion  of  the  contract  appears  to  be  clear,  as 
well  from  the  tenor  of  the  correspondence  as  from  the  fact  that  the 
market  was  rising.  A  few  days  after  the  full  delivery  of  the  first 
parcel,  viz.,  on  the  29th  of  May,  1872,  the  defendant  demanded  pay- 
ment for  the  125  tons,  which  the  plaintiffs  refused,  claiming  to  set 
off  damages  for  the  defendant's  breach  of  contract.  The  plaintiffs 
afterwards  demanded  delivery  of  the  remaining  125  tons;  and  upon 
the  defendant's  refusal  to  comply  with  that  demand  this  action  was 
brought.  The  question  is  whether  the  fact  of  the  plaintiffs'  refusal 
to  pay  for  the  125  tons  delivered  was  such  a  refusal  on  the  part  of 
the  purchasers  to  comply  with  their  part  of  the  contract  as  to  set 
the  seller  free  and  to  justify  his  refusal  to  continue  to  perform  it. 
This  certainly  appears,  viz.,  that  there  was  an  extension  by  mutual 
consent  of  the  time  for  the  delivery  of  the  iron  from  December,  1871, 
to  May,  1872,  with  constant  pressure  on  the  one  side  and  excuses 
and  resistance  on  the  other.  I  mention  that  because  it  is  impor- 
tant to  express  my  view  that,  in  cases  of  this  sort,  where  the  question 
is  whether  the  one  party  is  set  free  by  the  action  of  the  other,  thg 
real  matter  for  consideration  is  whether  the  acts  or  conduct  of  the 
one  do  or  do  not  amount  to  an  intimation  of  an  intention  to  abandon 
and  altogether  to  refuse  performance  of  the  contract.  I  say  this 
in  order  to  explain  the  ground  upon  which  1  think  the  decisions  in 
these  cases  must  rest.  There  has  been  some  conflict  amongst  them. 
But  I  think  it  may  be  taken  that  the  fair  result  of  them  is  as  I  have 
stated,  viz.,  that  the  true  question  is  whether  the  acts  and  conduct 
of  the  party  evince  an  intention  no  longer  to  be  bound  by  the  con- 
tract. Now,  non-payment  on  the  one  hand,  or  non-delivery  on  the 
other,  may  amount  to  such  an  act,  or  may  be  evidence  for  a  jury  of 
an  intention  wholly  to  abandon  the  contract  and  set  the  other  party 
free.  That  is  the  true  principle  on  which  Hoare  v.  Rennie  was 
decided,  whether  rightly  or  not  upon  the  facts,  I  will  not  presume 
to  say.  Where,  by  the  non-delivery  of  part  of  the  thing  contracted 
for,  the  whole  object  of  thp  onntrnpt  is  frustrated,  the  party  making 
default  renounces  on  his  part  all  the  obligations  of  the  contract. 
That  is  the  ground  upon  which  it  is  said  in  Jonasshon  v.  Young 
that  that  case  may  be  supported.  In  Withers  v.  Reynolds  there  was 
an  express  refusal  by  the  plaintiff  to  perform  the  contract,  and 
Patteson,  J.,  says :  "If  the  plaintiff  had  merely  failed  to  pay  for  any 
particular  load,  that  of  itself  might  not  have  been  an  excuse  to  the 
defendant  for  delivering  no  more  straw;  but  the  plaintiff  here  ex- 
pressly refuses  to  pay  for  the  loads  as  delivered;  the  defendant, 
therefore,  is  not  liable  for  ceasing  to  perform  his  part  of  the  con- 
tract." Wightman,  J.,  certainly,  and  Crompton,  J.,  by  inference, 
in  Jonassohn  v.  Young,  both  uphold  that  case  upon  the  principle  on 
which  I  rely.  The  principle  to  be  applied  in  these  cases  is,  whether 
the  non-delivery  or  the  non-payment  amounts  to  an  abandonment  of 


584  FREETH    V.    BURR  [CHAP.   V 

the  contract  or  a  refusal  to  perform  it  on  the  part  of  the  person  so 
making  default.  That  being  so,  and  my  brother  Brett  having  ruled 
that  the  mere  non-payment  for  the  first  portion  of  the  iron  con- 
tracted for,  unattached  by  any  other  act  on  the  part  of  the  pur- 
chasers, did  not  put  an  end  to  the  contract  so  as  to  disentitle  the  pur- 
chasers to  maintain  an  action  for  the  non-delivery  of  the  second 
portion,  but  only  gave  the  seller  a  remedy  by  cross-action  (of  which 
he  has  availed  himself),  I  am  of  opinion  that  his  ruling  was  correct, 
and  that  the  rule  should  be  discharged. 

Keating,  J.  I  entirely  agree  in  the  judgment  pronounced  by  my 
lord,  and  in  the  principle  upon  which  he  puts  it.  It  is  not  a  mere 
refusal  or  omission  of  one  of  the  contracting  parties  to  do  something 
which  he  ought  to  do,  that  will  justify  the  other  in  repudiating  the 
contract;  but  there  must  be  an  absolute  refusal  to  perform  his  part 
of  the  contract,  l^on-payment  is  an  element.  But,  looking  at  all 
the  circumstances  of  this  case,  —  a  rising  market ;  a  failure  on  the 
part  of  the  defendant  to  deliver  the  iron  according  to  the  terms  of 
the  contract;  a  series  of  deliveries  in  small  quantities  long  after  the 
times  for  delivery  provided  for  by  the  contract;  and  a  refusal  on  the 
part  of  the  plaintiffs  to  pay  for  the  iron  delivered,  not  only  accom- 
panied by  remonstrances,  but  with  a  requisition  to  the  seller  to  fix 
a  day  for  the  delivery  of  a  certain  quantity ;  I  do  not  think  they  show 
an  intention  on  rfie  part  of  the  plaintiffs  to  abandon  the  contract. 
As  upon  the  facts  there  appears  to  have  been  not  only  no  absolute 
refusal  to  perform  the  contract  by  the  plaintiffs,  but,  what  is  impor- 
tant, no  evidence  of  inability  on  their  part  to  perform  it,  I  think 
the  defendant  had  no  right  to  treat  the  contract  as  rescinded  and  to 
refuse  to  deliver  the  remainder  of  the  iron. 

Den  MAN,  J.  I  am  of  the  same  opinion.  The  learned  judge  ruled 
that  the  mere  refusal  by  the  plaintiffs  to  pay  for  the  portion  of  the 
iron  delivered  did  not  warrant  the  defendant  in  considering  the  con- 
tract as  at  an  end ;  and  he  gave  the  defendant  leave  to  move  to  enter 
a  verdict  or  a  nonsuit  if  the  Court  should  think  that  ruling  wrong. 
I  am  of  opinion,  upon  the  authority  of  Withers  v.  Beynolds,  that 
the  ruling  was  quite  right.  That  case  did  not  decide  expressly  that 
a  mere  failure  of  a  single  payment  might  not  be  evidence  of  a  re- 
fusal to  perform  the  contract.  But,  in  the  words  of  Patteson,  J., 
the  conduct  of  the  plaintiff,  coupled  with  the  non-payment,  amounted 
to  an  express  refusal  to  perform  the  contract  on  his  part.  There  was 
nothing  of  the  sort  here.  After  the  way  in  which  that  case  has 
been  treated  in  subsequent  authorities,  I  think  we  are  bound  to  hold 
it  to  be  a  correct  statement  of  the  law,  and  to  act  upon  it.  Notwith- 
standing the  plaintiffs'  refusal  to  pay,  the  defendant  was  bound  to 
go  on  and  deliver  the  rest  of  the  iron.  Rule  discharged. 


SECT.    II ]       MERSEY   STEEL    CO.    V.    NAYLOR,   BENZON,   &,    CO.     585 


THE  MEESEY  STEEL  AND  lEON  CO.  (Limited),  Appellant, 
V.  NAYLOE,  BENZON,  &  CO.,  Eespondents 

In  the  House  of  Loeds,  March  28,  1884 

[^Reported  in  9  Appeal  Cases,  434] 

Appeal  from  an  order  (dated  June  13,  1882)  of  the  Court  of 
Appeal  (Jessel,  M.  E,,  Lindley  and  Bowen,  L.  JJ.)  reversing  an 
order  of  Lord  Coleridge,  C.  J.  The  facts  are  fully  set  out  in  the 
report  of  the  decisions  helow.  The  facts  material  to  the  present 
report  may  be  stated  as  follows :  The  respondents  bought  from  the 
appellant  company  5000  tons  of  steel  of  the  company's  make  to  be 
delivered  1000  tons  monthly  commencing  January,  1881,  payment 
within  three  days  after  receipt  of  shipping  documents.  In  January 
the  company  delivered  part  only  of  that  month's  instalment,  and  in 
the  beginning  of  February  made  a  further  delivery.  On  the  2d  of 
Eebruary,  shortly  before  payment  for  these  deliveries  became  due, 
a  petition  was  presented  to  wind  up  the  company.  The  respondents, 
hond  -fide,  under  the  erroneous  advice  of  their  solicitor  that  they 
could  not  without  leave  of  the  court  safely  pay  pending  the  petition, 
objected  to  make  the  payment  then  due  unless  the  company  obtained 
the  sanction  of  the  court,  which  they  asked  the  company  to  obtain. 
On  the  10th  of  February  the  company  informed  the  respondents 
that  they  should  consider  the  refusal  to  pay  as  a  breach  of  contract, 
releasing  the  company  from  any  further  obligations.  On  the  15th 
of  February  an  order  was  made  to  wind  up  the  company  by  the  court. 
A  correspondence  ensued  between  the  respondents  and  the  liquidator, 
in  which  the  respondents  claimed  damages  for  failure  to  deliver 
the  January  instalment,  and  a  right  to  deduct  those  damages  from 
any  payments  •  then  due ;  and  said  that  they  always  had  been  and 
still  were  ready  to  accept  such  deliveries  and  make  such  payments 
as  ought  to  be  accepted  and  made  under  the  contract,  subject  to  the 
right  of  setoff.  The  liquidator  made  no  further  deliveries,  and 
brought  an  action  in  the  name  of  the  company  for  the  price  of  the 
steel  delivered.  The  respondents  counterclaimed  for  damages  for 
breaches  of  contract  for  non-delivery.  The  referee  having  found 
that  the  damages  due  to  the  defendants  for  non-delivery  amounted 
to  £1723,  being  in  excess  of  the  £1713  admitted  to  be  due  to  the 
plaintiffs  for  the  price  of  the  steel  delivered,  the  Court  of  Appeal, 
by  an  order  dated  the  13th  of  April,  1883,  gave  judgment  for  the 
defendants  vnth  costs.    The  plaintiffs  appealed  from  this  order  also. 

Lord  Blackburn.  I  have  no  doubt  that  Withers  v.  Eeynolds, 
2  B.  &  Ad.  882,  correctly  laid  down  the  law  to  this  extent,  that  where 
there  is  a  contract  which  is  to  be  performed  in  future,  if  one  of 
the  parties  has  said  to  the  other  in  effect,  "If  you  go  on  and  perform 
your  side  of  the  contract  I  will  not  perform  mine"  (in  Withers  v.. 


586    MERSEY   STEEL    CO.    V.    NAYLOR,   BENZON,    &    CO.       [CHAP.    V 

Reynolds,  2  B.  &  Ad.  882,  it  was,  "You  may  bring  your  straw,  but 
I  will  not  pay  you  upon  delivery  as  under  the  contract  I  ought  to 
do.  I  will  always  keep  one  bundle  of  straw  in  hand  so  as  to  have 
a  check  upon  you"),  that  in  effect  amounts  to  saying,  "I  will  not 
perform  the  contract."  In  that  case  the  other  party  may  say,  "You 
have  given  me  distinct  notice  that  you  will  not  perform  the  con- 
tract. I  will  not  wait  until  you  have  broken  it,  but  I  will  treat  you 
as  having  put  an  end  to  the  contract,  and  if  necessary  I  will  sue 
you  for  damages,  but  at  all  events  I  will  not  go  on  with  the  con- 
tract." That  was  settled  in  Hochster  v.  De  la  Tour,  2  E.  &  B.  678, 
in  the  Queen's  Bench,  and  has  never  been  doubted  since;  because 
there  is  a  legal  breach  of  the  contract  although  the  time  indicated 
in  the  contract  has  not  arrived. 

That  is  the  law  as  laid  down  in  Withers  v.  Reynolds,  2  B.  &  Ad. 
882.  That  is,  I  will  not  say  the  only  ground  of  defence,  but  a  suffi- 
cient ground  of  defence.  In  Freeth  v.  Burr,  Law  Rep.  9  C.  P.  208, 
it  was  also  so  laid  down;  and  Lord  Coleridge  here  thinks  the  facts 
were  such  as  to  bring  the  case  within  that  principle.  I  vidll  not 
at  this  time  of  the  day  go  through  them,  but  when  the  facts  are 
looked  at  it  is  to  me  clear  that  that  is  not  so.  So  far  from  the  re- 
spondents saying  that  when  the  iron  was  brought  in  future  they 
would  not  pay  for  it,  they  were  always  anxious  to  get  it,  and  for  a 
very  good  reason,  that  the  price  had  risen  high  above  the  contract 
price.  There  was  a  statement  that  for  reasons  which  they  thought 
sufficient  they  were  not  willing  to  pay  for  the  iron  at  present;  and 
if  that  statement  had  been  an  absolute  refusal  to  pay,  saying,  "Be- 
cause we  have  power  to  do  wrong  we  will  refuse  to  pay  the  money 
that  we  ought  to  pay,"  I  will  not  say  that  it  might  not  have  been 
evidence  to  go  to  the  jury  for  them  to  say  whether  it  would  not 
amount  to  a  refusal  to  go  on  with  the  contract  in  future,  for  a  man 
might  reasonably  so  consider  it.  But  there  is  nothing  of  that  kind 
here;  it  was  a  bond  fide  statement,  and  a  very  plausible  statement. 
I  will  not  say  more.  I  refrain  from  weighing  its  value  at  this  mo- 
ment; but,  as  I  said  before,  it  prevents  the  case  from  coming  within 
the  authority  of  Withers  v.  Reynolds,  2  B.  &  Ad.  882,  and  Freeth  v. 
Burr,  Law  Rep.  9  C.  P.  208,  and  consequently,  as  I  understand  it, 
Lord  Coleridge  made  a  mistake  in  the  ground  on  which  he  went. 
The  rule  of  law,  as  I  always  understood  it,  is  that  where  there  is  a 
contract  in  which  there  are  two  parties,  each  side  having  to  do  some- 
tliiiig  (it  is  so  laid  down  in  the  notes  to  Pordage  v.  Cole,  1  Wms. 
Saund.  r>48,  ed.  1871),  if  you  see  that  the  failure  to  perform  one 
part  of  it  goes  to  the  root  of  the  contract,  goes  to  the  foundation 
of  the  whole,  it  is  a  good  defence  to  say,  "I  am  not  going  on  to  per- 
form my  pjirt  of  it  when  that  which  is  the  root  of  the  whole  and  tlie 
substantial  considfTation  for  my  performance  is  defeated  by  your 
misconduct."  But  Mr.  Cohen  contended  that  whenever  there  was 
a  breach  of  the  contract  at  all  (T  think  he  hardly  continued  to  con- 


SECT.    II ]       MERSEY   STEEL    CO.    V.    NAYLOR,   BENZON,    &    CO.     587 

tend  that  after  a  little  while,  but  he  said  that  whenever  there  was 
a  breach  of  a  material  part  of  the  contract)  it  necessarily  went  to 
the  root  of  the  matter.  I  cannot  agree  with  that  at  all.  I  quite 
agreed  that  when  there  were  a  certain  number  of  tons  of  the  article 
delivered,  it  was  a  material  part  of  the  contract  that  the  man  was 
to  pay,  but  it  was  not  a  part  of  the  contract  that  went  to  the  root 
of  the  consideration  in  the  matter.  There  was  a  delay  in  fulfilling 
the  obligation  to  pay  the  money,  it  may  have  been  with  or  without 
good  reason  (if  that  would  have  made  any  difference),  but  it  did 
not  go  to  the  root  or  essence  of  the  contract,  nor  do  I  think  that  there 
is  any  sound  principle  upon  which  it  could  do  so.  I  repeatedly 
asked  Mr.  Cohen  whether  or  not  he  could  find  any  authority  which 
justified  him  in  saying  that  every  breach  of  a  contract,  or  even  a 
breach  which  involved  in  it  the  non-payment  of  money  which  there 
was  an  obligation  to  pay,  must  be  considered  to  go  to  the  root  of 
the  contract,  and  he  produced  no  such  authority.  There  are  many 
cases  in  which  the  breach  may  do  so;  it  depends  upon  the  construc- 
tion of  the  contract.  With  regard  to  the  case  of  Hoare  v.  E,ennie, 
5  H.  &  W.  19,  it  has  been  said  that  the  Chief  Baron  there  went  so 
far  as  to  say  that  it  was  the  essence  and  substance  of  the  contract 
that  the  whole  of  the  166  tons  of  iron,  and  no  less,  should  be  de- 
livered. If  it  "was  so,  it  would  follow  that  when  in  the  present  case 
the  January  shipment  had  not  been  made,  and  the  company  could 
only  deliver  part  of  the  quantity,  it  went  to  the  essence  of  the  con- 
tract. The  question  depends  upon  whether  the  whole  and  no  less 
is  the  essence  of  it.  And  again  in  Honck  v.  Muller,  7  Q.  B.  D.  92, 
which  has  been  referred  to,  it  is  expressly  and  pointedly  shown  that 
that  was  the  ground  taken,  and  the  noble  and  learned  Lord  opposite 
(Lord  Bramwell)  stated  that  in  his  opinion  the  contract  of  the  one 
party  was  to  deliver  and  of  the  other  to  take  2000  tons  of  iron,  and 
that  inasmuch  as  it  was  to  be  by  three  instalments  and  the  first  was 
gone  and  there  never  could  be  more  than  two  thirds  of  the  quan- 
tity, the  thing  bargained  for  being  the  whole  quantity  of  iron  and 
no  less,  the  defendant  was  not  bound  to  deliver  two  thirds  when  the 
plaintiff  required  the  two  thirds  only.  Supposing  that  that  was  the 
true  construction  of  the  contract,  I  think  that  that  would  be  the 
right  conclusion.  The  present  Master  of  the  Eolls  seems,  if  I  under- 
stand him  rightly,  to  have  thought  that  that  was  not  the  true  con- 
struction of  the  contract;  whether  it  was  or  not  I  do  not  express 
any  opinion,  except  to  point  out  that  whatever  be  the  construction 
of  other  contracts,  there  is  not  in  my  mind  the  slightest  pretext  for 
saying  that  such  is  the  construction  of  this  contract;  and  that  being 
so,  these  cases  have  really  no  bearing  upon  the  matter. 

The  circumstances  being  as  I  have  said,  the  contract  not  being 
such  as  to  make  this  payment  a  condition  precedent,  or  to  make 
punctual  payment  for  one  lot  of  iron  which  has  been  delivered  a 
matter  causing  the  contract  to  deliver  other  iron  afterwards  to  be 


588  VULCAN   TRADING    CO.    V.    KOKOMO   STEEL    CO.     [CHAP.    V 

a  dependent  contract,  being  of  opinion  that  that  is  not  the  meaning 
of  the  contract,  I  think  that  the  decision  of  the  Court  of  Appeal  was 
right. ^ 


VULCAN"  TRADIN'G  COEPOEATIOl^,  Plaintiff  m  Erroe,  v. 
KOKOMO  STEEL  &  WIRE  COMPANY,  Defendant  in  Error 

In  the  United  States  Circuit  Court  of  Appeals  for  the  Seventh 

Circuit,  October  Term,   1920 

[Reported  in  268  Federal  Reporter,  913] 

Before  Baker,  Evans  and  Page,  Circuit  Judges. 
Baker,  Circuit  Judge,  delivered  the  opinion  of  the  court: 
Yulcan  Corporation,  as  buyer,  and  Kokomo  Company,  as  seller, 
entered  into  a  contract  whereby  the  seller  sold  4,500  tons  of  wire 
rods  to  the  buyer  at  $58  a  ton  and  agreed  to  deliver  on  cars  at  Ko- 
komo, Indiana,  1,500  tons  in  November,  1,500  tons  in  December, 
and  1,500  tons  in  January;  and  the  buyer  agreed  to  establish  in  the 
seller's  name  an  irrevocable  banker's  credit,  subject  to  sight  drafts 
with  bills  of  lading  attached,  the  credit  for  the  November  shipments 
to  be  established  on  the  preceding  October  15th,  for  the  December 

1  Lords  Selbome,  Watson  and  Bramwell  delivered  concurring  opinions.  Lord 
Fitzgerald  also  concurred. 

In  Helgar  Corijoration  v.  Warner's  Features,  Incorporated,  222  N.  Y.  449,  Cardozo, 
J.,  thus  stated  for  the  court  the  rights  of  the  parties  under  an  installment  contract  to 
buy  and  sell  goods  in  a  jurisdiction  where  the  Uniform  Sales  Act  has  been  enacted. 

"The  rights  of  vendor  and  vendee  upon  the  breach  of  an  installment  contract  are 
now  regulated  by  statute.  The  rule  is  to  be  found  in  section  126,  subdivision  2,  of 
the  statute  governing  sales  of  goods  (Personal  Prop.  Law,  Consol.  Laws,  ch.  41; 
amd.  L.  1911,  ch.  571);  'Where  there  is  a  contract  to  sell  goods  to  be  delivered  by 
stated  installments,  which  are  to  be  separately  paid  for,  and  the  seller  makes  de- 
fective deliveries  in  respect  of  one  or  more  installments,  or  the  buyer  neglects  or 
refuses  to  take  delivery  of  or  pay  for  one  or  more  installments,  it  depends  in  each 
case  on  the  terms  of  the  contract  and  the  circumstances  of  the  case  whether  the 
breach  of  contract  is  so  material  as  to  justify  the  injured  party  in  refusing  to  proceed 
further  and  suing  for  damages  for  breach  of  the  entire  contract,  or  whether  the  breach 
is  severable,  giving  rise  to  a  claim  for  compensation,  but  not  to  a  right  to  treat  the 
whole  contract  as  broken.' 

"The  statute  thus  establishes  a  like  test  for  vendor  and  for  vendee.  The  earlier 
cases  may  not  be  wholly  uniform  (Wharton  &  Co.  v.  Winch,  140  N.  Y.  287;  Kokomo 
Strawboard  Co.  v.  Inman,  1H4  N.  Y.  92;  Wolfert  v.  Caledonia  S.  I.  Co.,  195  N.  Y.  118). 
Wo  do  not  nfjcd  to  r<!concilo  them.  Wo  have;  d(!parted  from  the  rule  of  the  English 
statute  ('id  &  Til  Vict.  ch.  71,  §  31,  subd.  2),  which  keeps  the  contract  alive  unless  the 
breach  ih  equivalent  to  repudiation.  (Note  of  Commissioners  on  Uniform  Laws, 
American  Uniform  Commercial  Acts,  p.  98;  Williston  on  Sales,  pp.  809,  810;  25 
Ualsbiiry,  Laws  of  England,  p.  220).  Wo  have  established  a  new  test,  wliich  weighs 
the  effect  of  the  default,  and  adjusts  the  rigor  of  the  remedy  to  the  gravity  of  the 
wrong.  '  It  defxinds  in  each  caw*;  on  the  terms  of  the  contract  and  the  circuinstancea 
of  the  c;i«<;'  whether  th(!  broach  is  'so  material'  ils  to  affect  the  contract  as  a  whole. 
"The  answer  to  thiit  quoi^tion  niu.st  v.ary  with  the  facts  (Williston  on  Salea, 
p.  810).  D(!fault  in  rrasjxMit  of  one  instalinK-nt,  though  falling  short  of  repudiation, 
may  under  sonify  conditions  Ik;  ho  material  that  thorn  should  b<^  an  end  to  the  obli- 
gation tf>  kfK'f)  tlie  noiitr.ict  alive.  Under  other  conditions,  the  default  may  be  nothing 
but  a  technical  omi.Hsion  to  olworve  thr;  letter  of  a  promise  (Williston  on  Sal(!s,  p.  823; 
Nat.  Machine  &  Tool  CJo.  ».  Standard  S.  M.  f >>.,  LSI  Mass.  275,  279;  Wharton  &  Co. 
V.  Winch,  supra).     General  btatemeuts  abound  that,  at  law,  time  is  always  of  the 


SECT.    II ]     VULCAN   TRADING   CO.    V.    KOKOMO   STEEL   CO.  589 

shipments  on  November  15th,  and  for  the  January  shipments  on 
December  15th. 

In  its  complaint  the  buyer  set  forth  the  contract  and  averred  that 
it  had  established  the  required  credit  of  $87,000  on  October  15th 
and  a  like  credit  on  November  15th;  that  the  December  credit  was 
not  established  until  December  23rd;  that  the  delay  of  eight  days 
was  occasioned  by  the  following  circumstances,  namely,  that  the 
seller  was  a  manufacturer  in  Indiana;  that  the  buyer  was  a  jobber 
in  New  York;  that  when  making  the  contract  the  seller  knew  that 
the  buyer  was  purchasing  the  wire  rods  for  the  purpose  of  reselling 
them  to  the  trade;  that  prior  to  December  15th  the  seller  knew  that 
the  buyer  had  resold  the  4,500  tons  deliverable  by  the  seller  under 
the  contract;  that  with  such  knowledge  the  seller  delivered  down  to 
December  15th  only  400  tons;  that,  if  the  seller  had  delivered  prior 
to  that  date  the  tonnage  then  due,  the  buyer  could  have  used  the 
bills  of  lading  as  bases  for  credit  and  would  have  established  the 
December  credit  on  the  15th;  that,  because  it  did  not  have  such 
bills  of  lading,  the  buyer  was  required  to  spend  the  eight  days  in 
procuring  other  means  of  credit;  that  on  January  1st  the  seller  was 
in  default  for  2,600  tons  of  the  promised  November  and  December 
shipments;  that  during  January  the  seller  continued  to  make  de- 
liveries until  the  2,600  tons  for  November  and  December  had  been 
delivered,  and  then  refused  to  make  any  part  of  the  1,500  tons  de- 
liveries for  January,  although  the  sum  of  $87,000  to  pay  therefor 
was  then,  and  had  been  since  December  23rd,  standing  to  the  credit 
of  the  seller;  and  that  thereby  the  buyer  was  damaged,  etc.  To  this 
complaint  the  seller's  general  demurrer  was  sustained  and  judgment 
for  costs  followed  the  buyer's  refusal  to  plead  further. 

Throughout  the  briefs  and  arguments  for  the  seller  runs  the  basic 
contention  that  the  buyer's  delay  in  establishing  the  December  15th 
credit  for  January  shipments  breached  a  condition  precedent  and 

essence  (Williston,  supra;  Norrington  v.  Wright,  115  U.  S.  188;  Booth  v.  S.  D.  Rolling 
Mill3  Co.,  60  N.  Y.  553;  Schmidt  v.  Reed,  132  N.  Y.  108).  For  some  purposes  this 
ia  still  true.  The  vendor  who  fails  to  receive  payment  of  an  installment  the  very 
day  that  it  is  due,  may  sue  at  once  for  the  price.  But  it  does  not  follow  that  he  may 
be  equally  precipitate  in  his  election  to  declare  the  contract  at  an  end  (Williston, 
p.  823;  Beatty  v.  Howe  Lumber  Co.,  77  Minn.  272,  and  cases  there  cited;  Graves  v. 
White,  87  N.  Y.  463,  466).  That  depends  upon  the  question  whether  the  default  is 
so  substantial  and  important  as  in  truth  and  in  fairness  to  defeat  the  essential  pur- 
pose of  the  parties.  Whatever  the  rule  may  once  have  been,  this  is  the  test  that  ia 
now  prescribed  by  statute.  The  failure  to  make  punctual  payment  may  be  material 
or  trivial  according  to  the  circumstances.  We  must  know  the  cause  of  the  default, 
the  length  of  the  delay,  the  needs  of  the  vendor,  and  the  expectations  of  the  vendee. 
If  the  default  is  the  result  of  accident  or  misfortune,  if  there  is  a  reasonable  assurance 
that  it  will  be  promptly  repaired,  and  if  immediate  payment  is  not  necessary  to  enable 
the  vendor  to  proceed  with  performance,  there  may  be  one  conclusion.  If  the  breach 
is  willful,  if  there  is  no  just  ground  to  look  for  prompt  reparation,  if  the  delay  has 
been  substantial,  or  if  the  needs  of  the  vendor  are  urgent  so  that  continued  perform- 
ance is  imperilled,  in  these  and  in  other  circumstances,  there  may  be  another  con- 
clusion. Sometimes  the  conclusion  will  follow  from  all  the  circumstances  as  an  in- 
ference of  law  to  be  drawn  by  the  judge;  sometimes,  as  an  inference  of  fact  to  be 
drawn  by  the  jury." 


590  VULCAN   TRADING   CO.    V.    KOKOMO   STEEL   CO.     [CHAP.   V 

thereby  absolved  the  seller  from  ever  raaking  the  shipments  promised 
for  January.  If  the  contract  had  been  for  only  the  November  de- 
liveries and  the  October  15th  credit,  we  will  assume  that  on  the 
buyer's  failure  to  establish  the  credit  on  October  15th  the  seller 
could  have  successfully  denied  obligation  to  deliver.  And  if  there 
had  been  successive  separate  contracts  similarly  covering  December 
and  January  deliveries,  the  consequences  of  failure  or  delay  in  estab- 
lishing prior  credits  would  have  been  the  same.  So  the  seller  is 
found  to  be  contending  for  the  very  same  right  that  would  have 
accrued  to  it  if  there  had  been  a  separate  contract  for  January  de- 
liveries. But  three  separate  contracts  were  not  executed.  There 
is  but  one  contract.  It  is  an  entirety,  even  though  it  calls  for  in- 
stalments of  deliveries  and  instalments  of  credit.  A  contract  for 
a  single  delivery  and  a  single  credit  and  a  contract  for  instalments 
of  deliveries  and  instalments  of  credit  are  alike  in  this  respect :  Per- 
formance of  the  buyer's  promise  to  establish  a  prior  credit  stands 
as  a  condition  precedent  to  the  seller's  obligation  to  deliver;  it  is 
a  condition  precedent  because  it  is  the  first  promise  to  be  fulfilled  in 
order  to  set  in  motion  the  execution  of  the  contract;  the  seller's 
promise  is  a  secondary,  subordinate,  dependent  condition;  but  if  the 
buyer  has  fulfilled  his  promise,  that  promise  has  been  converted 
into  a  completed  act  and  no  longer  stands  as  any  part  of  the  execu- 
tory contract,  and  the  seller's  promise  thereupon  acquires  the  primary 
rank  in  the  executory  contract.  A  single  contract  and  an  instal- 
ment contract  differ  in  this  respect :  In  the  single  contract,  if  the 
buyer  by  fulfilling  his  promise  to  establish'  the  single  credit  has  pro- 
moted the  seller's  promise  of  a  single  delivery  into  the  primary 
rank  in  the  executory  contract,  there  are  no  remaining  promises  on 
the  part  of  the  buyer  to  become  secondary,  subordinate,  dependent 
conditions;  while  in  the  instalment  contract,  if  the  buyer  by  fulfilling 
his  promise  respecting  the  first  instalment  of  credit  has  promoted 
the  seller's  promise  of  the  first  instalment  of  deliveries  into  the 
primary  rank  in  the  executory  contract,  there  remain  the  alternately 
succeeding  promises  of  credits  and  deliveries.  After  the  buyer  has 
stricken  from  the  executory  parts  of  the  instalment  contract  his 
first  promise  by  converting  it  into  a  completed  act,  may  the  seller 
ignore  his  own  default  in  completing  on  time  the  first  instalment 
of  deliveries  —  an  obligation  which  now  stands  first  among  the 
executory  parts  of  the  contract  —  and  insist  that  the  buyer's  promise 
of  the  succeeding  instalment  of  credit  stands  first  and  that  per- 
formance thereof  on  the  named  day  becomes  a  condition  precedent 
to  the  seller's  obligation  to  continue  the  performance  of  the  contract 
beyond  completing  the  first  promised  delivery?  Is  this  buyer's  de- 
lay of  eight  days  in  establishing  the  December  15th  credit,  while  the 
seller  was  executing  the  contract  without  regard  to  its  own  promises 
of  time,  fatal  to  the  mantenance  of  this  action?  Yes,  if  the  estab- 
lishment of  the  December  15th  credit  on  that  exact  date  was  a  con- 


SECT.   II]      VULCAN   TRADING   CO.    V.    KOKOMO   STEEL   CO.  591 

dition  precedent.  Yes  or  no,  dependent  upon  the  materiality  of  the 
delay,  if  the  condition  was  not  a  condition  precedent  but  merely  a 
condition  which  had  to  be  fulfilled  reasonably  in  the  circumstances 
in  which  the  parties  were  mutually  executing  the  contract.  But  in 
order  to  hold  that  the  condition  is  a  condition  precedent  it  would 
be  necessary  to  say  that  an  instalment  contract  is  the  same  in  law 
as  separate  and  independent  contracts  which  in  times  and  amounts 
of  credits  and  deliveries  would  correspond  with  the  instalments  of 
the  instalment  contract.  Such  is  not  the  law.  An  instalment  con- 
tract is  an  entirety.  The  present  contract  was  for  one  sale  of  4,500 
tons,  not  three  contracts  for  three  sales  of  1,500  tons  each.  ISTorring- 
ton  V.  Wright,  115  U.  S.  188;  Simpson  v.  Crippen,  L.  R.  8  Q.  B. 
14;  Freeth  v.  Burr,  L.  R.  9  C.  P.  208;  Mersey  Steel  &  Iron  Co.  v. 
N"aylor,  9  Ap.  Cas.  434;  Cherry  Valley  Iron  Works  v.  Florence 
Iron  Eiver  Co.,  64  Fed.  569;  Cycle  Co.  v.  Wheel  Co.,  105  Fed.  324; 
Construction  Co.  v.  Guerini  Stone  Co.  241  Fed.  545 ;  Williston  on 
Sales,  5th  1.  from  bottom  of  p.  821  to  6th  1.  of  p.  824;  13  Corpus 
Juris  568-9. 

So  the  inquiry  becomes :  Was  the  buyer's  delay  in  establishing 
the  December  15th  credit  until  December  23rd  a  material  breach  of 
a  subordinate  condition  of  the  contract  in  the  circumstances  pleaded 
in  the  complaint?  While  in  instalment  contracts  stipulations  of 
times  of  delivery  are  ordinarily  material  obligations,  breaches  of 
which  go  to  the  essence  of  the  contract,  stipulations  of  times  of 
payment,  in  the  absence  of  an  express  or  necessarily  implied  con- 
dition that  times  of  payment  shall  be  of  the  essence,  are  not  so  vital 
that  delay  in  payment  would  justify  the  seller's  refusal  to  deliver 
the  succeeding  instalments,  unless  the  delay  caused  material  injury 
to  the  seller  or  fairly  expressed  the  buyer's  intention  no  longer  to 
be  bound  by  his  remaining  executory  agreements.  (Authorities, 
supra.)  Without  an  agreement  to  the  contrary,  delay  in  payment 
may  ordinarily  be  compensated  for  with  interest;  but  without  an 
agreement  to  the  contrary,  delay  of  delivery  of  goods  beyond  the 
stipulated  times  violates  the  foundational  purpose  of  the  buyer  in 
entering  into  the  contract  at  all.  And  if  a  buyer's  delay  in  paying 
for  goods  already  delivered  would  not  necessarily  absolve  the  seller 
from  his  remaining  executory  agreements  to  deliver,  how  much  less 
material  was  this  buyer's  delay  in  establishing  the  December  credit 
against  the  promised  January  shipments!  On  October  15th  the 
seller  company  had  available  $87,000  of  the  buyer's  money  with 
which  to  pay  itself  for  the  J^ovember  shipments!  On  November  15th, 
though  the  seller  had  not  shipped  a  pound,  the  buyer  was  required 
to  and  did  put  up  $87,000  more,  because  the  seller  could  not  be  known 
to  be  in  default  for  the  ISTovember  shipments  until  the  last  day  of 
the  month.  On  December  15th,  the  seller  having  shipped  only  400 
tons  and  having  paid  itself  $23,200  therefor,  there  remained  in 
bank  subject  to  the  seller's  drafts  $150,800  of  the  buyer's  money.    On 


592  VULCAN   TRADING   CO.    V.    KOKOMO    STEEL   CO.     [CHAP.   V 

December  23rd  this  was  increased  to  $237,800,  and  the  amount  so 
remained  with  the  oncoming  of  January.  During  January  the 
seller  completed  the  shipments  due  in  jSTovember  and  December- 
and  when  the  seller  refused  to  do  anything  about  the  January  ship- 
ments, $87,000  of  the  buyer's  money  was  still  in  bank  for  the  seller's 
benefit.  JSTow  the  plain  purpose  of  requiring  the  buyer  to  establish 
credits  in  advance  of  deliveries  was  to  give  the  seller  unquestionable 
security,  not  security  that  subsequently  might  have  to  be  pursued, 
but  security  yielding  cash  on  delivery.  The  delay  of  eight  days  was 
not  a  material,  if  any,  impairment  of  that  purpose,  because  for  eight 
days  preceding  January  and  for  a  month  and  eight  days  preceding 
the  seller's  completion  of  the  November  and  December  shipments 
the  credits  for  the  entire  4,500  tons  were  available  to  the  seller.  And 
between  December  15th  and  December  23rd  the  pleaded  circum- 
stances of  the  seller's  knowledge  of  the  buyer's  purpose  in  entering 
into  the  contract,  the  seller's  knowledge  prior  to  December  15th  of 
the  buyer's  resales  of  the  4,500  tons,  and  the  rapidly  rising  market, 
so  far  from  fairly  expressing  the  buyer's  intention  no  longer  to  be 
bound,  unmistakably  demonstrate  the  buyer's  desire  that  the  con- 
tract should  be  fulfilled. 

Though  the  foregoing  considerations  suffice,  in  our  judgment, 
to  determine  this  writ  of  error,  two  other  propositions,  based  on  the 
premise  that  the  condition  respecting  the  December  15th  credit  was 
a  condition  precedent,  have  been  extensively  argued  and  it  may  not 
be  inappropriate  briefly  to  notice  them. 

One  is  that,  though  a  defendant's  act  of  prevention  will  excuse 
the  plaintiff's  nonperformance  of  a  condition  precedent,  nothing  short 
of  an  act  which  makes  it  "physically  impossible"  for  the  plaintiff 
to  perform  is  a  "legal  prevention."  Duress,  undue  influence,  and 
other  like  oppressions,  are  not  restricted  to  physical  means.  Why 
should  "legal  prevention"  bo  so  limited  ?  In  Lake  Shore  Ky.  Co.  v. 
Richards,  152  111.  59,  the  court,  after  reviewing  numerous  cases, 
denied  such  a  limitation.  See  also,  United  States  v.  Peck,  102  U.  S. 
64;  Griffin  v.  American  Gold  Mining  Co.,  123  Fed.  283;  Heiden- 
heimer  v.  Cleveland,  32  S.  W.  826  (Texas). 

The  other  is  that,  conceding  the  inability  of  the  party  who  is  first 
in  default  to  count  as  plaintiff  upon  the  defendant's  following  de- 
fault (State  V.  McCauley  &  Tevis,  15  Cal.  430;  Central  Lumber  Co. 
V.  Arkansas  Valley  Co.,  86  Kan.  131),  if  the  party  who  is  first  in 
default  is  defendant,  he  may  base  a  successful  resistance  upon  the 
plaintiff's  following  default.  But  in  Ankeny  v.  Eichardson,  187 
Fed.  550,  the  party  who  was  first  in  default  was  defendant  and  he  was 
not  })errnitted  to  speak  of  the  plaintiff's  act  in  following  his  example. 
But  to  iKiitiier  of  these  two  questions  do  we  now  find  it  necessary 
to  formulate  a  definitive  answer  of  our  own. 

The  juflgmciit  is  reversed  with  direction  to  overrule  the  demurrer 
to  the  complaint. 


SECT.    II  ]  CAHEN    V.    PLATT  593 

GEOKGE  CAHE]^,  Eespondent,  v.  JOHIST  E.  PLATT  et  al., 

Appellants 

New  York  Court  of  Appeals,  April  9-17,  1877 

{Reported  in  69  New  York,  348] 

Appeal  from  judgment  of  the  General  Term  of  the  Superior  Court 
of  the  City  of  New  York,  affirming  a  judgment  in  favor  of  plaintiff 
entered  upon  a  verdict.     (Reported  below,  8  J.  &  S.  483.) 

This  action  was  brought  to  recover  damages  for  the  alleged  breach 
of  a  contract  of  purchase  and  sale. 

The  facts  appear  sufficiently  in  the  opinion. 

Wm.  P.  Chambers,  for  the  appellants. 

Jno.  E.  Parsons,  for  the  respondent. 

Earl,  J.  In  September,  1872,  at  the  city  of  New  York,  the 
plaintiff  sold  to  the  defendants  10,000  boxes  of  glass,  at  seven  and 
one-half  per  cent  discount  from  the  tariff  price  of  July,  1872,  to 
be  paid  for  in  gold,  at  New  York  upon  delivery  of  invoice  and  bill 
of  lading,  by  bills  of  exchange  on  Antwerp.  The  glass  was  to  be  of 
approved  standard  qualities,  and  was  to  be  shipped  on  board  of  sail- 
ing vessels  at  Antwerp,  and  to  be  at  the  risk  of  the  defendants  as 
soon  as  shipped,  and  they  were  to  insure  and  pay  the  freight  and 
custom  duties.  The  glass  was  to  be  delivered  during  the  months  of 
October,  November,  and  December,  1872,  and  January,  1873.  In 
pursuance  of  this  contract,  the  plaintiff  delivered  to  the  defendants 
4,924  boxes  of  glass,  for  which  they  paid.  They  refused  to  receive 
any  more,  and  this  action  was  brought  to  recover  damages  consequent 
upon  such  refusal. 

The  defendants  claimed,  and  gave  evidence  tending  to  prove,  that 
the  glass  delivered  was  not  of  approved  standard  quality,  and  hence 
that  they  had  the  right  to  refuse  to  take  the  balance. 

While  some  months  after  the  glass  was  delivered  the  defendants 
complained  of  its  quality,  they  at  no  time  offered  to  return  it,  or 
gave  plaintiff  notice  to  retake  it.  They  received  it  under  the  con- 
tract, and  it  is  not  important  in  this  action  to  determine,  as  no  coun- 
terclaim is  set  up,  whether  or  not  a  right  of  action  for  damages 
on  account  of  the  inferior  quality  of  the  glass  survived  the  accept- 
ance. The  fact  that  the  glass  delivered  and  received  upon  the  con- 
tract was  inferior  did  not  give  them  the  right  to  repudiate  the 
contract  altogether.  They  could  demand  better  glass,  and  when  the 
plaintiff  offered  to  deliver  the  balance,  if  it  was  inferior,  they  could 
refuse  to  accept  it.  But  if  plaintiff  was  ready  and  willing  to  deliver 
for  the  balance  such  glass  as  the  contract  called  for,  they  were  bound 
to  receive  it.  Here  the  plaintiff  requested  them  to  take  the  balance 
of  the  glass,  and  they  refused  to  take  any  more,  and  thus  repudiated 
and  put  an  end  to  the  contract.  There  was  no  proof  that  the  plain- 
tiff insisted  upon  delivering  inferior  glass,  or  that  he  was  not  ready 


594  CAD  WELL    V.    BLAKE  [CHAP.   V 

and  willing  to  deliver  glass  of  the  proper  quality.  They  did  not 
take  the  position  that  they  were  willing  to  receive  glass  of  approved 
standard  quality,  but  refused  to  take  any  more  glass  under  the  con- 
tract. There  was,  therefore,  such  a  breach  of  contract  as  entitled 
the  plaintiff  to  recover  such  legal  damages  as  he  sustained  by  the 
breach. 

All  concur.  Judgment  reversed.^ 


PLINY  CADWELL  and  Another  v.  EZEKIEL  BLAKE  and 

Another 

Supreme  Judicial  Court  of  Massachusetts,  September  Term, 

1856 

[Reported  in  6  Gray,  402] 

Action  of  contract,  commenced  on  the  5th  of  April,  1854,  by 
the  assignees  in  insolvency  of  David  Ames  and  John  Ames,  upon 
an  agreement  in  writing  made  by  the  latter  with  the  defendants  on 
the  26th  of  January,  1853. 

The  following  are  the  material  parts  of  that  agreement :  "The 
said  D.  &  J.  Ames  hereby  sell  to  the  said  Blake  &  Valentine  all  the 
right,  title,  and  interest  which  the  said  D.  &  J.  Ames  have  in  the 
machinery  and  fixtures  now  at  their  paper-mill  at  Chicopee  Ealls. 
They  also  agree  that  said  Blake  &  Valentine  shall  have  the  right 
which  said  D.  &  J.  Ames  have  to  manufacture  white  paper,  made 
from  straw  and  other  materials;  which  right  has  been  assigned  to 
said  D.  &  J.  Ames  by  Jean  Theodore  Coupler  and  Marie  Amadee 
Charles  Millier,  and  as  described  in  the  application  of  said  D.  &  J. 
Ames  for  letters-patent  of  the  United  States.  They  also  agree  to 
instruct  the  said  Blake  &  Valentine  fully  in  the  art  and  mystery  of 
preparing  the  straw  and  other  materials,  and  manufacturing  the 
same  into  paper,  and  to  communicate  to  them  from  time  to  time  all 
the  improvements  which  they,  the  said  D.  &  J.  Ames,  shall  make 
in  said  art,  and  give  them  the  benefit  thereof;  which  instructions 
the  said  Blake  &  Valentine  are  to  keep  secret,  so  far  as  secrecy  can 
be  preserved  consistently  with  their  business." 

"The  said  Blake  &  Valentino  are  to  pay  for  said  machinery  and 
fixtures  four  thousand  dollars,  in  four  equal  annual  payments,  with 
annual  interest  from  date.  Payment  is  to  be  made  in  paper,  manu- 
factured according  to  the  process  above  mentioned,  at  the  market 
price  of  such  paper  at  the  time  when  each  payment  shall  become 
due,  the  paper  to  be  delivered  at  the  "Western  Railroad  freight  depot 
in  Springfield.  They  also  agree  to  take  possession  of  said  machinery 
Mtid  fixtures  by  the  foiirtb  of  July  next,  and  proceed  as  soon  as  may 

'  A  f)ortion  of  the-  opinion  nlatinR  to  ihr  moasuro  of  damagns,  is  oniittod.  Niimer- 
01IH  fIffJKionH  on  tlu-  ffFi-oi  of  a  hrnach  hy  on*-  ri'^rty  to  an  instalment  contract  on  the 
oblinationH  of  the  other  arc,  collected  in  2  Williston    Contracts,  §§  864-870. 


SECT.    II  ]  CADWELL    V.    BLAKE  595 

be  with  manufacture;  and  to  pay  to  said  D.  &  J.  Ames  for  tlie  right 
to  manufacture  said  white  paper"  a  certain  share  of  the  profits,  if 
the  profits  exceed  two  cents  a  pound;  otherwise  nothing. 

"If  any  dispute  or  disagreement  shall  arise  between  the  parties 
in  regard  to  the  estimate  of  the  profits,  it  shall  be  referred  to  three 
disinterested  men,  one  to  be  chosen  by  each  party,  and  the  third  by 
the  two  referees,  and  the  award  shall  be  binding  on  the  parties." 

"If  the  said  D.  &  J.  Ames  shall,  upon  request,  refuse  to  teach 
the  said  Blake  &  Valentine  the  art  of  making  said  paper  as  above 
mentioned,  they  shall  forfeit,  as  liquidated  damages,  distinct  from 
all  the  other  liabilities  under  the  contract,  the  sum  of  four  thousand 
dollars." 

The  declaration  set  forth  the  agreement,  and  averred  that  David 
Ames  and  John  Ames  delivered  said  machinery  and  fixtures  to  the 
defendants  according  to  the  terms  thereof,  and  the  defendants  ac- 
cepted and  received  the  same;  that  the  defendants  owed  the  plaintiffs 
therefor  the  sum  of  one  thousand  dollars  with  interest,  and  also  the 
interest  due  on  four  thousand  dollars,  as  therein  stipulated ;  and  that 
the  plaintiffs  had  been  ready  to  receive  the  paper  therein  specified, 
yet  the  defendants  had  not  delivered  the  same,  but  had  refused  so 
to  do. 

Answer,  1st.  That  the  defendants  entered  into  said  agreement 
upon  the  consideration  and  for  the  purpose  of  securing  the  right  to 
manufacture  white  paper  from  straw  by  the  process  therein  named, 
and  of  obtaining  the  necessary  instructions  in  said  art  and  mystery; 
that  D.  &  J.  Ames  and  the  plaintiffs  had  failed  to  fulfil  their  con- 
tract in  this  behalf,  and  had  neglected  and  refused  to  secure  to  the 
I  defendants  the  right  to  manufacture  according  to  said  process,  and 
to  instruct  them  in  the  art  and  mystery  thereof,  although  repeatedly 
requested  by  the  defendants  so  to  do,  and  had  prevented  the  de- 
fendants from  using  said  process.  2d.  That  there  had  been  a  failure 
of  consideration  for  the  contract  on  their  part;  that  said  machinery 
and  fixtures  were  of  no  value  to  them  without  said  instructions  and 
said  right  to  manufacture;  and  they  had  offered  to  return  them. 
3d  That  D.  &  J.  Ames  were  not  the  proprietors  of  said  right  to 
manufacture,  and  had  not  at  the  time,  nor  obtained  since,  any  effec- 
tual assignment  thereof,  or  any  right  to  contract  with  the  defendants 
therefor;  or  else  had  failed  to  avail  themselves  of  such  assignment, 
and  had  abandoned,  lost,  and  suffered  themselves  to  be  deprived  of 
the  right  to  use  said  process,  and  of  the  patent  issued  therefor; 
whereby  their  agreement  to  give  the  defendants  such  right  had  been 
defeated,  and  the  defendants  prevented  from  using  said  process  and 
from  manufacturing  said  paper.  4th.  That  the  defendants,  by  such 
failure  to  secure  to  them  said  right  and  to  give  them  such  instruc- 
tions, had  been  prevented  from  fulfilling  the  agreement  on  their  part. 
5th.  That  D.  &  J.  Ames  were  requested  to  teach  the  defendants  the 
art  and  mystery  of  making  said  paper  according  to  said  process,  but 


596  CADWELL    V.    BLAKE  [CHAP.    V 

neglected  and  refused  so  to  do,  and  thereby  incurred  a  forfeiture 
under  said  agreement  of  the  sum  of  four  thousand  dollars  as  liqui- 
dated damages;  which  the  defendants  claimed  the  right  to  apply  to 
offset  and  cancel  all  claims  of  the  plaintiffs  under  the  agreement. 

At  the  trial  in  this  court  the  defendants  admitted  the  execution  of 
the  agreement,  and  the  delivery  to  them  of  possession  of  the  paper- 
mill,  machinery,  and  fixtures  about  the  1st  of  March,  1853.  The 
plaintiffs  then  rested  their  case. 

The  defendants  contended  that  the  plaintiffs  were  not  entitled  to 
recover,  without  proving  "1st.  That  D,  &  J.  Ames  had  such  an  assign- 
ment of  the  right  as  their  contract  states :  2d.  That  they  had  availed 
themselves  of  it,  and  made  it  effectual  to  secure  to  themselves  the 
patent,  or  at  least  a  right  to  manufacture  under  it  for  themselves  and 
the  defendants;  3.  That  they  had  conveyed  or  secured  to  the  de- 
fendants the  right  to  use  the  process;  4th.  That  they  had  instructed 
the  defendants  in  the  art  of  making  said  paper." 

The  plaintiffs  denied  that  it  was  necessary  for  them  to  offer  any 
further  evidence,  or  that  any  of  the  matters  alleged  in  the  answer 
constituted  a  good  defence  to  the  action. 

Bigelow,  J.,  ruled  that  the  plaintiffs  had  made  out  a  prima  facie 
case,  and  would  be  entitled  to  a  verdict  unless  the  defendants  went 
forward  and  offered  evidence  of  the  matters  set  out  in  their  answers ; 
and  reported  the  case  for  the  determination  of  the  full  Court  upon 
these  two  questions :  1st.  The  correctness  of  his  ruling  as  to  the  suffi- 
ciency of  the  case  as  presented  by  the  plaintiffs;  2d.  The  sufficiency 
of  the  grounds  of  defence  set  forth  in  the  answer;  a  new  trial  to  be 
had  if  upon  either  of  these  points,  the  opinion  of  the  Court  should 
be  in  favor  of  the  defendants. 

The  arguments  and  decision  upon  this  report  were  had  at  the  last 
September  term. 

W.  G.  Bates  and  J.  Wells,  for  the  defendants. 

F.  Chamherlin,  for  the  plaintiffs,  cited  Boone  v.  Eyre,  2  H.  Bl. 
273,  note;  Stavers  v.  Curling,  3  Bing.  N.  C.  355;  Campbell  v.  Jones, 
6  T.  R.  572 ;  Lloyd  v.  Jewell,  1  Grcenl.  356 ;  Knapp  v.  Lee,  3  Pick. 
452;  Piatt  on  Cov.  90,  106;  Knight  v.  New  England  Worsted  Co.,  2 
Cush  271;  Townsend  v.  Wells,  3  Day,  327;  Couch  v.  Ingersoll,  2 
Pick.  300;  Pordage  v.  Cole,  1  Saund.  320,  and  note  4;  Franklin  v. 
Miller,  4  Ad.  &  El.  599. 

Shaw,  C.  J.  ISTo  question  arises  in  the  present  case  as  to  the 
pleading;  the  declaration  is  perhaps  sufficient,  under  the  new  practice 
act,  to  enable  the  plaintiffs  to  recover,  inasmuch  as  it  does  briefly 
aver  the  performance  on  the  part  of  D.  &  J.  Ames,  and  the  plaintiffs, 
their  assignees  in  insolv(!ncy,  of  all  tilings  on  their  part  by  the  terms 
of  tlie  contract  to  be  performed.  But  it  is  a  question  of  proof :  did 
the  plaintiffs  offer  sufficient  proof  of  performance  on  their  part  to 
enable  them  to  recover?  This  again  depends  on  the  construction  of 
the  contract,  and  whether,  according  to  its  true  interpretation,  the 


SECT.    II  ]  CADWELL    V.    BLAKE  597 

stipulation  for  the  payment  of  $4,000  and  interest,  in  paper  to  be 
manufactured  hj  the  process  contemplated  by  the  contract,  was  in- 
dependent, and  to  be  performed  absolutely  by  such  payment;  or 
was  it  dependent  and  conditional,  and  to  be  performed  only  on  con- 
dition that  certain  other  things  should  be  first  performed  on  the 
part  of  the  said  D.  &  J.  Ames? 

The  contract  consists  of  several  articles  on  both  sides,  is  expressed 
in  terms  somewhat  brief,  and  it  is  not  easy  to  gather  from  it  the 
full  and  clear  intent  of  the  parties.  The  great  purpose  of  the  con- 
tract seems  to  have  been  for  D.  &  J.  Ames  to  transfer  to  the  de- 
fendants a  right,  a  useful  and  beneficial  right,  to  manufacture  and 
sell  white  paper  in  so  cheap  a  manner  and  in  such  quantities  as  to 
yield  a  profit,  which  right  D.  &  J.  Ames  had  acquired  so  far  as  it 
could  be  acquired  by  assignment  before  patent,  and  of  which  they  were 
expecting  to  become  the  patentees  by  a  patent  to  be  regularly  issued 
by  the  competent  authority  of  the  United  States.  The  particular 
right  is  not  otherwise  specifically  described  and  identified  than  as 
a  right  which  had  been  assigned  to  them  by  Coupier  &  Millier,  and 
as  described  in  the  application  of  D.  &  J.  Ames  for  letters-patent. 
It  manifestly  looked  to  the  expectation  that  D.  &  J.  Ames  were  to  be 
the  patentees,  because  they  were  the  assignees  and  had  applied  for 
a  patent,  and  because  they  stipulated  to  extend  to  the  defendants  all 
the  benefit  of  the  improvements  which  they  should  make. 

In  construing  a  mutual  agreement,  in  which  there  are  several 
stipulations  on  both  sides,  the  question,  whether  one  is  absolute  and 
independent,  or  conditional  and  made  to  depend  on  something  first 
to  be  done  on  the  other  side,  does  not  depend  on  any  particular  form 
of  words,  or  upon  any  collocation  of  the  different  stipulations;  but 
the  whole  instrument  is  to  be  taken  together,  and  a  careful  con- 
sideration had  of  the  various  things  to  be  done,  to  decide  correctly 
the  order  in  which  they  are  to  be  done. 

It  is  contended  that,  as  the  machinery  and  fixtures  were  to  become 
the  property  of  the  defendants  at  once,  at  a  fixed  price  of  $4,000, 
payable  at  a  certain  time,  they  were  to  pay  for  them  at  all  events, 
whether  the  manufacture  of  paper  by  the  new  process  should  go  on 
or  not.  There  would  be  more  force  in  this  argument  if  it  appeared 
that  the  fixtures  and  machinery  thus  sold  were  adapted  to  the  gen- 
eral purposes  of  paper-making,  and  had  a  market  value,  indepen- 
dently of  the  new  process,  and  especially  if  the  time  for  making 
the  payment  had  been  fixed  at  a  time  before  the  acts  to  be  done  on 
the  other  side. 

But  in  this  case,  for  aught  that  appears,  the  machinery  and  fix- 
tures would  be  of  little  value  except  for  manufacturing  by  the  new 
process.  And  possibly  the  defendants  may  have  stipulated  to  pay 
a  sum  greater  than  their  value  for  these  articles,  in  consideraiton  of 
the  advantages  expected  from  the  whole  contract. 

The  stipulation,  that  the  price  of  the  machinery  and  fixtures  should 


598  CAD  WELL    V.    BLAKE  [CHAP.   V 

be  paid  at  a  fixed  time,  affords  no  criterion  for  determining  that 
the  stipulation  is  independent;  because  there  was  ample  time  before 
the  first  payment  for  D.  &  J.  Ames  to  transfer  the  machinery,  afford 
all  the  necessary  instruction,  execute  and  deliver  a  license  conveying 
to  the  purchasers  a  right  to  manufacture,  and  do  all  other  acts  relied 
on  as  conditions  precedent. 

But  the  strong  ground  on  which  the  Court  are  of  opinion  that 
these  acts  of  D.  &  J.  Ames  were  conditions  precedent  is,  that  these 
payments  were  to  be  made  by  a  delivery  of  paper,  to  be  manufac- 
tured by  this  new  process  from  straw  and  other  materials,  at  the 
then  market  value.  This  process  is  recognized  and  represented  in 
the  contract  itself  as  an  art  and  mystery,  to  be  kept  secret  as  far 
as  practicable,  not  yet  patented,  and  of  which,  therefore,  there  was 
no  specification  in  the  patent-office,  from  which  the  process  could  be 
learned.  The  machinery  sold  may  have  been  that  of  the  inventors, 
adapted  to  the  making  of  paper  by  this  process. 

It  seems  to  us  that  these  two  stipulations,  to  deliver  the  machinery 
and  to  give  the  instruction,  stand  upon  the  same  footing,  because 
both  were  necessary  to  the  making  of  paper  by  this  process.  The 
stipulation  to  instruct  in  the  art  and  mystery  was  absolute  and 
affirmative,  like  that  to  deliver  the  machinery,  not  dependent  on 
request.  There  was  a  distinct  stipulation,  that  if  they  should  refuse 
to  instruct  on  request,  they  should  be  liable  to  liquidated  damages; 
but  it  has  a  distinct  object,  and  does  not  supersede  the  other. 

Without  instruction  in  this  art  and  mystery,  the  defendants  might 
not  know  the  method  of  preparing  the  straw  and  using  the  machinery ; 
without  these,  this  kind  of  paper  could  not  be  made,  it  could  have 
no  market-price,  the  defendants  could  not  make  it,  and  of  course 
could  not  deliver  it. 

When  in  the  order  of  events  the  act  to  be  done  by  the  one  party 
must  necessarily  be  done  before  the  other  can  be  done,  it  is  neces- 
sarily a  condition  precedent,  although  there  be  a  stipulation  for 
liquidated  damages  for  the  breach  on  each  side,  and  although  there 
be  a  fixed  future  time  for  payment,  sufficiently  distant  to  have  the 
work  done  in  the  mean  time.  Suppose  B.  agrees  to  build  at  his  own 
shop  a  carriage  for  A.,  of  A's  materials;  A.  stipulates  seasonably  to 
furnish  materials,  and  to  pay  B.  in  four  months;  and  each,  upon 
failure,  stipulates  to  pay  a  sum  as  liquidated  damages.  The  fur- 
nishing or  t(!ndering  the  materials  by  A.  is  a  condition  precedent. 
Without  it  B.  cannot  perform.  He  must  build  it  of  A's  materials. 
Even  building  it  of  his  own  would  not  be  a  performance.  B.  has 
his  shop,  his  tools,  and  his  workmen  all  ready,  but  A.  does  not  fur- 
nish tlio  materials.  If  B.  sues  A.,  averring  readiness  to  perform,  he 
may  recover.  But  if  A.  sues  B.  for  not  building  tlie  carriage,  it 
would  be  a  good  answer  that  A.  himself  had  not  furnished  the  ma- 
terials; because,  whatever  else  the  contract  may  contain,  this  is  in 
its  nature  a  condition  precedent. 


SECT.  II  ]  CADWELL  V.    BLAKE  599 

The  Court  are  therefore  of  opinion  that  the  plaintiffs,  as  a  part  of 
their  own  case,  should  not  only  have  averred,  but  should  have  offered 
proof  at  the  trial,  that  D.  &  J.  xlmes  gave  full  and  ample  and  rea- 
sonable instruction  to  the  defendants,  or  —  which  is  of  the  same 
legal  effect  in  matters  of  contract  for  doing  specific  acts  —  that  they 
tendered  and  offered  such  instruction  in  regard  to  the  preparation  of 
the  material  and  the  use  of  the  machinery,  to  enable  them  to  make 
the  paper  in  the  manner  and  of  the  material  proposed,  which  the 
defendants  declined  receiving. 

The  Court  are  also  inclined  to  the  opinion  that  the  legal  effect 
of  the  stipulation  of  D,  &  J.  Ames  with  the  defendants  was,  that 
they  should  have  a  full  right  to  manufacture  paper  by  the  process 
therein  indicated,  whatever  the  nature  of  the  right  then  was  or  might 
become  by  the  obtaining  of  a  patent,  which  it  appears  by  the  con- 
tract they  expected  to  obtain,  or  in  failure  of  such  patent,  such  right 
as  they  should  hold  from  the  assignment  to  them  by  Coupler  & 
Millier.  They  were  embarking  in  a  new  and  expensive  enterprise; 
and  should  another  person  obtain  a  patent,  which  might  happen, 
they  might  be  placed  in  a  situation  in  which  they  could  not  carry 
on  the  manufacture  without  infringing  the  right  of  another.  If  the 
patent  was  obtained  by  D.  &  J.  Ames,  it  seems  to  us  that  they  should 
have  tendered  to  the  defendants  an  assignment  of  the  patent,  or  at 
least  a  right  under  it;  or  that,  if  the  application  was  still  pending, 
or  had  been  denied,  and  there  was  no  patent,  that  fact  should  have 
been  averred.  But  we  have  not  placed  our  decision  ordering  a  new 
trial  mainly  on  that  ground;  but  throw  out  the  suggestion  for  the 
consideration  of  parties,  should  a  new  trial  be  had. 

But  there  is  another  ground  upon  which  the  court  are  of  opinion 
that  a  new  trial  ought  to  be  had.  Perhaps  both  points  reserved  in 
the  report  depend  substantially  upon  the  same  question  of  construc- 
tion of  this  contract,  namely,  whether  any  of  the  stipulations  of 
D.  &  J.  Ames  constituted  conditions  precedent;  because,  if  they  did, 
and  so  far  as  they  did,  and  the  defendants  have  averred  the  per- 
formance of  them,  they  would,  if  proved  by  the  defendants,  as  they 
offered  to  do,  be  a  good  defence.  Upon  looking  at  the  answer,  we 
think  that,  even  if  the  plaintiffs  had  made  out  a  prima  facie  case, 
several  of  the  facts  stated  in  the  answer  would  have  been  competent 
for  the  defendants  to  prove;  and,  if  proved,  would  have  been  avail- 
able in  defence,  either  by  way  of  bar,  or  in  reduction  of  damages. 

New  trial  ordered. ' 

The  plaintiffs  then  amended  their  declaration  by  inserting  an 
averment  "that  the  said  D.  &  J.  Ames  instructed  the  defendants  in 
the  art  and  mystery  of  preparing  the  straw  and  other  materials,  and 
manufacturing  the  same  into  paper,  and  offered  them  further  in- 
structions if  they  should  need  it,  and  full  examination  of  the  prem- 
ises of  the  said  D.  &  J.  Ames,  and  permission  to  take  dimensions, 
and  to  be  shown  the  use  and  application  of  whatever  they  might 


600  CADWELL    V.    BLAKE  [CHAP.   V 

desire  to  inquire  about,  and  to  give  tliem  all  needful  information 
which  they  should  require." 

The  defendants  demurred  to  the  declaration,  for  that  it  did  not 
state  a  legal  cause  of  action,  substantially  in  accordance  with  the 
rules  contained  in  the  Statute  of  1852,  c.  312;  ''because  it  does  not 
allege  that  the  plaintiffs,  or  said  D,  &  J.  Ames,  had  secured  to  the 
defendants  the  right  to  manufacture  paper  by  the  process  named 
in  said  contract,  nor  that  the  defendants  have  the  right  to  manu- 
facture according  to  the  terms  of  the  contract." 

Bates  and  Wells,  for  the  defendants. 

R.  A.  Chapman  and  Chamberlin,  for  the  plaintiffs. 

Shaw,  C.  J.  The  Court  are  of  opinion  that  this  demurrer  is 
well  taken  and  must  be  sustained.  It  is  true  there  is  no  warranty 
in  terms  of  a  right  to  manufacture  paper  by  the  process  referred 
to;  but  we  think  such  a  warranty  and  condition  results  from  the 
provisions  of  the  contract,  the  whole  of  which  must  be  taken  together. 
D.  &  J.  Ames  agree  that  the  defendants  shall  have  the  right  to  manu- 
facture white  paper  from  straw  and  other  materials,  which  right 
has  been  assigned  to  D.  &  J.  Ames  by  Coupler  and  Miller.  It  is  not 
merely  hypothetical,  such  right  as  they  have,  if  they  have  any;  but 
an  express  stipulation  that  they  shall  have  the  right,  and  an  affirma- 
tive averment  of  the  fact  that  it  has  been  assigned  to  them,  so  that 
they  have  the  power  to  assure  it,  with  an  intimation  that  the  as- 
signment is  of  such  a  character  as  to  induce  them  to  apply  for  a 
patent,  which,  if  granted,  would  secure  to  them  an  exclusive  right. 
If  they  had  such  an  assignment,  whether  they  obtained  a  patent  or 
not,  it  would  prevent  any  other  person  from  obtaining  a  patent  so 
as  to  exclude  them  from  the  right.  Such  a  stipulation,  accompanied 
with  such  an  express  undertaking  that  they  held  such  an  assignment, 
amounted  to  a  stipulation  that  no  other  person  should  have  such 
right  as  to  exclude  them  therefrom;  and  that,  either  by  a  grant  of 
the  patent-right  from  D.  &  J.  Ames  if  they  obtained  one,  or  by 
common  right  if  none  should  be  obtained,  the  defendants  should 
have  the  right  to  manufacture  by  this  new  and  peculiar  process. 
When  we  consider  that  the  whole  object  of  the  contract  was  to  enable 
the  defendants  to  manufacture  by  this  process ;  that  the  consideration 
of  the  undertakings  of  the  defendants  was  their  right  and  power  so 
to  manufacture  paper;  that  tlie  debt  was  to  be  paid  in  paper  thus 
to  be  manufactured ;  that  without  such  right  the  machinery  and 
fixtures  might  be  of  little  value  to  them,  and  the  teaching  of  an  art 
they  could  not  practise,  without  infringing  the  rights  of  others, 
wholly  useless,  tlu;  conclusion  seems  inevitable,  that  the  enjoyment 
of  a  right  to  use  this  art  and  process,  patented  or  unpatented,  was 
regarded  by  the  parties  as  a  condition,  without  a  performance  of 
which  on  th(!  part  of  D.  &  J.  Ames,  or  those  who  claim  under  them, 
the  defendants  arc;  not  bound  to  make  the  stipulated  payments. 

Demurrer  sustained. 


SECT.    II  ]  VYSE    V.    WAKEFIELD  601 


VYSE  V.  WAKEFIELD 

In  the  Exchequek,  Easter  Teem,  1840 

\_Beported  in  6  Meeson  &  Welshy,  442] 

Covenant  on  an  indenture,  dated  the  3d  of  March,  1827,  whereby 
the  defendant,  in  consideration  of  3,100/.,  bargained,  sold,  and  as- 
signed to  the  plaintiff  certain  dividends,  interest,  and  annual  produce, 
from  time  to  time  due  and  payable  or  to  arise  from  and  after  the 
decease  of  one  Eliza  Robson,  during  the  natural  life  of  the  defend- 
ant, if  he  should  survive  her;  to  have,  hold,  receive,  and  take  the 
dividends,  &c.,  thereby  assigned  unto  the  plaintiff,  his  executors,  &c., 
from  and  after  the  decease  of  the  said  Eliza  Robson,  for  and  during 
the  natural  life  of  the  defendant,  if  he  should  survive  her;  and  the 
defendant  did  thereby  for  himself,  his  heirs,  &c.,  covenant,  promise, 
and  agree  with  and  to  the  plaintiff,  his  executors,  administrators, 
and  assigns,  amongst  other  things,  that  he  the  defendant  should 
and  would  at  any  time  or  times  thereafter,  at  the  request  of  the 
plaintiff,  his  executors,  administrators,  or  assigns,  appear  at  an  office 
or  offices  for  the  insurance  of  lives  within  London,  or  the  bills  of 
mortality,  or  before  the  agent  or  agents  of  any  such  office  or  offices 
in  the  county  where  he  the  defendant  might  happen  to  be  resident 
or  actually  to  be;  and  then  and  there  truly  answer  such  questions 
as  should  or  might  be  asked  or  required  touching  or  concerning  his 
age  and  state  of  health,  and  do  all  other  necessary  acts  in  order  to 
enable  the  plaintiff,  his  executors,  administrators,  or  assigns,  if  he 
or  they  should  think  proper,  to  insure  the  life  of  him  the  defendant; 
and  he  should  not  afterwards  do,  or,  as  far  as  with  him  should  lie, 
permit  to  be  done,  any  act,  deed,  or  thing  whatsoever,  whereby  any 
such  insurance  might  be  avoided  or  prejudiced;  as  by  the  said  in- 
denture, reference  being  thereunto  had,  will,  amongst  other  things, 
appear.  And  the  plaintiff  says,  that  he  the  defendant,  in  part  per- 
formance of  his  said  covenant,  did  afterwards,  to  wit,  on  the  8th 
day  of  March,  1827,  at  the  request  of  the  plaintiff,  appear  at  an 
office  for  the  insurance  of  lives  within  London,  that  is  to  say,  the 
office  of  a  certain  company  of  persons,  or  office  established  for  the 
purpose  and  carrying  on  the  trade  or  business  of  and  for  the  insur- 
ance of  lives,  under  the  name  of,  and  called  and  known  by  the  name 
of,  the  Rock  Life  Assurance  Company,  and  did  then  and  there 
answer  certain  questions  then  asked  and  required  of  him  touching 
and  concerning  his  age  and  state  of  health,  and  did  then  do  all  other 
necessary  acts  in  order  to  enable  the  plaintiff  to  insure  the  life  of 
him  the  defendant  in  and  with  the  said  company  or  office,  he  the 
plaintiff  then  thinking  proper  and  intending  to  insure  the  life  of 
him  the  defendant  in  and  Avith  the  said  company  or  office,  according 
to  the  course  and  practice  of  the  said  company  or  office;  the  an- 


602  VYSE    V.    WAKEFIELD  [CHAP.   V 

swering  such  questions  as  aforesaid,  and  tlie  said  other  matters  in 
that  behalf  aforesaid,  being  necessary  and  i^roper,  according  to  the 
course  and  practice  of  the  said  company  or  office,  to  enable  the  plain- 
tiff to  insure  the  life  of  the  defendant  thereupon  and  therewith, 
and  being  reasonable  in  that  behalf,  of  all  which  the  defendant  then 
had  notice.  And  the  plaintiff  further  says,  that  he  the  plaintiff  did 
thereupon,  and  within  a  reasonable  time  then  next  following,  to  wit, 
on  the  day  and  year  last  aforesaid,  according  to  the  course  and  prac- 
tice of  the  said  company  or  office,  insure  the  life  of  the  defendant 
in  and  with  the  said  company  or  office,  by  a  certain  policy  or  in- 
surance, at  and  for  the  premium  of  81 L  17s  Qd.,  payable  annually 
in  that  behalf,  in  order  to  and  whereby  the  plaintiff  then  became 
and  was  entitled,  if  such  premiums  should  be  so  paid,  to  be  paid 
and  satisfied  out  of  the  funds  and  property  of  the  said  company, 
according  to  the  provisions  of  the  company's  deed  of  settlement, 
within  three  calendar  months  after  satisfactory  proof  should  have 
been  received  at  the  office  of  the  said  company  of  the  death  of  the 
defendant,  the  sum  of  3,000?.,  and  such  further  sum  or  sums  as  might, 
under  the  regulations  of  the  said  company,  be  appropriated  as  a 
bonus  to  that  policy,  subject  to  and  under  the  condition  or  proviso, 
amongst  others,  that,  in  case  the  defendant  should  go  beyond  the 
limits  of  Europe,  the  same  should  be  null  and  void;  and  the  plaintiff 
says,  that  the  said  condition  or  proviso,  at  the  time  of  making  the 
said  indenture  and  from  thence  hitherto,  was  and  is  usual  and  rea- 
sonable; and  that  although  he  the  plaintiff  has  performed  and  ob- 
served every  thing  in  the  said  indenture  on  his  part  to  be  performed 
and  observed,  yet  the  defendant  has  broken  his  covenant  made  with 
the  plaintiff  as  aforesaid,  in  this,  to  wit,  that  he  the  defendant,  after 
the  making  thereof,  and  after  the  making  of  the  said  policy  or  in- 
surance as  aforesaid,  and  after  he  the  plaintiff  had  paid  to  the  said 
Rock  Life  Assurance  Company  divers,  to  wit,  twelve  annual  pre- 
miums as  aforesaid,  payable  in  respect  of  the  said  policy  or  insur- 
ance as  aforesaid,  and  after  the  sum  that,  under  the  regulations  of 
the  said  company,  would  have  been  appropriated  as  a  bonus  to  that 
policy,  in  case  of  the  death  of  the  defendant,  had  amounted  to  a 
large  sum,  to  wit,  2,000/.,  and  had  become  of  great  value  to  the  plain- 
tiff, to  wit,  the  value  of  2,000/.,  and  after  the  said  policy  had  become 
and  was  of  great  value  to  the  plaintiff,  to  wit,  of  the  value  of  3,000/., 
to  wit,  on  the  first  day  of  June,  1S38,  he  the  defendant  went  beyond 
the  limits  of  Europe,  to  wit,  to  the  province  of  Canada,  in  ISTortli 
America,  whereby  and  by  reason  of  the  premises  the  said  policy 
became  and  was  null  and  void,  &c. 

Rpf'fial  demurrer,  assigning  for  cnuso  that  the  declaration  does 
not  contain  ;iny  specific  averment  that  tlie  defendant,  before  he  went 
bfiyond  the  limits  of  Europe  as  in  the  declaration  alleged,  had  re- 
ceivful  or  had  any  notice  from  the  plaintiff,  or  otherwise  that  the 
defendant  had  by  any  means  been  made  or  become  aware  of  the  fact, 


SECT.    II  ]  VYSE    V.    WAKEFIELD  603 

that  the  plaintiff  had  insured  the  life  of  the  defendant  as  in  the 
declaration  alleged,  or  that  such  insurance  was  subject  to  or  under 
the  condition  or  proviso  in  the  declaration  aUeged;  whereas  the  de- 
fendant could  not  be  liable  for  going  beyond  the  limits  of  Europe, 
unless  he  knew  at  the  time  that  the  policy  had  been  effected,  and  that 
it  was  subject  to  the  condition  or  proviso  stated  in  the  declaration. 

Peacock,  in  support  of  the  demurrer,  was  stopped  by  the  Court, 
who  called  upon 

Cowling  to  support  the  declaration.  The  declaration  is  sufficient. 
It  was  not  necessary  to  allege  any  notice  to  the  defendant;  for  the 
declaration  states  that  the  defendant  did,  at  the  request  of  the  plain- 
tiff, appear  at  the  Rock  Life  Assurance  Office,  and  did  answer  cer- 
tain questions  put  to  him;  and  he  might,  therefore,  have  informed 
himself  of  the  fact  of  the  insurance  having  been  effected,  and  of 
the  terms  and  conditions  of  it.  The  general  rule  is,  that  a  party  is 
not  bound  to  do  more  than  the  terms  of  his  contract  oblige  him  to 
do;  and  here  there  is  nothing  in  this  covenant  requiring  him  to  give 
any  notice.  Therefore,  unless  the  circumstances  were  such  that  the 
defendant  had  not  any  means  of  informing  himself  of  it,  no  notice 
was  necessary.  This  contract  to  insure  is  confined  to  insurance 
offices  within  the  bills  of  mortality;  and  the  defendant  might  readily 
have  informed  himself  by  inquiry  of  the  fact  of  the  insurance  having 
been  effected,  and  of  the  terms  and  conditions  of  it.  In  Com.  Dig. 
tit.  Condition,  L.  9,  many  instances  are  given  where  parties  are  not 
bound  to  give  notice,  but  the  other  parties  must  take  notice  at  their 
peril.  It  is  there  said,  "If  a  condition,  covenant,  or  promise,  be  to 
do  an  act  to  a  stranger,  or  upon  performance  of  an  act  by  a  stranger, 
there  needs  no  notice ;  for  it  lies  equally  in  the  knowledge  of  the  obli- 
gor and  obligee,  and  the  obligor  takes  upon  himself  to  do  it;  as  if  a 
condition  be  to  pay  when  A.  marries,  there  needs  no  notice  when  A. 
marries.  So  if  a  condition,  covenant,  or  promise  be  to  do  upon  the 
performance  of  any  certain  and  particular  act  by  the  obligee  him- 
self, he  ought  to  do  it  without  notice  by  the'  obligee  that  the  act  is 
performed,  for  he  takes  it  upon  him  to  do  it  at  his  peril;  as  if  the 
condition  be  to  pay  so  much  when  the  obligee  marries,  there  need  not 
be  notice  of  his  marriage."  jSTotice  is  not  necessary,  unless  where 
the  party  expressly  contracts  to  give  notice,  or  where  it  must  nec- 
essarily be  implied  that  notice  is  to  be  given,  because  the  obligor 
cannot  know  or  ascertain  from  the  nature  of  the  thing  whether  the 
act  has  been  done  or  not.  In  Rex  v.  Holland^  it  was  held,  that  where 
a  public  officer  is  charged  with  a  breach  of  duty,  which  duty  arises 
from  certain  acts  within  the  limits  of  his  government,  it  is  not  nec- 
essary to  aver,  in  an  indictment  against  him,  that  he  had  notice  of 
those  acts,  as  he  is  presumed  from  his  situation  to  know  them.  In 
answer  to  the  objection  of  want  of  notice,  "Wood  says,  in  the  argument, 
"Notice  here  merely  means  knowledge;  and  when  the  matter  is  as 

1  5  T.  R.  607. 


604  VYSE    V.    WAKEFIELD  [CHAP.   V 

much  in  tlie  knowledge  of  the  defendant,  or  more,  than  of  any  other 
person,  the  law  presumes  that  he  had  knowledge ;"  for  which  he  cites 
16  Yiner's  Abr.  tit.  Notice,  p.  5,  pi.  10,  where  it  is  said,  "None  is 
bound  by  the  law  to  give  notice  to  another  of  that  which  that  other 
person  may  otherwise  inform  himself  of;"  and  Lord  Kenyon,  in 
giving  judgment,  refers  to  that  argument,  and  recognizes  it  as  show- 
ing "the  true  grounds  upon  which  notice  is  or  is  not  required  to  be 
averred."  So  here,  the  defendant  might  have  informed  himself 
whether  the  insurance  was  effected  or  not,  and  was  bound  to  do  so  at 
his  peril;  and  the  plaintiff  not  having  undertaken  by  his  contract 
to  give  the  defendant  notice  that  the  assurance  was  effected,  was  not 
bound  to  do  so.  The  defendant  by  his  covenant  undertakes  to  do 
nothing  to  vitiate  an  insurance  effected  with  any  person  within  the 
bills  of  mortality,  without  any  stipulation  whatever  as  to  notice  of 
the  particular  person  with  whom  it  should  be  effected.  [Parke,  B. 
If  the  covenant  had  spoken  of  an  insurance  to  be  effected  with  A.  B., 
there  would  be  no  necessity  for  notice;  but  if  it  were  with  any  per- 
son that  the  plaintiff  may  choose,  then  it  must  surely  be  necessary 
that  notice  should  be  given.  Is  not  notice  equally  necessary,  when 
the  covenant  applies  to  an  insurance  in  any  one  of  the  many  public 
offices  within  the  bills  of  mortality?]  If  five  or  six  offices  had  been 
named,  no  notice  would  be  necessary.  If  there  are  such  a  number 
of  insurance  offices  in  London  as  would  render  it  unreasonable  to 
expect  the  defendant  to  inquire  of  them  all  whether  such  an  insur- 
ance had  been  effected,  the  defendant  should  have  shown  that  by  his 
plea ;  not  having  done  so,  the  Court  will  not  assume  it  to  be  the  fact. 
In  Doe  V.  Whitehead,^  which  was  an  ejectment  by  landlord  against 
tenant  on  an  alleged  forfeiture  by  breach  of  a  covenant  to  insure 
"in  some  office  in  or  near  London,"  it  was  held  that  the  omission  to 
insure  must  be  proved  by  the  plaintiff.  There  the  same  objection 
would  have  applied,  as  it  would  have  been  necessary  for  the  landlord 
to  make  inquiry  at  every  office  in  or  near  London.  Lord  Denman, 
C.  J.,  says,  "The  proof  may  be  difficult,  where  the  matter  is  pe- 
culiarly within  the  defendant's  knowledge;  but  that  does  not  vary 
the  rule  of  law;  and  the  landlord  might  have  had  a  covenant  in- 
serted in  the  lease  to  insure  at  a  particular  office,  or  to  produce  a 
policy  when  called  for,  on  pain  of  forfeiture.  If  he  will  make  the 
conditions  of  his  lease  such  as  render  the  proof  of  a  breach  very 
difficult,  the  Court  cannot  assist  him."  Here  the  district  is  limited; 
but  if  the  number  of  offices  within  it  are  so  inconvenient  as  to  render 
inquiry  difficult,  the  Court  cannot  calculate  the  balance  of  incon- 
venience. Suppose  all  the  insurance  offices  were  in  one  street,  no 
notice  would  surely  in  such  case  be  necessary.  [Parke,  B.  Have 
you  any  authority  for  that,  or  in  any  case  where  there  is  any  choice 
as  to  wbfTf!  the  insurance  shall  be  effected?]  The  cases  cited  in  Com. 
Dig.,  before  referrod  to,  are  applicable  in  principle:  but  there  is  no 
»  8  Ad.  &  Ell  571,  3  Nov.  &  Per.  557. 


SECT.    II  ]  VYSE    V.    WAKEFIELD  605 

case  where  the  party's  having  a  choice  as  to  the  office  in  which  an 
insurance  is  to  be  effected,  had  been  held  to  render  notice  necessary. 
In  Viner's  Abr.,  Condition  (A.  d.),  pl-  15,  it  is  said,  "If  A.  sells  to 
B.  certain  weys  of  barley  or  other  things,  and  B.  assumes  to  pay 
for  every  wey  as  much  as  he  sells  a  wey  for  to  any  other  man;  if 
he  after  sells  to  others  certain  weys  for  a  certain  sum,  he  shall  not 
have  an  action  on  the  case  against  B.  upon  his  promise  till  he  hath 
given  him  notice  for  how  much  he  sold  the  wey  to  others;  for  B,  is 
not  bound  to  pay  it  till  notice,  because  it  is  uncertain  and  not  known 
to  him ;  and  here  he  assumes  in  general  and  not  in  particular,  scilicet, 
to  pay  so  much  as  J.  S.  shall  pay  for  a  wey,  and  so  he  does  not  as- 
sume to  take  notice  at  his  peril;  "but,"  it  is  added  in  pl.  16,  "if  he 
had  assumed  to  pay  as  much  for  every  wey  as  he  sold  a  wey  for  to 
J.  S.,  if  J.  S.  after  bought  a  wey  for  a  certain  sum,  he  ought  to 
take  notice  thereof  at  his  peril  without  any  notice  given,  otherwise 
he  hath  broke  his  promise."  If,  in  the  present  case,  the  number  of 
offices  had  been  limited,  it  is  quite  clear  that  notice  would  not  have 
been  necessary,  because  the  Court  cannot  measure  the  inconvenience 
arising  from  a  greater  or  less  number;  and  the  same  argument  will 
apply  where  the  district  is  limited.  The  defendant  might  have 
remedied  the  inconvenience,  if  any  inconvenience  exists,  by  providing 
for  it  in  his  contract. 

PeacocTc,  in  support  of  the  demurrer.     The  principle  established 
by  the  cases  is,  that  where  the  act  is  to  be  done  by  a  stranger  no 
notice  is  necessary,  because  the  fact  is  as  much  within  the  knowledge 
of  the  one  party  as  the  other;  but  where  the  act  is  to  be  done  by  the 
plaintiff  himself,  it  is  otherwise,  and  notice  must  be  given.     Powle 
V.  Hagger.     There  the  Court  expressly  drew  the  distinction  between 
the  case  where  the  act  is  to  be  done  by  a  stranger,  and  where  it  is 
to  be  done  by  the  plaintiff  himself,      [Parke,  B.     In  Bradley  v. 
Toder,  and  in  Fletcher  v.  Pynsett,  where  the  promise  was,  in  con- 
sideration that  the  plaintiff  would  marry  such  a  woman  the  defend- 
ant would  give  him  100?.,  it  was  held  that  notice  of  the  marriage 
was  not  necessary.]      In  Bradley  v.  Toder  the  Court  at  first  held 
that  the  declaration  was  not  good,  because  it  was  not  alleged  that 
the  plaintiff  gave  notice  of  the  marriage;   a)id  though  the  Court 
afterwards  resolved  that  it  was  good,  the  reason  given  is,  that  it        / 
was  a  necessary  intendment;  that  when,  after  the  marriage,  he  re-      "-^ 
quested  payment  of  the  money,  notice  of  the  marriage  was  given.  I     ^v^^ 
But  this  is  an  act  which  lies  entirely  within  the  knowledge  of  the/^X^ 
plaintiff,  who  effected  the  policy  and  who  alone  could  know  the  con-| 
ditions  annexed  to  it.    All  the  cases  turn  upon  the  question,  whether 
the  defendant  had  the  means  of  knowledge  or  not;  and  if  he  had 
not,  or  not  equally  with  the  plaintiff,  then  notice  is  requisite.     [Lord 
Abinger,  C.  B.    Suppose  the  defendant  had  promised  to  pay  1,000?. 
to  any  banker  in  London  that  the  plaintiff  chose  to  open  an  account 
with,  must  not  the  plaintiff  give  him  notice  of  the  bank  in  which 


606  VYSE    V.    WAKEFIELD  [CHAP.   V 

he  has  opened  an  account?  Pabke,  B.  Suppose  the  covenant  had 
been,  that  the  defendant  would  perform  the  terms  and  conditions 
of  any  policy  that  the  plaintiff  had  entered  into  with  the  Rock  Life 
Assurance  Company,  he  must  in  that  case  have  made  inquiry  as  to 

the  terms  upon  which  the  policy  was  effected.]     In v.  Henning 

it  is  said,  "If  the  agreement  be,  that  he  shall  pay  so  much  as  J.  S. 
in  particular  paid,  in  that  case,  quia  constat  de  persona,  and  he  is 
indifferently  named  betwixt  them,  the  defendant  at  his  peril  shall 
inquire  of  him,  and  the  plaintiff  is  not  bound  to  give  notice;  but 
when  the  person  is  altogether  uncertain,  there  the  plaintiff,  to  en- 
title himself  to  the  action,  ought  to  give  notice."  In  this  case  the 
plaintiff  had  the  option  of  selecting  any  of  the  insurance  offices,  and 
he  was  not  confined  with  respect  to  the  time  of  effecting  the  insur- 
ance; and  he  ought,  therefore,  to  have  given  notice.  [Parke,  B. 
Suppose  it  had  been  a  promise  to  pay  the  plaintiff  1001.  if  he  should 
go  to  Rome  or  Naples?]  There  it  would  be  his  duty  to  give  notice. 
"When  the  event  depends  upon  the  performance  of  one  of  two  acts 
which  are  in  the  plaintiff's  option,  he  is  bound  to  give  notice,  because 
it  could  only  be  known  to  the  plaintiff  when  he  had  exercised  his 
option.  [Parke,  B.  In  Haverley  v.  Leighton  the  plaintiff  promised 
J.  S.,  that  if  he  borrowed  of  one  Powell  100/.,  he  would  repay  that 
sum  to  him  upon  the  same  day  and  upon  the  same  conditions  that 
they  between  them  should  agree  upon,  and  it  was  there  held  that 
notice  was  not  necessary.]  That  case  shows  that  where  the  person 
or  the  act  is  certain,  no  notice  is  necessary;  but  when  the  person  or 
the  act  is  uncertain,  and  the  option  is  to  be  exercised  by  the  plaintiff, 
then  it  is  necessary. 

Lord  Abinger,  C.  B.  I  am  of  opinion  that  the  defendant  in  this 
case  is  entitled  to  our  judgment,  on  two  grounds.  The  plaintiff 
having  reserved  to  himself  the  liberty  of  effecting  the  insurance  at 
any  office  within  the  bills  of  mortality,  the  number  of  which  is  limited 
only  by  the  circumscription  of  the  place,  and  having  also  reserved 
to  himself  the  choice  of  time  for  effecting  the  insurance,  it  appears 
to  me  that  he  ought  to  give  the  defendant  notice  of  his  having  ex- 
ercised his  option,  and  of  the  insurance  having  been  effected,  before 
an  action  can  be  maintained.  But  there  is  also  another  ground,  which 
weighs  strongly  with  me  in  coming  to  this  conclusion.  Even  sup- 
posing the  defendant  were  bound  to  go  to  all  the  insurance  offices 
within  the  bills  of  mortality  to  ascertain  whether  such  a  policy  had 
been  effected,  he  would  still  be  obliged  to  do  something  more,  namely, 
to  learn  what  were  the  ])articular  conditions  on  which  it  was  effected; 
becaus(^  tin;  covenant  here  is,  not  that  the  defendant  shall  not  do  any 
thing  to  evade  the  covenants  or  conditions  usually  prescribed  by 
insurance  offices,  but  that  he  shall  not  violate  any  of  the  conditions 
by  which  Hucb  insurance  might  be  avoided  or  prejudiced;  i.e.,  he  is 
bound  to  oltscTvc  jill  flu;  stipulations  contained  in  any  policy  which 
the  plaintiff  may  eff(;c,t.    Now,  some  conditions  totally  distinct  from 


SECT.    Il]  VYSE    V.    WAKEFIELD  607 

the  conditions  in  general  use  might  be  annexed  by  a  particular  in- 
surance office;  and  in  such  case  it  would  be  most  unfair  to  allow 
the  plaintiif  to  keep  the  policy  in  his  pocket,  and  without  notice  of 
them  to  call  on  the  defendant  to  pay  for  a  violation  of  the  stipula- 
tions contained  in  it.  Suppose  one  of  the  conditions  imposed  by  the 
policy  were,  that  the  party  whose  life  was  insured  should  live  on  a 
particular  diet,  or  at  a  particular  place,  or  cease  from  some  par- 
ticular practice  to  which  he  was  addicted,  or  that  he  should  abandon 
some  course  of  exercise  which  might,  if  persevered  in,  cost  him  his 
life,  and  the  forsaking  of  which  the  insurance  office  might  be  fully 
justified  in  making  a  condition  of  insuring  the  life  at  all,  it  would 
be  hard  if  the  plaintiff  could,  without  giving  the  defendant  notice 
of  the  existence  of  such  a  condition,  make  him  pay  the  amount  of 
the  policy  on  its  violation.  The  rule  to  be  collected  from  the  cases  ' 
seems  to  be  this,  that  where  a  party  stipulates  to  do  a  certain  thing  ; 
in  a  certain  specific  event  which  may  become  known  to  him,  or  with  j 
which  he  can  make  himself  acquainted,  he  is  not  entitled  to  any 
notice,  unless  he  stipulates  for  it;  but  when  it  is  to  do  a  thing  which 
lies  within  the  peculiar  knowledge  of  the  opposite  party,  then  notice 
ought  to  be  given  him.  That  is  the  common  sense  of  the  matter,  and 
is  what  is  laid  down  in  all  the  cases  on  the  subject;  and  if  there  are 
any  to  be  found  which  deviate  from  this  principle,  it  is  quite  time 
that  they  should  be  overruled. 

Parke,  B.  My  mind  is  not  entirely  free  from  doubt :  but  I  am 
inclined,  on  the  whole,  to  agree  with  the  Lord  Chief  Baron.  The 
defendant  here  is  sued  on  a  covenant  by  which  he  stipulates  to  do 
two  things,  namely,  to  appear  at  an  office  for  the  insurance  of  lives, 
within  London  or  the  bills  of  mortality,  in  order  to  enable  the  plain- 
tiff to  effect  an  insurance  on  his  life;  and,  after  it  is  effected,  to 
perform  the  conditions  which  may  be  contained  in  it.  And  it  does 
not  appear  that  this  is  confined  to  an  insurance  to  be  effected  at 
the  particular  office  at  which  he  should  appear;  the  words  "such 
insurance"  in  this  covenant  meaning  simply  an  insurance  on  his  life. 
The  defendant  is  bound  in  the  first  instance  to  appear  at  an  insur- 
ance office,  and  when  the  insurance  is  effected,  he  is  then  bound,  as 
far  as  in  him  lies,  to  fulfil  the  stipulations  which  have  been  entered 
into  by  the  policy.  The  question  then  is,  whether  an  action  can  be 
maintained  on  this  covenant,  when  notice  of  the  effecting  such  in- 
surance, or  of  its  terms,  is  not  averred  in  the  declaration.  The 
general  rule  is,  that  a  party  is  not  entitled  to  notice,  unless  he  has! 
stipulated  for  it;  but  there  are  certain  cases  where,  from  the  very  J 
nature  of  the  transaction,  the  law  requires  notice  to  be  given,  though  | 
not  expressly  stipulated  for.  There  are  two  classes  of  cases  on  this 
subject,  neither  of  which,  however,  altogether  resembles  the  present. 
One  of  them  is,  where  a  party  contracts  to  do  something,  but  the 
act  on  which  the  right  to  demand  payment  is  to  arise  is  perfectly 
indefinite;  as  in  the  case  of  Haule  v.  Hemyng,^  where  a  man  prom- 
1  Viner's  Abr.  "Condition"  (A.  d.),  pl.  15;  Cro.  Jac.  422 


608  VYSE    V.    WAKEFIELD  [CHAP.   V 

ised  to  pay  for  certain  weys  of  barley  as  much  as  lie  sold  them  for 
to  any  other  man :  there  the  plaintiff  is  bound  to  aver  notice,  because 
the  person  to  whom  the  weys  are  to  be  sold  is  perfectly  indefinite, 
and  altogether  at  the  option  of  the  plaintiff,  who  may  sell  them  to 
whom  he  pleases;  and  in  such  cases  the  right  of  the  defendant  to  a 
notice  before  he  can  be  called  on  to  pay  is  implied  by  law  from  the 
construction  of  the  contract.  So,  where  a  party  stipulates  to  account 
before  such  auditors  as  the  obligee  shall  assign,  the  obligee  is  bound 
to  give  him  notice  when  he  has  assigned  them;  for  that  is  a  fact 
which  depends  entirely  on  the  option  or  choice  of  the  plaintiff.  On 
the  other  hand,  no  notice  is  requisite  when  a  specific  act  is  to  be 
done  by  a  third  party  named,  or  even  by  the  obligee  himself;  as,  for 
example,  where  the  defendant  covenants  to  pay  money  on  the  marriage 
of  the  obligee  with  B.,  or  perhaps  on  the  marriage  of  B.  alone  (for 
there  are  some  cases  to  that  effect),  or  to  pay  such  a  sum  to  a  certain 
person,  or  at  such  a  rate  as  A.  shall  pay  to  B.  In  these  cases  there 
is  a  particular  individual  specified,  and  no  option  is  to  be  exercised; 
and  the  party  who,  without  stipulating  for  notice,  has  entered  into 
the  obligation  to  do  those  acts,  is  bound  to  do  them.  But  there  is 
an  intermediate  class  of  cases  between  these  'two.  Let  us  suppose 
the  defendant  in  this  case  bound  to  perform  such  stipulations  as 
shall  be  contained  on  a  policy  to  be  effected  at  some  office  in  London. 
]^ow,  my  present  impression  is,  that  where  any  option  at  all  remains 
to  be  exercised  on  the  part  of  the  plaintiff,  notice  of  his  having  de- 
termined that  option  ought  to  be  given;  and  if  this  had  been  a 
covenant  by  the  defendant  to  perform  the  conditions  to  be  imposed 
by  any  insurance  company  then  existing  in  London,  I  think  it  would 
be  the  duty  of  the  plaintiff  to  notify  to  the  defendant  the  exercise 
of  his  option,  as  to  which  he  had  selected.  But  this  principle  holds 
even  more  strongly  in  the  present  case,  for  not  only  do  the  terms  of 
the  covenant  apply  to  all  actually  existing  companies  of  the  sort,  but 
to  all  that  might  at  any  future  time,  subsequent  to  the  date  of  the 
deed,  be  established  within  the  bills  of  mortality.  Now  that  is  a  con- 
dition which  appears  to  me  so  perfectly  indefinite,  that  notice  ought 
to  be  given  by  the  plaintiff  of  his  having  determined  his  choice,  and 
I  think,  therefore,  that  he  was  at  least  bound  to  give  notice  that  a 
policy  of  insurance  had  been  effected  by  him  at  such  a  particular 
office;  it  might  then,  perhaps,  be  the  duty  of  the  defendant  to  in- 
quire at  that  office  into  the  nature  and  terms  of  the  policy  which 
had  been  tbere  effected.  If,  therefore,  the  more  extended  construc- 
tion of  this  covenant  is  to  be  adopted,  and  the  defendant's  contract 
understood  to  extend  to  all  existing  and  future  companies,  no  doubt 
at  all  can  exist  upon  the  point.  Supposing,  however,  that  the  cove- 
nant is  to  be  construed  in  a  limited  sense,  as  restrained  to  any  office 
where  tlif  p;ir(v  should  have  appcarerl  to  answer  the  questions  rela- 
tive to  bis  lic.'iltli,  (fee,  as  the  words  "such  insurance"  seem,  and 
perhaps  with  truth,  to  indicate,  even  then  the  option  of  the  plaintiff 


SECT.    II ]  VYSE    V.    WAKEFIELD  609 

is  of  such  an  indefinite  nature  that  the  defendant  cannot  be  called 
on  to  account  for  the  non-observance  of  it,  unless  notice  be  given  to 
him.  Now  here  none  has  been  given;  there  is,  it  is  true,  notice  of 
an  intention  to  effect  a  policy,  but  none  either  of  its  having  been 
made  at  all,  or  made  with  any  particular  conditions.  Possibly,  if 
it  had  been  notified,  generally,  to  the  defendant,  that  an  insurance 
had  been  effected  at  a  particular  office,  it  would  become  his  duty 
then  to  inquire  into  its  nature,  and  the  conditions  with  which  it  was 
coupled;  but  I  think  he  was  at  least  entitled  to  notice  of  the  fact 
of  its  existence. 

Alderson,  B.  I  am  of  the  same  opinion;  and  my  judgment  is 
founded  on  the  authority  of  Haule  v.  Hemyng,  as  reported  in  Viner's 
Abr.  Condition  (A.  d.),  pi.  15.  In  this  case  the  defendant  covenants 
that  he  will  not  do  any  act,  deed,  or  thing,  whereby  any  such  in- 
surance may  be  avoided  or  prejudiced.  The  insurance  is  to  be  ef-  ; 
fected  at  any  time  or  times,  or  at  any  office  or  offices,  within  certain 
limits,  and  is  not  confined  to  the  then  existing  offices.  The  plaintiff 
has  the  selection  from  an  indefinite  number;  and  it  seems  to  me  that 
the  person  who  is  to  select  the  office  must  give  notice  of  his  having 
done  so.  If  the  defendant  had  received  notice  that  an  insurance  was 
effected  in  the  Rock  Life  Insurance  Company,  I  by  no  means  say 
that  he  would  not  be  bound  to  inform  himself  of  any  conditions  to 
which  it  might  be  subject. 

KoLFE,  B.  I  am  of  the  same  opinion.  I  own  that  when  the  case 
was  first  opened,  my  impression  was  in  favor  of  the  plaintiff;  and 
for  this  reason,  that  when  a  party  enters  into  a  contract,  he  is 
bound  to  perform  it,  whether  reasonable  or  not.  Where  the  law 
casts  an  obligation  upon  him,  it  says  that  it  shall  be  reasonable;  but 
that  is  not  so  where  a  party  contracts  to  do  a  particular  act ;  for  then 
it  is  his  own  fault  for  entering  into  such  a  contract.  In  the  progress 
of  the  argument,  my  opinion  changed;  and  I  think  that  the  plaintiff 
was  bound  to  give  notice.  I  find  it  stated  in  Viner's  Abr.  Condition 
(A.  d.),  pi.  10,  ''If  I  am  bound  to  enfeoff  such  persons  as  the  obligee 
shall  name,  he  ought  to  give  notice  of  those  he  names,  otherwise  I 
am  not  bound  to  enfeoff  them;"  and  reason  seems  in  favor  of  this 
principle  of  law.  The  question  is,  what  is  the  meaning  of  the  con- 
tract, where  a  party  covenants  to  do  something  at  the  option  of  an- 
other ?  It  must  mean,  provided  he  have  notice  of  that  option  having 
been  exercised.  Judgment  for  the  defendants 

1  Affirmed  on  error,  7  M.  &  W.  126.  And  see  Phoenix  Ins.  Co.  v.  Doster,  106  U.  S. 
30;  Spooner  v.  Baxter,  16  Pick.  409;  Becket  v.  Gridley,  67  Minn.  37;  McLean  v. 
Republic  Ins.  Co.,  3  Lans.  421;    Genesee  College  v.  Dodge,  26  N.  Y.  213. 


ll' 


20 


610  MAKIN    V.    WATKINSON  [CHAP.   V 


MAKIISr  V.  wATKiisrsoisr 

In  the  Exchequer,  November  22,  1870 
[Reported  in  Law  Reports,  6  Exchequer,  25] 

Declaration  upon  a  covenant  contained  in  a  lease  of  a  mill,  and 
other  buildings,  with  machinery  and  fixtures,  by  which  the  lessors 
(of  whom  the  defendant  was  one)  covenanted  with  the  plaintiff  (the 
lessee)  that  they  would,  at  all  times,  during  the  demise,  at  their 
own  expense,  maintain  and  keep  the  main  walls,  main  timbers,  and 
roofs  of  the  said  buildings  in  good  and  substantial  repair,  order,  and 
condition;  alleging  performance  of  conditions  precedent,  and  a  de- 
fault in  repairing,  whereby,  &c. 

Plea :  That  the  plaintiff  gave  no  notice  to  the  lessors  of  any  want 
of  repair  in  the  main  walls,  main  timbers,  and  roofs,  nor  that  the 
same  were  not  in  good  and  substantial  order  and  condition. 

Demurrer  and  joinder. 

Wills  was  called  upon  to  support  the  plea.  The  only  authority 
for  the  plea  is  a  dictum  of  Mansfield,  C.  J.,  and  Gibbs,  J.,  in  Moore 
V.  Clark,^  that  "the  lessor  may  charge  the  lessee  without  notice,  for 
the  lessor  is  not  on  the  spot  to  see  the  repairs  wanting;  the  lessee  is, 
and  therefore  the  lessee  cannot  charge  the  lessor  for  breach  of  repairs 
without  notice,  for  the  lessor  may  not  know  that  repairs  are  nec- 
essary." The  justice  of  this  is  the  more  obvious  if  its  principle  is 
applied  to  a  similar  case,  that  of  a  watch-maker  selling  a  watch,  with 
an  agreement  to  keep  it  in  repair  for  six  months;  it  is  plain  that 
he  could  not  be  sued  for  non-repair  unless  the  buyer  required  repairs 
to  be  done.  The  lessor  in  the  one  case,  and  the  watch-maker  in  the 
other,  not  only  would  not,  but  could  not,  know  that  repairs  were 
wanted  unless  notice  was  given;  for  they  would  have  no  right  to 
insist  upon  examining  the  premises  or  the  watch,  and  would  be 
guilty  of  a  trespass,  if  they  did  so  against  the  will  of  the  possessor. 
The  dictum  above  cited  is  supported  by  several  analogous  cases.  In 
Com.  Dig.  Condition,  L,  10,  it  is  laid  down  that  "if  a  condition  be 
that  the  lessee  repair,  and  that  the  lessor  find  timber,  the  lessee  ought 
to  demand  timber,  and  give  notice  how  much  will  be  sufficient." 
[Bramwell,  B.,  referred  to  L.  8,  "if  a  condition,  covenant  or  prom- 
ise, be  to  pay  as  much  for  goods  as  every  other  pays;  the  obligee  shall 
givf!  notice  how  much  another  pays."]  In  Vin.  Abr.  Condition 
(A.  d.),  pll.  13,  38,  it  is  laid  down  that  when  the  condition  is  an 
act  to  be  performed  by  a  stranger,  the  obligor  must  take  notice  at 
bis  peril;  but  in  the  case  cited  in  the  latter  placitiim  (Pollen  v. 
K^iiifresrneal,  as  stated  in  the  margin),  and  in  Harris  v.  Ferrand,  re- 
ported in  Hardr.  41,  and  cited  in  Vin.  Ab.  TTotice,  A.  2,  pi.  12,  the 
I>rinciple  is  more  fully  and  more  correctly  stated  that  "notice  is  not 

>  5  Taunt,  at  p.  96. 


SECT.    Il]  MAKIN    V.    WATKINSON  611 

necessary  where  the  thing  lies  as  mnch  in  the  cognizance  of  the  one 
as  the  other;  but  where  it  lies  more  properly  in  the  cognizance  of 
the  plaintiff  than  of  the  defendant  notice  is  necessary."  That  prin- 
ciple was  acted  upon  in  Vyse  v.  Wakefield,  and  is  entirely  applicable 
to  this  case.  [Maetin,  B.  A  distinction  has  always  been  made  be- 
tween a  condition  and  a  covenant.  Channell,  B.  The  principle 
has  been  laid  down,  that  where  notice  or  demand  is  merely  formal, 
the  bringing  of  the  action  is  sufficient  notice,  but  not  otherwise.] 
Here  the  notice  is  essential;  if  the  lessor  is  to  have  no  notice,  ex- 
tensive repairs  may  have  been  executed  by  the  tenant,  of  which  the 
lessor  knows  nothing,  and  of  the  necessity  of  which  he  has,  after  they 
are  done,  no  means  of  judging,  but  for  which  he  may  be  compelled 
to  pay;  and  he  may  be  made  liable  for  consequential  damage  which 
he  had  no  opportunity  of  preventing.  [Bramwell,  B.  The  case 
would  be  different  if  the  covenant  were,  on  the  making  of  the  lease, 
to  'put  in  repair.  But  the  plaintiff's  contention  would  reduce  the 
lessor  to  a  dilemma;  if  he  went  on  the  premises  to  repair,  and  re- 
pairs were  not  needed,  he  would  be  liable  to  be  sued  in  trespass;  if 
he  did  not  go  and  repairs  were  needed,  he  would  be  liable  for  con- 
sequential damage,  and  he  could  have  no  knowledge  whether  they 
were  or  were  not  needed.] 

Kemplay,  in  support  of  the  demurrer.  If  the  defendant  is  right, 
there  is  no  difference  between  a  covenant  to  repair  and  a  covenant 
to  repair  on  notice.  The  rule,  is,  that  notice  is  not  necessary  unless 
it  is  stipulated  for  by  the  contract;  see  I  "Wms.  Saund.  116,  note  to 
Cutler  V.  Southern,  and  2  "Wms.  Saund.  62,  n.  (4),  where  all  the 
authorities  are  collected;  Cole's  Case.  [Bramwell,  B.  The  cove- 
nant in  Cole's  Case  was  to  save  harmless,  but  if  it  had  been  merely 
to  indemnify,  must  not  notice  have  been  given  of  the  damnification  ?] 
The  defendant's  view  cannot  be  sustained  without  adding  words  to 
the  covenant,  and  there  is  no  authority  for  such  addition.  [Bram- 
well, B.  Words  were  added  in  Vyse  v.  Wakefield.  The  question  is, 
whether  in  reason  the  covenant  does  not  require  the  addition;  we 
must  construe  it  if  possible  as  a  covenant  made  by  reasonable  people.] 
It  is  not  necessary  for  that  purpose  to  add  words;  there  Is  nothing 
unreasonable  in  it  as  it  stands;  the  lessor  being  under  an  obligation 
to  repair  would  have  an  implied  license  to  do  all  things  necessary. 
The  dictum  in  Moore  v.  Clarke,  was  not  necessary  to  the  case;  on  the 
other  hand,  Coward  v.  Gregory^  is  in  favor  of  the  plaintiff.  [Bram- 
well, B.  There  the  covenant  was  to  put  the  premises  in  repair, 
which  implied  they  were  out  of  repair.] 

Channell,  B.  I  am  of  opinion  that  this  is  a  good  plea.  The 
declaration  is  good,  because  it  avers  the  performance  of  conditions 
precedent,  which  would  include  a  request  if  a  request  is  necessary. 
The  question  is,  whether  the  plea  denyina;  the  giving  of  notice  is 
a  good  defence.     I  agree  that  the  case  of  Moore  v.  Clark  is  not  an 

1  Law  Rep.  2  C.  P.  153. 


612  MAKIN    V.    WATKINSON  [CHAP.   V 

authority;  because,  although  what  was  said  there  upon  this  point  was 
said  by  two  very  eminent  judges,  one  of  them  (Gibbs,  J.)  peculiarly 
conversant  with  pleading,  and  was  illustrative  of  the  matter  under 
discussion,  yet  it  was  not  necessary  to  the  determination  of  the  case. 
We  must,  therefore,  look  at  the  question  apart  from  direct  authority, 
and  upon  general  principles.  And,  looking  at  it  in  this  way,  Vyse 
V.  Wakefield  is  to  some  extent  an  authority,  for  it  warrants  the  propo- 
sition that,  when  a  covenant  would,  according  to  the  letter,  be  an 
unreasonable  one,  words  not  inconsistent  with  the  words  used  may 
be  interpolated  to  give  it  a  reasonable  construction.  This  proceeds 
on  the  assumption  that  the  contracting  parties  were  reasonable  men, 
and  intended  what  was  reasonable.  If,  however,  the  language  of  the 
covenant  is  clearly  inconsistent  with  the  words  sought  to  be  added, 
I  agree  that,  however  absurd  the  covenant  may  be,  it  cannot  be 
varied. 

ISTow  here  repairs  are  to  be  done  to  the  exterior  of  the  premises,  as 
to  which  it  is  just  possible  that  the  lessor  might  by  observation  ac- 
quire a  knowledge  of  their  necessity.  But  the  main  timbers  of  the 
building,  which  must  be  within  its  carcase,  and  the  roofs  are  to  be 
kept  in  repair;  and  of  the  repairs  required  for  these  he  could  have 
no  knowledge  without  notice.  He  could  not  enter  to  see  the  con- 
dition of  those  parts,  even  though,  independently  of  his  obligation 
under  the  covenant,  it  might  be  of  great  consequence  to  him  to  be 
acquainted  with  it.  Here,  therefore,  by  the  rule  of  common  sense, 
which  is  supported  by  the  case  of  Vyse  v.  Wakefield,  we  ought  to 
import  into  the  covenant  the  condition  that  he  shall  have  notice  of 
the  want  of  repair  before  he  can  be  called  on  under  the  covenant 
to  make  it  good. 

Bramwell,  B.  I  am  also  of  opinion  that  the  plea  is  good.  To 
hold  it  to  be  so,  we  must  hold  the  defendant's  covenant  to  be  a  cove- 
nant to  repair  on  notice.  I  have  the  strongest  objection  to  inter- 
polate words  into  a  contract,  and  think  we  ought  never  to  do  so 
unless  there  is  some  cogent  and  almost  irresistible  reason  for  it, 
arising  from  the  absurdity  of  the  contract  if  it  is  read  without  them. 
Dogs  such  a  reason,  then,  exist  here?  I  think  it  does.  I  think  that 
wo  are  irresistibly  driven  to  say  that  the  parties  cannot  have  in- 
tended so  preposterous  a  covenant  as  that  the  defendant  should  keep 
in  repair  that  of  which  he  has  no  means  of  ascertaining  the  condi- 
tion. The  lessee  is  in  possession ;  lie  rnn  say  to  the  lessor:  "You  shall 
not  come  on  the  premises  witboiif  Inwfnl  cause;"  and  to  come  for 
the  pnrpose  of  looking  into  the  state  of  the  premises  would  not  be 
a  lawful  cause.  If  the  lessor  comes  to  repair  when  no  repair  is 
needed,  he  will  be  a  trespasser;  if  he  does  not  come,  he  will,  accord- 
ing to  tbo  plaintiff's  contention,  bo  linblo  to  an  action  on  the  cove- 
nant if  rop.'iir  is  noodoH,  and  will  bo  linblo,  not  only  to  the  cost  of 
repair,  but  to  consequential  damage  for  injury  to  chattels  caused 
by  want  of  the  ropairs  he  had  no  opportunity  of  effecting.     This  is 


SECT.    II  ]  MAKIN    V.    WATKINSON  613 

SO  preposterous  that  we  ought  to  hold  that  the  parties  intended  the 
covenant  to  be  read  with  the  qualification  suggested. 

As  to  the  authorities,  we  have,  in  the  first  place,  an  obiter  dictum 
of  two  eminent  judges,  which  was  appropriate  to  the  matter  in  hand, 
and  is  therefore  of  great  value,  though  not  binding.  The  authorities 
on  analogous  cases,  collected  in  Comyns'  Digest,  are  by  no  means 
clear;  some  seem  one  way,  some  another;  and  one,  which  occurs 
under  the  title  Condition,  L.  9,  is  very  much  in  favor  of  the  plain- 
tiff. The  case  there  referred  to  is  Fletcher  v.  Pynsett,^  where,  it 
appears,  the  defendant  covenanted  with  the  plaintiff  that,  if  he  would 
marry  the  defendant's  daughter,  the  defendant  would  assure  to  him 
a  certain  copyhold ;  and  it  was  held  that  the  plaintiff  was  entitled  to 
sue  without  giving  notice  of  the  marriage.  It  seems  to  be  suggested 
that,  when  the  engagement  is  conditional  upon  the  doing  of  an  act 
by  a  third  person,  notice  must  be  taken  from  that  person.  But  this 
cannot  be  the  reason  of  the  rule;  for  in  a  case  put  under  L.  8  of  the 
title  I  have  referred  to,  it  is  said  that  a  promise  to  pay  as  much  for 
goods  as  any  other  pays  requires  a  notice  of  how  much  another  pays.^ 
But  there  seems  no  reason  why  the  obligee  should  be  less  bound  to 
give  notice,  or  the  obligor  more  bound  to  take  notice,  of  the  act  of  a 
stranger  than  of  the  act  of  the  obligee  himself,  as  in  some  of  the 
eases  put  in  L,  9,  where  it  is  said  notice  is  not  necessary. 

If  we  look  to  the  reason  of  the  rule,  it  is  that  when  a  thing  is  in 
the  knowledge  of  the  plaintiff,  but  cannot  be  in  the  knowledge  of  the 
defendant,  but  the  defendant  can  only  guess  or  speculate  about  the 
matter,  then  notice  is  necessary. 

To  have  inserted  a  provision  in  the  covenant,  requiring  notice, 
would  certainly  have  been  very  reasonable.  "When  it  is  a  question 
of  putting  it  into  the  covenant  by  implication,  one  must  needs,  as 
in  all  cases,  have  great  doubt;  but  upon  the  whole,  looking  to  the 
authorities,  and  bearing  in  mind  what  is  said  in  Moore  v.  Clark,  I 
think  we  are  warranted  in  so  reading  the  covenant. 

Martin,  B.  I  am  of  opinion  that  this  plea  is  bad.  I  think  that 
when  we  are  construing  a  contract  we  ought  to  adhere  to  its  words, 
and  not  insert  words  not  to  be  found  in  it ;  otherwise  it  is  impossible 
for  the  parties  to  know  what  are  the  obligations  they  have  bound 
themselves  to,   or  for  counsel  to  advise  with   certainty.     Now  the 

1  Cro.  Jac.  102;  see  to  same  effect,  Roll.  Abr.  Cond.  C.  1,  2,  3,  4,  under  the  head- 
ing "At  what  time  performance  should  be  when  no  time  is  limited." 

2  Holmes  v.  Twist,  the  case  there  referred  to,  was  decided  by  the  Exchequer  Cham- 
ber, reversinc;  the  judgment  of  the  King's  Bench,  some  judges  of  the  court  below, 
agreeing  with  the  judgment  of  reversal  (Hob.  51);  the  reason  there  assigned  was, 
that  the  price  was  "a  thing  of  his  (the  plaintiff's)  private  knowledge,  and  not  like 
the  case  of  bond  to  perform  the  award;"  in  Cro.  Jac.  432,  where  the  same  case  is 
referred  to  in  a  similar  case  of  — —  v  Henning  (Haul  v.  Hemmings,  in  1  Roll.  Rep. 
285),  it  is  said  a  difference  was  taken  "if  the  agreement  be  that  he  shall  pay  so  much 
as  J.  S.  in  particular  paid;  in  that  case  quia  constat  de  persona,  and  he  is  indifferently 
named  betwixt  them,  the  defendant  at  his  peril  shall  inquire  of  him,  and  the  plaintiff 
is  not  bound  to  give  notice."  The  latter  reason  seems  to  be  adopted  by  Parke,  B.,  in 
Vyse  V.  Wakefield  (6  M.  &  W.  at  pp.  453,  454),  as  the  ratio  decidendi  of  these  cases. 


614  MAKIN    V.    WATKINSON  [CHAP.   V 

declaration  states  a  covenant  by  tlie  defendant  to  keep  in  good  and 
substantial  repair,  and  that  the  defendant  did  not  keep  in  repair. 
In  answer  to  this  the  plea  alleges  that  there  was  no  notice  of  want 
of  repair.  I  think  this  plea  bad,  and  for  the  simplest  reason,  that 
no  such  stipulation  is  contained  in  the  covenant,  nor  any  thing  from 
which  such  a  stipulation  can  be  inferred. 

I  cannot  perceive  that  the  covenant  as  it  stands  is  so  unreasonable 
as  is  alleged.  Moreover,  there  are  in  leases  covenants  to  repair  gen- 
erally, and  covenants  to  repair  on  notice;  but  if  this  covenant  is 
construed  in  the  way  proposed,  it  is  idle  to  require  notice  in  terms; 
the  one  covenant  will  do  as  well  as  the  other. 

The  authorities  appear  to  me  directly  against  the  plea.  The  prop- 
osition laid  down  by  Mr.  Cowling  arguendo  in  Vyse  v.  Wakefield 
is,  I  apprehend,  perfectly  correct :  "The  general  rule  is  that  a  party 
is  not  bound  to  do  more  than  the  terms  of  this  contract  oblige  him 
to  do ;"  and  all  the  judgments  support  what  he  says.  Lord  Abinger, 
C.  B.,  says:  "The  rule  to  be  collected  from  the  cases  seems  to  be 
this,  that  where  a  party  stipulates  to  do  a  certain  thing  in  a  certain 
specific  event  which  may  become  known  to  him  or  with  which  he 
can  make  himself  acquainted,  he  is  not  entitled  to  any  notice,  unless 
he  stipulates  for  it."  Now,  the  assumption  in  the  present  case  that 
the  defendant  cannot  know  without  notice,  is  in  my  judgment,  idle. 
Parke,  B.,  says :  "The  general  rule  is  that  a  party  is  not  entitled  to 
notice  unless  he  has  stipulated  for  it;  but,"  he  adds,  "there  are  cer- 
tain cases  where,  from  the  nature  of  the  transaction,  the  law  requires 
notice  to  be  given,  though  not  expressly  stipulated  for;"  he  proceeds 
to  describe  those  cases  as  cases  where  the  thing  to  be  performed  is 
indefinite,  and  at  the  option  of  the  plaintiff;  and  he  decides  the  case 
before  him  on  the  ground  that  an  option  still  remained  to  be  exercised 
by  the  plaintiff.  The  present  transaction  is  not  of  such  a  nature. 
Lastly,  llolfe,  B.,  says :  "I  own  that  when  the  case  was  first  opened 
my  impression  was  in  favor  of  the  plaintiff ;  and  for  this  reason,  that 
when  a  party  enters  into  a  contract  he  is  bound  to  perform  it,  whether 
reasonable  or  not.  Where  the  law  casts  an  obligation  upon  him,  it 
says  that  it  shall  be  reasonable;  but  that  is  not  so  when  a  party  con- 
tracts to  do  a  particular  act,  for  then  it  is  his  own  fault  for  entering 
into  such  a  contract."  I  entirely  agree  with  the  rule  of  law  so  stated, 
and  therefore  think  we  are  not  at  liberty  to  import  any  such  stipula- 
tion into  this  covenant  as  the  defendant  claims. 

Judgment  for  the  defendants 

'  L.  &  8.  W.  Railway  Co.  v.  Flower,  1  C.  P.  D.  77;  Manchester  Warehouse  Co.  v. 
Carr,  5  C.  P.  D.  507;  Thomas  v.  Kingsland,  12  Daly,  316;  Sinton  v.  Butler,  40  Ohio 
St.  158,  ace. 


SECT.   II]  HUGALL    V.    MCLEAN  615 


HUGALL  V.  McLean 

In  the  Queen's  Bench  Division,  Couet  of  Appeal,  May  1,  1885 

[^Reported  in  53  Law  Times  Reports,  94] 

This  was  an  action  to  recover  a  sum  of  £63  as  damages  for  an 
alleged  breach  of  an  agreement  to  keep  the  drains  and  sewers  of  a 
house  in  tenantable  repair. 

The  defendant,  who  was  receiver  in  an  administration  action,  let 
a  house  to  the  plaintiff  for  three  years  from  August,  1882,  by  an 
agreement  by  which  the  defendant  agreed  to  execute  the  "repairs 
to  the  roof,  main  walls,  main  timbers,  drains,  and  sewers,  which 
are  to  be  kept  in  good  tenantable  repair  and  condition  by  the  re- 
ceiver during  the  tenancy." 

On  the  18th  June,  1883,  while  the  plaintiff  was  in  occupation 
under  the  agreement,  the  basement  of  the  house  was  flooded  with 
sewage  in  consequence  of  the  defective  condition  of  the  drains.  The 
plaintiff  thereupon  sent  for  a  sanitary  engineer  and  instructed  him 
to  put  the  drains  into  a  proper  state  of  repair.  On  the  22d  Sept., 
1883,  after  the  repairs  had  been  executed,  the  plaintiff  wrote  to  the 
defendant  complaining  of  the  expense  to  which  she  had  been  put, 
and  asking  whether  she  should  send  him  the  bill  for  the  repairs. 
This  was  the  first  notice  which  the  defendant  received  that  the  base- 
ment of  the  house  had  been  flooded. 

At  the  trial  the  jury  found  that  the  plaintiff  did  not  know,  and 
had  not  the  means  of  knowing,  that  the  drains  were  in  a  defective 
condition  before  the  18th  June,  1883.  They  also  found  that  the 
defendant  did  not  know  that  the  drains  were  in  a  defective  condition 
before  that  date,  but  they  found  that  he  had  the  means  of  knowing. 

Upon  these  findings  Wills,  J.,  gave  judgment  for  the  defendant. 

The  plaintiff  appealed. 

Lewis  Coward,  for  the  plaintiff. 

Fullarion,  for  the  defendant. 

Brett,  M.  K.  The  terms  of  the  agreement  in  the  present  case  are 
substantially  the  same  as  those  of  the  covenant  in  Makin  v.  Wat- 
kinson,  23  L.  T.  Eep.  n.  s.  592 ;  L.  K.  6  Ex.  25 ;  and  as  those  of  the 
act  of  Parliament  in  The  London  and  Southwestern  Railway  Com- 
pany V.  Flower,  33  L.  T.  Rep.  n.  s.  687;  1  C.  P.  Div.  77,  and  there- 
fore I  am  of  opinion  that  we  must  give  the  agreement  the  same  in- 
terpretation as  was  given  in  those  cases.  It  is  the  case  of  an  agree- 
ment drawn  in  the  form  of  a  common  covenant  in  a  lease,  and  the 
meaning  of  such  a  covenant  was  settled  by  a  decision  given  nearly 
fifteen  years  ago  (Makin  n.  Watkinson,  uhi  sup.)  ;  that  decision  has 
been  followed  in  other  cases,  and  no  doubt  many  covenants  in  leases 
have  been  drawn  on  the  faith  of  the  interpretation  placed  on  the 
covenant  in  that  case.     This  being  so,  I  think  that,  even  if  we  dis- 


616  HAYDEN    V.   BRADLEY  [CHAP.   V 

agreed  with  the  view  adopted  in  Makin  v.  Watkinson,  we  should 
still  be  bound  to  give  the  same  interpretation  to  the  agreement  in 
this  case ;  but  in  my  opinion  it  is  impossible  to  doubt  that  the  reasons 
for  the  interpretation  placed  on  the  covenant  in  Makin  v.  Watkin- 
son  are  unanswerable.  We  must  look  at  the  implication  which  the 
judges  made  in  that  case,  and  which  will  be  found  at  the  end  of  the 
judgment  of  Channell,  B.,  where  he  says :  "We  ought  to  import  into 
the  covenant  the  condition  that  he  shall  have  notice  of  the  want  of 
repair  before  he  can  be  called  on  under  the  covenant  to  make  it 
good."  L.  E.  6  Ex.  at  page  28.  This  shows  that  we  must  imply 
this  condition  as  if  it  were  written  into  the  agreement;  and  if  this 
is  so  the  tenant  must  take  care  that  the  landlord  has  notice  of  the 
defective  state  of  repair.  I  doubt  whether,  if  the  landlord  had  no- 
tice aliunde  he  would  be  liable,  but  it  is  not  necessary  to  decide  this. 
If  he  were  told  by  a  neighbor  that  the  premises  were  out  of  repair 
it  might  happen  that  he  would  be  unable  to  enter.  Here  the  land- 
lord, according  to  the  finding  of  the  jury,  had  the  means  of  notice 
of  the  want  of  repair;  but  this  does  not  help  the  plaintiff  so  as  to 
enable  her  to  treat  the  landlord  as  if  he  had  had  actual  notice.  It 
is  clear  that  on  such  an  agreement  the  landlord  is  not  liable  until  he 
has  had  notice. 

Baggallay  and  Bowen,  L.  JJ.,  concurred. 

Appeal  dismissed} 


ASHLEY  HAYDEN  v.  WILLIAM  BRADLEY 

Supreme  Judicial  Court  of  Massachusetts,  September  Term, 

1856 

[Reported  in  6  Gray,  425] 

Action  of  contract  to  recover  damages  for  the  defendant's  failure 
to  keep  in  repair  the  buildings  included  in  a  lease  from  the  defend- 
ant to  the  plaintiff  of  a  hotel  and  farm  in  Southwick,  by  which  the 
defendant  covenanted  to  "put  the  buildings  and  fences  on,  around, 
and  about  the  premises  in  a  good  condition,  and  so  to  maintain  them 
for  and  during  the  term  of"  the  lease,  and  the  plaintiff  covenanted 
"that  the  lessor  may  enter  to  view  and  make  improvements,  and  to 
expel  the  lessee,  if  he  shall  fail  to  pay  the  rent,  or  make  or  suffer 
any  strip  or  waste  thereof." 

At  the  trial  in  the  Court  of  Common  Pleas  the  defendant,  who 
resided  in  Springfield,  contended  that  he  was  not  liable,  under  his 
covenant,  for  damages  arising  from  want  of  repair,  after  the  plain- 
tiff hud  entered  into  the  occupation  of  the  premises  under  the  lease, 
and  before  notice  to  the  defendant  of  such  want  of  repair.  But 
Mellen,  C.  J.,  instructed  the  jury  that  "for  defects  in  the  buildings, 
occurring  after  the  commencement  of  the  lease,  the  plaintiff  was 
»  Cf.  McUer  v.  Holmes,  [1918]  2  K.  B.  100. 


SECT.    II ]  HUNT    V.    LIVERMORE  617 

entitled  to  recover  it  being  the  duty  of  the  defendant,  under  this 
lease,  to  take  notice  of  such  defects  or  want  of  repair,  and  prevent 
damage  to  the  plaintiif  by  repairing  the  same,  without  notice  from 
the  plaintiff."  The  jury  returned  a  verdict  for  the  plaintiff,  and 
the  defendant  alleged  exceptions. 

H.  Vose,  for  the  defendant. 

W.  G.  Bates,  for  the  plaintiff. 

Metcalf,  J.  The  established  rule  of  law,  which  the  court  are 
now  to  apply,  is  rightly  stated  by  Lord  Abinger  in  Vyse  v.  Wake- 
field, 6  M.  &  W.  452,  453.  It  is  this :  "Where  a  party  stipulates  to 
do  a  certain  thing  in  a  certain  specific  event  which  may  become 
known  to  him,  or  with  which  he  can  make  himself  acquainted,  he 
is  not  entitled  to  any  notice,  unless  he  stipulates  for  it;  but  when 
it  is  to  do  a  thing  which  lies  within  the  peculiar  knowledge  of  the 
opposite  party,  then  notice  ought  to  be  given  him."  The  case  at 
bar  comes  within  the  first  branch  of  this  rule.  The  defendant  stipu- 
lated to  maintain  the  buildings  in  good  condition  during  the  term 
for  which  he  demised  them  to  the  plaintiff,  on  the  happening  of  a 
specific  event,  to  wit,  that  they  should  not  be  in  good  condition,  but 
should  need  repairs.  He  might  have  known,  or  made  himself  ac- 
quainted with  the  fact,  that  they  needed  repairs.  And  he  did  not 
stipulate  for  notice.  See  Smith  v.  Goffe,  2  Ld.  Raym.  1126,  and 
11  Mod.  48;  1  Saund.  PI.  &  Ev.  (2d  ed.)  214;  System  of  Pleading, 
126,  127;  Lawes  PI.  in  Assump.   (Amer.  ed.)   176  et  seq} 

But  if  the  defendant's  agreement  to  maintain  the  buildings  in 
good  condition  were  not  of  itself  sufficient  to  decide  the  question 
raised  in  this  case,  yet  there  is  another  clause  in  the  lease  which 
is  decisive,  namely,  the  reservation  by  the  defendant  of  a  right  of 
entry  upon  the  premises  "to  view  and  make  improvements."  He, 
therefore,  having  provided  for  himself  the  means  of  ascertaining 
the  contingency  upon  which  he  was  to  make  repairs,  was  not  en- 
titled to  notice  from  the  plaintiff  that  the  contingency  had  happened. 
Keys  V.  Powell,  2  A.  K.  Marsh.  254.  Exceptions  overruled. 


EBENEZEE  HUNT  v.  EDWARD  ST.  LOE  LIVERMORE 

Supreme  Judicial  Court   of  Massachusetts,  April   Term,   1828 

[Reported  in  5  Pickering,  395] 

Assumpsit  on  a  promissory  note  from  the  defendant  to  the  plain- 
tiff, not  negotiable,  dated  Eebruary  26,  1823,  for  $1,400,  payable  on 
demand. 

^  In  Hutchinson  v.  Cummings,  156  Mass.  329,  330,  the  court  said  in  regard  to  an 
agreement  to  repair,  "Assuming  in  favor  of  the  plaintiff  that  this  agreement  bound 
the  defendants  to  make  all  necessary  repairs  while  Mrs.  Dennin  continued  to  occupy, 
it  must  be  implied  that  they  were  only  to  make  repairs  upon  reasonable  notice." 


618  HUNT    V.    LIVERMORE  [CHAP.   V 

At  the  trial  before  Morton,  J.,  the  plaintiff  called  a  witness,  who 
testified  that  on  the  2d  of  December,  1824,  the  plaintiff  demanded 
of  the  defendant  payment  of  the  note,  or  a  return  of  the  bond  here- 
after mentioned;  but  that  the  defendant  did  not  pay  the  note,  nor 
return  the  bond,  but  replied  that  what  is  written  is  written. 

The  defendant  then  gave  in  evidence  a  bond  from  the  plaintiff, 
dated  February  26,  1823,  conditioned  that  the  plaintiff,  upon  the 
defendant's  paying  him  the  sum  of  $1,400,  should  make  and  execute 
to  the  defendant  a  good  and  valid  warranty  deed  of  certain  land 
which  the  defendant  had  agreed  to  purchase  of  the  plaintiff  for  the 
sum  mentioned. 

The  defendant  also  produced  the  following  receipt,  signed  by  the 
plaintiff:  "February  26,  1823,  Received  of  E.  S.  Livermore  a  note 
of  hand  for  $1,400,  for  which  I  have  this  day  given  him  a  bond 
for  a  deed  of  a  certain  piece  of  land :  but  provided  the  bargain  is 
not  carried  into  effect,  I  am  to  deliver  up  said  note  upon  said  Liver- 
more's  delivering  up  said  bond." 

The  defendant  contended  that  the  plaintiff  was  not  entitled  to  his 
action  before  he  had  tendered  a  deed  of  the  estate  described  in  the 
bond,  and  that  the  defendant  now  had  a  right  to  rescind  the  contract 
referred  to  in  the  bond  and  receipt,  and  to  return  the  bond  to  the 
plaintiff,  which  he  offered  to  do  in  Court.  But  the  judge,  being 
of  opinion  that  these  facts  did  not  amount  to  a  defence  against  the 
note,  directed  the  defendant  to  be  called.  If  the  whole  Court  should 
be  of  a  different  opinion,  the  default  was  to  be  taken  off  and  the 
plaintiff  to  become  nonsuit. 

Livermore  and  Hoar,  for  the  defendant.  The  three  writings,  bear- 
ing the  same  date  and  relating  to  the  same  subject-matter,  are  to  be 
considered  as  one  transaction,  and  they  show  a  promise  by  the  de- 
fendant to  pay,  provided  the  condition  of  the  bond  is  performed. 
If  the  bargain  was  not  carried  into  effect,  the  note  was  to  be  given 
up.  The  plaintiff  therefore  should  have  performed  his  part  of  the 
contract,  or  at  least  have  tendered  a  deed  of  the  land  as  a  condition 
precedent  to  bringing  an  action  on  the  note.  Collins  v.  Gibbs,  2 
Burr.  899;  Thorpe  v.  Thorpe,  1  Ld.  Raym.  662;  s.  c.  1  Salk.  171; 
Pordage  v.  Cole,  1  Wms.  Saund.  320,  note  4. 

The  note  was  a  nudum  jjacium.  No  consideration  was  given  for 
it:  and,  independent  of  that  objection,  it  is  not  recoverable,  for  when 
the  land  was  to  be  conveyed  the  money  was  to  be  paid  ;  so  that  whether 
the  bargain  for  the  land  should  be  carried  into  effect  or  rescinded, 
the  note  was  to  be  given  up.     It  was  in  fact  a  nullity. 

Stearns,  contra.  It  is  manifest,  on  the  face  of  the  papers,  that 
giving  the  receipt  was  an  after  transaction.  The  payment  of  the 
considerntioti  is  a  condition  precedent  to  giving  a  deed,  but  the  note 
is  uTKiujilificd  in  its  terms,  and  being  on  deitiand  might  have  been 
sued  imni(!(liately. 

But  if  the  several  writings  wore  one;  transaction,  they  do  not  con- 


SECT.    II  ]  HUNT    V.    LI  VERM  ORE  619 

stitute  a  defence  against  the  note.  If  there  was  a  mutual  right  to 
rescind,  it  was  not  without  a  limitation  as  to  time,  and  nearly  two 
years  had  elapsed  before  payment  of  the  note  was  demanded;  which 
allowed  the  defendant  more  than  a  reasonable  time  to  make  his  elec- 
tion. Bothy's  case,  6  Co.  31;  Pothier  on  Obligations,  No.  205. 
The  opinion  of  the  Court  was  drawn  up  by 

Putnam,  J.     We  think  that  the  note,  the  receipt,  and  the  bond 
should  be  construed  as  if  they  were  parts  of  one  contract. 

The  plaintiff  on  his  part  agreed  to  convey  the  land  to  the  de- 
fendant when  he  should  pay  the  purchase-money,  and  the  defendant 
agreed  to  pay  the  purchase-money  when  the  plaintiff  should  convey 
the  land,  xis  no  time  for  the  conveyance  or  for  the  payment  is  men- 
tioned, the  law  supplies  the  deficiency  by  providing  that  the  con- 
tract should  be  executed  in  a  reasonable  time.  And  an  offer  to  do 
what  the  contract  required  of  either  party,  and  a  demand  and  re- 
fusal of  the  other  to  do  what  was  required  of  him,  would  entitle 
the  party  so  offering  to  perform  to  a  remedy  upon  the  contract.  It 
is  clear  to  our  minds,  that  the  contract  is  to  be  construed  as  con- 
taining dependent  stipulations.  Neither  party  intended  to  trust 
to  the  personal  security  of  the  other.  If  Hunt  had  in  a  reasonable 
time  offered  to  give  a  good  deed  of  the  land,  and  had  demanded 
payment  of  the  money  mentioned  in  the  note,  and  Livermore  had 
refused  to  accept  the  deed  and  to  pay  according  to  his  engagement. 
Hunt  would  have  had  his  remedy  at  law  against  Livermore  for  the 
purchase-money.  On  the  other  hand,  if  Livermore  had  in  a  reason- 
able time  offered  to  pay  his  note,  and  had  demanded  a  deed,  and 
Hunt  had  refused  to  accept  the  money  and  to  give  the  deed  simul- 
taneously, Livermore  would  have  had  his  remedy  at  law  against 
Hunt  for  the  damages  sustained  by  his  not  conveying  the  land  ac- 
cording to  his  agreement. 

If  the  stipulation  contained  in  the  receipt  of  the  plaintiff  to  de- 
liver up  the  note  upon  the  defendant's  delivering  up  the  bond,  "pro- 
vided the  bargain  is  not  carried  into  effect,"  were  to  be  construed 
to  give  either  party  an  election  at  his  own  pleasure  to  annul  the  con- 
tract, it  is  evident  that  the  contract  could  never  be  carried  into  effect 
against  him  who  should  please  to  avoid  it.  It  would,  in  effect,  have 
no  binding  operation.  It  would  not  be  what  the  civil  law  defines, 
*'juris  vinculum  quo  necessitate  adstringimur."  "It  is  of  the  essence 
of  all  agreements  which  consist  of  promising  something,  that  they 
should  produce  an  obligation  in  the  party  making  the  promise  to 
discharge  it;  hence  it  follows  that  nothing  can  be  more  contradictory 
to  such  an  obligation  than  the  entire  liberty  of  the  party  making  the 
promise  to  perform  it  or  not  as  he  may  please."  Pothier  on  Obig. 
"No.  47,  48.  The  case  at  bar  strongly  illustrates  that  position.  If 
it  were  that  either  party  had  the  entire  liberty  of  vacating  it,  the 
contract  would  be  void  for  want  of  obligation.  It  would  stand  thus : 
Hunt  engages  to  convey  his  land  to  Livermore  for  $1,400,  if  Hunt 


620  BEECHER    V.    CONRADT  [CHAP.   V 

shall  please  to  do  so;  and  Livermore  engages  to  pay  $1,400  for  the 
land,  if  he  shall  please  to  do  so.  "We  cannot  suppose  the  parties  in- 
tended to  make  such  a  vain  bargain.  We  are  satisfied  that  it  was 
a  valid  contract,  containing  dependent  stipulations  to  be  performed 
by  each  before  he  could  compel  a  performance  by  the  other.  It  fol- 
lows, therefore,  that  the  plaintiff  was  not  entitled  to  the  money  or 
price  of  the  land,  inasmuch  as  he  neglected  to  offer  to  convey  the 
land  by  a  proper  deed. 

We  are  all  of  opinion  that  the  default  should  be  taken  off,  and 
that  the  plaintiff  should  be  nonsuited.^ 


BEECHER  V.  COl^RADT 

!N^EW  York  Court  of  Appeals,  September  Term,  1855 

[Reported  in  3  Kernan,  108] 

Action  commenced  in  the  Supreme  Court,  in  1851,  to  recover  the 
amount  agreed  to  be  paid  by  the  defendant  in  and  by  the  contract 
hereinafter  mentioned.  The  complaint  alleged  the  making  of  the 
contract;  that  it  had  been  duly  transferred  to  the  plaintiff;  that  the 
party  of  the  first  part  to  the  contract  and  the  plaintiff  had  always 
fulfilled  and  kept  all  things  therein  contained  on  their  part  to  be 
performed;  that  the  defendant  had  neglected  to  pay  the  amount 
agreed  to  be  paid  by  him;  and  that  the  whole  amount  of  the  prin- 
cipal and  interest  named  in  the  contract  was  due  and  unpaid,  and 
judgment  for  this  amount  was  demanded.     The  answer  put  all  the 

»  Smith  V.  Henry,  7  Ark.  207;  Sorrells  v.  McHenry,  38  Ark.  127,  134;  Perry  v. 
Quackenbush,  105  Cal.  299;    Tyler  v.  Young,  3   111.  444;    Thompson  v.  Shoemaker, 

68  111.  256,  259;  Duncan  v.  Charles,  5  111.  561;  Headly  v.  Shaw,  39,  111.  354;  Weiss 
V.  Binnian,  178  111.  241;  Bowles  v.  Newby,  2  Blackf.  364;  Cunningham  v.  Gwinn, 
4  Blackf.  341;  McCulloch  v.  Dawson,  1  Ind.  413;  Hickman  v.  Rayl,  65  Ind.  5515; 
Zebley  v.  Sears,  38  Iowa,  507;  Little  v.  Thurston,  58  Me.  86;  Smith  v.  Boston  & 
Maine  R.  R.,  6  Allen,  262;  Fort  Payne  Co.  &  Iron  Co.  v.  Webster,  163  Mass.  134; 
Siglin  V.  Frost,  173  Mass.  284;    Sutton  v.  Bockwith,  68  Mich.  303;    PoWell  v.  Newell, 

69  Minn.  406;  Pequcs  v.  Mosby,  15  Miss.  340;  Divine  v.  Divine,  58  Barb.  264;  Hoag 
V.  Parr,  13  Hun,  95;  Ewing  v.  Wightman,  167  N.  Y.  107;  Shelly  v.  Mikkelson,  6 
N.  Dak.  22;  First  Nat.  Bank  v.  Spear,  12  S.  Dak.  108;  Chandler  v.  Marsh,  4  Vt.  88; 
Acme  Food  Co.  v.  Older,  64  W.  Va.  255,  ace.  See  also  Duncan  v.  Clements,  17  Ark. 
279;   Faust  v.  Jones,  23  Ark.  323;    Falvoy  v.  Woolncr,  71  N.  Y.  App.  Div.  331. 

Moggridge  v.  Jones,  14  East,  486;  Spiller  v.  Wostlakc,  2  B.  &  Ad.  155;  Hageman 
V.  Sharkey,  2  Miss.  277;  Gibson  v.  Newman,  2  Miss.  349;  Hazlip  v.  Noland  14  Miss. 
294;  Snyder  v.  Murdock,  51  Mo.  175;  Lewis  v.  McMiUen,  41  Barb.  420,  contra.  See 
also  Tron.son  v.  Colby  University,  9  N.  Dak.  ijW. 

In  many  of  the  cases  cited  aV)ovo  it  is  not  clearly  brought  out  whether  the  court 
int<!nd(;d  to  decide  that  the  f)]aintiff  must  show  affirmatively  as  part  of  his  case  pay- 
ment by  liirii  of  his  obligation,  l)u1  this  was  decided  in  the  following  cases:  Newsome 
V.  Williams,  27  Ark.  632,  635;  ('unniiiuham  ?'.  (Jwinn,  4  Blackf.  341;  Summers  v. 
Slceth,  45  Ind.  598;  Hatfield  v.  Miller,  123  Ind.  463,  466;  School  District  v.  Rogers, 
8  Iowa,  316;  Ewing  v.  Wightman,  167  N.  Y.  107;  Withers  v.  Atkinson,  1  Watts,  236, 
246.  In  Maine,  it  has  been  held,  however,  that  though  default  in  payment  by  the 
plaintiff  is  a  defence,  such  default  must  b(!  .shown  by  the  defendant.  Manning  v. 
Hrown,  10  Mo.  49;    NUes  v.  Phinney,  90  Me.  122. 


SECT.   II J  BEECHER   V.    CONTIADT  621 

allegations  of  the  complaint  in  issue.  The  cause  was  tried  at  the 
Oneida  County  Circuit,  held  by  Mr.  Justice  Gridley,  The  plaintiff 
read  in  evidence  the  contract  mentioned  in  the  complaint.  It  was 
dated  the  third  day  of  January,  1839,  and  executed  by  Abraham 
Varick,  as  surviving  executor  of  the  will  of  one  Walker,  deceased, 
as  party  of  the  first  part,  and  by  the  defendant  as  party  of  the 
second  part.  By  the  terms  of  this  contract  the  party  of  the  first 
part,  in  consideration  of  one  cent  to  him  paid,  and  "upon  the  ex- 
press condition  that  the  party  of  the  second  part  shall  and  do  well 
and  faithfully  perform  the  covenants  hereinafter  mentioned,  and 
to  be  performed  on  his  part,"  covenanted  for  himself  and  his  assigns 
to  execute  and  deliver  to  the  party  of  the  second  part  a  deed  of  con- 
veyance in  fee,  containing  covenants  of  warranty  against  the  acts 
of  the  grantor,  of  and  for  a  parcel  of  land  which  was  described  in 
the  contract;  and  the  defendant,  the  party  of  the  second  part,  cove- 
nanted to  pay  to  the  party  of  the  first  part  or  his  assigns  "the  sum 
of  three  hundred  and  ninety-six  dollars  in  five  equal  annual  pay- 
ments, with  interest  annually  on  all  sums  unpaid."  The  plaintiff 
further  proved  that  the  land  mentioned  in  the  contract  was  conveyed 
and  the  contract  assigned  to  him  in  December,  1850,  and  rested. 
Thereupon  the  counsel  for  the  defendant  moved  the  court  to  non- 
suit the  plaintiff,  on  the  ground,  among  others,  that  inasmuch  as 
the  action  was  brought  to  recover  the  whole  amount  of  the  purchase- 
money  after  the  same  had  become  due  by  the  contract,  the  plaintiff 
could  not  recover  without  proving  that  he  tendered  a  conveyance  of 
the  land,  or  offered  to  convey  the  same  to  the  defendant  before  the 
commencement  of  the  action.  The  Court  overruled  the  objection,  re- 
fused to  nonsuit  the  plaintiff,  and  decided  that  he  was  entitled  to 
recover  the  amount  of  the  purchase-money  mentioned  in  the  con- 
tract. The  counsel  for  the  defendant  excepted.  The  judgment  ren- 
dered at  the  circuit  was  afiirmed  by  the  Supreme  Court  at  a  Gen- 
eral Term,  held  in  the  Fifth  District.  The  defendant  apppealed  to 
this  court. 

Samuel  Beardsley,  for  the  appellant. 

Charles  A.  Mann,  for  the  respondent. 

Gardiner,  C.  J.  The  plaintiff  has  neither  averred  nor  was  there 
proof  of  any  other  breach  of  the  contract  upon  the  part  of  the  de- 
fendant, except  the  non-payment  of  the  purchase-money.  The  plain- 
tiff had  a  right  to  sue  for  each  instalment  as  they  severally  became 
payable;  but  this  right  he  has  waived,  and  now  seeks  to  recover  the 
whole  purchase-money  in  this  action,  without  an  averment  or  proof 
of  a  tender  of  a  conveyance  or  a  readiness  or  willingness  to  convey. 
It  is  not  denied  by  the  court  below  that,  if  the  several  payments  had 
been  made  as  they  fell  due,  and  the  suit  had  been  commenced  for 
the  last  instalment  alone,  the  plaintiff  must  have  made  such  an  aver- 
ment and  sustained  it  by  proof,  if  questioned;  the  point  is  too  plain 
to  admit  of  discussion.     It  is,  however,  said  that  a  right  of  action 


622  BEECHER    V.    CONRADT  [CHAP.   V 

accrued  as  tlie  instalments  became  payable,  which  the  non-perform- 
ance of  the  plaintiff  would  not  discharge.  This  doctrine  assumes 
a  right,  upon  the  part  of  the  plaintiff,  to  divide  his  cause  of  action 
into  as  many  suits  as  there  were  instalments.  The  first  answer  to 
this  suggestion  is,  that  the  consideration  for  the  conveyance  by  the 
vendor  was  an  entire  sum,  to  be  paid  by  instalments;  that  the  whole 
was  due  at  the  commencement  of  the  action,  and  the  plaintiff  has 
sued  for  the  whole  purchase-money  without  attempting  to  distinguish, 
in  his  complaint  or  evidence,  between  the  different  instalments.  The 
second  answer  is,  that  the  plaintiff  having  elected  to  wait  until  the 
fifth  and  last  instalment  became  due,  and  upon  the  payment  of  which, 
as  this  case  stands,  the  defendant  would  be  entitled  to  a  deed,  cannot 
now  sustain  his  action  for  either  instalment  without  proof  of  per- 
formance or  readiness  to  perform  on  his  part.  The  covenants,  as 
to  the  four  first  instalments,  were  originally  independent;  but  the 
plaintiff,  by  his  omission  to  insist  upon  a  strict  performance  by  the 
defendant,  has  lost  the  right  to  bring  more  than  one  suit  for  the 
money  which  formed  the  consideration  for  his  conveyance.  The 
defendant,  by  a  tender  of  the  whole,  which  he  has  now  a  right  to 
pay,  would  be  entitled  to  his  deed.  The  plaintiff  on  the  other  hand 
must  establish  his  right  to  the  consideration  as  an  entirety,  or  he 
cannot  recover  anything.  If  he  recovered  in  this  action  but  $50, 
the  judgment  Avould  be  a  complete  bar  to  any  further  claim  for 
the  purchase-money,  and  when  that  judgment  was  paid  the  defend- 
ant would  be  entitled  to  his  deed.^ 

The  defendant  could  not  protect  himself  against  an  action  by  an 
offer  to  pay  the  first,  or  all  of  the  four  first  instalments;  as  the  con- 
sideration was  entire,  and  all  due,  the  plaintiff  could  insist  upon 
the  whole.  And  yet,  if  because  the  covenants  were  originally  inde- 
pendent they  must  always  continue  so,  the  defendant  must  have  the 
right  to  discharge  by  payments  what  the  plaintiff'  could  enforce  by 
action. 

The  truth  is,  the  parties  by  lapse  of  time  are  in  the  same  situation 
as  though  the  purchase-money  was  all  payable  at  one  time.  The 
defendant  has  lost  his  right  to  pay  the  instalments  separately,  and 
the  plaintiff  his  right  to  enforce  collection  by  separate  suits.  There 
is  but  a  single  cause  of  action,  one  and  indivisible.  The  defendant, 
if  he  would  obtain  his  deed,  must  pay  all,  and  the  plaintiff,  if  he 
would  recover,  must  show  such  a  performance  on  his  part  as  would 
entitle  him  to  all  the  unpaid  consideration.  The  condition  attaches 
to  the  wboln  debt  and  every  part  of  it.  The  judgment  of  the  Supreme 
Court  .should  be  reversed,  and  a  new  trial  ordered,^ 

>  See  Bum'tt  v.  T^elfy,  47  Conn.  323;  Manton  v.  Gammon,  7  111.  App.  201;  Cockley 
V.  'Rnickcr,  M  Ohio  St.  214.  Comparo  Rc^nri  v.  .lohnston,  G3  N.  Y.  App.  Div.  340; 
Mcl-(int'>ilin  r.  Hill,  V,  Vt.  20.     See  Horman  on  KHfoi.,)(.],  §§220,  rf  seq. 

'  Hill  r.  flrit'Hl.y.  '.'.r,  Cn.].  650;  McCroHkcy  r.  I/idd,  <»(>  rul.  4.'').^.;  Irwin  v.  Lee,  34 
Ind.  319;  Sopfr  v.  CaU;  f..'',  Kan.  M(>;  Brcntnall  v.  Marshall,  10  Kan.  App.  488; 
Shelly  V.  Mikkclaon.  5  N.  Dak.  22;    Boyd  v.  McCuUough,  137  Pa.  7,  16;    Firet  Nat. 


SECT.    II  ]  BEECHER    V.    CONRADT  623 

Denio,  Johnson,  Marvin,  and  Dean,  JJ.,  concurred. 

Cbippen,  J.  (dissenting).  The  first  and  fifth  grounds  on  which 
the  motion  for  a  nonsuit  was  asked  may  properly  be  resolved  into 
one,  and  considered  together,  as  they  both  present  the  same  identical 
question.  If  the  plaintiff  was  bound  to  prove  the  tender  of  a  deed, 
or  an  offer  to  give  such  a  deed  to  the  defendant  as  the  contract  called 
for,  prior  to  bringing  his  action  to  recover  the  purchase-money,  then 
he  failed  to  maintain  the  action,  and  the  Court  in  that  event  erred 
in  refusing  the  nonsuit.  In  order  to  determine  this  question,  it  will 
be  necessary  to  refer  with  care  to  the  terms  of  the  agreement  between 
Varick,  the  trustee,  and  the  defendant.  By  this  contract  Varick 
agreed  to  convey  lot  No.  3,  in  Walker's  patent,  on  the  condition  of  a 
full  and  faithful  performance  of  all  the  covenants  contained  in  the 
contract  to  be  performed  by  the  defendant.  On  the  part  of  the  de- 
fendant, the  first  covenant  made  by  him  was  that  he  would  pay 
the  trustee,  Mr.  Varick,  his  heirs  or  assigns,  the  just  and  full  sum 
of  $396  in  five  equal  annual  payments,  with  interest  annually  on 
all  sums  unpaid.  The  contract  bears  date  on  the  third  day  of  Jan- 
uary, 1839;  consequently,  the  last  annual  payment  became  due  on 
the  third  day  of  January,  1844.  This  covenant  of  the  defendant  is 
not  made  to  depend  on  any  contingency  or  act  of  the  other  party, 
or  on  any  condition  to  be  found  in  the  contract.  When,  then,  let 
us  inquire,  did  the  defendant  become  entitled  to  the  deed  of  said 
premises?  The  parties,  by  the  plain  language  of  the  contract,  have 
said  that  the  defendant  shall  be  entitled  to  such  deed  on  the  express 
condition  that  he  shall  pay  the  sum  of  $396  in  five  equal  annual 
payments,  from  the  third  day  of  January,  1839,  with  annual  interest. 
It  is  not  easy  to  mistake  the  meaning  of  parties,  when  they  use  lan- 
guage so  plain  and  emphatic  in  making  their  contracts. 

The  defendant  most  clearly  was  not  entitled  to  a  deed  when  the 
first,  second,  third,  or  fourth  instalments  became  due,  even  if  they 
had  been  punctually  paid  by  him.  So,  also,  in  relation  to  the  last 
instalment,  the  time  for  its  payment  was  fixed  by  the  agreement; 


Bank  v.  Spear,  12  S.  Dak.  108;  Hogan  v.  Kyle,  7  Wash.  595,  ace.  See  also  McElwell 
V.  Bridgeport  Land  Co.,  54  Fed.  Rep.  (C.  C.  A.)  627. 

Weaver  v.  Childress,  3  Stew.  (.\la.)  361;  Hays  v.  Hall,  4  Port,  374,  387;  White  v. 
Beard,  5  Port.  94,  100;  Duncan  v.  Charles,  5  111.  561;  Sheeran  v.  Moses,  84  HI.  448; 
Gray  v.  Meek,  199  111.  136,  139;  Allen  v.  Sanders,  7  B.  Mon.  593;  Coleman  v.  Rowe 
6  Miss.  460;  Clopton  v.  Bolton,  23  Miss.  78;  McMath  v.  Johnson,  41  Miss.  439; 
Bowen  v.  BaUey,  43  Miss.  405;  Biddle  v.  Coryell,  3  Har.  (N.  J.  L.)  377,  contra.  See 
also  Loud  V.  Pomona  Land  Co.,  153  U.  S.  564,  580;  Bean  v.  Atwater,  4  Conn.  3;  White 
V.  Atkins,  8  Cush.  367;    Kettle  v.  Harvey,  21  Vt.  301. 

As  to  the  effect  in  equity  of  a  provision  in  the  contract  that  payments  which  have 
been  made  shall  be  forfeited  by  failure  to  complete  the  purchase  at  the  time  named, 
see  Ames's  Cas.  Eq.  Jur.  I.  338-341;    2  Williston  Contracts,  §  791. 

In  regard  to  sales  of  personal  property  the  English  Sale  of  Goods  Act  provides: 
"Sec.  41,  (1)  Subject  to  the  provisions  of  this  Act,  the  unpaid  seller  of  goods  who  is 
in  possession  of  them  is  entitled  to  retain  possession  of  them  until  payment  or  tender 
of  the  price  in  the  following  cases,  namely:  — 

"(6)  Where  the  goods  have  been  sold  on  credit,  but  the  term  of  credit  has  expired." 
This  provision  is  copied  in  the  American  Uniform  Sales  Act,  Sec.  54  (1)  (b). 


624  BEECHER    V.    CONRADT  [CHAP.   V 

when  the  time  arrived  the  money  became  due  and  payable  from  the 
defendant.  No  act  was  agreed  to  be  performed  on  the  part  of  the 
trustee  or  the  plaintiff,  as  assignee  of  the  contract,  in  order  to  en- 
title him  to  the  money  due  on  the  last  payment.  The  premises  were 
to  be  conveyed  on  the  express  condition  of  the  payment  of  the  whole 
amount  of  the  purchase-money. 

No  act  whatever  was  agreed  to  be  done  by  the  trustee  to  entitle 
him  to  the  money;  or,  in  other  words,  the  defendant  agreed  that  he 
had  no  right  to  call  for  a  conveyance,  except  upon  the  express  con- 
dition that  he  paid  the  whole  amount  of  the  purchase-money.  The 
case  is  clearly  distinguishable  from  that  of  Grant  v.  Johnson,  1 
Selden,  247.  In  that  case  the  contract  did  not  require  the  defendant 
to  pay  the  whole  amount  of  the  purchase-money  before  obtaining  a 
deed.  He  was  entitled,  by  the  terms  of  the  agreement,  to  receive 
both  the  possession  of  the  premises  and  a  deed  thereof  before  he  could 
be  called  upon  for  the  payment  of  the  instalment  in  controversy  in 
that  action.  Not  so  in  the  case  at  bar;  and  in  this  particular  the 
cases  are  manifestly  and  clearly  different.  The  defendant  in  this 
action  had  no  right  to  ask  for  a  deed,  except  upon  the  express  con- 
dition that  he  first  paid  the  full  amount  of  the  purchase-money.  I 
have  not  been  able  to  find  any  adjudged  case  conflicting  with  the 
plaintiff's  right  to  recover  in  this  action  the  amount  due  upon  the 
contract. 

The  judgment  should  be  affirmed. 

Hand,  J.  (dissenting).  I  am  of  the  opinion  that  the  covenants 
to  pay  the  purchase-money  and  to  convey  the  land  are  independent. 
The  defendant  agreed  to  pay  the  purchase-money,  and  at  certain  speci- 
fied times;  and  the  vendor  agreed  to  convey  "upon  the  express  con- 
dition" that  he  did  so.  No  suit  was  commenced  until  all  of  the  pur- 
chase-money became  due.  But  that  circumstance  did  not  make  the 
covenants  dependent  which  before  were  independent.  Where  the  last 
payment  and  the  conveyance  are  to  be  simultaneous  acts,  and  the 
prior  payments  have  not  been  made,  in  a  suit  for  the  purchase- 
money,  a  performance  or  an  offer  to  perform  is  necessary,  Johnson 
V.  Wygant,  11  Wend.  48;  Grant  v.  Johnson,  1  Seld.  247.  But  that 
is  not  this  case  as  I  understand  this  contract.  The  payment  of  all 
the  purchase-money  was  a  condition  precedent  to  the  right  of  the 
defendant  to  demand  a  conveyance.  Having  covenanted  absolutely 
to  pay  certain  sums  at  the  expiration  of  certain  fixed  periods,  and  the 
vendor  having  promised  a  deed  on  condition  that  the  payments  were 
made,  the  clear  intention  of  the  parties  must  have  been  that  payment 
of  all  the  money  should  precede  the  conveyance.  There  was  no  duty 
for  the  vendor  to  perform  until  tlie  vendee  had  performed  all  the 
covenants  on  his  part.  By  inserting  the  word  "condition"  or  "suh 
condiiione,"  a  condition  is  created.  10  Co.  42  a;  2  Bac.  Abr,,  "Con- 
dition," (A.) ;  Piatt  Covenants,  72.  "Upon  condition"  is  an  expres- 
sion from  which  a  condition  precedent  usually  arises.     (Piatt  on 


SECT.    II  ]  EDDY    V.    DAVIS  625 

Covenants,  supra.)  The  agreement  here  was  not  merely  to  convey 
"upon"  payment  being  made,  but  "upon  the  express  condition"  that 
the  vendee  should  perform;  while  the  covenant  to  pay  is  without 
condition.  And  besides,  the  meaning  of  the  words  "upon  condition" 
has  been  settled  by  consideration,  which  should  not  be  disturbed. 
Tor  this  reason  I  think  the  judgment  should  be  affirmed. 

Judgment  reversed. 


CHARLES  H.  EDDY  et  al.,  Appellants,  v.  ALVIN  DAVIS, 

Respondent 

New  Yoek  Court  of  Appeals,  June  24^0ctober  8,  1889 

[Reported  in  116  New  York,  247] 

Appeal  from  order  of  the  General  Term  of  the  Supreme  Court 
in  the  third  judicial  department,  made  May  4,  1886,  which  reversed 
a  judgment  in  favor  of  plaintiffs,  entered  upon  a  decision  of  the  court 
on  trial  at  Special  Term  and  granted  a  new  trial. 

The  action  was  brought  to  recover  from  defendant  unpaid  instal- 
ments alleged  to  be  due  upon  a  contract  to  purchase  land. 

By  the  contract,  which  was  executed  March  1,  1875,  plaintiff  agreed 
to  sell  to  defendant  a  lot  of  land  in  the  village  of  Westport,  upon 
which  there  was  a  brick  store,  for  the  sum  of  $1,600,  payable  in 
annual  instalments  varying  from  $100  to  $200. 

The  contract  provided  that  possession  should  be  given  on  payment 
of  the  first  instalment,  and  contained  the  following  provisions:  "The 
party  of  the  second  part  (defendant)  is  to  have  one  hundred  feet 
depth  of  land  including  the  store  running  east  and  west,  running 
north  and  south  the  width  of  the  store."  "The  said  parties  of  the 
first  part  agree  that  on  receiving  the  sum  of  eight  hundred  dollars 
at  the  time  and  manner  above  mentioned,  they  will  execute  and  deliver 
to  the  said  party  of  the  second  part,  at  their  own  proper  cost  and 
expense,  a  good  and  sufficient  deed  of  said  property  by  the  party  of 
the  second  part  giving  to  the  parties  of  the  first  part  a  bond  and 
mortgage  on  said  property  for  the  remaining  sum  unpaid."  "And 
the  said  party  of  the  first  part  agrees  to  keep  open  a  right  of  way 
back  of  said  building."  "It  is  understood  that  the  party  of  the  second 
part  is  to  put  up  during  the  coming  year  a  building  on  the  east  end 
of  said  store,  to  cost  not  less  than  six  hundred  dollars." 

Defendant  paid  the  first  instalment  under  the  contract,  entered 
into  possession  and  entered  the  building  called  for  by  the  contract. 
He  made  other  payments  in  amount  about  sufficient  to  pay  the  in- 
terest on  the  purchase-money.  At  the  time  of  the  commencement  of 
the  action  two  instalments,  amounting  to  $300,  were  not  due.  At 
the  time  the  agreement  was  made  the  plaintiffs  owned  other  property 
adjoining  the  lot  sold  defendant,  on  the  north,  and  bounded  on  the 


626  EDDY    V.    DAVIS  [CHAP.    V 

west  by  the  principal  street  of  the  village;  and  over  this  property 
access  could  be  had  from  the  street  to  the  rear  of  defendant's  lot. 

In  June,  1875,  plaintiffs  sold  to  one  Joseph  Hutchings  all  the  rest 
of  the  property  owned  by  them,  without  any  reservation  of  a  right 
of  way  to  defendant's  lot,  and  at  the  time  of  the  commencement  of 
this  action  they  owned  no  property  over  which  they  could  give  a 
right  of  way  to  the  rear  of  defendant's  store.  ^ 

Further  facts  appear  in  the  opinion. 

Bichard  L.  Hand,  for  appellants. 

Chester  McLaughlin,  for  respondent. 

Brown,  J.  The  trial  court  found,  as  conclusions  of  law,  that  the 
defendant  "was  not  entitled  to  a  conveyance  of  property,  or  of  such 
right  of  way  until  the  full  sum  of  sixteen  hundred  dollars,  the  con- 
sideration provided  by  said  contract,  was  paid,  and  that  the  provision 
in  said  contract  for  deeding  the  premises  to  the  defendant,  upon  the 
payment  of  eight  hundred  dollars  and  interest,  was  for  his  (defend- 
ant's) benefit,  and  he  could  avail  himself  of  it  at  his  option,  by  pay- 
ing such  money  at  the  times  provided  in  the  contract,  and  demanding 
a  deed  and  tendering  a  bond  and  mortgage;  not  having  paid  or  made 
such  demand  or  tender,  and  having  waived  right  to  make  any  claim 
under  this  provision,  as  appears  in  the  sixth  finding  of  fact,  the  con- 
tract was  to  be  treated  as  if  it  had  been  omitted,  and  the  action  hav- 
ing been  brought  to  recover  instalments  due,  no  tender  of  a  deed 
by  the  plaintiffs  was  necessary  to  enable  them  to  maintain  this  ac- 
tion." 

The  sixth  finding  of  fact  referred  to  was  as  follows:  "That  im- 
mediately before  the  commencement  of  this  action  the  plaintiffs,  by 
their  attorneys,  applied  to  said  defendant  and  informed  him  that 
plaintiffs  were  ready  and  willing  to  perform  said  contract  on  their 
part  if  he  was  ready  to  pay,  to  which  defendant  replied  that  he  could 
not  pay,  and  said  he  wanted  to  give  up  the  property,  and  thereupon 
plaintiffs  commenced  this  action." 

It  is  undisputed  that  within  two  months  after  the  defendant  en- 
tered into  possession  of  the  property  plaintiffs  sold  all  their  adjoin- 
ing land,  and  thus  put  it  out  of  their  power  to  comply  with  their 
agreement  with  defendant,  and  keep  open  a  right  of  way  to  the 
roar  of  his  store;  and  at  the  time  of  the  offer  mentioned  in  the  find- 
ing of  fact  I  have  quoted  the  plaintiffs  were  powerless  to  fulfil  their 
agreement.  The  finding,  therefore,  that  they  were  ready  to  perform, 
or  that  their  offer  and  defendant's  refusal  constituted  a  waiver  of 
terifler  of  the  deed  cannot  be  sustained.  A  tender  imports  not  only 
rfiadiiiess  and  ability  to  perform,  but  actual  production  of  the  thing 
to  be  delivered.  The  formal  requisite  of  a  tender  may  be  waived, 
but  to  establish  a  Avaiver  there  must  bo  an  existing  capacity  to  per- 
form. Nelson  v.  Plimpton  Elevating  Co.,  55  N.  Y.  484;  Lawrence 
V.  Miller,  80  id.  137;  Bigler  v.  Morgan,  77  id,  318. 

Here  there  was  no  existing  capacity,  as,  having  sold  all  the  ad- 


SECT.    II  ]  EDDY    V.    DAVIS  627 

jacent  lands,  plaintiffs  could  not  perform  their  covenant  '"to  keep 
open  a  right  of  way"  back  of  defendant's  store.  The  conclusion  of 
a  waiver  is  not,  therefore,  sustained.  If,  however,  the  construction 
put  upon  the  contract  by  the  learned  trial  court,  in  the  conclusion 
of  law  I  have  quoted,  is  correct,  then  the  finding  of  a  waiver  of 
tender  of  performance  is  unimportant. 

Never  having  paid  $800  of  the  purchase-money,  defendant  was 
not  in  a  position  to  demand  the  conveyance,  and  there  being  in  the 
contract,  as  construed  by  the  trial  court,  no  covenant  on  the  part  of 
the  plaintiff  to  deliver  the  deed  until  the  full  consideration  was  paid, 
tender  of  the  conveyance  as  a  condition  precedent  to  recover  for 
unpaid  instalments  was  not  necessary,  and  no  question  as  to  the 
sufficiency  of  the  facts  to  constitute  a  waiver  of  tender  could  legiti- 
mately arise. 

Where  a  contract  for  the  sale  of  land  provides  for  partial  pay- 
ments of  the  purchase-money  prior  to  the  delivery  of  the  deed,  the 
vendor  may  sue  for  such  instalments  when  due  without  tendering 
a  conveyance.  Paine  v.  Brown,  37  N".  Y.  228;  Harrington  v.  Hig- 
gins,  17  Wend.  376. 

But  when,  after  the  instalments  are  all  due,  the  vendor  brings  an 
action  for  the  purchase-money,  he  is  not  entitled  to  recover  without 
proving  an  offer  before  suit  to  convey  the  land  to  the  defendant  on 
receiving  the  purchase-price.  When  the  last  instalment  falls  due  the 
payment  of  the  whole  of  the  unpaid  purchase-money  and  the  convey- 
ance of  the  land  become  dependent  acts.  Beecher  v.  Conradt,  13 
K  Y.  108. 

And  the  same  rule  applies  when  an  action  is  brought  for  any  in- 
stalment payable  at  or  after  the  term  fixed  for  the  delivery  of  the 
deed.  Grant  v.  Johnson,  5  IT.  Y.  257;  Pordage  v.  Cole,  1  Saund. 
320b,  Sergeant  Williams'  note.  So  that  if  the  fair  interpretation  of 
the  contract  is,  as  was  held  by  the  trial  court,  that  there  was  no 
obligation  on  plaintiffs'  part  to  deliver  a  deed  until  the  whole  of  the 
purchase-money  was  paid,  except  in  case  of  a  demand  therefor  by 
defendant  after  payment  of  $800  and  tender  of  a  bond  and  mortgage 
for  the  balance  of  the  purchase-price,  then  the  judgment  was  right 
and  must  be  affirmed. 

We  come,  therefore,  to  the  consideration  of  the  question  whether 
the  learned  trial  judge  was  right  in  his  construction  of  the  contract 
that  the  provision  for  a  delivery  of  the  deed  when  $800  was  paid 
was  one  for  the  benefit  of  the  defendant,  enforceable  only  on  his 
demand,  or  whether  it  was  a  covenant  on  the  part  of  the  plaintiffs 
to  deliver  the  conveyance  at  the  time  named. 

We  can  find  no  support  for  the  construction  adopted  by  the  trial 
court  in  the  agreement  itself,  and  it  is  not  based  upon  any  finding 
of  fact. 

The  construction  is  harsh,  unfair,  and  unnecessary.  The  parties 
appear  to  have  provided  expressly  for  all  matters  between  them.    We 


628  EDDY    V.    DAVIS  [CHAP.   V 

expect  naturally  to  find  mutual  obligations  in  the  contract.  The 
vendee  agrees  to  pay  the  purchase-money,  and  we  look  for  an  agree- 
ment on  the  part  of  the  vendor  to  convey.  If  it  is  not  contained  in 
the  clause  of  the  contract  under  discussion,  it  does  not  exist  in  ex- 
press terms,  and  we  are  forced  to  imply  it  from  the  nature  of  the 
instrument. 

In  Kobb  V.  Montgomery,  20  Johns.  15,  cited  by  appellants,  there 
was  an  express  covenant  on  payment  of  the  purchase-money,  and 
a  further  provision  that  if,  after  the  first  payment  was  made,  de- 
fendant wished  to  get  a  deed,  and  to  give  a  bond  and  mortgage  for 
securing  the  two  last  payments,  plaintiffs  would  give  a  deed. 

Thus  the  intent  of  the  parties  was  clear  that  it  was  to  be  optional 
with  the  vendee  whether  he  would  take  a  deed  on  making  the  first 
payment. 

Here  there  is  no  express  covenant  to  give  a  deed  at  all,  unless  it 
is  in  the  provision  cited.  The  language  used  in  this  part  of  the  con- 
tract does  not  express  an  option,  but  is  that  of  a  positive  undertaking. 
It  is:  "Parties  of  the  first  part  agree,  on  receiving  the  sum  of  eight 
hundred  dollars,  .  .  .  that  they  will  execute  and  deliver  ...  a 
sufficient  deed." 

We  think  the  intent  of  the  parties  is  plainly  inferable  from  the 
language  used,  that  this  was  a  covenant  on  plaintiff's  part  to  convey 
at  the  time  and  under  the  circumstances  mentioned. 

We  have,  therefore,  an  action  to  recover  unpaid  instalments  brought 
after  the  time  stipulated  for  the  delivery  of  the  deed,  and  in  such 
case,  to  entitle  plaintiffs  to  recover,  it  was  incumbent  upon  them 
to  show  an  offer  made  before  suit,  to  convey  on  receiving  the  stipu- 
lated part  of  the  purchase-money.  Grant  v.  Johnson,  and  Beecher 
V.  Conradt,  supra.  The  facts  of  this  case  are  very  similar  to  the  cases 
cited.  In  Grant  v.  Johnson  the  contract  was  to  sell  the  land  for 
$9.50;  $200  of  which  was  payable  in  April,  1846,  and  $200  in  April, 
1847,  and  the  balance  in  two  annual  payments  thereafter. 

The  seller  was  to  give  possession  in  ]^ovember,  1845,  and  a  deed 
in  Mny,  1846.  The  action  was  for  the  instalment  due  in  April,  1847, 
and  this  court  held  that  delivery  of  the  deed  was  a  condition  prece- 
dent to  the  payment  of  the  second  instalment,  and  having  made  no 
tender,  plaintiff  could  not  recover. 

In  Beecher  v.  Conradt  the  purchase-money  was  payable  in  five 
instalments.  IVone  were  paid,  and  after  they  were  all  due  plaintiff 
broiifflit  an  action  for  the  whole  purchase-money.  This  court  held 
that  while  the  covenants  as  to  the  first  four  instalments  were  origi- 
nally independent,  when  the  last  instalment  fell  due,  conveyance  and 
paymoiit  were  dependent  acts,  and  that  no  part  of  the  purchase- 
monc-y  (•()}}](]  be  recovered  without  tender  of  a  conveyance  before  com- 
rnf'iiffmcnt  of  the  action.  To  th(!  same  effect  are  Hoag  v.  Parr,  13 
Hiin.  05;  James  v.  Bnrchell,  82  N.  Y.  108;  Smith  v.  McCluskey, 
45  Barb.  G21.    The  determination  of  the  question  what  are  and  what 


SECT.    II  ]  EDDY    V.   DAVIS  629 

are  not  dependent  covenants  is  not  one  free  from  difficulty,  and  many 
of  the  cases  are  so  irreconcilable  that  they  are  studied  with  little 
profit  or  assistance  to  the  judgment. 

Each  case  must  be  determined  by  the  cardinal  rule  of  interpreting 
all  contracts,  viz.,  to  ascertain  the  intention  of  the  parties  to  the 
agreement;  and  here  we  think  there  is  no  doubt  the  intention  was  to 
deliver  the  deed  of  the  property  when  $800  of  the  purchase-money 
was  paid.  For  all  the  instalments  falling  due  prior  to  that  time 
plaintiffs  might  have  brought  their  action  and  recovered  without 
proof  of  offer  to  convey,  but  having  waited  until  after  the  time  fixed 
for  the  delivery  of  the  deed,  payment  and  conveyance  became  de- 
pendent and  concurrent  acts,  and  tender  of  performance  was  essen- 
tial on  their  part  to  an  enforcement  of  defendant's  obligations  under 
the  contract.  The  case  seems  to  fall  directly  within  the  spirit  of 
the  second  rule  suggested  by  Sergeant  "Williams  in  his  note  to  Por- 
dage  V.  Cole,  supra:  "When  a  day  is  appointed  for  the  payment  of 
money,  and  the  day  is  to  happen  after  the  thing  which  is  the  con- 
sideration is  to  be  performed,  no  action  for  the  money  can  be  sus- 
tained without  averring  a  performance ;"  and  the  rights  of  the  parties 
under  such  circumstances  as  exist  in  this  case  are  clearly  stated  by 
Judge  Gardner  in  Beecher  v.  Conradt  as  follows:  "The  defendant 
has  lost  his  right  to  pay  the  instalments  separately,  and  the  plain- 
tiff his  right  to  enforce  collection  by  separate  suits.  There  is  but 
a  single  cause  of  action,  one  and  indivisible.  The  defendant,  if  he 
would  obtain  his  dues,  must  pay  all,  and  the  plaintiff,  if  he  would 
recover,  must  show  such  a  performance  on  his  part  as  would  entitle 
him  to  all  the  unpaid  consideration."  None  of  the  cases  cited  by  the 
appellant  are  in  conflict  with  the  rule  stated,  under  the  construction 
we  have  given  the  contract. 

Robb  V.  Montgomery,  20  Johns.  15,  in  one  respect,  I  think,  must 
be  erroneously  reported.  The  case  states  that  the  declaration  averred 
non-payments  of  all  the  instalments. 

If  we  are  to  understand  by  this  that  the  action  was  brought  to 
recover  the  whole  purchase-money,  and  to  regard  the  court  as  holding 
that  no  tender  of  conveyance  was  necessary,  then  the  case  is  in  con- 
flict with  all  the  later  authorities.  But  if  the  action  was  to  recover 
the  first  instalment  only,  then  the  decision  is  intelligible.  I  think 
the  action  must  have  been  for  the  first  instalment.  The  case  as  re- 
ported arose  upon  a  demurrer  by  defendant  to  a  replication  to  a  plea 
in  the  answer  and  involved  the  single  question  whether  the  assign- 
ment of  the  contract  and  the  conveyance  of  the  land  to  Bemus  by 
the  vendor,  before  the  first  instalment  was  due  (Bemus  being  ready 
and  willing  and  having  the  capacity  to  convey  to  defendant)  was 
a  bar  to  the  recovery.  The  court  held  that  it  was  not,  and  in  so  de- 
ciding is  in  harmony  with  later  decisions,  which  hold  that  in  an 
action  by  a  vendor  for  an  instalment  of  purchase-money  falling  due 
prior  to  the  time  limited  for  the  delivery  of  the  deed,  want  of  title 
in  the  vendor  is  not  a  defence.    Harrington  v.  Higgins,  17  "Wend.  376. 


630  JAMES    V.   BURCHELL  [CHAP.   V 

These  and  all  kindred  cases  will  be  found,  I  think,  to  have  arisen 
on  independent  covenants  in  contracts,  and  the  rule  established  by 
them  has  no  application  in  an  action  by  a  vendor  for  purchase-money 
brought  subsequent  to  the  day  stipulated  for  the  delivery  of  the  deed. 

The  appellant  makes  the  point  that  the  agreement  to  keep  open 
the  right  of  way  was  a  personal  covenant,  having  no  relation  to  the 
title,  and  its  violation  furnished  no  excuse  for  refusal  to  pay  the 
purchase-money. 

The  appellant  is  not  in  a  position  to  raise  such  a  question,  being 
concluded  by  the  finding  of  the  trial  court,  that  such  right  of  way 
was  necessary  to  the  proper  enjoyment  of  the  store,  and  that  the 
parties  intended  that  defendant  should  have  such  way,  and  that  it 
should  be  conveyed  to  him  with  the  store;  and  we  think  a  right  of 
way,  which  the  trial  judge  found  to  constitute  in  value  one  half  of 
the  property  agreed  to  be  sold,  cannot  be  regarded  as  an  immaterial 
part  of  the  consideration  of  the  defendant's  obligation.  Having  put 
it  out  of  their  power  to  convey  the  property  which  they  had  agreed 
to  sell,  the  plaintiffs  were  not  able  to  make  a  valid  offer  of  per- 
formance, and  hence  not  entitled  to  recover  the  unpaid  purchase- 
money. 

The  order  of  the  General  Term  was  right  and  should  be  affirmed, 
and  judgment  absolute  rendered  for  the  defendant  on  the  stipulation, 
with  costs. 

All  concur. 

Order  affirmed  and  judgment  accordingly. 


EDWARD  D.  JAMES  et  al..  Appellants,  v.  JOHN"  J.  BUR- 
CHELL, Respondent 

New  Yokk  Coukt  of  Appeals,  June  17-September  21,  1880 

[Reported  in  82  New  York,  108] 

Appeal  from  judgment  of  the  General  Term  of  the  Court  of  Com- 
mon Pleas  in  and  for  the  city  and  county  of  New  York,  affirming  a 
judgment  in  favor  of  defendant,  entered  upon  a  decision  of  the  court 
oil  trial  without  a  jury.     (Reported  below,  7  Daly,  531.) 

This  action  was  brought  to  recover  damages  for  the  alleged  fail- 
ure of  defendant  to  perform  a  contract. 

On  January  11,  1871,  the  parties  entered  into  a  contract  by  which 
the  plaintiff,  Sarah  James,  in  consideration  of  one  dollar,  agreed 
"to  sell  and  convey,  or  cause  to  be  conveyed,"  as  thereinafter  stated, 
to  tlu!  defendant  four  lots  of  land  in  the  city  of  New  York,  for  the 
sum  of  $11,000  for  each  lot.  It  was  further  covenanted  that  the 
defendant  should  commence  the  erection  of  four  houses  upon  the  lots 
on  or  before;  Fftbruary  10,  1871,  and  complete  the  same  within  seven 
months  from  that  date;  the  plaintiffs  to  advance  $4,000  on  each  house 
to  aid  in  its  erection,  and  upon  being  paid  and  reimbursed  the  price 


SECT.    Il]  JAMES    V.    BURCHELL  631 

of  said  lots  and  advances  thereon,  either  in  cash  or  the  bonds  of  the 
defendant,  secured  by  mortgages  on  the  premises,  then  the  plaintiffs 
agreed  "to  convey,  or  cause  to  be  conveyed,"  the  same  to  the  defend- 
ant, in  fee  by  a  full  covenant  warranty  deed  free  from  all  reasonable 
objections  and  from  all  incumbrances,  except  such  incumbrances  as 
should  be  made,  or  caused  or  suffered  to  be  made,  by  the  defendant; 
the  latter  agreed  to  complete  the  contract  and  to  take  title  within 
eight  months.  The  plaintiffs  also  covenanted  that  Sarah  James  was 
seized  in  her  own  right  of  a  good  title  to  said  premises  in  fee  simple. 
It  was  also  agreed  that  the  plaintiffs  at  their  election  might  mortgage 
each  of  said  lots  to  the  amount  of  $15,000,  and  convey  the  same  sub- 
ject to  said  mortgages  in  lieu  of  purchase-money  for  the  same  amount. 

The  court  found  that  on  the  same  day  the  contract  was  made  plain- 
tiffs conveyed  the  premises  by  warranty  deed  to  Isaac  B.  Findull, 
subject  to  no  incumbrances  whatever.  Defendant  never  entered  into 
possession  of  the  premises,  but  refused  to  erect  the  buildings  because 
the  plaintiffs  could  give  no  valid  title  to  the  property. 

It  appeared  that  some  months  after,  but  before  the  expiration  of 
the  eight  months,  Findull  reconveyed  to  Mrs.  James.  Findull  was 
a  former  clerk  of  James,  and  the  conveyance  to  him  was  without 
consideration.  He  knew  at  the  time  he  received  the  deed  of  the  con- 
tract between  the  parties. 

E.  H.  Benn,  for  appellants. 

Oshorn  E.  Bright,  for  respondent. 

Miller,  J.  The  plaintiffs,  in  their  contract  with  the  defendant, 
covenanted  that  Sarah  James,  one  of  them,  was  seized  in  her  own 
right  of  a  good  title  to  the  premises  in  fee  simple  which  were  to  be 
conveyed  to  the  defendant;  and  it  was  further  provided  that  the 
plaintiffs,  if  they  so  desire,  could  mortgage  each  of  the  lots  to  the 
amount  of  $15,000.  On  the  same  day  after  the  contract  bears  date, 
and  when  the  parties  acknowledged  its  execution,  the  plaintiffs  con- 
veyed the  premises  by  warranty  deed  to  one  Findull,  subjected  to 
no  incumbrances  whatever.  The  question  presented  is  whether  the 
plaintiffs  had  a  right  thus  to  impair  the  title,  or  in  any  other  manner 
than  by  the  mortgages  provided  for;  and,  as  this  conveyance  was 
made  to  Findull,  whether  the  plaintiffs  had  not  violated  the  cove- 
nant, and  the  defendant  was  thereby  released  from  any  liability 
under  the  contract.  The  plaintiff's  counsel  insists  that  the  fact  that 
another  person  held  the  legal  title  for  a  portion  of  the  intervening 
time,  or  that  the  defendant  prior  to  the  time  fixed  for  taking  title, 
was  required  by  independent  covenants  to  do  certain  acts  and  things 
toward  the  performance  of  the  contract  on  his  part,  is  immaterial. 
We  think  he  is  in  error  in  this  respect,  and,  under  the  provisions 
of  the  contract,  the  transfer  of  the  title  to  Findull  by  the  plaintiffs 
was  important  and  material.  By  the  contract,  as  will  be  seen  by 
reference  to  the  same,  the  defendant  agreed  to  erect  buildings  upon 
the  lots,  of  a  certaio  style  and  quality,  and  of  considerable  value. 


632  JAMES    V.    BURCHELL  [CHAP.   V 

within  seven  montlis  from  the  date,  the  plaintiffs  to  advance  money 
from  time  to  time  on  each  of  such  buildings.  The  lots  were  to  be 
conveyed  by  the  plaintiffs  by  warranty  deed,  free  from  incumbrances, 
except  such  as  should  be  caused  or  suffered  by  the  defendant,  who 
was  to  take  title  and  pay  for  the  same  within  eight  months  from  date. 
It  is  apparent  from  the  terms  of  the  contract  that  the  defendant  must 
have  relied  to  a  considerable  extent  upon  the  personal  responsibility 
of  the  plaintiffs.  Upon  the  faith  of  an  existing  and  perfect  title 
in  Mrs.  James,  he  was  to  take  possession,  erect  valuable  buildings, 
and  expend  large  amounts  of  money.  The  covenant  that  Mrs.  James 
was  seized  and  the  permission  given  to  mortgage  the  premises  was 
not  only  an  inducement  for  the  expenditure  of  $60,000,  to  be  made  by 
the  defendant,  as  the  contract  provided,  but  a  guarantee  that  no 
other  incumbrances  should  be  placed  upon  the  property.  The  cove- 
nant of  seizin  would  be  of  no  benefit  if  the  plaintiffs  could  convey 
to  a  stranger  without  its  violation,  and  compel  the  defendant  to 
erect  the  buildings  upon  lands  to  which  he  might  never  acquire  any 
title,  and  in  that  event  to  trust  entirely  to  an  action  at  law  against 
the  plaintiffs  for  reimbursement  or  indemnity.  From  the  contract 
it  is  evident  that  the  intention  of  the  parties  was  that  the  defendant 
should  be  protected  in  taking  possession  of  the  premises  and  in  the 
erection  of  buildings  thereon,  and  under  the  circumstances  of  the 
case  that  the  title  should  remain  unimpaired  in  Mrs.  James  until 
the  conveyance  was  delivered.  Instead  of  this,  on  the  very  day  the 
contract  was  acknowledged  the  plaintiffs  conveyed  the  premises  to 
rindull,  who  had  been  a  clerk  of  Mr.  James,  and  who  took  it  in 
trust  for  Mrs.  James  and  paid  no  consideration  for  the  conveyance. 
They  thus  parted  with  all  their  right  and  title  to  the  lot,  and  sub- 
jected the  defendant  to  the  hazard  of  losing  what  might  be  expended 
upon  the  same.  As  the  testimony  stood  we  think  the  defendant  was 
not  bound  to  proceed  and  complete  the  contract  after  the  plaintiffs 
had  parted  with  their  title  by  a  conveyance  to  a  stranger. 

The  conveyance  by  the  plaintiffs  and  the  execution  of  the  mort- 
gages by  the  defendant,  according  to  the  contract  for  the  price  of 
the  lots  and  advances,  were  to  be  simultaneous  acts.  In  such  a  case 
the  covenants  are  dependent,  and  there  must  be  an  existing  capacity 
in  the  one  who  is  to  convey  to  give  a  good  title.  This  distinction  is 
stated  fully  by  Spencer,  J.,  in  Eobb  v.  Montgomery,  20  Johns.  15. 
The  expenditure  to  be  made,  which  was  very  large,  should  not,  in 
view  of  the  peculiar  provisions  of  the  contract,  be  regarded  as  an 
ordinary  payment  on  account  of  the  purchase-money,  as  the  cove- 
nants were  manifestly  int(!nded  and  must  be  considered  as  mutual 
and  dependent.  Judson  v.  Wass,  11  Johns.  525;  Tucker  v.  "Woods, 
12  ifl.  100.  We  have  carefully  examined  all  the  cases  cited  to  sus- 
tain thf!  proposition  contended  for  by  the  plaintiffs'  counsel,  and  we 
think  that  none  of  tlir-rn  uplu)!']  tlu;  doctrine  that  in  a  case  presenting 
the  cbaraeteriHtic  features  of  the  one  at  bar,  a  conveyance  to  a  third 
party  is  not  material. 


SECT.    II  ]  JAMES    V.   BURCHELL  633 

Some  stress  is  laid  by  the  appellants'  counsel  upon  the  provision 
in  the  contract  that  the  plaintiffs  agreed  "to  sell  and  convey,  or 
cause  to  be  conveyed."  This  is  not  controlling ;  and  taking  the  whole 
contract  together,  we  think  that  the  testimony  shows  that  the  de- 
fendant did  not  intend  to  accept  any  other  warranty  than  that  of  the 
plaintiffs.  That  Findull  knew  of  the  contract  with  the  defendant  at 
the  time  he  took  the  deed,  and  therefore  he  took  it  subject  to  the 
rights  of  the  defendant,  and  could  have  been  compelled  to  convey, 
is  not  important,  for,  as  we  have  seen,  the  defendant  lost  the  benefit 
of  the  plaintiffs'  responsibility  by  the  transfer  of  the  title  without 
any  consideration  whatever  to  a  person  of  at  least  doubtful  respon- 
sibility, and  thus  was  not  sufficiently  protected  in  making  the  large 
expenditure  required  for  the  building  of  the  houses.  The  defendant 
had  a  right  to  rely  upon  the  responsibility  of  the  plaintiffs  under  the 
contract,  and  the  want  of  it  may  well  have  prevented  the  defendant 
from  taking  possession  and  from  erecting  the  buildings  as  was  in- 
tended. The  subsequent  reconveyance  by  Findull  to  Sarah  James 
could  have  no  effect  in  restoring  the  defendant's  rights  which  were 
affected  by  the  conveyance  to  Findull.  The  conveyance  from  Fin- 
dull to  the  plaintiffs  was  not  made  until  some  months  after  the  con- 
veyance by  the  plaintiffs  to  him,  and  was  recorded  even  long  after 
that,  and  it  is  not  proved  to  have  been  brought  to  the  knowledge  of 
the  defendant.  The  defendant,  with  knowledge  of  the  want  of  title 
in  the  plaintiffs,  was  not,  under  the  covenants  in  the  contract,  bound 
to  take  possession  and  proceed  with  the  erection  of  the  buildings. 

The  question  whether  the  deed  to  Findull  was  made  and  delivered 
before  or  after  the  making  and  delivery  of  the  contract  is  not  vital, 
as  in  either  contingency  the  plaintiffs  had  broken  the  covenant  of 
seizin,  and  as  the  covenants  were  dependent  and  mutual,  the  defend- 
ant was  under  no  obligation  to  proceed  and  erect  the  buildings  and 
fulfil  the  terms  of  the  contract.  In  view  of  the  covenants  which  have 
been  considered,  the  contract  was  at  an  end  when  the  conveyance 
was  made  to  Findull.  The  finding  of  the  judge,  that  the  contract 
was  executed  and  delivered  upon  the  11th  day  of  January,  1871,  being 
the  time  of  its  acknowledgment,  instead  of  the  day  of  its  date,  is 
therefore  not  material,  and  even  if  erroneous,  cannot  affect  the  result. 
For  the  same  reason  the  refusal  to  find  that  the  deed  was  delivered 
after  the  date  of  the  contract  was  not  erroneous.  There  was  no 
error  in  refusing  to  send  the  case  back  for  further  findings,  or  in  any 
of  the  refusals  to  find,  or  in  any  other  respect. 

The  judgment  should  be  affirmed. 

All  concur  except  Folgeb,  C.  J.,  and  Rapallo,  J.,  not  voting,  and 
Finch,  J.,  absent  at  argument.  Judgment  affirmed.^ 

^  Fort  Payne  Co.  v.  Webster,  163  Mass.  134;  Meyers  v.  Markham,  90  Minn.  230; 
Brodhead  v.  Reinbold,  200  Pa.  618,  ace.  See  also  Leonard  v.  Bates,  1  Blackf.  172. 
Garberino  v.  Roberts,  109  Cal.  125;  Webb  v.  Stephenson,  11  Wash.  342,  contra.  But 
see  Brimmer  v.  Salisbury,  167  Cal.  522. 


634  ZIEHEN    V.    SMITH  [CHAP.    V 


WILLIAM  ZIEHEN,  Kespondent,  v.  DAVID  J.  SMITH, 

Appellant 

New  York  Coukt  qf  Appeals,  January  30-Eebruary  25,  1896 
[Reported  in  148  New  York,  558] 

O'Bkien,  J.  The  plaintiff,  as  vendee,  under  an  executory  contract 
for  the  sale  of  real  estate,  has  recovered  of  the  defendant,  the  vendor, 
damages  for  a  breach  of  the  contract  to  convey,  to  the  extent  of  that 
part  of  the  purchase  money  paid  at  the  execution  of  the  contract, 
and  for  certain  expenses  in  the  examination  of  the  title.  The  ques- 
tion presented  by  the  record  is  whether  the  plain tiif  established  at 
the  trial  such  a  breach  of  the  contract  as  entitled  him  to  recover. 

By  the  contract,  which  bears  date  August  10,  1892,  the  defendant 
agreed  to  convey  to  the  plaintiff  by  good  and  sufficient  deed  the  lands 
described  therein,  being  a  country  hotel  with  some  adjacent  land. 
The  plaintiff  was  to  pay  for  the  same  the  sum  of  $3,500,  as  follows  : 
$500  down,  which  was  paid  at  the  time  of  the  execution  of  the  con- 
tract, $300  more  on  the  15th  day  of  September,  1892.  He  was  to 
assume  an  existing  mortgage  on  the  property  of  $1,000,  and  the 
balance  of  $1,700  he  was  to  secure  by  his  bond  and  mortgage  on  the 
property,  payable,  with  interest,  one  year  after  date.  The  courts 
below  have  assumed  that  the  payment  of  the  $300  by  the  plaintiff, 
the  execution  of  the  bond  and  mortgage,  and  the  delivery  of  the  con- 
veyance by  the  defendant,  were  intended  to  be  concurrent  acts,  and, 
therefore,  the  day  designated  by  the  contract  for  mutual  perform- 
ance was  the  15th  of  September,  1892.  Since  no  other  day  is  men- 
tioned in  the  contract  for  the  payment  of  the  money,  or  the  exchange 
of  the  papers,  we  think  that  this  construction  was  just  and  reason- 
able, and,  in  fact,  the  only  legal  inference  of  which  the  language  of 
the  instrument  was  capable.  It  is  not  alleged  or  claimed  that  the 
plaintiff  on  that  day,  or  at  any  other  time,  offered  to  perform  on 
his  part  or  demanded  performance  on  the  part  of  the  defendant,  and 
this  presents  the  serious  question  in  the  case  and  the  only  obstacle 
to  the  plaintiff's  recovery.  It  is,  no  doubt,  the  general  rule  that  in 
order  to  entitle  a  party  to  recover  damages  for  the  breach  of  an 
executory  contract  of  this  character  he  .must  show  performance  or 
tender  of  performance  on  his  part.  He  must  show  in  some  way 
that  the  other  party  is  in  default  in  order  to  maintain  the  action,  or 
that  pfrformaiifc  or  tender  has  been  waived.  But  a  tender  of  per- 
formariff!  on  the  part  of  the  vendee  is  dispensed  with  in  a  case  where 
it  appears  that  the  vendor  has  disabled  himself  from  performance, 
or  that  he  is  on  the  day  fixed  by  the  contract  for  that  purpose,  for 
any  reason,  unable  to  perform.  The  judgment  in  this  case  must 
stand,  if  at  all,  npon  the  ground  tliat  on  the  15th  day  of  September, 
1892,  the  defendant  was  unable  to  give  to  the  plaintiff  any  title  to 


SECT.    II  ]  ZIEHEN    V.    SMITH  635 

the  property  embraced  in  the  contract,  and  hence  any  tender  of  per- 
formance on  the  part  of  the  plaintiff,  or  demand  of  performance  on 
his  part,  was  unnecessary,  because  upon  the  facts  appearing  it  would 
be  an  idle  or  useless  ceremony. 

It  appeared  upon  the  trial  that  at  the  time  of  the  execution  of 
the  contract  there  was  another  mortgage  upon  the  premises  of  $1,500, 
which  fact  was  not  disclosed  to  the  plaintiff,  and  of  the  existence  of 
which  he  was  then  ignorant.  X^^at  on  or  prior  to  the  21st  of  July, 
1892,  some  twenty  days  before  the  contract  was  entered  into,  an  ac- 
tion was  commenced  to  foreclose  this  mortgage,  and  notice  of  the 
pendency  of  the  action  filed  in  the  county  clerk's  office.  That  on  the 
30th  of  September  following  judgment  of  foreclosure  was  granted 
and  entered  on  the  31st  of  October  thereafter,  and  on  the  28th  of 
December  the  property  was  sold  to  a  third  party  by  virtue  of  the 
judgment,  and  duly  conveyed  by  deed  from  the  referee.  It  appears 
that  the  defendant  was  not  the  maker  of  this  mortgage  and  was  not 
aware  of  its  existence,  but  it  was  made  by  a  former  owner,  and  the 
defendant's  title  was  subject  to  it  when  he  contracted  to  sell  the 
property  to  the  plaintiff. 

The  decisions  on  the  point  involved  do  not  seem  to  be  entirely 
harmonious.  In  some  of  them  it  is  said  that  the  existence,  at  the 
date  fixed  for  performance,  of  liens  or  incumbrances  upon  the  prop- 
erty is  sufficient  to  sustain  an  action  by  the  vendee  to  recover  the 
part  of  the  purchase  money  paid  upon  the  contract.  (Morange  v. 
Morris,  3  Keyes,  48;  Ingalls  v.  Hahn,  47  Hun,  104.)  The  general 
rule,  however,  to  be  deduced  from  an  examination  of  the  leading 
authorities  seems  to  be  that  in  cases  where  by  the  terms  of  the  con- 
tract the  acts  of  the  parties  are  to  be  concurrent,  it  is  the  duty  of 
him  who  seeks  to  maintain  an  action  for  a  breach  of  the  contract, 
either  by  way  of  damages  for  the  non-performance,  or  for  the  recovery 
of  money  paid  thereon,  not  only  to  be  ready  and  willing  to  perform 
on  his  part,  but  he  must  demand  performance  from  the  other  party. 
The  qualifications  to  this  rule  are  to  be  found  in  cases  where  the 
necessity  of  a  formal  tender  or  demand  is  obviated  by  the  acts  of 
the  party  sought  to  be  charged  as  by  his  express  refusal  in  advance 
to  comply  with  the  terms  of  the  contract  in  that  respect,  or  where  it 
appears  that  he  has  placed  himself  in  a  position  in  which  perform- 
ance is  impossible.  If  the  vendor  of  real  estate,  under  an  executory 
contract,  is  unable  to  perform  on  his  part,  at  the  time  provided  by 
the  contract,  a  formal  tender  or  demand  on  the  part  of  the  vendee 
is  not  necessary  in  order  to  enable  him  to  maintain  an  action  to 
recover  the  money  paid  on  the  contract,  or  for  damages.  (Hudson  v. 
Swift,  20  Johns.  24;  Fuller  v.  Hubbard,  6  Cow.  13;  Green  v.  Green, 
9  Cow.  47;  Hartley  v.  James,  50  IST.  Y.  38;  Blgler  v.  Morgan,  77 
N.  Y.  312;  Burwell  v.  Jackson,  9  IST.  Y.  547;  Bogardus  v^ 'N'.  Y. 
Life  Ins.  Co.,  101  K  Y.  328;  Tamsen  v.  Schaefer,  lo8  E".  Y.  604.) 
In  this  case  there  was  no  proof  that  the  defendant  waived  tender 


636  EX   PARTE    CHALMERS.      IN   RE   EDWARDS       [CHAP.   V 

or  demand  either  by  words  or  conduct.  The  only  difficulty  in  the 
way  of  the  performance  on  his  part  was  the  existence  of  the  mortgage 
which  the  proof  tends  to  show  was  given  by  a  former  owner  and  its 
existence  on  the  day  of  performance  was  not  known  to  either  party. 
In  order  to  sustain  the  judgment  we  must  hold  that  the  defendant 
on  the  day  of  performance  was  unable  to  convey  to  the  plaintiff  the 
title  which  the  contract  required  simply  because  of  the  existence  of 
the  incumbrance.  We  do  not  think  that  it  can  be  said  upon  the 
facts  of  this  case  that  the  defendant  had  placed  himself  in  such  a 
position  that  he  was  unable  to  perform  the  contract  on  his  part  and 
that  his  title  was  destroyed  or  that  it  was  impossible  for  him  to 
convey  within  the  meaning  of  the  rule  which  dispenses  with  the  ne- 
cessity of  tender  and  demand  in  order  to  work  a  breach  of  an  execu- 
tory contract  for  the  sale  of  land.  It  cannot  be  affirmed  under  the 
circumstances  that  if  the  plaintiff  had  made  the  tender  and  demand 
on  the  day  provided  in  the  contract  that  he  would  not  have  received 
the  title  which  the  defendant  had  contracted  to  convey.  The  con- 
tract is  not  broken  by  the  mere  fact  of  the  existence  on  the  day  of 
performance  of  some  lien  or  incumbrance  which  it  is  in  the  power 
of  the  vendor  to  remove.  That  is  all  that  was  shown  in  this  case, 
and  hence  the  judgment  was  recovered  in  violation  of  an  important 
principle  of  the  law  governing  contracts. 

For  this  reason  judgment  should  be  reversed  and  a  new  trial 
granted,  costs  to  abide  the  event. 

All  concur.  Judgment  reversed.^ 


Ex  PABTE  CHALMEES.    In  ee  EDWAEDS 

In  Chancert,  January  24-31,  1873 
[Reported  in  Law  Reports,  8  Chancery  Appeals,  289] 

This  was  an  appeal  from  a  decision  of  the  Chief  Judge  in  Bank- 
ruptcy. 

On  the  19th  of  October,  1870,  Messrs.  Hall  Brothers  &  Shaw,  of 
Widnes,  contracted  to  sell  to  the  bankrupt  Edwards  330  tons  of 
bleaching-powder,  upon  terms  which  were  stated  in  the  following 
letter  written  by  their  agent : 

"Dkaij  Sir,  —  I  have  this  day  sold  to  you,  on  account  of  Messrs. 
Hall  Brothers  &  ShaAV,  Widnes,  330  tons  of  bleaching-powder,  35 
per  cent,  at  85.  Qd.  per  cwt.,  free  on  board  here,  to  be  delivered  thirty 
tons  per  month  from  February  to  December,  1871,  both  inclusive. 
To  be  packed  in  oak  casks,  and  to  be  unbranded.  Payment  by  cash 
in  fourteen  days  from  date  of  each  delivery,  deducting  2^  discount." 

Under  the  terms  of  this  contract  the  monthly  instalments  up  to 
and  including  the  October  instalment  were  delivered  and  paid  for. 
The  November  instalment  was  delivered,  but  Avns  not  paid  for. 
'  Hiftgins  V.  Eaglcton,  165  N.  Y.  466,  ace. 


SECT.    II ]       EX   PARTE    CHALMERS.      IN   RE   EDWARDS  637 

On  the  20th  of  December,  1871,  Edwards  called  a  meeting  of  his 
creditors,  at  which  he  declared  himself  insolvent.  Messrs.  Hall  & 
Co.  attended  this  meeting,  and  on  the  23d  of  December  they  wrote 
a  letter  to  Edwards  in  the  following  terms :  — 

"We  give  you  notice  that  we  refuse  to  deliver  any  more  bleaching- 
powder  upon  contract." 

Accordingly,  the  December  instalment  of  bleaching-powder  was 
never  delivered. 

On  the  1st  of  January,  1872,  Edwards  filed  a  petition  for  liquida- 
tion by  arrangement;  but  on  the  19th  of  January  it  was  resolved  to 
proceed  in  bankruptcy,  and  he  was  adjudicated  a  bankrupt  on  the 
8th  of  February  following.  Mr.  Chalmers  was  subsequently  ap- 
pointed trustee. 

Under  these  circumstances  the  trustee  claimed  the  delivery  of  the 
thirty  tons  of  bleaching-powder,  and  on  Hall  &  Co.  refusing  to  de- 
liver them,  he  claimed,  in  the  County  Court  at  Liverpool,  damages 
amounting  to  £150  against  Hall  &  Co.,  for  their  breach  of  the  con- 
tract. The  County  Court  Judge  having  refused  his  application, 
the  trustee  applied  to  the  Chief  Judge  in  Bankruptcy,  who  affirmed 
the  decision  of  the  County  Court  Judge.  The  trustee  now  renewed 
the  application  before  the  Court  of  Appeal. 

SiK  G.  Mellish,  L.  J.,  after  stating  the  facts  of  the  case,  con- 
tinued as  follows :  — 

The  first  question  that  arises  is,  what  are  the  rights  of  a  seller  of 
goods  when  the  purchaser  becomes  insolvent  before  the  contract  for 
sale  has  been  completely  performed?  I  am  of  opinion  that  the  re- 
sult of  the  authorities  is  this  —  that  in  such  a  case  the  seller,  not- 
withstanding he  may  have  agreed  to  allow  credit  for  the  goods,  is  not 
bound  to  deliver  any  more  goods  under  the  contract  until  the  price 
of  the  goods  not  yet  delivered  is  tendered  to  him ;  and  that,  if  a  debt 
is  due  to  him  for  goods  already  delivered,  he  is  entitled  to  refuse  to 
deliver  any  more  till  he  is  paid  the  debt  due  for  those  already  de- 
livered, as  well  as  the  price  of  those  still  to  be  delivered.  In  Bloxam 
V.  Sanders,^  Bayley,  J.,  says:  "If  goods  are  sold  upon  credit,  and 
nothing  is  agreed  upon  as  to  the  time  of  delivering  the  goods,  the 
vendee  is  immediately  entitled  to  the  possession,  and  the  right  of 
possession  and  the  right  of  property  vest  at  once  in  him;  but  his 
right  of  possession  is  not  absolute,  it  is  liable  to  be  defeated  if  he 
becomes  insolvent  before  he  obtains  possession.  Whether  default 
in  payment  when  the  credit  expires  will  destroy  his  right  of  pos- 
session if  he  has  not  before  that  time  obtained  actual  possession, 
and  put  him  in  the  same  situation  as  if  there  had  been  no  bargain 
for  credit,  it  is  not  now  necessary  to  inquire,  because  this  is  a  case 
of  insolvency,  and  in  a  case  of  insolvency  the  point  seems  to  be 
perfectly  clear:  Hanson  v.  Meyer.^  If  the  seller  has  despatched  the 
goods  to  the  buyer,  and  insolvency  occurs,  he  has  a  right,  in  virtue 
1  4  B.  &  C.  941,  948.  ^  6  East,  614. 


638  EX   PARTE    CHALMERS.      IN   RE   EDWARDS       [CHAP.   V 

of  his  original  ownership,  to  stop  them  in  transitu.  Why?  Because 
the  property  is  vested  in  the  buyer  so  as  to  subject  him  to  the  risk 
of  any  accident;  but  he  has  not  an  indefeasible  right  to  the  posses- 
sion, and  his  insolvency,  without  payment  of  the  price,  defeats  that 
right.  And  if  this  be  the  case  after  he  has  despatched  the  goods, 
and  whilst  they  are  in  transitu,  a  fortiori  is  it  when  he.  has  never 
parted  with  the  goods,  and  when  no  transitus  has  begun.  The  buyer, 
or  those  who  stand  in  his  place,  may  still  obtain  the  right  of  pos- 
session if  they  will  pay  or  tender  the  price,  or  they  may  still  act 
upon  their  right  of  property  if  anything  unwarrantable  is  done  to 
that  right." 

In  Wentworth  v.  Outhwaite,^  Parke,  B.,  says  "  What  the  effect 
of  stoppage  in  transitu  is,  whether  entirely  to  rescind  the  contract 
or  only  to  replace  the  vendor  in  the  same  position  as  if  he  had  not 
parted  with  the  possession,  and  entitle  him  to  hold  the  goods  until 
the  price  be  paid  down,  is  a  point  not  yet  finally  decided,  and  there 
are  difficulties  attending  each  construction.  If  the  latter  supposi- 
tion be  adopted  (as  most  of  us  are  strongly  inclined  to  think  it  ought 
to  be,  on  the  weight  of  authority),  the  vendor  is  entitled  to  retain 
the  part  actually  stopped  in  transitu  till  he  is  paid  the  price  of  the 
whole,  but  has  no  right  to  retake  that  which  has  arrived  at  its 
journey's  end.  His  right  of  lien  on  the  part  stopped  is  revested, 
but  no  more." 

And  in  Griffiths  v.  Perry,^  Crompton,  J.,  says :  "  A  vendor's  lien 
on  specific  goods  sold  is  gone  when  a  bill  is  given  for  the  price,  but 
revives  if  that  bill  is  dishonored  before  he  has  parted  with  possession 
of  the  goods ;  or  rather,  he  then  acquires,  not  a  lien,  strictly  speaking, 
but  a  right  of  withholding  delivery,  analogous  to  the  right  of  an 
unpaid  vendor  to  stop  in  transitu.  Miles  v.  Gorton,^  and  many 
other  cases,  show  that  a  part  delivery  of  the  goods  does  not  do  away 
with  the  right  to  withhold  delivery  of  the  rest,  unless  such  part  de- 
livery is  intended  as  a  delivery  of  the  whole.  Then  does  it  make 
any  difference  here  that  the  goods  were  not  specific  goods?  I  think 
that  Valpy  v.  Oakeley  *  is  conclusive  to  show  that  it  does  not;  and 
I  consider  that  case  to  have  been  rightly  decided.  .  .  .  What,  then, 
is  the  position  of  the  parties  upon  the  bill  becoming  dishonored  and 
the  vendee  insolvent?  According  to  Lord  Abinger's  view  of  the 
law  in  Miles  v.  Gorton,  the  contract  to  deliver  is  thereby  put  an 
end  to  altogether.  I  am  not  inclined  to  go  so  far  as  to  say  that; 
but  I  think  that,  at  all  events,  the  vendor  has  a  right,  in  such  a 
state  of  things,  to  say  to  the  vendee,  *I  will  not  deliver  the  goods  until 
I  see  that  I  shall  get  my  price  paid.'  So,  in  the  present  case  the 
plaintiff,  or  his  assignees  in  bankruptcy,  could  not,  I  think,  call  upon 
tb(!  dfiff-ndant  to  deliver  the  rest  of  the  iron  without  paying  him 
for  it." 

»  10  M.  (t  W.  436.  452.  '  2  Cr.  &  M.  504 

2  1  E.  &  E.  G80,  088.  *  16  Q.  B.  941. 


gECT.    11  ]       EX    PARTE   CHALMERS.      IN   RE   EDWARDS  639 

In  both  Bloxam  v.  Sanders  and  Wentworth  v.  Outhwaite  there  had 
been  a  sale  of  specific  goods,  not  merely  an  agreement  to  sell  goods 
to  be  delivered  by  instalments;  but  it  would  be  strange  if  the  right 
of  a  vendor,  who  had  agreed  to  deliver  goods  by  instalments  were 
less  than  that  of  a  vendor  who  had  sold  specific  goods ;  and  the  judg- 
ment of  Crompton,  J.,  in  Griffiths  v.  Perry,  to  which  I  have  re- 
ferred, shows  clearly  that  there  is  no  difference  between  the  two  cases. 

I  am,  therefore,  of  opinion  that,  in  the  present  case,  when  the  in- 
solvency of  the  purchaser  had  been  declared  the  vendor  was  not 
bound  to  deliver  any  more  goods  until  the  price  of  the  goods  de- 
livered in  November,  as  well  as  those  which  were  to  be  delivered  in 
December,  had  been  tendered  to  him.  The  only  question  then  is, 
what  was  the  effect  of  the  vendor's  letter  of  the  23d  of  December? 
Mr.  Russell  argued  that  the  refusal  to  perform  a  contract  before  the 
time  arrives  for  its  performance  is  in  itself  a  breach  of  the  contract. 
But  that  can  only  be  the  case  where  the  person  who  refuses  to  per- 
form the  contract  is  not  entitled  to  refuse.  Had  the  vendor  in  this 
case  a  right  to  refuse?  In  my  view  that  depends  upon  the  question 
whether  the  insolvent  purchaser  was  ready  and  willing  to  pay  the 
price  both  of  the  N'ovember  and  December  instalments.  It  is  clear 
that  he  was  not.  I  admit  that  the  mere  non-payment  of  the  price 
of,  the  November  instalment  did  not  of  itself  give  a  right  to  the 
vendor  to  refuse  to  perform  the  contract;  and  I  agree  with  what 
was  said  by  Crompton,  J.,  in  Griffiths  v.  Perry,  that  the  mere  fact 
of  the  insolvency  of  the  purchaser  did  not  put  an  end  to  the  contract. 
It  certainly  would  be  very  unfair  if  it  had  that  effect;  for  if  the 
insolvent  had  any  beneficial  contracts  remaining,  it  would  be  hard 
on  him  as  well  as  on  his  creditors  if  they  could  not  have  the  benefit 
of  those  contracts.  But  if  an  insolvent  has  any  such  beneficial  con- 
tracts, it  is  his  duty  to  inform  his  creditors  or  the  Court  of  Bank- 
ruptcy, if  the  case  be  within  its  jurisdiction,  of  the  fact,  and  he  can 
then  apply  to  have  a  sufficient  part  of  his  assets  applied  for  the 
completion  of  the  contracts,  and  if  the  contracts  were  beneficial  this 
would,  without  doubt,  be  allowed  by  his  creditors  or  by  the  Court. 
If  this  were  done,  and  due  notice  were  given  to  the  vendor,  I  enter- 
tain no  doubt  that  he  would  be  bound  to  complete  the  contract  on  his 
part,  and  would  not  be  allowed  to  take  advantage  of  the  insolvency 
of  the  other  party  to  put  an  end  to  the  contract.  But  where  the  in- 
solvent or  his  trustee  does  nothing  of  the  kind,  he  practically  gives 
notice  to  his  creditors  and  those  with  whom  he  has  contracted  that  he 
does  not  mean  to  pay  any  of  his  debts  or  perform  any  of  his  con- 
tracts. In  the  present  case,  Edwards,  by  calling  his  creditors  to- 
gether and  informing  them  of  his  insolvency,  practically  gave  notice 
to  Hall  &  Co.  that  he  did  not  mean  to  pay  them  either  for  the  No- 
vember or  the  December  instalment.  Indeed  he  could  not  pay  for 
the  November  instalment  without  the  consent  of  the  other  creditors; 
it  would  have  been  a  fraudulent  preference.    Both  parties  knew  that 


640  CHRISTIE    V.   BORELLY  [CHAP.   V 

he  had  no  intention  of  paying  any  further  sum;  and  Hall  &  Co.'s 
letter  of  the  23d  of  December  only  means  that  on  the  assumption, 
which  assumption  they  were,  under  the  circumstances,  justified  in 
making,  that  the  November  and  December  instalments  would  not  be 
paid,  they  refused  to  deliver  any  more  bleaching-powder.  In  my 
opinion  they  had  a  right  to  say  that,  and  they  committed  no  breach 
of  the  contract  by  writing  the  letter.  The  appeal  must  therefore  be 
dismissed  with  costs. 

Lord  Selboene,  L.  C.  I  entirely  agree  in  the  judgment  of  the 
Lord  Justice,  and  in  the  reasons  he  has  given  for  it. 

Sir  Wm.  James,  L.  J.    I  am  of  the  same  opinion.^ 


CHEISTIE  V.  BOEELLY 

In  the  Common  Pleas,  January  17,  1860 

[Reported  in  29  Law  Journal  Reports,  Common  Pleas,  153] 

The  first  count  of  the  declaration  stated  that,  in  consideration 
that  the  plaintiff  guaranteed  to  the  defendant  that  two  bills  of  ex- 
change of  100/.  and  62?.,  both  drawn  by  Messrs.  C.  W.  Olivier  &  Co. 
upon  Messrs.  Owen  &  Co.,  75  Lower  Thames  Street,  and  both  due  on 
the  23d  of  January,  1859,  would  be  paid  and  retired  by  the  said 
Messrs.  Owen  &  Co.  when  due,  the  defendant  in  return  engaged  and 
guaranteed  to  the  plaintiff  the  repayment  of  the  sum  of  300?.  towards 
the  payment  of  Scotch  whiskeys,  as  follows:  6  puncheons,  5  hhds., 
4  qr.  casks,  Auchtertool,  2  punchions,  5  hhds.,  8  qr.  casks,  Anderton, 
which  Mr.  B.  Fisse,  of  ]^f orris  Street,  had  ordered,  and  was  about 
to  receive  from  the  plaintiff.  Averment,  by  the  plaintiff,  that  he  had 
performed  all  things  on  his  part  to  be  done  and  performed,  in  pur- 
suance of  the  said  agreement,  to  entitle  him  to  due  performance 
by  the  defendant  of  his  the  defendant's  part  of  the  said  agreement; 
and  that  the  said  two  bills  of  exchange  of  lOOZ.  and  62?.  were  duly 
paid  and  retired  by  the  said  Messrs.  Owen  &  Co.  when  the  same  be- 
came and  were  due  and  payable;  and  that  he  the  plaintiff  delivered 
to  the  said  Mr.  B.  Fisse  the  said  Scotch  whiskeys  in  the  said  agree- 
ment hereinbefore  mentioned,  and  that  the  said  Mr.  E.  Fisse,  al- 
though requested  to  pay  tlie  said  amount  of" 300?.  towards  the  pay- 
ment of  the  said  Scotch  whiskeys,  had  not  paid  for  the  said  Scotch 

»  Bloomer  v.  Bernstein,  L.  R.  9  C.  P.  588;  Morgan  v.  Bain,  L.  R.  10  C.  P.  15;  Mesa 
».  Duffus,  6  Comm.  Cas.  165;  Re  Phenix  Ressompr  Rtccl  Co.,  4  Ch.  D.  108;  Brassel 
V.  Troxcl,  08  111.  App.  l.'il;  R:i[)ph!yc  v.  R;icin<!  Soodor  Co.,  79  Iowa,  220;  Hobbs  v. 
Columbia  Falls  Co.,  159  Mass.  109;  Lennox  v.  Murphy,  171  Mass.  370,  373;  Pardee 
V.  Kanady,  100  N.  Y.  121;  VandcrKrift  v.  Cowlcs  Engineering  Co.,  161  N.  Y.  435; 
Diem  V.  Koblitz,  49  Ohio  St.  41;  Dougherty  Bros.  v.  Central  Bank,  93  Pa.  227;  Lan- 
caster Bank  v.  Huver,  114  Pa.  210,  ace.     See  al.so  Uniform  Sales  Act,  §§63,  54. 

Com[)are  fiJz  jmrle  Pollard,  2  Low.  411;  Stf)kes  v.  Baar,  18  Fla.  656;  Chemical 
Nat.  Hank  v.  World's  Fair  Exposition,  170  III.  82;  C.  F.  Jowctt  Pub.  Co.,  159  Mass. 
517  Bank  Comraissionera  v.  New  Hampshire  Trust  Co.,  69  N.  H.  621. 


SECT.    II  ]  CHRISTIE    V.    BORELLY  641 

whiskeys,  nor  the  said  sum  of  300/.  or  any  part  thereof,  and  the 
same  still  remained  wholly  due  and  unpaid;  yet  that  the  defendant 
had  disregarded  and  broken  his  said  promise  in  this,  that  he  had  not 
paid,  or  caused  to  be  paid,  to  the  plaintiff  the  said  sum  of  SOOl.  or 
any  part  thereof,  but,  on  the  contrary  thereof,  wholly  neglected  and 
refused  so  to  do. 

The  defendant  pleaded  (inter  alia)  secondly,  to  the  said  first  count, 
that,  although  the  said  debt  and  sum  of  300L  in  the  said  first  count 
mentioned,  repayment  whereof  the  defendant  engaged  and  guaran- 
teed to  the  plaintiff,  was  not  payable,  and,  by  the  terms  of  the  said 
order  of  the  said  Mr.  B.  Fisse,  was  not  payable  until  after  the  said 
two  bills  drawn  by  Messrs.  C.  W.  Olivier  upon  Messrs.  Owen  &  Co., 
and  guaranteed  by  the  plaintiff,  became  due  and  payable,  as  the 
plaintiff  and  the  defendant,  at  the  time  of  the  making  of  the  said 
mutual  agreement  and  guarantees,  well  knew;  yet  the  said  two  bills 
of  exchange  of  1001.  and  621.,  in  the  said  first  count  mentioned,  were 
not  duly  or  at  any  time  paid  or  retired  by  the  said  Messrs.  Owen, 
of  which  the  plaintiff  had  due  notice,  but  never  at  any  time  paid  or 
retired  the  said  bills.    Issue  thereon. 

The  defendant  having,  at  the  trial,  obtained  a  verdict  in  his  favor 
on  the  issue  taken  on  the  second  plea,  the  Court,  in  Michaelmas  Term 
last,  on  the  application  of  Edward  James,  granted  a  rule  nisi  to 
enter  judgment  for  the  plaintiff  on  such  issue  non  obstante  veredicto, 
on  the  ground  that  the  said  second  plea  was  no  answer  to  the  action. 
Against  this  rule,  ' 

Petersdorf,  Serjt.,  and  Garth  now  showed  cause. 

Grant,  in  support  of  the  rule. 

Erle,  C.  J.  I  am  of  opinion  that  this  rule  should  be  made  ab- 
solute: and  that  the  plaintiff  is  entitled  to  have  judgment  entered 
for  him  non  obstante  veredicto.  The  real  question  is,  whether  the 
promises  are  independent  promises,  or  whether  they  are  mutual 
promises,  their  performance  being  mutually  the  consideration  for 
each  other.  It  appears  to  me  that  they  are  independent  promises. 
The  defendant  guarantees  the  repayment  of  300/.  towards  the  pay- 
ment of  certain  whiskey  being  paid  for  when  due;  and  the  plaintiff 
guarantees  that  two  bills  of  exchange  of  100/.  and  62/.  shall  be  paid 
when  due.  It,  therefore,  appears  that  the  damages  in  respect  of 
the  breach  on  one  side  must  be  very  different  from  the  damages  aris- 
ing from  the  breach  on  the  other  side;  on  the  one  side  they  would 
be  300/.,  and  on  the  other  only  162/.;  it  is  consequently  apparent,  on 
the  face  of  the  contract  itself,  that  it  was  not  intended  by  the  parties 
that  performance  of  the  one  stipulation  should  be  a  condition  prece- 
dent to  performance  of  the  other.  The  question  is,  to  my  mind,  one 
entirely  of  fact,  namely,  what  was  the  intention  of  the  parties  to 
this  contract?  The  rules  of  law  are  agreed  on  by  both  sides,  and  it 
is  only  a  question  of  construction.  On  the  construction  of  this  con- 
tract, I  am  of  opinion  that  the  performance  of  the  plaintiff's  promise 

21 


642  LEAVITT    V.    FLETCHER  [CHAP.   V 

was  not  a  condition  precedent;  and,  therefore,  that  the  second  plea 
is  no  answer,  and  consequently  that  the  rule  ought  to  be  made  abso- 
lute. 

Williams,  J.  The  rules  of  law  are  now  well  established,  and  the 
object  is  to  discover  in  each  case  what  is  the  intention  of  the  parties. 
If  it  had  appeared  from  the  contract  in  the  present  case,  that  the 
undertaking  of  the  plaintiff  had  been  to  pay  absolutely  when  the 
bills  became  due,  the  case  would  have  been  a  very  different  one  from 
what  it  is.  What,  however,  the  plaintiff  undertakes  is,  only  to  pay 
if  Messrs.  Owen  do  not  retire  the  bills;  therefore,  the  compensation 
to  be  paid  by  the  plaintiff,  in  consequence  of  such  third  party  not 
doing  their  duty,  is  a  matter  which  must  have  to  be  afterwards  ascer- 
tained; and  is  it  likely  that  it  was  the  intention  of  the  parties  to 
this  contract  that  the  defendant's  performance  was  not  to  take  place 
until  after  such  amount  of  compensation  had  been  ascertained?  It 
is,  I  think,  obvious  that  such  could  not  have  been  the  intention  of  the 
parties;  for  Messrs.  Owen  might  have  retired  the  bills  when  due, 
and  so  there  would  have  been  nothing  at  all  payable  by  the  plaintiff. 

WiLLES,  J.  I  am  of  the  same  opinion.  It  appears  to  me  that 
the  promise  only  on  the  one  side  is  the  consideration  for  the  promise 
on  the  other  side;  and  that  the  plea  is,  therefore,  a  bad  plea. 

Rule  absolute} 


DANIEL  G.  LEAVITT  v.  CHAKLES  G.  FLETCHEE 

Supreme  Judicial  Coubt  of  Massachusetts,  January  Term,  1865 

[Reported  in  10  Allen,  119] 

Contract  brought  by  a  lessee  against  a  lessor  to  recover  damages 
for  a  breach  of  the  covenant  to  repair.  The  material  portions  of  the 
lease  and  the  agreed  facts  upon  which  the  case  was  submitted  to  the 
determination  of  the  whole  court  are  stated  in  the  opinion. 

D.  S.  Richardson  &  B.  J.  Williams,  for  the  plaintiff. 

T.  H.  Sweetser  &  W.  8.  Gardner,  for  the  defendant. 

Gray,  J.  By  the  indenture  upon  which  this  action  is  brought  the 
defendant  "does  lease,  demise,  and  let"  to  the  plaintiff  a  brick  stable 
standing  on  the  lessor's  own  land,  and  a  wooden  carriage-house 
standing  on  land  held  by  him  under  a  lease  from  others,  with  a  pro- 
vision that  if  they  shall  require  the  termination  of  that  lease  and 
the  removal  of  the  carriage-liouso,  the  plaintiff'  may  terminate  this 
lease.  The  lessor  "agrees  to  make  all  necessary  repairs  on  the  out- 
side of  said  building."  The  lessee  agrees  to  pay  a  certain  rent 
monthly,  and  to  quit  and  deliver  up  the  premises  to  the  lessor  at 
the  end  of  the  term  "in  as  good  order  and  condition,  reasonable  use 

'  r,U)flOTi  V.  riolflsmifTi,  5  D.  M.  &  G.  757;  MutTml  Life  Ins.  Co.  v.  French,  30  Ohio 
8t.  240;  AlcxiiiiflrT  r.  rontirKntal  Ins.  Co.,  07  Wis.  422,  ncc.  Compare  Griggs  v. 
Moors,  ICiH  Mu8a.  .'I.'i4;    Martin  v  Schoonbergcr,  8  W.  &  G.  367. 


SECT.    II  ]  LEAVITT    V.    FLETCHER  643 

and  wearing  thereof,  fire  and  other  unavoidable  casualties  excepted, 
as  the  same  now  are  or  may  be  put  into  by  the  said  lessor;"  not  to 
make  or  suffer  any  waste  thereof;  and  ''that  the  lessor  may  enter 
to  view  and  make  improvements,  and  to  expel  the  lessee,  if  he  shall 
fail  to  pay  the  rent  as  aforesaid,  or  make  or  suffer  any  strip  or  waste 
thereof.  And  said  lessee  is  to  make  all  necessary  repairs  on  the 
inside  of  the  building  at  his  own  expense." 

The  brick  stable  is  the  building  mentioned  in  the  lease  next  before 
the  lessor's  covenant  to  make  outside  repairs;  but  we  have  no  doubt 
that  this  covenant  includes  all  the  premises  leased  by  the  defendant 
to  the  plaintiff,  the  carriage-house  as  well  as  the  stable.  Indeed  in 
the  duplicate  indenture  in  the  hands  of  the  defendant  the  plural 
word  "buildings"  is  substituted  for  "building"  in  this  covenant. 

The  facts  agreed  by  the  parties  are  as  follows :  The  carriage-house 
was  a  frame  covered  with  matched  boards,  had  a  shingled  roof  and 
a  plank  floor,  and  on  the  inside  was  left  uncovered  by  lath  or  plaster. 
While  the  plaintiff  was  occupying  the  premises  under  the  lease,  a 
quantity  of  snow  accumulated  upon  the  roof  of  the  carriage-house, 
until,  at  the  close  of  a  heavy  snow  storm,  the  carriage-house 
fell  from  the  weight  of  snow,  crushing  and  injuring  the  plaintiff's 
carriages  kept  therein.  The  plaintiff  afterwards  demanded  of  the 
defendant  that  he  should  restore  and  rebuild  the  carriage-house,  but 
the  defendant  refused  to  do  so.  There  is  nothing  in  the  case  to  show 
that  any  negligence  of  either  party  contributed  to  the  accident. 

For  five  months  succeeding  the  fall  of  the  carriage-house,  the  plain- 
tiff paid  to  the  defendant,  under  protest,  the  rent  reserved  in  the  lease ; 
and  then,  ceasing  to  pay  rent,  was  ejected  by  the  defendant.  The 
lessee's  covenant  to  pay  rent  was  not  affected  by  the  injury  to  the 
premises,  nor  limited  by  the  exception  of  unavoidable  casualty  in  his 
subsequent  covenant,  and  is  independent  of  the  lessor's  covenant  to 
make  outside  repairs.  Belfour  v.  Weston,  1  T.  E,.  310;  Hare  v. 
Groves,  3  Anstr.  687 ;  Kramer  v.  Cook,  1  Gray,  550,  and  cases  cited. 
And  it  is  not  now  denied  that  the  lessee  was  rightly  required  to  pay 
rent,  and  lawfully  ejected  for  failing  to  pay.^ 

The  lessee  in  this  action  claims  damages,  1st,  for  the  injury  occa- 
sioned by  the  fall  of  the  carriage-house;  2dly,  for  the  failure  of  the 
lessor  to  rebuild  it,  after  being  expressly  requested  so  to  do. 

It  is  well  settled  that  in  a  lease  of  real  estate  no  covenant  is  implied 

1  Dawson  v.  Dyer,  5  B.  &  Ad.  584;  Suplice  v.  Farnsworth,  7  M.  &  G.  576;  Edge 
V.  Boileau,  16  Q.  B.  D.  120;  Lewis  v.  Chisholm,  68  Ga.  40;  Palmer  v.  Meriden  Brit- 
tannia  Co.,  188  111.  508;  Thomson-Houston  Co.  v.  Durant  Land  Co.,  144  N.  Y.  34; 
Prescott  V.  Ottenstatter,  85  Pa.  434,  ace.  But  if  a  landlord  covenants  to  keep  premises 
in  repair,  and  nevertheless  allows  the  premises  to  become  untenantable,  the  tenant 
may  abandon  them,  and  thereby  terminate  his  liability  for  rent.  Lewis  v.  Chisholm, 
68  Ga.  40;  Bizzell  v.  Lloyd,  100  111.  214;  Sheary  v.  Adams,  18  Hun,  181  (statutory); 
McCardeU  v.  Williams,  19  R.  I.  701. 

A  promise  to  put  in  repair  was  held  a  condition  precedent  to  the  obligation  of  the 
lessee  to  take  the  premises  in  Hickman  v.  Rayl,  55  Ind.  212.  And  so  to  the  obliga- 
tion of  one  who  had  agreed  to  purchase.  Tripp  v.  Smith,  180  Mass.  122.  Compare 
Shenners  v.  Pritchard,  104  Wis.  257. 


644  BLANDFORD    V.   ANDREWS  [CHAP.    V 

that  the  lessor  shall  keep  the  premises  in  repair  or  otherwise  fit  for 
occupation.  Dutton  v.  Gerrish,  9  Gush.  89;  Foster  v.  Peyser,  id. 
242,  and  cases  cited;  Welles  v.  Castles,  3  Gray,  326.  The  express 
covenant  of  the  defendant  in  this  case  is  only  "to  make  all  necessary 
repairs  on  the  outside  of  the  building."  He  does  not  covenant  that 
the  outside  shall  not  give  way,  hut  that,  if  it  does,  he  will  repair  it. 
He  cannot  therefore  be  held  liable  for  the  damages  occasioned  by 
the  fall  of  the  building. 

But  it  has  been  the  established  rule  of  the  common  law  for  ages 
that  an  express  covenant  to  repair  binds  the  covenantor  to  make 
good  any  injury  which  human  power  can  remedy,  even  if  caused  by 
storm,  flood,  fire,  inevitable  accident,  or  the  act  of  a  stranger.  Year- 
book 40  Ed.  III.  6;  Dyer,  33a;  Paradine  v.  Jane,  Aleyn,  27;  s.  c. 
Style,  47;  Compton  v.  Allen,  Style,  162;  Bullock  v.  Dommitt,  6 
T.  E.  650;  Green  v.  Eales,  2  Q.  B.  225;  s.  c.  1  Gale  &  Dav.  468; 
Phillips  V.  Stevens,  16  Mass.  238;  Bigelow  v.  Collamore,  5  Gush.  231; 
Allen  V.  Culver,  3  Denio,  294;  Dermott  v.  Jones,  2  Wallace,  7,  8. 
The  defendant's  covenant  contains  no  exception  of  natural  causes  or 
inevitable  accident.  "The  outside  of  the  building"  includes  the  whole 
outer  shell  of  the  building,  or  external  inclosure  of  roof  and  sides. 
Green  v.  Eales,  above  cited.  "The  necessary  repairs  on  the  outside" 
are  those  which  will  make  the  building  outwardly  complete.  When 
those  are  made,  then,  and  not  before,  the  lessee  will  be  bound  by  his 
covenant  "to  make  all  necessary  repairs  on  the  inside."  The  fact 
that  rebuilding  the  outside  will  so  far  replace  the  whole  building  as 
to  leave  very  little  to  be  done  on  the  inside,  and  thus  make  the  per- 
formance of  the  lessee's  covenant  very  easy,  does  not  in  any  degree 
excuse  the  lessor  from  first  performing  his  covenant.  The  defendant 
is  therefore  responsible  for  the  damages  suffered  by  the  plaintiff  by 
reason  of  the  defendant's  refusal  to  rebuild,  from  the  time  of  that 
refusal  until  the  ejectment  of  the  plaintiff  for  not  paying  his  rent; 
and  according  to  the  agreement  of  the  parties  the  case  must  stand  for 
the  assessment  of  those  damages. 

Judgment  for  the  plaintiff  accordingly} 


BLANDFORD  v.  ANDREWS 

In  thk  Queen's  Bench,  Michaelmas  Term,  1599 

{Reported  in  Crohe  Elizabeth,  694] 

Dkbt  on  an  obligation  of  80?.  conditioned  that  if  the  defendant  pro- 
cur(!d  a  marriage  to  be  had  between  the  plaintiff  and  one  Bridget 
Palnifr,  at  or  before  the  feast  of  St.  Bartholomew  then  next  follow- 
ing, tlint  tliori,  ^c.     Tlie  defendant  pleadet]  that  the  plaintiff,  before 

'  Ah  tf)  the  li.il.ility  of  a  covc-nantor  to  repair  the  consequences  of  extraordinary 
caflualti(!B,  wm  .'i  Williston  Contracts,  §  1967. 


SECT.    II  ]  UNITED   STATES    V.    PECK  645 

that  feast,  came  to  the  said  Bridget  Palmer  and  called  her  whore; 
and  told  her  that,  if  he  married  her,  he  would  tie  her  to  a  post;  and 
used  other  opprobrious  words  unto  her;  by  reason  whereof  the  de- 
fendant could  not  procure  the  said  marriage  before  the  said  feast. 
Whereupon  the  plaintiff  demurred.  Williams,  Serjt.,  moved  that 
this  was  not  any  plea;  for  he  hath  not  shown  that  he  used  his  en- 
deavor to  procure  the  marriage;  for  it  may  be  that,  notwithstanding 
these  words,  they  would  have  intermarried.  And  of  that  opinion  was 
all  the  Court;  for  the  defendant  ought  to  show  that  there  was  not 
any  default  in  him,  and  that  he  did  as  much  as  in  him  lay  to  pro- 
cure it;  otherwise  he  doth  not  save  his  obligation;  and  these  words 
spoken  before  the  day,  at  one  time  only,  are  not  such  an  impediment 
but  that  the  marriage  might  have  taken  eifect.  Wherefore  it  was 
adjudged  for  the  plaintiff. 


UN^ITED  STATES  v.  PECK 

PECK  V.  UNITED  STATES 

SuPEEME  Court  of  the  United  States,  October  Term^  1880 

{^Reported  in  102  United  States,  64] 

Appeals  from  the  Court  of  Claims. 

Peck,  the  claimant,  entered  into  a  contract  with  the  proper  mili- 
tary officer  to  fiirnish  and  deliver  a  certain  quantity  of  wood  and  hay 
to  the  military  station  at  Tongue  River,  in  the  Yellowstone  region, 
on  or  before  a  specified  day.  He  furnished  the  wood,  but  failed  to 
furnish  the  hay,  which  was  furnished  by  other  parties  at  an  increased 
expense.  The  accounting  officers  of  the  government  claimed  the 
right  to  deduct  from  the  claimant's  wood  account  the  increased  cost 
of  the  hay.  Whether  J;his  could  lawfully  be  done  was  the  principal 
question  in  the  cause. 

The  Court,  upon  an  examination  of  the  contract  and  of  the  sur- 
rounding circumstances  of  the  case,  were  of  opinion  that  the  con- 
tracting parties,  in  stipulating  relating  to  hay,  contemplated  hay 
to  be  cut  in  the  Yellowstone  valley,  and  specially  at  the  Big  Meadows 
near  the  mouth  of  Tongue  River,  —  which  was,  indeed,  the  only  hay 
which  the  claimant  could  have  procured  within  hundreds  of  miles, 
and  which  it  was  known  he  relied  on.  The  government  officers, 
fearing  that  the  claimant  would  not  be  able  to  carry  out  his  contract, 
and  it  being  absolutely  necessary  that  the  hay  should  be  had,  allowed 
other  parties  to  cut  the  hay  at  Big  Meadows,  and  therewith  to  supply 
the  Tongue  River  station.  The  claimant  complained  of  the  double 
injury:  first,  of  giving  the  hay  which  he  relied  on  to  other  parties; 
and,  secondly,  of  charging  him  for  the  increased  expense  of  getting 
it.     The  question  was  whether  the  surrounding  circumstances  could 


646  UNITED   STATES    V.    PECK  [CHAP.   V 

be  taken  into  consideration  in  the  claimant's  excuse,  although  the 
contract  made  no  mention  of  the  source  from  which  he  was  to  procure 
the  hay  to  be  supplied  by  him  to  the  government. 

Mr.  Assistant  Attorney-General  Smith,  for  the  United  States, 

Mr.  John  B.  Sanborn,  contra. 

Mr.  Justice  Bradley,  after  stating  the  case,  delivered  the  opinion 
of  the  Court. 

We  think  that  the  facts  of  the  case  clearly  bring  it  within  the  rules 
allowing  the  introduction  of  parol  evidence :  first,  for  the  purpose 
of  showing,  by  the  surrounding  circumstances,  the  subject-matter  of 
the  contract,  namely,  hay  to  be  cut  and  gathered  in  the  region  where 
it  was  to  be  delivered;  secondly,  for  the  purpose  of  showing  the  con- 
duct of  the  agents  of  the  defendants  by  which  the  claimant  was 
encouraged  and  led  on  to  rely  on  a  particular  means  of  fulfilling  his 
contract  until  it  was  too  late  to  perform  it  in  any  other  way;  and 
then  was  prevented  by  these  agents  themselves  from  employing  those 
means.  The  supply  of  hay  which  he  depended  on,  and  which  under 
the  circumstances  he  had  a  right  to  depend  on,  was  taken  away  by 
the  defendants  themselves.  In  other  words,  the  defendants  prevented 
and  hindered  the  claimant  from  performing  his  part  of  the  contract. 

That  the  subject-matter  of  a  contract  may  be  shown  by  parol  evi- 
dence of  the  surrounding  circumstances,  see  Bradley  v.  Washington, 
Alexandria,  &  Georgetown  Steam  Packet  Co.,  13  Pet.  89;  Thoring- 
ton  V.  Smith,  8  Wall.  1 ;  Maryland  v.  Railroad  Company,  22  id. 
105;  Reed  r.  Insurance  Company,  95  U.  S.  23;  1  Greenl.  Evid. 
sect.  277;  Taylor,  Evid.  sect,  1082.  And  that  the  conduct  of  one 
party  to  a  contract  which  prevents  the  other  from  performing  his 
part  is  an  excuse  for  non-performance,  see  Addison,  Contracts,  sect. 
326;  Fleming  v.  Gilbert,  3  Johns.  (N.  Y.)  528.  In  the  case  last 
cited,  the  defendant  was  sued  on  a  bond  obliging  him  by  a  certain 
time  to  procure  and  cancel  a  mortgage  of  the  plaintiff  and  deliver 
the  same  to  him.  The  defendant  was  allowed  to  prove  by  parol  that 
he  procured  the  mortgage,  and,  having  inquired  of  the  plaintiff 
what  he  should  do  with  it,  was  directed  to  place  it  in  the  hands  of  a 
third  person.  This  was  held  to  be  an  excuse  for  not  having  fully 
performed  the  condition.  Judge  Thompson  said:  "It  is  a  sound 
principle  that  he  who  prevents  a  thing  being  done  shall  not  avail 
himself  of  the  non-performance  he  has  occasioned.  Had  not  the 
plaintiff  dispensed  with  a  further  compliance  with  the  condition  of 
the  bond,  it  is  probable  that  the  defendant  would  have  taken  meas- 
ures to  ascertain  what  steps  wert^  requisite  to  get  the  mortgage  dis- 
charged of  record,  and  would  have  literally  complied  with  the  con- 
dition of  the  bond."  So  when  A.  gave  to  B.  a  bond  to  convey  certain 
premises,  but  they  subsequently  agreed  by  parol  to  rescind  the  con- 
tract, aiif]  A.  th(!reu))on  sold  the  premises  to  a  third  person,  it  was 
hehl  that  tboiigli  the  Nond  was  not  cancelled  or  given  up,  nor  any 
of  tlie  j)aper9  changed,  yet  by  the  parol  agreement  and  the  acts  of 


SECT.    Il]  SIR   ANTHONY    MAYNE's    CASE  647 

the  parties  under  it  the  bond  was  discharged.  Dearborn  v.  Cross, 
7  Cow.  (N.  Y.)  48;  and  see  2  Cowen  Hill's  Notes  to  Phillips  on  Evid. 
605.    The  principle  involved  in  these  cases  is  applicable  to  the  present. 

Judgment  affirmed} 


SIR  ANTHONY  MAYNE'S  CASE 

In  the  Queen's  Bench,  Easter  Tekm,   1596 

[Reported  in  5  Reports,  20fe] 

The  case  in  effect  was,  that  Sir  Anthony  Mayne  did  lease  certain 
land  to  Scott  for  twenty-one  years  by  indenture,  and  covenanted  that 
at  any  time  during  the  life  of  Scott,  upon  surrender  of  his  lease.  Sir 
Anthony,  &c.,  would  make  a  new  lease  during  the  residue  of  the 
years,  and  bound  himself  to  perform  the  covenants,  &c.  And  now 
in  debt  on  the  said  obligation  by  Scott  against  Sir  Anthony,  he 
pleaded  that  Scott  did  not  surrender,  &c.  To  which  Scott  replied, 
and  said,  that  after  the  said  lease  Sir  Anthony  had  accepted  a  fine 
sur  conusans  de  droit  come  ceo,  &c.,  and  by  the  same  fine  granted 
and  rendered  the  land  to  the  conusee  for  eighty  years :  upon  which 
the  defendant  did  demur  in  law.  And  it  was  adjudged  for  the  plain- 
tiff.    And  in  this  case  three  points  were  resolved :  — 

1.  That  Sir  Anthony  Mayne  had  broken  his  covenant  without  any 
surrender  made;  for,  by  the  said  fine  levied  by  him  for  eighty  years, 
he  had  disabled  himself  either  to  take  a  surrender  or  to  make  a  new 
lease;  and  the  law  will  not  enforce  any  one  to  do  a  thing  which  will 
be  vain  and  fruitless;  lex  neminem,  cogit  ad  vana  seu  inutilia  pera- 
genda:  but  it  would  be  vain  to  compel  him  to  make  a  surrender  to 
him  Avho  cannot  take  it;  and  although  the  lessee  in  this  case  by  the 
words  of  the  indenture  ought  to  do  the  first  act,  soil,  to  make  the 
surrender,  yet  when  the  lessor  hath  disabled  himself,  not  only  to 
take  the  surrender,  but  also  to  make  a  new  lease  according  to  the 
covenant,  for  this  cause  the  lessor's  covenant  is  broken  without  any 
surrender  made.  Vide  32  E.  III.,  Barre  264,  and  21  E.  IV.,  55  a. 
If  you  are  bound  to  enfeoff  me  of  the  manor  of  D.  before  such  a 
feast,  if  you  make  a  feoffment  of  the  said  manor  to  another  before 

'  Lancashire  v.  Killingworth,  1  Lord  Ray.  686:  Mackay  v.  Dick,  6  App.  Gas.  251; 
Anvil  Mining  Co.  v.  Humble,  153  U.  S.  540,  552;  Kingman  v.  Western  Mfg.  Co.,  92 
Fed.  Rep,  486;  Tennessee,  &c.  R.  R.  Co.  v.  Danforth,  112  Ala.  80;  WoK  v.  Marsh,  54 
Cal.  228:  Love  v.  Mabury,  59  Cal.  484:  Griffith  v.  Happersberger,  86  Gal.  605;  Dur- 
land  V.  Pitcaim,  51  Ind.  426;  King  v.  King,  69  Ind.  467:  Dill  v.  Pope,  29  Kan.  289; 
Jones  V.  Walker,  13  B.  Mon.  163;  De  La  Vergne  Co.  v.  New  Orleans  Co.,  51  La  Ann. 
1733:  North  v.  Mallory,  94  Md.  305:  Grice  v.  Noble,  59  Mich.  515;  Lee  v.  Briggs,  99 
Mich.  487:  Gallagher  v.  Nichols,  60  N.  Y.  438:  Nichols  v.  Scranton  Steel  Co.,  137 
N.  Y  471:  Baker  v.  Woman's  Union,  57  N.  Y.  App.  Div.  290:  Guilford  v.  Mason 
(R.  1)  53  Atl.  Rep.  284:  Olson  v.  Snake  River  Co.,  22  Wash.  139;  Jones  v.  Singer 
Mfg.  Co.,  38  W.  Va.  147.  ace. 

See  also  District  of  Columbia  v.  Camden  Iron  Works,  181  U.  S.  453,  Holt  v.  Silver, 
169  Mass.  435;    59  Am.  St.  Rep.  283,  n. 


648  SIR   ANTHONY    MAYNE's    CASE  [CHAP.   V 

the  said  feast,  you  have  forfeited  your  obligation,  although  you  re- 
purchase the  land  again  before  the  feast,  because  you  were  once 
disabled  to  make  the  feoffment.  And  therewith  agreeth  Temp.  E.  I., 
Covenant  29.  A  man  leased  a  manor  for  years,  and  the  lessee  cove- 
nanted to  keep  the  houses  of  the  manor  and  as  much  as  was  in  the 
manor  in  as  good  plight  as  he  found  them;  during  the  term  the 
lessee  committed  waste  in  the  houses,  and  in  cutting  of  oaks ;  the  lessor 
brought  an  action  of  covenant  before  the  end  of  the  term  for  the 
oaks,  because  for  them  it  was  impossible  that  the  covenant  should 
be  performed;  otherwise  it  is  of  the  houses,  and  therewith  agree  F. 
I^.  B.  145  K,  and  13  E.  III.,  Tit.  Covenant  2. 

2.  It  was  resolved,  if  a  man  seised  of  lands  in  fee  covenants  to 
enfeoff  J.  S.  of  them  upon  request,  and  afterwards  he  makes  a  feoff- 
m.ent  in  fee  of  the  said  lands;  now  in  this  case  J.  S.  shall  have  an 
action  of  covenant  without  request.  And  that  in  effect  is  all  one  with 
the  principal  cause. 

3.  It  was  resolved  that,  in  the  case  at  bar,  if  the  said  term  of  eighty 
years  were  but  an  interest  of  a  future  term,  so  that  Scott  notwith- 
standing that  might  make  the  surender,  yet  in  such  case  Scott  should 
have  an  action  of  covenant  without  making  any  surrender;  for  true 
it  is  that  he  may  surender ;  but  also  true  it  is  that  Sir  Anthony  after 
such  surrender  canot  make  the  new  lease,  which  was  the  effect  that 
the  surrender  should  produce;  and  therefore  inasmuch  as  the  lessor 
hath  disabled  himself  to  make  a  new  lease,  which  is  the  effect  and 
end  of  the  surrender,  and  that  which  he  ought  to  do  in  his  part,  the 
lessee  shall  not  be  enforced  to  make  the  surrender,  which  is  the 
first  thing  to  be  done  on  his  part,  for  by  the  surrender  he  would  lose 
his  old  term  without  a  possibility  of  having  the  new  according  to  the 
lessor's  covenant.  And  therewith  agreeth  14  H.  IV.,  19  a.  J.,  person 
of  the  church  of  C,  was  bound  in  an  obligation  of  100?.  to  the  prior 
of  E. ;  the  condition  was  that  if  the  parson  resign  his  church  within 
certain  time  to  the  prior  for  a  certain  pension  as  they  could  agree, 
that  then  the  obligation  should  be  void ;  and  afterwards  and  within 
the  time  the  prior  and  parson  agreed  of  a  pension  of  51.,  yet  the 
parson  did  refuse  to  resign.  And  the  opinion  of  the  whole  Court  was 
that,  although  th(!y  had  agreed  of  the  pension,  yet  the  parson  is  not 
bound  to  resign  until  the  prior  hath  tendered  him  a  deed  of  the  said 
pension,  by  which  he  might  be  sure  of  it.^ 

*  "If  a  man  bind.s  himsulf  to  do  certain  acts  which  ho  afterwards  renders  himself 
unaljle  to  pcjrform,  Ik?  thcrnliy  disix^nses  with  tli(^  performance  of  conditions  prece- 
dent to  th(r  act  which  hf;  has  ho  rendered  himself  vmable  to  perform."  Per  Maule,  J., 
Sands  v.  Clarke,  8  C.  R.  761,  702,  citing  Maync's  case,  sujpra;  and  see  Newcomb  v. 
Brackc^tt,  10  Mass.  101. 


SECT.    Il]  SHALES    V.    SEIGNORET  649 


SHALES  V.  SEIGNOEET 

In  the  King's  Bench,  Easter  Teem,  1699 

[Reported  in  1  Lord  Raymond,  440] 

Covenant  upon  articles  of  agreement.  The  plaintiff  declares  that  it 
was  covenanted  and  agreed  between  him  and  the  defendant  that  he,  in 
consideration  of  twenty  guineas  by  the  defendant  to  him  then  paid, 
should  transfer  to  the  defendant  before  or  upon  the  19th  of  No- 
vember, 1695,  1,000/.  of  bank  stock;  and  that  the  defendant  cove- 
nanted with  the  plaintiff  to  accept  it  upon  notice  of  three  days,  and 
to  pay  to  the  plaintiff  for  it  940L;  and  then  the  plaintiff  avers  that 
no  bank  stock  is  transferable  by  law  but  in  the  office  of  the  Bank 
of  England,  in  the  presence  of  both  the  parties;  and  that  he  gave 
three  days'  notice  to  the  defendant  that  he  would  transfer  to  him 
the  bank  stock  in  the  office  of  the  Bank  the  19th  of  November;  and 
that  he  attended  there  the  whole  day  to  have  transferred  it;  but 
that  the  defendant  did  not  come  to  accept  it;  for  which  he  brings 
his  action  for  the  940?.,  &c.  The  defendant,  after  oyer  of  the  articles, 
pleads  that  the  plaintiff  nor  none  of  his  assigns  had  any  interest  in 
any  bank  stock  upon  the  18th  of  November,  &c.  The  plaintiff 
demurs.  And  the  whole  Court  was  of  opinion  that  the  plea  was 
ill;  because,  though  the  plaintiff  had  not  any  bank  stock  upon  the 
18th  of  November,  yet,  if  he  had  it  the  19th,  he  might  have  performed 
the  contract  within  the  time ;  for  the  covenant  was  not  that  he  should 
transfer  any  particular  1,000/.  of  bank  stock  which  he  had  at  the 
time  of  the  covenant,  but  any  1,000/.  of  stock.  But  then  the  whole 
Court  held :  1.  That  this  action  will  not  lie  for  the  plaintiff  in  this 
case,  because  it  appears  that  the  plaintiff  has  not  transferred;  and, 
without  transfer  to  the  defendant,  the  defendant  is  not  bound  to 
pay  the  money,  for  the  money  was  to  be  paid  upon  the  transfer; 
and,  therefore,  no  transfer,  no  money.  Co.  Lit.  304  ;^  Dyer,  371 ; 
2  Mod.  266,  Otway  v.  Holdips.  But  the  matter  in  the  declaration 
might  have  been  a  good  excuse  for  the  plaintiff,  if  the  defendant  had 
sued  him  for  not  transferring  the  bank  stock;  or  the  plaintiff  might 
have  assigned  his  breach  in  the  non-acceptance  of  the  stock  by  the 
defendant.^  2.  The  Court  held  that  it  did  not  appear  to  the  Court 
but  that  the  bank  stock  was  transferable  at  another  place  than  at  the 
office  of  the  Bank;  for  though  the  act  says  that  no  transfer  shall  be 
but  as  the  king  shall  appoint,  and  the  king  has  appointed  it  to  be 
at  the  office  of  the  Bank,  and  not  in  any  other  place;  yet  that  ought 

^  "If  a  man  plead  performance  of  covenants,  and  the  plaintiff  reply  that  he  did  not 
such  an  act  according  to  his  covenant,  the  defendant  saith  that  he  offered  to  do  it, 
and  the  plaintiff  refused  it;  this  is  a  departure,  because  the  matter  is  not  pursuant: 
for  it  is  one  thing  to  do  a  thing,  and  another  to  offer  to  do  it,  and  the  other  refused 
to  do  it;   therefore  that  should  have  been  pleaded  in  the  former  plea."     Co.  Lit.  304. 

«  Plumb  V.  Taylor,  27  111.  App.  238,  ace. 


650  RIPLEY  V.  m'cluke  [chap.  V 

to  have  been  pleaded,  or,  otherwise,  the  Court  cannot  take  notice  of 
it;  and,  therefore,  notAvithstanding  any  thing  that  appears  here  to 
the  contrary,  the  transfer  might  have  been  in  any  other  place;  and 
then  a  tender  ought  to  have  been  made  to  the  person.  Sir  Bar- 
tholomew Shower  and  Mr.  Northey  argued  for  the  plaintiif ;  Darnall 
and  Wright,  king's  Serjeants,  for  the  defendant. 

Judgment  for  the  defendant. 


RIPLEY  V.  M'CLURE 

In  the  Exchequer,  July  6,  1849 

{^Reported  in  4  Exchequer  Reports,  345] 

Assumpsit  for  breach  by  the  defendant  of  his  agreement  to  buy 
a  third  interest  in  a  cargo  of  tea,  though  the  plaintiff  was  ready  to 
deliver  it  had  not  the  defendant  discharged  him  from  so  doing. 

The  defendant  pleaded  inter  alia  fraud  of  the  plaintiff,  a  denial 
that  he  had  discharged  the  plaintiff  from  delivering  the  tea,  and 
that  if  he  had  done  so  he  retracted  and  withdrew  the  discharge  be- 
fore the  arrival  of  the  vessel. 

At  the  trial  before  Coleridge,  J.,  at  the  Liverpool  Spring  Assizes, 
1849,  the  following  facts  appeared  in  evidence:  The  plaintiff  was  a 
merchant  carrying  on  business  at  Liverpool  in  his  own  name,  and 
also  with  another  person  at  Shanghse,  in  China,  as  commission 
agents,  under  the  firm  of  Thomas  Ripley  &  Co.  The  defendant 
carried  on  business  as  a  merchant  and  general  commission  agent  at 
Belfast,  under  the  firm  of  William  M'Clure  &  Son.  On  the  20th  of 
June,  1846,  the  plaintiff  and  defendant  entered  into  a  joint  adven- 
ture for  importing  a  cargo  of  tea  from  China,  in  which  the  defendant 
was  to  have  one-third  interest.  An  investment  in  goods  was  to  be 
made  to  purchase  the  tea,  which  was  to  be  brought  by  the  ship  Mary 
Ann  Webb;  and  consigned  to  the  defendant  at  Belfast  for  sale  at  the 
customary  commission.  On  the  7th  of  October,  1846,  the  plaintiff 
wrote  to  the  defendant,  inclosing  invoice  of  shipment  to  China,  and 
stating  "the  proceeds  to  be  invested  in  tea  for  the  Belfast  market, 
in  which  you  are  to  take  one-third  interest."  The  plaintiff  subse- 
quently wrote  to  the  defendant,  representing  that  the  adventure  was 
likely  to  prove  a  loss,  and  offering  to  release  him  from  his  engage- 
ment. Some  correspondence  then  took  place,  and  ultimately  this  con- 
tract was  annulled  by  mutual  consent,  and  on  the  16th  of  March, 
1847,  the  agreement  set  out  in  the  declaration  was  substituted.  The 
defendant  became  dissatisfied  with  this  agreement,  and  proposed  to 
the  j)laintiff  to  cancel  it,  and  set  up  the  first  contract.  A  long  cor- 
respondence ensued,  in  which  the  defendant  alleged  that  he  had 
been  induced  to  abandon  the  first  contract  and  enter  into  the  subse- 
quent agreement  by  reason  of  the  misrepresentations  of  the  plaintiff. 


SECT.    II  ]  RIPLEY    V.    m'cLURE  651 

On  the  1st  of  July,  1847,  the  plaintiff  sent  to  the  defendant  copies 
of  the  invoices  of  the  tea,  in  a  letter  containing  the  following  pas- 
sage :  "I  have  had  it  from  yourself,  that  you  do  not  intend  to  comply 
with  the  conditions  of  the  contract  for  the  purchase  of  one-third  of 
this  cargo,  a  threat  which  I  am  inclined  to  believe  you  do  not  intend 
to  act  upon.  On  this  subject  you  will  please  give  me  your  opinion 
in  writing,  and  I  shall  be  glad  if  you  will  assign  your  reasons  for 
choosing  such  a  course,  when  the  contract  on  my  part  will  be  ful- 
filled to  the  letter."  No  answer  having  been  returned  to  this  letter, 
the  plaintiff,  on  the  26th  of  August,  again  wrote  to  the  defendant 
thus :  "As  regards  the  Mary  Ann  Webb,  there  is  nothing  left  for  me 
to  do  but  to  send  her  to  some  other  port  than  Belfast,  since  you  have 
declined  to  fulfill  your  contract."  On  the  30th,  the  defendant  wrote 
in  reply:  "As  to  the  cargo  of  the  Mary  Anne  Webb,  to  one-third  of 
which  we  still  think  we  are  entitled  under  our  first  contract,  we  ob- 
serve you  now  intend  to  send  it  to  a  different  port.  I  am  willing, 
and,  such  being  the  case,  I  am  glad  this  unpleasant  matter  should 
be  thus  ended;  and  I  am  willing  to  waive  any  claim  I  may  have 
under  either  the  first  or  second  contract."  In  reply,  the  plaintiff 
wrote  that  it  was  not  his  intention  to  release  the  defendant  from  his 
contract  of  purchase.  On  the  1st  of  September,  the  defendant  wrote 
to  the  plaintiff  as  follows :  "I  give  you  notice,  that  I  am  entitled  to 
have  these  teas  delivered  at  Belfast,  either  under  the  first  or  second 
contract,  and  that,  if  you  fail  to  deliver  them  accordingly,  I  shall 
hold  myself  released  from  all  contracts  respecting  them."  On  the 
21st  of  September,  the  Mary  Ann  Webb  arrived  in  Belfast  Lough 
with  the  cargo  of  tea  on  board;  and  the  defendant,  having  been  in- 
formed of  it,  wrote  to  the  plaintiff,  stating  that  he  was  "willing  to 
dispose  of  the  cargo  and  appropriate  the  proceeds  according  to  the 
interests  of  both  parties  therein."  The  defendant  also  on  the  same 
day  served  the  captain  of  the  vessel  with  a  copy  of  this  letter.  In 
consequence,  however,  of  directions  from  the  plaintiff,  the  vessel 
sailed  from  Belfast  on  the  24th  of  September  for  London,  without 
delivering  any  portion  of  her  cargo  to  the  defendant.  The  copy  of 
the  invoice  sent  to  the  defendant  was  headed  thus :  "Invoice  of  Con- 
gou tea  shipped  on  board  the  Mary  Ann  Webb,  Silk,  master,  for 
Belfast,  and  consigned  to  Thomas  Ripley,  Esq.,  Liverpool."  It  after- 
wards appeared  .that,  in  the  heading  of  the  original  invoice,  the 
words  "on  account  and  risk  of  Messrs.  M'Clure  &  Son  and  Thomas 
Ripley"  were  inserted  after  the  word  "Belfast."  The  bills  of  lading 
stated  that  the  goods  were  bound  for  Belfast  market,  and  consigned 
unto  Thomas  Ripley  or  his  assignee. 

It  was  submitted,  on  the  part  of  the  plaintiff,  that  the  above  cor- 
respondence proved  that  the  defendant  had  refused  to  perform  the 
contract  declared  on,  and  had  discharged  the  plaintiff  from  deliver- 
ing the  tea  at  Belfast.  On  behalf  of  the  defendant  it  was  contended, 
that  he  had  not  refused  to  perform  the  contract  in  question,  and 


652  RIPLEY  V.  m'clure  [chap.  V 

that,  so  far  from  discharging  the  plaintiff  from  delivering  the  tea 
at  Belfast,  he  had  insisted  on  the  plaintiff  delivering  it  there. 

The  following  questions  were  put  by  the  learned  judge,  in  writing, 
to  the  jury,  who  returned  the  accompanying  answers :  — 

First,  Was  the  plaintiff  guilty  of  any  misrepresentation  as  to  the 
circumstances  connected  with  the  former  contract,  by  which  the  de- 
fendant was  induced  to  enter  into  the  second?     No. 

Second,  Did  the  defendant  at  any  time  refuse  to  perform  the  second 
contract?     Yes,  by  implication. 

Third,  Did  the  defendant  ever  withdraw  that  refusal  before  the 
ship  arrived  at  Belfast?     No. 

Fourth,  "Was  the  plaintiff  willing  to  deliver,  according  to  the 
second  contract,  down  to  the  time  of  the  defendant's  refusal  to  per- 
form the  contract?  Yes,  but  not  after  the  arrival  of  the  vessel  at 
Belfast,  the  defendant  having  repudiated  the  contract. 

Fifth,  To  and  on  whose  account  were  the  teas  consigned  ?  Thomas 
Eipley. 

On  these  findings,  the  learned  judge  directed  a  verdict  for  the 
defendant  on  the  issue  raised  by  the  fifth  plea,  and  for  the  plaintiff 
on  the  other  issues. 

Enowles,  in  Easter  Term  last,  obtained  a  rule  on  the  part  of  the 
defendant  for  a  new  trial,  on  the  ground  of  the  verdict  being  against 
evidence,  and  also  upon  the  following  alleged  grounds  of  misdirec- 
tion :  First,  that  the  learned  judge  had  told  the  jury,  with  reference 
to  the  letter  of  the  first  of  July,  in  which  the  plaintiff  demanded  that 
the  defendant  should  state  in  writing  whether  he  intended  to  comply 
with  the  contract,  that  the  plaintiff  had  a  right  to  an  answer  from 
the  defendant.  Secondly,  that  the  learned  judge  was  wrong  in  putting 
the  question  to  the  jury  whether  the  defendant  at  any  time  refused 
to  perform  his  contract ;  but  the  question  ought  to  have  been,  whether 
he  did  so  refuse,  after  the  arrival  of  the  vessel  at  Belfast,  and  that 
the  learned  judge  was  not  correct  in  directing  a  verdict  to  be  entered 
for  the  plaintiff  on  the  third  issue,  upon  the  answers  which  had  been 
returned  by  the  jury.  Thirdly,  that  the  mode  in  which  the  question 
was  put  to  the  jury,  as  to  the  consignment  of  the  teas  to  the  plain- 
tiff was  improper.  A  rule  was  also  obtained  to  arrest  the  judgment, 
on  the  ground  that  the  fifth  plea  was  found  for  the  defendant,  and 
was  a  complete  answer  to  the  action. 

In  the  Vacation  Sittings,  after  the  last  Term  (June  19  and  21), 

Martin  and  /.  Henderson  showed  cause. 

Knowlc-H,  Crompton,  Unthank,  and  Mellish,  in  support  of  the  rule. 

The  judgmtitit  of  the  Court  was  delivered  by 

Parke,  B.  A  motion  for  a  new  trial  was  made  in  this  case,  on 
the  ground  of  misdirection,  and  the  verdict  being  against  evidence. 
Also  a  motion  to  arrest  the  judgment,  on  the  ground  that  the  issue 
on  the  fifth  plea  was  found  for  the  (h^ftuidant,  and  was  an  answer 
to  the  action.     (After  stating  the  pleadings,  his  lordship  proceeded)  : 


SECT.    II ]  RIPLEY    V.    m'cLURE  653 

According  to  the  statement  of  the  contract  in  the  declaration,  and 
a§  it  was  proved,  it  was  an  executory  contract  to  purchase  one-third 
of  a  cargo  of  teas  exported  from  China,  capable  of  being  ascertained, 
such  purchase  to  be  made  on  certain  contingencies,  viz.,  the  arrival 
of  the  cargo  at  Belfast,  the  absence  of  previous  contracts  in  China 
affecting  the  cargo,  and  other  circumstances  mentioned  in  the  agree- 
ment. It  is  clear,  therefore,  that  the  property  did  not  pass  by  the 
contract,  and  the  delivery  of  the  cargo  by  the  plaintiff  as  vendor  to 
the  defendant  as  vendee,  —  not  a  mere  readiness  to  deliver  after  ar- 
rival, —  was  a  condition  precedent  to  the  plaintiff's  right  to  recover 
the  price,  for  that  price  was  payable,  not  on,  but  after  delivery.  It 
also  appeared  on  the  trial,  and  is  a  most  important  element  in  the 
consideration  of  the  case,  and  is  a  key  to  many  ambiguous  parts  of  the 
defendant's  conduct  in  the  transaction,  that  there  had  been  before 
a  contract  of  partnership  in  an  outward  adventure,  and  the  cargo 
expected  in  return  for  it  by  the  same  vessel,  for  which  the  contract 
declared  upon,  being  a  contract  of  purchase  and  sale,  was  substi- 
tuted. The  liability  to  perform  the  contract  of  purchase  and 
its  non-performance,  not  that  for  a  partnership  in  a  joint  ad- 
venture, was  the  question  in  the  case.  One  defence  was  fraud  in 
obtaining  the  second  contract  by  false  representations  as  to  the 
probable  result  of  the  first,  which  defence  was  not  made  out.  The 
other  is  the  one  with  respect  to  which  a  misdirection  is  alleged  to 
have  taken  place.  This  was  in  two  particulars :  the  first  was,  that 
the  question  which  the  learned  judge  left  to  the  jury,  as  to  the  non- 
performance of  the  contract,  was,  whether  the  defendant  refused  at 
any  time  to  fulfil  the  second  contract,  not  whether  he  refused  after 
the  arrival ;  and  secondly,  that,  as  to  the  question  whether  he  refused 
or  not,  the  learned  judge  told  the  jury  that  the  plaintiff  had  a  right, 
before  the  arrival  of  the  cargo,  to  a  distinct  answer  whether  the 
defendant  would  fulfil  the  contract  or  not. 

As  to  the  latter  point,  if  this  had  been  laid  down  as  a  proposition 
of  law,  it  would  certainly  not  have  been  correct.  The  defendant  was 
not  bound  to  do  anything  before  the  arrival.  But  it  was  contended, 
that  this  was  only  an  observation  made  by  my  brother  Coleridge  on 
the  facts,  and  amounted  merely  to  this,  that,  in  the  intercourse  of 
merchants  under  the  circumstances  of  the  case,  a  letter  from  the 
plaintiff  to  the  defendant,  containing  a  request  for  such  an  answer, 
ought  to  have  been  answered;  and  we  do  not  think  that  my  brother 
Coleridge  meant  to  say  more,  nor  that  the  jury  could  have  understood 
him  to  do  so.     The  other  objection  requires  more  consideration. 

It  was  contended,  for  the  defendant,  that  to  constitute  a  breach 
of  the  contract,  a  refusal  at  any  time  was  insufficient;  that  it  must 
be  a  refusal  after  the  arrival  of  the  cargo;  and  that  the  supposed 
refusal  in  July,  to  which  the  attention  of  the  jury  was  said  to  have 
been  directed,  and  which  was  long  before  the  contract  to  buy  became 
absolute,  was  no  breach,  and  nothing  more  than  an  expression  of  an 


654  RIPLEY  V.  m'clure  [chap.  V 

intention  to  break  the  contract,  not  final,  and  capable  of  being  re- 
tracted. And  we  think,  that  if  the  jury  had  been  told  that  a  refusal 
before  the  arrival  of  the  cargo  was  a  breach,  that  would  have  been 
incorrect.  We  think  that  point  rightly  decided  in  Phillpotts  v. 
Evans. 

But  we  cannot  collect  that  the  learned  judge  ever  told  the  jury 
that  a  refusal  at  any  time  was  a  breach.  He  left  the  questions  in 
writing,  whether  there  was  a  refusal  at  any  time,  and  whether  that 
refusal  had  been  subsequently  retracted;  and  the  jury  having  found, 
as  we  think  they  were  warranted  by  the  evidence  to  do,  that  it  had 
not,  there  was  certainly  evidence  of  a  continual  refusal  down  to  and 
inclusive  of  the  time  when  the  defendant  was  bound  to  receive,  which 
would  render  the  defendant  liable,  if  all  the  conditions  precedent  had 
been  performed  or  waived.  But  then  it  was  said,  and  rightly,  that 
the  delivery  of  the  cargo  being  a  condition  precedent,  the  plaintiff 
was  bound  to  perform  it,  unless  the  defendant  waived  or  discharged 
him  from  so  doing.  In  the  declaration  there  is  an  allegation,  though 
informal,  of  such  waiver  or  discharge,  coupled  with  the  allegation 
of  refusal,  and  an  issue  upon  it  in  the  third  plea,  and  the  plaintiff 
no  doubt  was  bound  to  prove  that  waiver  or  discharge:  we  do  not 
feel  any  difficulty  in  saying  that  there  was  ample  evidence  of  such 
waiver  in  the  conversation  referred  to  in  the  plaintiff's  letter  of  the 
1st  of  July,  coupled  with  the  whole  tenor  of  the  defendant's  letters. 

By  an  express  refusal  to  comply  with  the  conditions  of  the  contract 
of  purchase,  the  defendant  must  be  understood  to  have  said  to  the 
plaintiff,  "You  need  not  take  the  trouble  to  deliver  the  cargo  to  me 
when  it  arrives  at  Belfast,  as  purchaser,  for  I  never  will  become 
such;"  and  this  would  be  a  waiver  at  that  time  of  the  delivery; 
and,  if  unretracted,  would  dispense  with  the  actual  delivery  after 
arrival. 

And  if  we  look  to  the  corespondence,  it  is  to  be  inferred  from  it 
that  the  defendant  never  did  mean  to  perform  the  contract  of  pur- 
chase at  all;  and,  consequently,  never  retracted  the  waiver  of  the 
delivery  by  the  plaintiff  as  a  vendor.  It  is  true  that  the  defendant 
insists  that  the  cargo  shall  be  delivered  at  Belfast;  and  even  the 
alleged  parol  refusal  was  probably  not  intended  to  be,  as  Mr.  Mellish 
in  his  able  and  ingenious  argument  with  truth  contended,  any  waiver 
of  the  delivery  at  Belfast;  it  may  be  taken  that  the  defendant  always 
meant  that;  but  the  true  question  is  not  whether  the  delivery  at 
Belfast  was  waived,  but  whether  the  delivery  under  the  second  con- 
tract, that  is,  the  contract  of  ])urchase  and  sale,  was  waived;  and 
we  feel  no  doubt  that  tlu;  flcfcndant,  after  ho  had  formed  the  opinion 
that  he  had  been  deluded  into  a  coritriu't  of  purchase  by  false  represen- 
tations of  the  prospects  of  the  original  adventure  in  the  first  in- 
there})y  intcndcf]  to  waive  the  delivery  under  that  contract,  and  never 
stance,  wholly  re-fused  to  be  bound  by  the  contract  of  sale,  and 
afterwards  retracted  the  waiver. 


SECT.    Il]  HOCHSTER    V.    DE   LA   TOUR  655 

This  was  a  question  for  the  jury;  and  we  do  not  see  any  reason 
to  think,  from  the  report  and  the  statements  of  the  learned  counsel 
on  both  sides,  that  the  jury  were  not  in  substance  properly  directed 
as  to  the  question  for  their  decision;  and  we  are  all  quite  satisfied 
with  their  verdict.  Rule  discharged.^ 


ALBERT  HOCHSTER  v.  EDGAR  FREDERICK  De  la  TOUR 

In  the  Queen's  Bench,  June  25,  1852 

[Reported  in  2  Ellis  &  Blackburn,  678] 

Declaration  :  "for  that,  heretofore,  to  wit,  on  12th  April,  1852, 
in  consideration  that  plaintiff,  at  the  request  of  defendant  would 
agree  with  the  defendant  to  enter  into  the  service  and  employ  of  the 
defendant  in  capacity  of  a  courier,  on  a  certain  day  then  to  come, 
to  wit,  the  1st  day  of  June,  1852,  and  to  serve  the  defendant  in  that 
capacity,  and  travel  with  him  on  the  continent  of  Europe  as  a  courier 
for  three  months  certain  from  the  day  and  year  last  aforesaid,  and 
to  be  ready  to  start  with  the  defendant  on  such  travels  on  the  day 
and  year  last  aforesaid,  at  and  for  certain  wages  or  salary,  to  wit," 
£10  per  month  of  such  service,  "the  defendant  then  agreed  with  the 

^  A  portion  of  the  opinion  is  omitted.  The  judgment  of  the  Court  was  afterwards 
aflirmed  in  the  Exchequer  Chamber.     [5  Exch.  140.1 

It  is  sometimes  supposed  that  where  one  party  to  a  contract  makes  a  material  breach 
thereof  or  repudiates  his  obligations,  the  other  party  must  either  continue  perform- 
ance or  wholly  rescind  the  contract,  and  thus  lose  all  right  to  recover  damages  for 
the  breach.  But  the  great  weight  of  authority  is  opposed  to  this  conclusion.  See  3 
Williston  Contracts,  §  1303. 

In  Anvil  Mining  Co.  v.  Humble,  153  U.  S.  540,  551,  Brewer,  J.,  in  delivering  the 
opinion  of  the  Court  said:  "It  is  insisted,  and  authorities  are  cited  in  support  thereof, 
that  a  party  cannot  rescind  a  contract  and  at  the  same  time  recover  damages  for  hia 
non-performance.  But  no  such  proposition  as  that  is  contained  in  that  instruction. 
It  only  lays  down  the  nile,  and  it  lays  that  down  correctly,  which  obtains  when  there 
is  a  breach  of  a  contract.  Whenever  one  party  thereto  is  guilty  of  such  a  breach  as  ia 
here  attributed  to  the  defendant,  the  other  party  is  at  liberty  to  treat  the  contract  aa 
broken  and  desist  from  any  further  effort  on  his  part  to  perform;  in  other  words,  he 
may  abandon  it,  and  recover  as  damages  the  profits  which  he  would  have  received 
through  fall  performance.  Such  an  abandonment  is  not  technically  a  rescission  of 
the  contract,  but  is  merely  an  acceptance  of  the  situation  which  the  wrong-doing  of 
the  other  party  has  brought  about.  Generally  speaking,  it  is  true  that  when  a  contract 
is  not  performed  the  party  who  is  guilty  of  the  first  breach  is  the  one  upon  whom  rests 
all  the  liability  for  the  non-performance.  A  party  who  engages  to  do  work  has  a 
right  to  proceed  free  from  any  let  or  hindrance  of  the  other  party,  and  if  such  other 
party  interferes,  hinders,  and  prevents  the  doing  of  the  work  to  such  an  extent  as,  to 
render  its  performance  difficult  and  largely  diminish  the  profits,  the  first  may  treat 
the  contract  as  broken,  and  is  not  bound  to  proceed  under  the  added  burdens  and 
increased  expense.  It  may  stop  and  sue  for  the  damages  which  it  has  sustained  by 
reason  of  the  non-performance  which  the  other  has  caused." 

In  Daley  v.  People's  Building  Assoc,  178  Mass.  13,  18,  Holmes,  C.  J.,  said:  "Con- 
duct going  no  further  than  the  defendant's  might  not  justify  even  a  refusal  of  further 
performance  on  the  other  side,  ...  a  right  which  must  not  be  confounded  with 
rescission  and  which,  in  some  cases,  is  more  easily  made  out."  See  also  Boston  Co.  v. 
Ansell,  39  Ch.  D.  339,  365;  Cherry  Valley  Iron  Works  v.  Florence  River  Co.,  64  Fed. 
Rep.  (C.  C.  A.)  569;   Hayes  v.  Nashville,  80  Fed.  Rep.  641,  645. 


656  HOCHSTER    V.    DE   LA   TOUR  [CHAP.    V 

plaintiff,  and  then  promised  him,  that  he,  the  defendant,  would  engage 
and  employ  the  plaintiff  in  the  capacity  of  a  courier  on  and  from  the 
said  1st  day  of  June,  1852,  for  three  months"  on  these  terms;  '"and 
to  start  on  such  travels  with  the  plaintiff  on  the  day  and  year  last 
aforesaid,  and  to  pay  the  plaintiff"  on  these  terms.  Averment  that 
plaintiff,  confiding  in  the  said  agreement  and  promise  of  the  de- 
fendant, "agreed  with  the  defendant"  to  fulfil  these  terms  on  his  part, 
"and  to  be  ready  to  start  with  the  defendant  on  such  travels  on  the 
day  and  year  last  aforesaid,  at  and  for  the  wages  and  salary  afore- 
said." That,  "from  the  time  of  the  making  of  said  agreement  of 
the  said  promise  of  the  defendant  until  the  time  when  the  defendant 
wrongfully  refused  to  perform  and  broke  his  said  promise,  and  ab- 
solved, exonerated,  and  discharged  the  plaintiff  from  the  perform- 
ance of  his  agreement  as  hereinafter  mentioned,  he,  the  plaintiff, 
was  always  ready  and  willing  to  enter  into  the  service  and  employ 
of  the  defendant,  in  the  capacity  aforesaid,  on  the  said  1st  June, 
1852,  and  to  serve  the  defendant  in  that  capacity,  and  to  travel  with 
him  on  the  continent  of  Europe  as  a  courier  for  three  months  cer- 
tain from  the  day  and  year  last  aforesaid,  and  to  start  with  the  de- 
fendant on  such  travels  on  the  day  and  year  last  aforesaid,  at  and 
for  the  wages  and  salary  aforesaid;  and  the  plaintiff,  but  for  the 
breach  by  the  defendant  of  his  said  promise  as  hereinafter  mentioned, 
would,  on  the  said  1st  June,  1852,  have  entered  into  the  said  service 
and  employ  of  the  defendant  in  the  capacity  and  upon  the  terms  and 
for  the  time  aforesaid;  of  all  which  several  premises  the  defendant 
always  had  notice  and  knowledge :  yet  the  defendant,  not  regarding 
the  said  agreement,  nor  his  said  promise,  afterwards  and  before  the 
said  1st  June,  1852,  wrongfully  wholly  refused  and  declined  to  en- 
gage or  employ  the  defendant  in  the  capacity  and  for  the  purpose 
aforesaid,  on  or  from  the  said  1st  June,  1852,  for  three  months,  or 
on,  from,  or  for,  any  other  time,  or  to  start  on  such  travels  with 
the  plaintiff  on  the  day  and  year  last  aforesaid,  or  in  any  manner 
whatsoever  to  perform  or  fulfil  his  said  promise,  and  then  wrong- 
fully wholly  absolved,  exonerated,  and  discharged  the  plaintiff  from 
his  said  agreement,  and  from  the  performance  of  the  same  agree- 
ment on  his  the  plaintiff's  part,  and  from  being  ready  and  willing 
to  perform  the  same  on  the  plaintiff's  part;  and  the  defendant  then 
wrongfully  wholly  broke,  put  an  end  to,  and  determined  his  said 
promise  and  engagement,"  to  the  damage  of  the  plaintiff.  The  writ 
was  dated  on  the  22d  of  May,  1852. 

Pleas:  1.  That  defendant  did  not  agree  or  promise  in  manner,  and 
form,  &c. :  conclusion  to  the  country.     Issue  thereon. 

2.  That  plaintiff  did  not  agree  with  defendant  in  manner  and  form, 
&c. :  coiiclu.sion  to  the  country.     Issue  thereon. 

3.  That  j)laintiff  was   not  ready  and  willing,  nor  did  defendant 
3.  That  plaintiff  was  not  ready  and  willing,  nor  did  defendant  ab- 
solve, exonerate,  or  discharge  plaintiff  from  being  ready  and  willing, 
in  manner  and  form,  &c. :  conclusion  to  the  country.     Issue  thereon. 


SECT.    II ]  HOCHSTER    V.   DE    LA   TOUR  657 

4.  That  defendant  did  not  refuse  or  decline,  nor  wrongfully  ab- 
solve, exonerate,  or  discharge,  nor  wrongfully  break,  put  an  end  to, 
or  determine,  in  manner  and  form,  kc. :  conclusion  to  the  country. 
Issue  thereon. 

On  the  trial,  before  Erie,  J.,  at  the  London  sittings  in  last  Easter 
Term,  it  appeared  that  plaintiff  was  a  courier,  who  in  April,  1852, 
was  engaged  by  defendant  to  accompany  him  on  a  tour,  to  commence 
on  1st  June,  1852,  on  the  terms  mentioned  in  the  declaration.  On 
the  11th  May,  1852,  defendant  wrote  to  plaintiff  that  he  had 
changed  his  mind,  and  declined  his  services.  He  refused  to  make 
him  any  compensation.  The  action  was  commenced  on  22d  May.  The 
plaintiff,  between  the  commencement  of  the  action  and  the  1st  June, 
obtained  an  engagement  with  Lord  Ashburton,  on  equally  good  terms, 
but  not  commencing  till  4th  July.  The  defendant's  counsel  objected 
that  there  could  be  no  breach  of  the  contract  before  the  1st  of  June. 
The  learned  judge  was  of  a  contrary  opinion,  but  reserved  leave  to 
enter  a  nonsuit  on  this  objection.  The  other  questions  were  left  to 
the  jury,  who  found  for  plaintiff. 

Hugh  Hill,  in  the  same  term,  obtained  a  rule  nisi  to  enter  a  non- 
suit, or  arrest  the  judgment.     In  last  Trinity  Term. 

Hannen  showed  cause. 

Hugh  Hill  and  Deighton,  contra. 

Lord  Campbell,  C.  J.,  now  delivered  the  judgment  of  the  court :  — 

On  this  motion  in  arrest  of  judgment,  the  question  arises  whether 
if  there  be  an  engagement  between  A.  and  B.,  whereby  B.  engages 
to  employ  A.  on  and  from  a  future  day  for  a  given  period  of  time, 
to  travel  with  him  into  a  foreign  country  as  a  courier,  and  to  start 
with  him  in  that  capacity  on  that  day,  A.  being  to  receive  a  monthly 
salary  during  the  continuance  of  such  service,  B.  may,  before  the 
day,  refuse  to  perform  the  agreement  and  break  and  renounce  it,  so 
as  to  entitle  A.  before  the  day  to  commence  an  action  against  B.  to 
recover  damages  for  breach  of  the  agreement,  A.  having  been  ready 
and  willing  to  perform  it,  till  it  was  broken  and  renounced  by  B. 
The  defendant's  counsel  very  powerfully  contended  that,  if  the  plain- 
tiff was  not  contented  to  dissolve  the  contract,  and  to  abandon  all 
remedy  upon  it,  he  was  bound  to  remain  ready  and  willing  to  per- 
form it  till  the  day  when  the  actual  employment  as  courier  in  the 
service  of  the  defendant  was  to  begin;  and  that  there  could  be  no 
breach  of  the  agreement,  before  that  day,  to  give  a  right  of  action. 
But  it  cannot  be  laid  down  as  a  universal  rule  that,  where  by  agree- 
ment an  act  is  to  be  done  on  a  future  day,  no  action  can  be  brought 
for  a  breach  of  the  agreement  till  the  day  for  doing  the  act  has 
arrived.  If  a  man  promises  to  marry  a  woman  on  a  future  day,  and 
before  that  day  marries  another  woman,  he  is  instantly  liable  to  an 
action  for  breach  of  promise  of  marriage.  Short  v.  Stone,  8  Q.  B. 
358.  If  a  man  contracts  to  execute  a  lease  on  and  from  a  future 
day  for  a  certain  term,  and,  before  that  day,  executes  a  lease  to  an- 


658  HOCHSTER    V.    DE   LA   TOUR  [CHAP.   V 

other  for  the  same  term,  he  may  be  immediately  sued  for  breaking 
the  contract.  Ford  v.  Tiley,  6  B.  &  C.  325.  So  if  a  man  contracts 
to  sell  and  deliver  specific  goods  on  a  future  day,  and  before  the  day 
he  sells  and  delivers  them  to  another,  he  is  immediately  liable  to  an 
action  at  the  suit  of  the  person  with  v^hom  he  first  contracted  to  sell 
and  deliver  them.  Bowdell  v.  Parsons,  10  East,  359.  One  reason 
alleged  in  support  of  such  an  action  is,  that  the  defendant  has,  be- 
fore the  day,  rendered  it  impossible  for  him  to  perform  the  contract 
at  the  day ;  but  this  does  not  necessarily  follow ;  for,  prior  to  the  day 
fixed  for  doing  the  act,  the  first  wife  may  have  died,  a  surrender  of 
the  lease  executed  might  be  obtained,  and  the  defendant  might  have 
repurchased  the  goods  so  as  to  be  in  a  situation  to  sell  and  deliver 
them  to  the  plaintiff.  Another  reason  may  be  that,  where  there  is 
a  contract  to  do  an  act  on  a  future  day,  there  is  a  relation  consti- 
tuted between  the  parties  in  the  mean  time  by  the  contract,  and  that 
they  impliedly  promise  that  in  the  mean  time  neither  will  do  any- 
thing to  the  prejudice  of  the  other  inconsistent  with  that  relation. 
As  an  example,  a  man  and  woman  engaged  to  marry  are  affianced 
to  one  another  during  the  period  between  the  time  of  the  engagement 
and  the  celebration  of  the  marriage.  In  this  very  case  of  traveller 
and  courier,  from  the  day  of  the  hiring  till  the  day  when  the  em- 
ployment was  to  begin,  they  were  engaged  to  each  other;  and  it 
seems  to  be  a  breach  of  an  implied  contract  if  either  of  them  re- 
nounces the  engagement.  This  reasoning  seems  in  accordance  with 
the  unanimous  decision  of  the  Exchequer  Chamber  in  Elderton  v. 
Emmens,  6  C.  B.  160,  which  we  have  followed  in  subsequent  cases 
in  this  court.  The  declaration  in  the  present  case,  in  alleging  a 
breach,  states  a  great  deal  more  than  a  passing  intention  on  the  part 
of  the  defendant  which  he  may  repent  of,  and  could  only  be  proved 
by  evidence  that  he  had  utterly  renounced  the  contract,  or  done  some 
act  which  rendered  it  impossible  for  him  to  perform  it.  If  the  plain- 
tiff has  no  remedy  for  breach  of  the  contract  unless  he  treats  the 
contract  as  in  force,  and  acts  upon  it  down  to  the  1st  June,  1852,  it 
follows  that,  till  then,  he  must  enter  into  no  employment  which  will 
interfere  with  his  promise  "to  start  with  the  defendant  on  such 
travels  on  the  day  and  year,"  and  that  he  must  then  be  properly 
equipped  in  all  respects  as  a  courier  for  a  three  months'  tour  on 
the  continent  of  Europe.  But  it  is  surely  much  more  rational,  and 
more  for  the  benefit  of  both  parties,  that,  after  the  renunciation  of 
the  agreement  by  the  defendant,  the  plaintiff  should  be  at  liberty 
to  consider  himself  absolved  from  any  fnture  performance  of  it,  re- 
taining his  right  to  sue  for  any  damage  he  has  suffered  from  the 
breach  of  it.  Thus,  instead  of  remaining  idle  and  laying  out  money 
in  preparations  which  must  be  useless,  he  is  at  liberty  to  seek  service 
utiflf-r  another  emy)loyer,  which  would  go  in  mitigation  of  the  dam- 
ages to  which  he  would  otherwise  be  entitled  for  a  breach  of  the 
contract.     It  seems  strange  that  the  defendant,  after  renouncing  the 


SECT.    II  ]  HOCHSTER    V.   DE   LA   TOUR  659 

contract,  and  absolutely  declaring  that  lie  will  never  act  under  it, 
should  be  permitted  to  object  that  faith  is  given  to  his  assertion,  and 
that  an  opportunity  is  not  left  to  him  of  changing  his  mind.  If 
the  plaintiif  is  barred  of  any  remedy  by  entering  into  an  engage- 
ment inconsistent  with  starting  as  a  courier  with  the  defendant  on 
the  1st  June,  he  is  prejudiced  by  putting  faith  in  the  defendant's 
assertion;  and  it  would  be  more  consistent  with  principle,  if  the 
defendant  were  precluded  from  saying  that  he  had  not  broken  the 
contract  when  he  declared  that  he  entirely  renounced  it.  Suppose 
that  the  defendant,  at  the  time  of  his  renunciation,  had  embarked  on 
a  voyage  for  Australia,  so  as  to  render  it  physically  impossible  for 
him  to  employ  the  plaintiff  as  a  courier  on  the  continent  of  Europe 
in  the  months  of  June,  July,  and  August,  1852:  according  to  de- 
cided cases,  the  action  might  have  been  brought  before  the  1st  June; 
but  the  renunciation  may  have  been  founded  on  other  facts,  to  be 
given  in  evidence,  which  would  equally  have  rendered  the  defendant's 
performance  of  the  contract  impossible.  The  man  who  wrongfully 
renounces  a  contract  into  which  he  has  deliberately  entered  cannot 
justly  complain  if  he  is  immediately  sued  for  a  compensation  in 
damages  by  the  man  whom  he  has  injured;  and  it  seems  reasonable 
to  allow  an  option  to  the  injured  party,  either  to  sue  immediately, 
or  to  wait  till  the  time  when  the  act  was  to  be  done,  still  holding  it 
as  prospectively  binding  for  the  exercise  of  this  option,  which  may 
be  advantageous  to  the  innocent  party,  and  cannot  be  prejudicial  to 
the  wrong-doer.  An  argument  against  the  action  before  the  1st  of 
June  is  urged  from  the  difficulty  of  calculating  the  damages;  but 
this  argument  is  equally  strong  against  an  action  before  the  1st  of 
September,  when  the  three  months  would  expire.  In  either  case, 
the  jury  in  assessing  the  damages  would  be  justified  in  looking  to 
all  that  had  happened,  or  was  likely  to  happen,  to  increase  or  miti- 
gate the  loss  of  the  plaintiff  down  to  the  day  of  trial.  We  do  not 
find  any  decision  contrary  to  the  view  we  are  taking  of  this  case. 
Leigh  V.  Paterson,  8  Taunt.  540,  only  shows  that,  upon  a  sale  of 
goods  to  be  delivered  at  a  certain  time,  if  the  vendor  before  the  time 
gives  information  to  the  vendee  that  he  cannot  deliver  them,  having 
sold  them,  the  vendee  may  calculate  the  damages  according  to  the 
state  of  the  market  when  they  ought  to  have  been  delivered.  If  this 
was  a  sale  of  specific  goods,  the  action,  according  to  Bowdell  v.  Par- 
sons, 10  East,  359,  might  have  been  brought  before  that  time,  as 
soon  as  the  vendor  had  sold  and  delivered  them  to  another,  Phill- 
potts  V.  Evans,  5  M.  &  W.  475,  was  a  similar  case;  and  the  only 
question  there  was  as  to  the  mode  of  calculating  the  damages  on 
a  breach  of  contract  for  the  sale  and  delivery  of  wheat,  —  the  court 
very  properly  holding  that  the  plaintiff  was  entitled  to  damages 
according  to  the  state  of  the  market  when  the  wheat  was  to  be  de- 
livered; the  court  professing  to  proceed  upon  the  rule  laid  down  in 
Startup  V.  Cortazzi,  2  C.  M.  &  R,  165,  where  no  question  arose  as 


660  HOCHSTER    V.   DE   LA   TOUR  [CHAP.   V 

to  the  right  to  bring  au  action  before  the  stipulated  day  of  delivery 
on  a  renunciation  of  the  contract.  Parke,  B.,  whose  dicta  are  en- 
titled to  very  great  weight,  certainly  does  say  in  Phillpotts  v.  Evans, 
5  M.  &  W.  477,  with  reference  to  the  notice  by  the  defendants  that 
they  would  not  accept  the  corn:  "I  think  no  action  would  then  have 
lain  for  the  breach  of  the  contract,  but  that  the  plaintiffs  were  bound 
to  wait  until  the  time  arrived  for  delivery  of  the  wheat,  to  see  whether 
the  defendant  would  then  receive  it."  But  the  learned  judge  might 
suppose  that  the  notice  did  not  amount  to  a  renunciation  of 
the  contract;  and,  if  he  thought  that,  after  such  a  renunciation,  the 
plaintiffs  were  bound  to  proceed  with  the  performance  of  the  contract 
on  their  part,  and  to  incur  expense  and  loss  in  tendering  the  wheat 
before  they  could  have  any  remedy  on  the  contract,  we  cannot  agree 
with  him.  In  Ripley  v.  M'Clure,  4  Exch.  345,  it  is  said  that,  under 
a  contract  for  the  sale  and  delivery  of  goods,  a  refusal  to  receive  them 
at  any  time  before  they  ought  to  be  delivered  was  not  necessarily 
a  breach  of  the  contract;  but  the  court  intimated  no  opinion  upon 
the  question  whether,  there  being  a  contract  to  do  an  act  at  a  future 
day,  if  one  party  before  the  day  renounces  the  contract,  the  other 
thereupon  has  a  remedy  for  a  breach  of  the  contract.  x\nd  they 
held  that  a  refusal  by  one  party  before  the  day  when  the  act  is  to 
be  done,  if  unretracted,  would  be  evidence  of  a  continual  refusal 
down  to,  and  inclusive  of,  the  time  when  the  act  was  to  be  done. 
The  only  other  case  cited  in  the  argument  which  we  think  it  necessary 
to  notice  is  Blanche  v.  Colburn,  8  Bing.  14,  which  appears  to  be 
an  authority  for  the  plaintiff.  There  the  defendants  had  engaged 
the  plaintiff  to  write  a  treatise  for  a  periodical  publication.  The 
plaintiff  commenced  the  composition  of  the  treatise;  but,  before  he 
had  completed  it,  and  before  the  time  when  in  the  course  of  con- 
ducting the  publication  it  would  have  appeared  in  print,  the  pub- 
lication was  abandoned.  The  plaintiff  thereupon,  without  completing 
the  treatise,  brought  an  action  for  breach  of  contract.  Objection 
was  made  that  the  plaintiff  could  not  recover  on  the  special  contract, 
for  want  of  having  completed,  tendered,  and  delivered  the  treatise, 
•according  to  the  contract.  Tindal,  C.  J.,  said :  "The  fact  was,  that 
the  defendants  not  only  suspended,  but  actually  put  an  end  to,  'The 
Juvenile  Library ;'  they  had  broken  their  contract  with  the  plaintiff." 
The  declaration  contained  counts  for  work  and  labor;  but  the  plain- 
tiff appears  to  have  retained  his  verdict  on  the  count  framed  on  the 
spefial  contract,  thus  showing  that,  in  the  opinion  of  the  court,  the 
plaintiff  might  treat  the  remmciation  of  the  contract  by  the  defend- 
ants as  a  breach,  and  maintain  an  action  for  that  breach,  without 
considering  that  it  remained  in  force  so  as  to  bind  him  to  perform 
his  part  of  it  before  ])ringing  an  action  for  the  breach  of  it.  If  it 
should  bo  licld  that,  upon  a  contract  to  do  an  act  on  a  future  day, 
a  renunciation  of  the  contract  by  one  party  dispenses  with  a  con- 
flitioTi  to  be  performed  in  the  mean  time  by  the  other,  there  seems 


SECT.    Il]  FROST    V.    KNIGHT  661 

no  reason  for  requiring  that  other  to  wait  till  the  day  arrives  before 
seeking  his  remedy  by  action;  and  the  only  ground  on  which  the 
condition  can  be  dispensed  with  seems  to  be,  that  the  renunciation 
may  be  treated  as  a  breach  of  the  contract. 

Upon  the  whole,  we  think  that  the  declaration  in  this  case  is  suffi- 
cient. It  gives  us  great  satisfaction  to  reflect  that,  the  question  being 
on  the  record,  our  opinion  may  be  reviewed  in  a  Court  of  Error.  In 
the  mean  time  we  must  give  judgment  for  the  plaintiff. 

,  Judgment  for  plaintijf.^ 


FEOST  V.  KI^IGHT 

In  the  Exchequer  Chamber,  February  8,  1872 

[Reported  in  Law  Reports  7  Exchequer^  111] 

CocKBUKN,  C.  J.  This  case  comes  before  us  on  error,  brought  on 
a  judgment  of  the  Court  of  Exchequer  arresting  the  judgment  in  the 
action  on  a  verdict  given  for  the  plaintiff. 

The  action  was  for  breach  of  promise  of  marriage.  The  promise, 
as  proved,  was  to  marry  the  plaintiff  on  the  death  of  the  defendant's 
father.  The  father  still  living,  the  defendant  announced  his  inten- 
tion of  not  fulfilling  his  promise  on  his  father's  death,  and  broke  off 
the  engagement,  whereupon  the  plaintiff,  without  waiting  for  the 
father's  death,  at  once  brought  the  present  action.  The  plaintiff 
having  obtained  a  verdict,  a  rule  nisi  was  applied  for  to  arrest  the 
judgment,  on  the  ground  that  a  breach  of  the  contract  could  only 
arise  on  the  father's  death,  till  which  even  no  claim  for  performance 
could  be  made,  and,  consequently,  till  its  occurrence,  no  action  for 
breach  of  the  contract  be  maintained.  A  rule  nisi  having  been 
granted,  a  majority  of  the  Court  of  Exchequer  concurred  in  making 
it  absolute,  Martin,  B.,  dissenting;  and  the  question  for  us  is,  whether 
the  judgment  of  the  majority  was  right. 

The  cases  of  Lovelock  v.  Franklyn,  8  Q.  B.  371,  and  Short  v. 
Stone,  8  Q.  B.  358,  which  latter  case  was  an  action  for  breach  of 
promise  of  marriage,  had  established  that  where  a  party  bound  to 
the  performance  of  a  contract  at  a  future  time  puts  it  out  of  his 
own  power  to  fulfil  it,  an  action  will  at  once  lie.  The  case  of  Hoch- 
ster  V.  De  la  Tour,  2  E.  &  B.  678,  22  L.  J.  (Q.  B.)  445,  upheld 
in  this  court  in  The  Danube  and  Black  Sea  Co.  v.  Xenos,  13  C.  B. 
(n.  s.)  825,  31  L.  J.  (C.  P.)  284,  went  further,  and  established  that 

1  Frost  V.  Knight,  L.  R.  7  Ex.  Ill;  Johnstone  v.  Milling,  16  Q.  B.  D.  460;  Synge 
V.  Synge  (C.  A.),  [1894]  1  Q.  B.  466;  Roth  v.  Taysen,  73  L.  T.  628,  ace.  See  also, 
Danube,  &c.  Co.  v.  Xenos,  13  C.  B.  (n.  s.)  825;  Avery  v.  Bowden,  .5  E.  &  B.  714; 
Reid  V.  Hoskins,  6  E.  &  B.  953;  Roper  v.  Johnson,  L.  R.  8  C.  P.  167;  Brown  v.  Muller, 
L.  R.  7  Ex.  319;  Re  South  African  Trust  Co.,  74  L.  T.  769;  Rhymney  Ry.  Co.  v. 
Brecon  Rv.  Co.,  69  L.  J.  Ch.  813;  Honour  v.  Equitable  Society,  [1900]  1  Ch.  852; 
Smith  V.  Butler,  [1900]  1  Q.  B.  694;    Michael  v.  Hart,  [1902]  1  K.  B.  482. 

The  English  doctrine  has  been  followed  in  Canada.  Dalrymple  v.  Scott,  19  Ont. 
App.  477,  483;    Cromwell  r.  Morris,  34  Dom.  L.  R.  305. 


662  FROST    V.    KNIGHT  [CHAP.   V 

notice  of  an  intended  breacli  of  contract  to  be  performed  in  futuro 
had  a  like  effect. 

The  law  with  reference  to  a  contract  to  be  performed  at  a  future 
time,  where  the  party  bound  to  performance  announces  prior  to  the 
time  his  intention  not  to  perform  it,  as  established  by  the  cases  of 
Hochster  v.  De  la  Tour,  and  The  Danube  &  Black  Sea  Co.  v.  Xenos, 
on  the  one  hand,  and  Avery  v.  Bowden,  5  E.  &  B.  714,  26  L.  J.  (Q. 
B.)  3,  Eeid  v.  Hoskins,  6  E.  &  B.  953,  26  L.  J.  (Q.  B.)  5,  and  Bar- 
wick  V.  Buba,  2  C.  B.  (n.  s.)  563,  23  L.  J.  (C.  P.)  280,  on  the  other, 
may  be  thus  stated :  The  promisee,  if  he  pleases,  may  treat  the  notice 
of  intention  as  inoperative,  and  await  the  time  when  the  contract 
is  to  be  executed,  and  then  hold  the  other  party  responsible  for  all 
the  consequences  of  non-performance;  but  in  that  case  he  keeps  the 
contract  alive  for  the  benefit  of  the  other  party  as  well  as  his  own; 
he  remains  subject  to  all  his  own  obligations  and  liabilities  under  it, 
and  enables  the  other  party  not  only  to  complete  the  contract,  if  so 
advised,  notwithstanding  his  previous  repudiation  of  it,  but  also 
to  take  advantage  of  any  supervening  circumstance  which  would 
justify  him  in  declining  to  complete  it. 

On  the  other  hand,  the  promise  may,  if  he  thinks  proper,  treat 
the  repudiation  of  the  other  party  as  a  wrongful  putting  an  end 
to  the  contract,  and  may  at  once  bring  his  action  as  on  a  breach  of 
it;  and  in  such  action  he  will  be  entitled  to  such  damages  as  would 
have  arisen  from  the  non-performance  of  the  contract  at  the  ap- 
pointed time,  subject,  however,  to  abatement  in  respect  of  any  cir- 
cumstances which  may  have  afforded  him  the  means  of  mitigating 
his  loss. 

Considering  this  to  be  now  settled  law,  notwithstanding  anything 
that  may  have  been  held  or  said  in  the  cases  of  Phillpotts  v.  Evans, 
5  M.  &  W.  475,  and  Eipley  v.  M'Clure,  4  Ex.  at  p.  359,  we  should 
have  no  difficulty  in  applying  the  principle  of  the  decision  in  Hochster 
V.  De  la  Tour,  2  E.  &  B.  678,  22  L.  J.  (Q.  B.)  445,  to  the  present- 
case,  were  it  not  for  the  difference  which  undoubtedly  exists  between 
that  case  and  the  present,  viz.,  that,  whereas  there  the  performance 
of  the  contract  was  to  take  place  at  a  fixed  time,  here  no  time  is 
fixed,  but  the  performance  is  made  to  depend  on  a  contingency, 
namely,  the  death  of  the  defendant's  father  during  the  lifetime  of 
the  contracting  parties.  It  is  true  that  in  every  case  of  a  personal 
obligation  to  be  fulfilled  at  a  future  time,  there  is  involved  the  pos- 
sible contingency  of  the  death  of  the  party  binding  himself,  before 
the  time  of  performance  arrives;  but  here  we  have  a  further  con- 
tingency depending  on  the  life  of  a  third  person,  during  which  neither 
party  can  claim  performance  of  the  promise.  This  being  so,  we 
thought  it  right  to  take  time  to  consider  whether  an  action  would 
lie  before  the  death  of  the  defendant's  father  had  placed  the  plain- 
tiff in  a  position  to  claim  the  fulfilment  of  the  defendant's  promise. 

After  full  consideration  we  are  of  opinion  that,  notwithstanding 


SECT.    IlJ  FROST    V.    KNIGHT  663 

the  distinguishing  circumstance  to  which  I  have  referred,  this  case 
falls  within  the  principle  of  Hochster  v.  De  la  Tour,  2  E.  &  B.  678, 
22  L.  J.  (Q.  B.)  455,  and  that,  consequently,  the  present  action  is 
well  brought. 

The  considerations  on  which  the  decision  in  Hochster  v.  De  la 
Tour  is  founded  are  that  the  announcement  of  the  contracting  party 
of  his  intention  not  to  fulfil  the  contract  amounts  to  a  breach,  and 
that  it  is  for  the  common  benefit  of  both  parties  that  the  contract 
shall  be  taken  to  be  broken  as  to  all  its  incidents,  including  non-per- 
formance at  the  appointed  time;  as  by  an  action  being  brought  at 
once,  and  the  damages  consequent  on  non-performance  being  as- 
sessed at  the  earliest  moment,  many  of  the  injurious  effects  of  such 
non-performance  may  possibly  be  averted  or  mitigated. 

It  is  true,  as  is  pointed  out  by  the  Lord  Chief  Baron  in  his  judg- 
ment in  this  case,  that  there  can  be  no  actual  breach  of  a  contract 
by  reason  of  non-performance  so  long  as  the  time  for  performance 
has  not  yet  arrived.  But,  on  the  other  hand,  there  is  —  and  the  de- 
cision in  Hochster  v.  De  la  Tour,  proceeds  on  that  assumption  —  a 
breach  of  the  contract  when  the  promisor  repudiates  it  and  declares 
he  will  no  longer  be  bound  by  it.  The  promisee  has  an  inchoate  right 
to  the  performance  of  the  bargain,  which  becomes  complete  when 
the  time  for  performance  has  arrived.  In  the  mean  time  he  has 
a  right  to  have  the  contract  kept  open  as  a  subsisting  and  effective 
contract.  Its  unimpaired  and  unimpeached  efficacy  may  be  essential 
to  his  interests.  His  rights  acquired  under  it  may  be  dealt  with  by 
him  in  various  ways  for  his  benefit  and  advantage.  Of  all  such 
advantage  the  repudiation  of  the  contract  by  the  other  party,  and 
the  announcement  that  it  never  will  be  fulfilled,  must  of  course  de- 
prive him.  It  is  therefore  quite  right  to  hold  that  such  an  announce- 
ment amounts  to  a  violation  of  the  contract  in  omnibus,  and  that 
upon  it  the  promisee,  if  so  minded,  may  at  once  treat  it  as  a  breach 
of  the  entire  contract,  and  bring  his  action  accordingly. 

The  contract  having  been  thus  broken  by  the  promisor,  and  treated 
as  broken  by  the  promisee,  performance  at  the  appointed  time  becomes 
excluded,  and  the  breach  by  reason  of  the  future  non-performance 
becomes  virtually  involved  in  the  action  as  one  of  the  consequences 
of  the  repudiation  of  the  contract ;  and  the  eventual  non-performance 
may  therefore,  by  anticipation,  be  treated  as  a  cause  of  action,  and 
damages  be  assessed  and  recovered  in  respect  of  it,  though  the  time 
for  performance  may  yet  be  remote. 

It  is  obvious  that  such  a  course  must  lead  to  the  convenience  of 
both  parties ;  and  though  we  should  be  unwilling  to  found  our  opinion 
on  grounds  of  convenience  alone,  yet  the  latter  tend  strongly  to 
support  the  view  that  such  an  action  ought  to  be  admitted  and  up- 
held. By  acting  on  such  a  notice  of  the  intention  of  the  promisor, 
and  taking  timely  measures,  the  promisee  may  in  many  cases  avert, 
or  at  all  events  materially  lessen,  the  injurious  effects  which  would 


664  FROST    V.    KNIGHT  [CHAP.    V 

otherwise  flow  from  the  non-fulfilment  of  the  contract;  and  in  as- 
sessing the  damages  for  breach  of  performance,  a  jury  will  of  course 
take  into  account  whatever  the  plaintiff  has  done,  or  has  had  the 
means  of  doing,  and,  as  a  prudent  man,  ought  in  reason  to  have 
done,  whereby  his  loss  has  been,  or  would  have  been,  diminished. 

It  appears  to  us  that  the  foregoing  considerations  apply  to  the 
cause  of  a  contract  the  performance  of  which  is  made  to  depend  on 
a  contingency,  as  much  as  to  one  in  which  the  performance  is  to 
take  place  at  a  future  time;  and  we  are  therefore  of  opinion  that  the 
principle  of  the  decision  of  Hochster  v.  De  la  Tour,  2  E.  &  B,  678, 
22  L.  J.  (Q.  B.)  455,  is  equally  applicable  to  such  a  case  as  the 
present. 

It  is  next  to  be  observed  that  the  law  as  settled  by  Hochster  v. 
De  la  Tour  and  Danube  and  Black  Sea  Company  v.  Xenos,  13 
C.  B.  (n.  s.)  825,  31  L.  J.  (C.  P.)  284,  is  obviously  quite  as 
applicable  to  a  contract  in  which  personal  status  or  personal  rights 
are  involved  as  to  one  relating  to  commercial  or  pecuniary  interests. 
Indeed,  the  contract  of  marriage  appears  to  afford  a  striking  illus- 
tration of  the  expediency  of  holding  that  an  action  may  be  main- 
tained on  the  repudiation  of  a  contract  to  be  performed  in  futuro. 
On  such  a  contract  being  entered  into,  not  only  does  a  right  to  its 
completion  arise  with  reference  to  domestic  relations  and  possibly 
pecuniary  advantages,  as  also  to  the  social  status  accruing  on  mar- 
riage, but  a  new  status,  that  of  betrothment,  at  once  arises  between 
the  parties.  This  relation,  it  is  true,  has  not,  by  the  law  of  England, 
the  same  important  consequences  which  attached  to  it  by  the  canon 
law  and  the  law  of  many  other  countries.  Nevertheless  it  carries 
with  it  consequences  of  the  utmost  importance  to  the  parties.  Each 
becomes  bound  to  the  other;  neither  can,  consistently  with  such  a 
relation,  enter  into  a  similar  engagement  with  another  person;  each 
has  an  implied  right  to  have  this  relation  continued  till  the  contract 
is  finally  accomplished  by  marriage.  To  the  woman,  more  especially, 
it  is  all-important  that  the  relation  shall  not  be  put  an  end  to. 
Independently  of  the  mental  pain  occasioned  by  the  abrupt  termina- 
tion of  such  an  engagement,  the  fact  of  its  existence,  if  followed  by 
stich  a  termination,  must  necessarily  operate  to  her  serious  disad- 
vantage. During  its  continuance  others  will  naturally  be  deterred 
from  approaching  her  with  matrimonial  intentions;  nor  could  she 
admit  of  such  approaches,  if  made;  while  the  breaking  off  of  the 
engagement  is  too  apt  to  east  a  slur  upon  one  who  has  been  thus 
treated.  "We  see,  therefore,  every  reason  for  applying  the  principle 
of  Hochster  v.  De  la  Tour,  2  E.  &  B.  678,  22  L.  J.  (Q.  B.)  455, 
to  such  a  case,  and  for  holding  the  contract,  if  repudiated,  to  be 
broken,  not  only  in  its  present,  but  also  in  its  ultimate  obligations 
and  consequences.  To  hold  that  the  aggrieved  party  must  wait  till 
the  time  fixed  for  marrying  shall  have  arrived,  or  the  event  on  which 
it  is  to  depend  shall  have  happened,  would  have  the  effect  of  aggra- 


SECT.    II]  FROST    V.    KNIGHT  665 

vating  the  injury,  by  preventing  the  party  from  forming  any  other 
union,  and  by  reason  of  advancing  age  rendering  the  probability  of 
such  a  union  constantly  less.  It  has  been  suggested,  indeed,  that 
the  desire  of  marrying  and  the  happiness  to  be  expected  from  it 
diminish  with  advancing  years,  and  therefore  that,  when  by  terms 
of  the  contract  marriage  is  only  to  take  place  at  a  remote  time,  the 
value  of  the  marriage  and  the  damages  to  be  recovered  for  a  breach 
of  the  promise  would  be  less  if  the  refusal  were  made  when  the  time 
for  marrying  was  accomplished;  and  that,  consequently  an  action 
ought  not  to  be  allowed  till  the  time  when  the  fulfilment  of  the  con- 
tract could  have  been  claimed.  We  cannot  concur  in  this  view. 
We  think  that,  in  estimating  the  amount  of  injury  done  and  of  the 
compensation  to  be  made  for  it,  if  the  contract  were  broken  when 
the  time  for  marrying  had  arrived,  the  wasted  years  and  the  im- 
possibility of  forming  any  other  engagement  during  the  intermediate 
time  should  be  taken  into  account,  and  not  merely  the  age  of  the 
parties  and  the  then  existing  value  of  the  marriage.  It  is,  there- 
fore, manifest  that  it  is  better  for  both  parties  —  for  the  party  in- 
tending to  break  the  contract,  as  well  as  for  the  party  wronged  by 
the  breach  of  it  —  that  an  express  repudiation  of  the  contract  should 
be  treated  as  a  violation  of  it  in  all  its  incidents,  and  should  give  the 
right  to  the  party  wronged  to  bring  an  action  at  once,  and  have  the 
damages  assessed  at  the  earliest  moment.  T^o  one  can  doubt  that, 
morally  speaking,  a  party  who  determines  to  break  off  a  matrimonial 
engagement  acts  far  more  commendably  if  he  at  once  gives  notice 
of  his  intention  than  if  he  keeps  that  intention  secret  till  the  time  for 
fulfilling  the  promise  has  come.  The  reason  is  that  the  giving  such 
notice  at  the  earliest  moment  tends  to  mitigate,  while  the  delay  in 
giving  it  necessarily  aggravates,  the  injury  to  the  party  wronged. 

It  has  been  urged  that  there  must  be  great  difficulty  in  thus  as- 
sessing damages  prospectively.  But  this  must  always  be  more  or 
less  the  case  whenever  the  principle  of  Hochster  v.  De  la  Tour 
comes  to  be  applied.  It  would  equally  exist  where  one  of  the  parties, 
by  marrying  another  person,  gave  rise,  as  in  the  case  of  Short  v. 
Stone,  8  Q.  B.  358,  to  an  immediate  right  of  action.  It  cannot  be 
said  fhat  the  difficulty  is  by  any  means  insuperable,  and  the  advan- 
tages resulting  from  the  application  of  the  principle  of  Hochster  v. 
De  la  Tour  are  quite  sufficient  to  outweigh  any  inconvenience  arising 
from  the  difficulty  of  assessing  the  damages. 

We  are  struck  by  the  fact  that  the  Lord  Chief  Baron,  while  holding 
that  the  present  action  would  not  lie,  expressed  an  opinion  that  the 
wrong  done  by  the  repudiation  of  a  contract  of  marriage  might  be 
made  the  foundation  of  an  action  on  the  case,  in  which  the  facts 
should  be  set  forth.  But  as  the  rights  and  obligations  of  the  parties 
arise  here  entirely  out  of  the  contract,  we  have  a  difficulty  in  seeing 
how  such  an  action  could  "be  maintained.  But  be  that  as  it  may, 
as  in  such  an  action  as  is  thus  suggested  the  damages  would  have  to 


666  JOHNSTONE    V.    MILLING  [CHAP.    V 

be  ascertained  with  reference  to  the  same  facts  and  the  same  con- 
siderations as  in  an  action  brought  on  the  contract,  it  seems  to  us 
by  far  the  simpler  course,  the  case  being,  as  it  seems  to  us  for  the 
reasons  we  have  given,  clearly  within  the  decision  in  Hochster  v. 
may  be  maintained,  and  that  in  it  the  plaintiff  is  entitled  to  recover 
damages  in  respect  of  the  non-fulfilment  of  the  promise  as  though 
the  death  of  the  defendant's  father  —  the  event  on  which  the  ful- 
filment was  to  depend  —  had  actually  occurred. 

We  are  therefore  of  opinion  that  the  judgment  of  the  Court  of 
Exchequer  must  be  reversed/ 


JOH:NrSTONE  V.  MILLING 

In  the  Queen's  Bench  Division  Coukt  of  Appeal,  January  13,  1886 

[Reported  in  16  Queens  Bench  Division,  460] 

Appeal  from  the  order  of  the  Queen's  Bench  Division  directing 
that  judgment  should  be  entered  for  the  defendant  on  the  counter- 
claim for  damages  to  be  ascertained  by  a  reference. 

The  defendant  in  the  action  set  up  a  counter-claim  for  damages 
for  breach  of  a  covenant  contained  in  a  lease  by  which  the  plaintiif 
covenanted  with  the  defendant  to  rebuild  the  demised  premises. 
The  reply  stated,  among  other  things,  that  the  plaintiff  had  not  re- 
ceived any  notice  to  rebuild  from  the  defendant  as  required  by  the 
terms  of  the  covenant,  and  also  that  the  lease  was  surrendered  by 
the  defendant  before  the  time  at  which  the  obligation  to  rebuild 
would  have  arisen. 

The  action  was,  after  issue  joined,  remitted  to  the  county  court 
for  trial. 

The  facts  with  regard  to  the  claim  are  immaterial  to  this  report. 

The  facts  Avith  regard  to  the  counter-claim  as  found  by  the  county 
court  judge  were  that  the  plaintiff  had  been  unable  to  find  the  money 
to  rebuild  the  premises;  that  the  plaintiff  both  before  and  after  the 
surrender  of  the  lease  told  the  defendant  that  he  was  unable  and 
would  be  unable  to  find  the  money  for  rebuilding  the  premises;  that 
the  defendant  in  consequence  of  the  plaintiff  stating  that  he  was 
and  would  be  unable  to  find  the  money  for  rebuilding  the  premises 
surrendered  the  lease;  and  that  the  defendant  suffered  damage  by 
such  surrender.  The  defendant's  counsel  submitted  on  those  find- 
ings that  the  defendant  was  entitled  to  a  verdict  on  the  counterclaim. 

The  county  court  judge,  however,  held  the  contrary,  and  found  a 

verdict  both  on  the  claim  and  on  the  counter-claim  for  the  plaintiff, 

and  entered  judgment  accordingly. 

•  K>:rt7,  V.  Frank,  76  Tnd.  504;  Adams  v.  Byorly,  123  Ind.  36S;  Holloway  v.  Griffith, 
32  Town,  400;  Lfwifl  tj.  Tapm.an,  00  Md.  204;  Shcnhan  v.  Barry,  27  Mich.  217;  Biirtis 
V.  ThompHfm.  42  N.  Y.  240;  Brown  v.  Odill,  104  Tonn.  250;  Burko  v.  Shaver,  92  Va. 
345,  ar.c.  Hcf;  also  Trammoll  ?).  VauRhan,  158  Mo.  214;  Stanford  v.  McKill,  6  N.  Dak. 
336;    Swigor  v.  Hayrruin,  50  \V.  Va.  12.'i. 


SECT.    II]  JOHNSTONE    V.    MILLING  667 

A  rule  nisi  for  a  new  trial  was  obtained  by  the  defendant  in  the 
Queen's  Bench  Division;  and  the  Divisional  Court  (Huddleston,  B, 
and  Cave,  J.),  upon  the  argument  of  the  rule,  made  the  order  against 
which  the  plaintiff  appealed. 
Foote,  for  the  plaintiff. 
Brooke  Little,  for  the  defendant. 

BowEN,  L.  J.  [opinions  against  the  counterclaim  having  been 
given  by  Lord  Esher,  M.  R.  and  by  Cotton,  L.  J.,]  I  am  of  the  same 
opinion.  The  question  which  we  have  to  decide  arises  with  regard 
to  the  defendant's  counter-claim.  The  claim  made  by  the  defendant 
is  upon  a  covenant  by  which  the  plantiff  undertook,  after  the  expira- 
tion of  four  years  from  the  commencement  of  the  term,  to  rebuild 
the  premises  upon  notice  from  the  defendant  to  do  so.  The  defend- 
ant says  that  before  the  time  had  arrived  for  the  performance  by 
the  plaintiff  of  this  obligation  he  repudiated  his  liability  on  the  con- 
tract, and  so  conferred  an  immediate  right  of  action  on  the  defend- 
ant. We  have,  therefore,  to  consider  upon  what  principles  and  under 
what  circumstances  it  must  be  held  that  a  promisee,  who  finds  him- 
self confronted  with  a  declaration  of  intention  by  the  promisor  not 
to  carry  out  the  contract  when  the  time  for  performance  arrives,  may 
treat  the  contract  as  broken,  and  sue  for  the  breach  thereof.  It  would 
seem  on  principle  that  the  declaration  of  such  intention  by  the  prom- 
isor is  not  in  itself  and  unless  acted  on  by  the  promisee  a  breach  of 
the  contract;  and  that  it  only  becomes  a  breach  when  it  is  converted 
by  force  of  what  follows  it  into  a  wrongful  renunciation  of  the  con- 
tract. Its  real  operation  appears  to  be  to  give  the  promisee  the 
right  of  electing  either  to  treat  the  declaration  as  hrutum  fulmen, 
and  holding  fast  to  the  contract  to  wait  till  the  time  for  its  per- 
formance has  arrived,  or  to  act  upon  it,  and  treat  it  as  a  final  asser- 
tion by  the  promisor  that  he  is  no  longer  bound  by  the  contract,  and 
a  wrongful  renunciation  of  the  contractual  relation  into  which  he 
has  entered.  But  such  declaration  only  becomes  a  wrongful  act  if 
the  promisee  elects  to  treat  it  as  such.  If  he  does  so  elect,  it  becomes 
a  breach  of  contract,  and  he  can  recover  upon  it  as  such.  Upon 
looking  to  the  reason  of  the  thing  it  seems  obvious  that  in  the  latter 
case  the  rights  of  the  parties  under  the  contract  must  be  regarded 
as  culminating  at  the  time  of  the  wrongful  renunciation  of  the  con- 
tract, which  must  then  be  regarded  as  ceasing  to  exist  except  for  the 
purpose  of  the  promisee's  maintaining  his  action  upon  it;  it  would 
be  unjust  and  inconsistent  with  all  fairness  that  the  promisee  should 
be  entitled  to  bring  his  action  as  upon  a  wrongful  renunciation  of 
the  contract,  and  yet  to  treat  the  contract  as  still  open  and  existing 
with  regard  to  the  future.  Such  being  the  reason  of  the  thing,  the 
auhorities  seem  all  to  be  the  same  way.  In  Hochster  v.  De  la  Tour, 
2  E.  &  B.  678,  22  L.  J.  (Q.  B.)  455,  Lord  Campbell  thus  expresses 
the  doctrine :  "But  it  is  surely  much  more  rational  and  more  for  the 
benefit  of  both  parties  that,  after  the  renunciation  of  the  agreement 


668  JOHNSTONE    V.    MILLING  [CHAP.   V 

by  the  defendant,  the  plaintiff  should  be  at  liberty  to  consider  him- 
self absolved  from  any  future  performance  of  it,  retaining  his  right 
to  sue  for  any  damage  he  has  suffered  from  the  breach  of  it."  In 
the  passage  cited  by  my  brother  Cotton  from  Frost  v.  Knight,  L.  R. 
7  Ex.  11,  Cockburn,  C.  J.,  points  out  that  there  are  these  two  al- 
ternatives open  to  the  promisee,  and  that  it  is  a  condition  essential 
to  his  right  to  sue  upon  a  repudiation  of  the  contract  before  the  time 
for  performance  as  upon  a  breach  that  he  should  thenceforth  treat 
the  contract  as  at  an  end  except  for  the  purpose  of  being  sued  upon. 
Such  being  the  doctrine  on  the  subject,  the  question  arises  whether 
it  is  applicable  to  the  case  of  a  lease.  It  has  been  decided  in  Sur- 
plice V.  Farnsworth,  7  M.  &  G.  576,  that  a  tenant  could  not  throw 
up  his  tenancy  on  the  breach  of  a  stipulation  that  the  landlord  should 
put  the  premises  in  repair.  No  one  ever  yet  heard  of  an  attempt 
to  put  an  end  to  a  lease  in  respect  of  a  breach  of  covenant  except  in 
cases  where  the  term  was  made  dependent  upon  the  performance 
of  the  covenant  as  a  condition.  No  case  has  been  cited  in  which  it 
has  been  sought  to  apply  the  doctrine  of  Hochster  v.  De  la  Tour, 
2  E.  &  B.  678,  22  L.  J.  (Q.  B.)  455,  to  such  a  case  as  this,  or  to 
any  case  where  the  promisee  sought  to  keep  open  the  contract  after 
the  alleged  repudiation  by  the  promisor,  and  also  to  sue  for  damages 
for  such  repudiation  as  for  a  breach.  It  is  not  necessary  to  decide 
the  point,  but  I  very  much  doubt  whether  the  doctrine  of  Hochster 
V.  De  la  Tour  is  applicable  in  such  a  case  as  this  between  lessor  and 
lessee.  Apart,  however,  from  this  question,  I  think  that  the  court 
below  were  wrong  with  regard  to  the  inferences  of  fact  which  they 
drew.  The  claim  being  for  wrongful  repudiation  of  the  contract, 
it  was  necessary  that  the  plaintiff's  language  should  amount  to  a 
declaration  of  intention  not  to  carry  out  the  contract,  or  that  it 
should  be  such  that  the  defendant  was  justified  in  inferring  from  it 
such  intention.  We  must  construe  the  language  used  by  the  light 
of  the  contract  and  the  circumstances  of  the  case  in  order  to  see 
whether  there  was  in  this  case  any  such  renunciation  of  the  contract. 
It  seems  to  me  that  the  county  court  judge  was  of  the  contrary 
opinion,  and,  looking  to  the  whole  history  of  the  transaction,  I  can- 
not say  that  he  was  wrong.  Unless  the  language  of  the  plaintiff  can 
only  reasonably  be  construed  as  importing  such  renunciation,  I  think 
the  court  below  ought  not  to  have  disregarded  the  finding,  and  treated 
what  the  plaintiff  said  as  amounting  to  a  renunciation  of  the  con- 
tract within  the  doctrine  to  which  I  have  alluded.  Further,  assuming 
that  there  was  evidence  to  support  a  finding  that  what  the  plaintiff 
said  was  a  renunciation  of  the  contract,  there  does  not  seem  to  me 
to  bo  a  tittle  of  evidence  to  show  that  the  defendant  ever  elected  to 
treat  it  as  such,  and  all  reason  and  authority,  as  I  have  said,  appear 
to  me  to  show  that  he  must  so  elect  to  treat  it,  in  order  that  it  may 
constitute  a  breach  of  the  contract.  It  appears  to  me,  therefore,  that 
the  case  for  tbo  df^ff-ndant  entirely  fails.  For  these  reasons  I  think 
that  tlie  .'ii)})cal  slionld  be  allowed.  Appeal  aJIoived. 


SECT.    II]  DINGLEY    V.    OLER  669 


DIISTGLEY  AND  ANOTHER   V.    OLEE.  AND   ANOTHER 
OLEE   AND   ANOTHER   V.   DIISTGLEY    AND   ANOTHER 

.Supreme  Court  of  the  United  States,  March  8,  9-April  5,  1886 
[Reported  in  117  United  States,  490] 

This  was  an  action  of  assumpsit  brought  by  Dingley  Brothers 
against  W.  M.  Oler  &  Co.,  of  Baltimore,  to  recover  damages  for  the 
alleged  breach  of  an  agreement,  whereby,  it  was  averred,  the  de- 
fendants undertook  and  promised,  in  consideration  of  3,245  25-100 
tons  of  ice  delivered  to  them  by  the  plaintiffs  in  1879,  to  return  and 
deliver  to  the  plaintiffs  the  same  quantity  of  ice  from  the  defendant's 
ice-houses  in  the  year  1880. 

The  court  made  a  special  finding  of  the  facts,  and,  in  pursuance 
of  the  conclusions  of  law  based  thereon,  rendered  judgment  in  favor 
of  the  plaintiffs  for  the  sum  of  $7,335.35. 

Exceptions  were  taken  by  each  party  to  rulings  of  the  court,  on 
which  errors  are  assigned,  the  cause  being  brought  here  for  review 
on  writs  of  error  sued  out  by  the  respective  parties. 

The  court  found,  as  matter  of  fact,  that  late  in  the  season  of  1879, 
the  plaintiffs,  finding  themselves  in  possession  of  a  large  quantity  of 
ice  undisposed  of,  and  which  threatened  to  be  a  total  loss,  pressed 
the  defendants  to  buy  some  or  all  of  it.  Both  parties  were  dealers 
in  ice,  cutting  it  upon  the  Kennebec  Biver  and  shipping  it  thence 
during  the  season,  that  is,  while  the  river  was  open. 

The  offers  of  the  plaintiff's  were  rejected,  but  the  defendants,  by 
their  letter  of  Sept.  6,  made  a  counter  offer  to  take  a  cargo  and 
"return  the  same  to  you  next  year  from  our  houses."  The  plaintiffs, 
by  their  letter  of  September,  1879,  accepted  this  offer,  and  several 
cargoes  were  delivered  upon  the  same  terms;  the  total  delivery  was 
3,245  25-100  tons. 

In  July,  1880,  one  of  the  plaintiffs  spoke  to  one  of  the  defendants 
about  delivering  the  ice,  and  he  replied  that  he  did  not  know  about 
that,  delivering  ice  when  it  was  worth  five  dollars  a  ton,  which  they 
had  taken  when  it  was  worth  fifty  cents  a  ton,  but  he  promised  to 
write  an  answer.  July  7,  1880,  the  defendants  wrote,  repeating  their 
objections,  and  saying,  among  other  things,  "we  must,  therefore,  de- 
cline to  ship  the  ice  for  you  this  season,  and  claim  our  right  to  pay 
you  for  the  ice  in  cash  at  the  price  you  offered  other  parties  here 
(that  is,  fifty  cents),  or  give  you  ice  when  the  market  reaches  that 
point." 

The  plaintiffs,  July  10,  1880,  wrote  that  they  had  a  right  to  the 
ice,  and  had  sold  it  in  expectation  of  its  delivery,  to  which  the  de- 
fendants answered,  July  15,  1880,  reciting  the  circumstances  of  the 
case  and  the  hardship  of  such  a  demand,  and  again  denying  the  obli- 
gation.    The  letter  contained  this  sentence:  "We  cannot,  therefore, 


670  DINGLEY    V.    OLER  [CHAP.   V 

comply  with  your  request  to  deliver  you  the  ice  claimed,  and  respect- 
fully  submit  that  you  ought  not  to  ask  this  of  us/'  &c.,  asking  for  a 
reply  or  a  personal  interview.  Neither  appears  to  have  been  given, 
and  this  action  was  commenced  July  21,  1880.  The  court  further 
found  that  ice  was  worth  five  dollars  a  ton  in  July,  1880,  and  fell 
later  in  the  season  to  two  dollars  a  ton. 

Thereupon  the  court  held,  as  matter  of  law,  that  there  was  a  con- 
tract executed  by  the  plaintiffs,  and  to  be  executed  by  the  defendants, 
who  were  bound  to  deliver  3,245  25-100  tons  of  ice  from  their  houses 
on  the  Kennebec  River  during  the  year  of  1880;  that  the  year  meant 
the  shipping  season;  and  that  the  defendants  had  the  whole  season, 
if  they  chose  to  demand  it,  in  which  to  make  delivery,  and  that  the 
letters  of  July  7  and  15  from  the  defendants  to  the  plaintiffs  con- 
tained an  unequivocal  refusal  to  deliver  any  ice  during  the  season; 
that  the  defendants  having  unqualifiedly  refused  to  ship  the  ice,  this 
action  could  be  maintained,  though  brought  before  the  close  of  the 
season,  but  that  the  damages  were  not  to  be  reckoned  by  the  price 
of  ice  in  July;  that  what  the  plaintiffs  lost  was  3,245  25-100  tons  of 
ice  some  time  during  the  season ;  that  the  price  of  ice  went  down  after 
July  to  two  dollars  a  ton,  and  the  measure  of  damages  must  be 
reckoned  at  this  rate,  with  interest  from  the  date  of  the  writ. 

To  these  conclusions  of  law  both  parties  excepted. 

Mr.  Orville  Dewey  Baker,  for  Dingley  and  another. 

Mr.  Bernard  Carter,  for  Oler  &  Co. 

Mk.  Justice  Matthews,  after  stating  the  case  as  above  rejDorted, 
delivered  the  opinion  of  the  court :  — 

We  agree  in  opinion  with  the  Circuit  Court,  that  according  to  the 
terms  of  the  contract,  the  defendants  had  the  option  of  delivering  the 
ice  contracted  for  at  any  time  during  the  whole  shipping  season  of 
1880,  giving  to  the  plaintiffs  reasonable  notice  of  the  time  when 
fixed,  and  an  opportunity  to  prepare  for  receiving  and  taking  it 
away  from  the  defendants'  houses.  The  language  of  the  contract 
was  that  the  defendants  were  to  "return  the  same  (the  ice)  to  you 
next  year  from  our  houses."  "J^ext  year,"  it  is  not  denied,  means 
the  shipping  season  of  1880,  during  which  navigation  was  open,  and 
in  time  for  the  plaintiffs,  on  notice,  to  obtain  vessels,  send  them  to 
the  ice  houses  for  loading,  and  get  out  of  the  river  before  it  was 
closed  to  navigation.  The  defendants  were  to  deliver,  and  although 
that,  under  the  circumstances,  required  nothing  on  their  part  but  to 
be  ready  for  the  plaintiffs  to  receive  and  load  on  their  vessels,  that 
state  of  readiness  might  depend  upon  other  engagements  of  the 
defendants  in  respect  to  ice  in  the  same  houses,  so  that  they  had 
the  ri^'bt  under  the  terms  of  the  contract  to  consult  their  convenience 
as  to  the  particular  day  when  they  would  furnish  to  the  plaintiffs 
the  ice  for  shipment.  The  first  and  principal  act  to  be  done  under 
the  contract  was  to  be  done  by  the  defendants,  that  is,  the  delivery, 
and  the  words  of  the  agreement  are  fully  satisfied  when  that  is  done 


SECT.    II  ]  DINGLEY    V.    OLER  671 

at  any  reasonable  time  within  the  season  of  1880.  And  this  confers 
upon  the  defendants,  bound  to  make  the  delivery,  the  choice  of  the 
time  within  the  period  permitted  by  the  contract.  Wheeler  v.  New 
Brunswick  &  Canada  Railroad  Co.,  115  U.  S.  29. 

We  differ,  however,  from  the  opinion  of  the  Circuit  Court  that 
the  defendants  are  to  be  considered,  from  the  language  of  their  letters 
above  set  out,  as  having  renounced  the  contract  by  a  refusal  to  per- 
form, within  the  meaning  of  the  rule  which,  it  is  assumed,  in  such 
a  case,  confers  upon  the  plaintiffs  a  right  of  action  before  the  ex- 
piration of  the  contract  period  for  performance.  We  do  not  so  con- 
strue the  correspondence  between  the  parties.  In  the  letter  of  July 
7  the  defendants  say :  "We  must,  therefore,  decline  to  ship  the  ice  for 
you  this  season,  and  claim  as  our  right  to  pay  you  for  the  ice,  in 
cash,  at  the  price  you  offered  it  to  other  parties  here,  or  give  you  ice 
when  the  market  reaches  that  point."  Although  in  this  extract  they 
decline  to  ship  the  ice  that  season,  it  is  accompanied  with  the  ex- 
pression of  an  alternative  intention,  and  that  is,  to  ship  it,  as  must 
be  understood,  during  that  season,  if  and  when  the  market  price 
should  reach  the  point  which,  in  their  opinion,  the  plaintiffs  ought 
to  be  willing  to  accept  as  its  fair  price  between  them.  It  was  not 
intended,  we  think,  as  a  final  and  absolute  declaration  that  the  con- 
tract must  be  regarded  as  altogether  off,  so  far  as  their  performance 
was  concerned,  and  it  was  not  so  treated  by  the  plaintiffs.  For,  in 
their  answer  of  July  10,  they  repeat  their  demand  for  delivery  im- 
mediately, speak  of  the  letter  of  the  7th  instant  as  asking  "for  a 
postponement  of  the  delivery,"  urge  them  "to  fill  our  order,"  and 
close  with  "hoping  you  (the  defendants)  will  take  a  more  favorable 
view  upon  further  reflection,"  &c.  Here  certainly  was  a  locus  peni- 
tentice  conceded  to  the  defendants  by  the  plaintiffs  themselves,  and 
a  request  for  further  consideration,  based  upon  a  renewed  demand, 
instead  of  abiding  by  and  standing  upon  the  previous  one. 

Accordingly,  on  July  15,  the  defendants  replied  to  the  demand 
for  an  immediate  delivery  to  meet  the  exigency  of  the  plaintiffs'  sale 
of  the  same  ice  to  others,  and  the  letter  is  evidently  and  expressly 
confined  to  an  answer  to  the  particular  demand  for  a  delivery  at 
that  time.  They  accordingly  say:  "Now  you  ask  us  at  a  time  when 
we  are  pressed  by  our  sales,  and  by  short  supply  threatening  us  and 
others,  to  deliver  to  you  the  equivalent  in  tons  of  the  ice  taken  from 
you  under  the  circumstances  stated.  This  does  not  seem  to  us  to  be 
fair,"  &c.  "We  cannot,  therefore,  comply  with  your  request  to  de- 
liver to  you  the  ice  claimed,  and  respectfully  submit  that  you  ought 
not  to  ask  this  of  us  in  view  of  the  facts  stated  herein  and  in  ours 
of  the  7th."  This,  we  think,  is  very  far  from  being  a  positive,  un- 
conditional, and  unequivocal  declaration  of  fixed  purpose  not  to  per- 
form the  contract  in  any  event  or  at  any  time.  In  view  of  the  con- 
sequences sought  to  be  deduced,  and  claimed  as  a  matter  of 
law  to  follow,  the  defendants  have  a  right  to  claim  that  their  ex- 


672  DINGLEY    V.    OLER  [CHAP.    V 

pressions,  sought  to  be  converted  into  a  renunciation  of  the  contract, 
shall  not  be  enlarged  by  construction  beyond  their  strict  meaning. 

The  view  taken  by  the  Circuit  Court  of  the  correspondence  and 
conduct  of  the  parties,  and  which  we  hold  to  be  erroneous,  brought 
the  case  within  the  rule  laid  down  by  the  English  courts  in  Hochster 
V.  De  la  Tour,  2  E.  &  B.  678;  Frost  v.  Knight,  L.  R.  7  Ex.  Ill; 
Danube  &  Black  Sea  Railway  Co.  v.  Xenos,  11  C.  B.  (jsr.  s.)  152, 
and  which,  in  Roper  v.  Johnson,  L.  R.  8  C.  P.  167,  178,  was  called 
a  novel  doctrine,  followed  by  the  courts  of  several  of  the  States ;  Crab- 
tree  V.  Messersmith,  19  Iowa,  179;  Holloway  v.  Griffith,  32  Iowa, 
409;  Fox  v.  Kitton,  19  111.  519;  Chamber  of  Commerce  v.  Sollitt, 
43  111.  519;  Dugan  v.  Anderson,  36  Md.  567;  Burtis  v.  Thompson, 
42  JST.  Y.  246,^  but  disputed  and  denied  by  the  Supreme  Judicial 
Court  of  Massachusetts  in  Daniels  v.  Newton,  114  Mass.  530,  and 
never  applied  in  this  court.  Accordingly,  the  right  to  maintain  the 
present  action  was  justified  upon  the  principle  supposed  to  be  estab- 
lished by  those  cases. 

The  construction  we  place  upon  what  passed  between  the  parties 
renders  it  unnecessary  for  us  to  discuss  or  decide  whether  the  doc- 
trine of  these  authorities  can  be  maintained  as  applicable  to  the  class 
of  cases  to  which  the  present  belongs;  for,  upon  that  construction, 
this  case  does  not  come  within  the  operation  of  the  rule  invoked. 

In  Smoot's  case,  15  Wall.  36,  this  court  quoted  with  approval  the 
qualifications  stated  by  Benjamin  on  Sale,  1st  ed.  424,  2d  ed.  §  568, 
that  "a.  mere  assertion  that  the  party  will  be  unable,  or  will  refuse 
to  perform  his  contract,  is  not  sufficient;  it  must  be  a  distinct  and 
unequivocal  absolute  refusal  to  perform  the  promise,  and  must  be 
treated  and  acted  upon  as  such  by  the  party  to  whom  the  promise 
was  made;  for,  if  he  afterwards  continue  to  urge  or  demand  a  com- 
pliance with  the  contract,  it  is  plain  that  he  does  not  understand  it 
to  be  at  an  end." 

"We  do  not  find  any  such  refusal  to  have  been  given  or  acted  upon 
in  the  present  case,  and  the  facts  are  not  stronger  than  those  in 
Avery  v.  Bowden,  5  E.  &  B.  714,  s.  c.  6  E.  &  2.  953,  which  were  held 

'  Now  followed  by  the  Federal  Courts,  Roehm  v.  Horst,  178  U.  S.  1,  Central  Trust 
Co.  V.  Chicago 'Auditorium  Assoc.  240  U.  S.  581;  Equitable  Tn,ist  Co.  v.  Western  Pac. 
R.  Co.  244  Fed.  485,  250  Fed.  327  (C.  C.  A.)  246  U.  S.  672;  Grau  v.  Foss,  &c.  Co. 
V.  Bullock,  59  F(!d.  Rep.  83,  87;  Marks  v.  Van  Eeghen,  85  Fed.  Rep.  (C.  C.  A.)  853. 
The  Supreme  Court  long  remained  apparently  imdecidfKl.  Cleveland  RollinK  Mill  v. 
Rhodes,  121  U.  S.  2.55,  264;  Pierco  r.  Tonncssco,  &c.  R.  R.  Co.,  173  U.  S.  1,  12. 
Sec  also  Edward   Hines  Lumber  Co.  v.  All(-y,  73  Fed.  Rep.  (C.  C.  A.)  603. 

The  numt-rous  decisions  in  state  courts  are  collected  in  3  Williston  Contracts,  §  1314. 
The  at)lest  opinion  in  opposition  to  the  prevailing  view  is  that  in  Daniels  v.  Newton, 
114  Ma.4s.  5.30. 

In  IJcnecke  v.  IIa"hler,  38  N.  Y.  App.  Div.  344,  the  Court  refused  to  apply  the  doc- 
trine of  anticipatory  hn^ach  to  the  case  of  a  promis.sory  note.  See  also  Honour  v. 
Ef|uitable  Soc.  flOOf)]  1  Ch.  852;  Greenway  v.  Gaithor,  Taney,  227;  Flinn  v.  Mowry, 
131  Cal.  4HI.  In  Roehm  v.  Horst,  178  U.  S.  1,  17,  Fiimjoh,  C.  .1.,  distinguished  the 
ciMc.  f)f  a  note  on  tlu;  ground  that  the  doctrine  of  anticipatory  breach  only  applies  to 
contracts  where  there  are  mutual  obligations.  See  also  O'Neill  v.  Supreme  Council, 
70  N.  J.  L.  410. 


SECT.    Il]  PARKER    V.   RUSSELL  673 

not  to  constitute  a  breach  or  renunciation  of  the  contract.  The  most 
recent  English  case  on  the  subject  is  that  of  Johnstone  v.  Milling, 
in  the  Court  of  Appeals,  16  Q.  B.  D.  460,  decided  in  January  of  the 
present  year,  which  holds  that  the  words  or  conduct  relied  on  as 
a  breach  of  the  contract  by  anticipation  must  amount  to  a  total  re- 
fusal to  perform  it,  and  that  that  does  not  by  itself  amount  to  a 
breach  of  the  contract,  unless  so  acted  upon  and  adopted  by  the  other 
party. 

The  present  action  was  prematurely  brought  before  there  had  been 
a  breach  of  the  contract,  even  in  this  sense,  by  the  defendants;  for 
what  they  said  on  July  15  amounted  merely  to  a  refusal  to  comply 
with  the  particular  demand  then  made  for  an  immediate  delivery. 

The  judgment  is  accordingly  reversed  upon  the  writ  of  error  sued 
out  hy  the  defendants  below,  and  the  cause  remanded,  with  in- 
structions to  take  further  proceedings  therein  according  to  law; 
and  upon  the  writ  of  error  of  plaintiffs  helow  judgment  will  he 
given  that  they  take  nothing  hy  their  writ  of  error. 


ISAAC  PAKKER  v.  ELECTA  P.  RUSSELL 

Supreme  Judicial  Court  of  Massachusetts,  May  24-June  28,  1882 

[Reported  in  133  Massachusetts,  74] 

Contract.  The  declaration  alleged  "that  the  defendant,  in  con- 
sideration of  the  conveyance  by  the  plaintiff  to  the  defendant  of 
certain  real  estate  in  Deerfield,  promised  and  agreed  to  support  and 
maintain  the  plaintiff,  furnishing  him  with  all  things  necessary  and 
convenient  in  sickness  and  in  health,  during  the  natural  life  of  the 
plaintiff;  that  the  defendant  accepted  said  conveyance,  and  has 
occupied  and  used  said  estate,  but  has  refused  and  neglected  and 
still  neglects  and  refuses  to  perform  her  said  agreement."  "Writ  dated 
Sept.  14,  1880.  Trial  in  the  Superior  Court,  before  Bacon,  J.,  who 
allowed  a  bill  of  exceptions,  in  substance  as  follows :  — 

The  evidence  tended  to  show  that,  in  March,  1873,  the  defendant, 
for  a  good  consideration,  agreed  to  support  the  plaintiff  during  his 
life;  that  she  did  support  him  in  her  house  from  that  time  till  about 
Oct.  1,  1878,  when  her  house  was  destroyed  by  fire;  and  that  since 
the  fire  the  defendant  had  furnished  no  aid  or  support  to  the  plaintiff. 

The  defendant  requested  the  judge  to  rule  that  damages  could  only 
be  recovered  in  this  action  for  failure  to  furnish  support  to  the 
plaintiff  prior  to  the  date  of  the  writ;  and  that  damages  for  such 
failure  since  the  date  of  the  writ  must  be  sought  in  another  action. 
The  judge  declined  to  so  rule,  and  instructed  the  jury  that  if  the 
defendant,  for  a  period  of  about  two  years,  neglected  to  furnish  aid 
or  support  to  the  plaintiff,  without  any  fault  of  the  plaintiff,  the 


674  PARKER    V.    RUSSELL  [CHAP.   V 

plaintiff  might  treat  the  contract  as  at  an  end,  and  recover  damages 
for  the  breach  of  the  contract  as  a  whole ;  and  that  the  plaintiff  would 
be  entitled  to  recover  compensation  for  the  past  failure  of  the  de- 
fendant to  furnish  him  aid  and  support  and  full  indemnity  for  his 
future  support. 

The  defendant  also  requested  the  judge  to  rule  that  the  plaintiff, 
under  his  declaration,  could  not  recover  damages  for  any  period 
subsequent  to  the  date  of  the  writ;  but  the  judge  declined  so  to  rule. 

The  jury  returned  a  verdict  for  the  plaintiff  in  the  sum  of  $972.25; 
and  found  specially  that  the  support  of  the  plaintiff,  under  the 
terms  of  the  contract,  from  the  date  of  the  fire  to  the  date  of  the 
writ,  was  of  the  value  of  $377.40,  and  that  the  same  from  the  date 
of  the  fire  to  the  date  of  the  trial  was  of  the  value  of  $473.60.  In 
case  the  plaintiff  should  not  be  entitled  to  damages  under  the  rule 
laid  down  by  the  judge,  judgment  was  to  be  entered  for  the  one  sum 
or  the  other,  as  this  court  should  determine  the  rule  of  damages  to 
be.     The  defendant  alleged  exceptions. 

F.  L.  Greene,  for  the  defendant. 

A.  DeWoIf,  for  the  plaintiff. 

Field,  J.  In  an  action  for  a  breach  of  contract  to  support  the 
plaintiff  during  his  life,  if  the  contract  is  regarded  as  still  subsisting, 
the  damages  are  assessed  up  to  the  date  of  the  writ,  and  not  up  to 
the  time  when  the  verdict  is  rendered.    Fay  v.  Guynon,  131  Mass.  31. 

But  if  the  breach  has  been  such  that  the  plaintiff  has  the  right 
to  treat  the  contract  as  absolutely  and  finally  broken  by  the  defend- 
ant, and  he  elects  so  to  treat  it,  the  damages  are  assessed  as  of  a  total 
breach,  of  an  entire  contract.  Amos  v.  Oakley,  131  Mass.  413;  Schell 
V.  Plumb,  55  N.  Y.  592;  Kemelee  v.  Hall,  31  Vt.  582;  Fales  v.  Hem- 
enway,  64  Maine,  373;  Sutherland  v.  Wyer,  67  Maine,  64;  Lamor- 
eaux  V.  Eolfe,  36  N.  H.  33;  Mullaly  v.  Austin,  97  Mass.  30;  Howard 
V.  Daly,  61  N.  Y.  362. 

Such  damages  are  not  special  or  prospective  damages,  but  are  the 
damages  naturally  resulting  from  a  total  breach  of  the  contract,  and 
are  suffered  when  the  contract  is  broken,  and  are  assessed  as  of  that 
time.  From  the  nature  of  the  contract  they  include  damages  for 
not  performing  the  contract  in  the  future  as  well  as  in  the  past.  The 
value  of  the  contract  to  the  plaintiff  at  the  time  it  is  broken  may  be 
somewhat  indefinite  because  the  duration  of  the  life  of  the  plaintiff 
is  uncertain,  but  uncertainty  in  the  duration  of  a  life  has  not,  since 
the  adoption  of  life  tables,  been  regarded  as  a  reason  why  full  relief 
in  damages  should  not  be  afforded  for  a  faihire  to  perform  a  con- 
tract which  by  its  terms  was  to  continue  during  life. 

Wh(!n  the  defendant,  for  example,  absolutely  refuses  to  perform 
such  a  contract  after  the  time  for  entering  upon  the  performance 
has  begun,  it  would  be  a  great  liardship  to  compel  the  plaintiff  to  be 
ready  iit  iill  times  during  his  life  to  be  supported  by  the  defendant, 
if  the  defendant  should  at  any  time  change  his  mind;  and  to  hold 


SECT.   Il]  PARKER    V.    RUSSELL  675 

that  he  must  resort  to  successive  actions  from  time  to  time  to  obtain 
his  damages  piecemeal,  or  else  leave  them  to  be  recovered  as  an 
entirety  by  his  personal  representatives  after  his  death. 

Daniels  v.  Newton,  114  Mass.  530,  decides  that  an  absolute  re- 
fusal to  perform  a  contract  before  the  performance  is  due  by  the 
terms  of  the  contract  is  not  a  present  breach  of  the  contract  for 
which  any  action  can  be  maintained;  but  it  does  not  decide  that  an 
absolute  refusal  to  perform  a  contract  after  the  time  and  under  the 
conditions  in  which  the  plaintiff  is  entitled  to  require  performance, 
is  not  a  breach  of  the  contract,  even  although  the  contract  is  by  its 
terms  to  continue  in  the  future. 

The  cases  cited  by  the  defendant  are  not  inconsistent  with  these 
views.  In  Pierce  v.  Woodward,  6  Pick.  206,  the  declaration  was 
for  a  breach  of  a  negative  promise,  namely,  "not  to  set  up  the  busi- 
ness of  a  grocer"  within  certain  limits;  and  it  was  held  that  the 
damages  could  be  assessed  only  to  the  date  of  the  writ.  The  de- 
fendant might  at  any  time,  without  the  consent  of  the  plaintiff,  stop 
carrying  on  the  business,  when  the  plaintiff's  damages  would  nec- 
essarily cease. 

Powers  V.  Ware,  4  Pick.  106,  was  an  action  of  covenant  broken, 
brought  by  the  overseers  of  the  poor,  under  the  St.  of  1793,  c.  59, 
§  5,  for  the  breach  of  a  covenant  to  maintain  an  apprentice  under 
an  indenture  of  apprenticeship.  The  court  in  the  opinion  speak  of 
the  common-law  rule  in  assessing  damages  only  to  the  date  of  the 
writ.  But  the  statute  under  which  the  action  was  brought  prevented 
the  overseers;  from  treating  the  contract  as  wholly  at  an  end,  because 
it  gave  the  apprentice  a  right  of  action  when  the  term  is  expired, 
"for  damages  for  the  causes  aforesaid,  other  than  such,  if  any,  for 
which  damages  may  have  been  recovered  as  aforesaid,"  that  is,  by 
the  overseers. 

Hambleton  v.  Veere,  2  Saund.  169,  was  an  action  on  the  case 
for  enticing  away  an  apprentice;  and  Ward  v.  Rich,  1  Vent.  103, 
was  an  action  for  abducting  a  wife;  and  neither  throws  much  light 
on  the  rule  of  damages  for  breach  of  a  contract. 

Horn  V.  Chandler,  1  Mod.  271,  was  covenant  broken  upon  an  in- 
denture of  an  infant  apprentice,  who  under  the  custom  of  London 
had  bound  himself  to  serve  the  plaintiff  for  seven  years;  the  declara- 
tion alleged  a  loss  of  service  for  the  whole  term,  a  part  of  which 
was  unexpired;  on  demurrer  to  the  plea,  the  declaration  was  held 
good,  but  it  was  said  "that  the  plaintiff  may  take  damages  for  the  de- 
parture only,  not  the  loss  of  service  during  the  term;  and  then  it 
will  be  well  enough."  But  if  this  be  law  to-day  in  actions  on  inden- 
tures of  apprenticeship,  it  must  be  remembered  that  they  are  peculiar 
contracts,  in  which  the  rights  and  obligations  of  the  parties  are  often 
affected  by  statutory  regulations,  and  in  some  cases  they  cannot  be 
avoided  or  treated  as  at  an  end  at  the  will  of  the  parties. 

In  this  case,  the  declaration  alleges  in  effect  a  promise  to  support 


676  GA   NUN    V.    PALMER  [CHAP.   V 

the  plaintiff  during  his  life,  from  and  after  receiving  the  convey- 
ance of  certain  real  estate,  an  acceptance  of  such  conveyance,  and 
a  neglect  and  refusal  to  perform  the  agreement.  These  are  sufficient 
allegations  to  enable  the  plaintiff  to  recover  damages  as  for  a  total 
breach.  The  court  instructed  the  jury  that,  "if  the  defendant  for 
a  period  of  about  two  years  neglected  to  furnish  aid  or  support  to 
the  plaintiff,  without  any  fault  of  the  plaintiff,  the  plaintiff  might 
treat  the  contract  as  at  the  end,  and  recover  damages  for  the  breach 
of  the  contract  as  a  whole."  We  cannot  say  that  this  instruction  was 
erroneous  as  applied  to  the  facts  in  evidence  in  the  cause,  which  are 
not  set  out. 

The  jury  must  have  found  that  the  plaintiff  did  treat  the  con- 
tract as  finally  broken  by  the  defendant,  and  the  propriety  of  this 
finding  on  the  evidence  is  not  before  us. 

Judgment  on  the  verdict  for  the  larger  sum?- 


MAEY  F.  Gxi  jSTUN,  on  Behalf  of  Herself  and  All  Other  Creditors 

of  Jane  M.  Sands,  Deceased,  Appellant,  v.  MxiRY  E.  PALMER, 

Individually  and  as  Executrix  of  Jane  M.  Sands,  Deceased, 

Respondent 

!N"ew  York  Court  of  Appeals,  June  8-October  3,  1911 

[Reported  in  202  New  York,  483] 

Haight,  J.  This  action  was  brought  to  recover  $20,000.  under 
a  contract  made  in  1899,  by  which  Jane  M.  Sands  promised  the 
plaintiff  $70  a  month  during  the  promisor's  life,  and,  at  the  time 
of  the  latter's  death,  $20,000,  contained  in  the  promisor's  safety  de- 
posit box,  in  consideration  of  the  plaintiff's  promise  to  care  for  the 
said  Jane  M.  Sands  as  long  as  she  lived. 

The  trial  judge  found  that  the  plaintiff  in  pursuance  of  this  con- 
tract cared  for  Miss  Sands  until  May  1900,  when  Miss  Sands  left  her 
and  moved  to  the  defendant's  residence  with  whom  she  entered  into 
a  similar  oral  contract,  but  vnth  less  compensation.  She  continued 
to  reside  there  until  her  death  on  August  17,  1906,  and  left  a  will 
in  which  the  defendant  was  made  sole  beneficiary  and  sole  executrix. 
The  plaintiff  received  the  i)nyment  of  $70  a  month  during  the  time 

«  Pierce  v.  Tennessee,  &c.  Co.,  173  U.  S.  1;  Re  Manhattan  Ice  Co.,  114  Fed.  Rep. 
390;  Northrop  v.  Mercantile  Trust  Co.,  110  Fed.  Rep.  069;  Strauss  v.  Mecrtief,  64 
Ala.  200;  Howard  Col.  v.  Turner,  71  Ala.  420;  ^tna  Life  Ins.  Co.  v.  Nexsen,  84  Ind. 
.347;  Coldman  v.  Goldman,  51  La.  Ann.  761;  Sutherland  v.  Wyer,  67  Me.  64;  Speirs 
V.  Unif)n  Drop-ForRc;  Co.,  180  Mass.  S7;  Cutter  v.  Gillette,  163  Mass.  05;  Girard  v. 
Ta</('art,,  5  S.  <fe  R.  10;  Kinn  v.  Steiren,  44  Pa.  00;  Chamberlin  v.  Morgan,  68  Pa. 
IfiK;  Rcniflee  v.  Hall,  31  Vt.  5K2;  Treat  v.  Tliles,  81  "Wis.  280.  See  also  Mayne  on 
Dairia"cs  ailh  Of].),  106  c.t  Hcq.;    Sutherland  on  DainaRes,   §§108,  112,  113. 

Thf  ef)nlrary  decisions  of  Lichtenstein  v.  Brooks,  75  Tex.  106,  108;  Gordon  v. 
Brfwstcr,  7  Wis.  355  (ronf.  Tn-at  v.  Hiles,  81  Wis.  280;  Walsh  v.  Myers,  92  Wis. 
397),  arc  not  to  he  supported.    Sec  also  Salyers  v.  Smith,  67  Ark.  626. 


SECT.    II]  GA    NUN    V.    PALMER  677 

of  her  care  for  Miss  Sands,  and  the  only  issue  presented  is  her  right 
to  $20,000.  The  action  was  brought  on  May  31,  1907.  The  trial 
court  was  of  the  opinion  that  there  was  a  breach  of  the  contract  in 
its  entirety  at  the  time  the  defendant  left  the  plaintiff's  house,  and 
that  therefore,  the  Statute  of  Limitations  barred  the  claim.  In  reach- 
ing this  result  the  learned  justice  in  his  opinion  refers  to  the  case  of 
Henry  v.  Rowell  (31  Misc.  Rep.  384;  affirmed  on  the  opinion  below, 
63  App.  Div.  620)  as  an  authority  upon  the  subject,  which  he  was 
bound  to  follow.  That  was  an  action  on  quantum  meruit  to  recover 
for  the  value  of  twelve  years'  board  and  lodging  furnished  by  the 
plaintiff  to  the  decedent  in  her  lifetime,  under  an  agreement  to  board 
and  lodge  her  in  his  household  as  long  as  she  should  live,  she  agree- 
ing to  leave  him  by  will  all  of  the  property  she  should  own  at  the 
time  of  her  death.  After  receiving  board  and  lodging  from  the  plain- 
tiff for  twelve  years  the  decedent  left  his  abode  and  went  elsewhere 
and  lived  for  fourteen  years  thereafter,  and  then  died  leaving 
a  will  in  which  she  disposed  of  her  property  to  other  persons.  Sub- 
sequently that  action  was  brought.  In  that  case  it  was  held  that 
there  was  a  breach  of  the  contract  at  the  time  that  the  decedent  left 
the  plaintiff's  residence,  and  that  the  Statute  of  Limitations  com- 
menced to  run  at  that  time;  that  there  was  but  one  cause  of  action 
available  to  the  plaintiff,  and  that  was  for  the  value  of  the  board 
and  lodging  furnished  by  him  up  to  that  time.  In  that  case  there 
was  no  agreement  to  pay  a  definite  sum  for  board  and  lodging  per 
month  or  by  the  year,  the  only  agreement  to  pay  therefor  being  the 
promise  of  the  decedent  to  make  a  will  giving  the  plaintiff  all  of  her 
property.  It  is,  therefore,  apparent  that  but  one  cause  of  action 
existed  in  that  case.  But  whether  the  court  correctly  held  that  the 
action  could  not  be  maintained  after  the  testatrix's  death  by  reason 
of  the  running  of  the  statute,  we  now  express  no  opinion. 

The  case  we  have  now  under  review  differs  from  the  above  case, 
for  under  the  agreement  the  decedent  promised  to  pay  the  plaintiff 
$70  a  month  for  the  support  of  the  house,  etc.,  that  being  a  definite, 
fixed  amount  payable  monthly,  for  which  an  action  could  have  been 
maintained  therefor  at  the  end  of  each  month.  With  reference  to 
the  other  provision  of  the  agreement,  instead  of  the  decedent  prom- 
ising to  make  a  will  giving  the  plaintiff  all  of  her  property,  she 
agreed  at  her  death  that  the  plaintiff  is  to  have  the  $20,000  in  her 
safe  deposit  box;  and  instead  of  this  action  being  brought  for  the 
value  of  services  rendered  on  quantum  meruit,  it  is  brought  upon 
the  contract,  the  plaintiff  claiming  the  stipulated  sum  expressed 
therein.  It  may  be  that  but  one  cause  of  action  exists  in  favor  of 
the  plaintiff  for  the  breach  of  the  $20,000  clause  of  the  contract,  and 
that  such  an  action  could  have  been  maintained  at  the  time  the  de- 
cedent left  the  plaintiff's  house  and  went  to  reside  elsewhere.  But 
in  view  of  the  fact  that  the  plaintiff  might  meet  with  misfortune, 
disabling  her  from  carrying  out  her  part  of  the  contract  to  care  for 


678  GA   NUN    V.    PALMER  [CHAP.   V 

the  decedent  "in  sickness  and  in  health  as  long  as  she  lives/'  thus 
rendering  the  determination  of  the  amount  of  her  damages  uncertain 
and  difficult  to  prove,  she  saw  fit  to  wait  until  the  amount  specified 
in  the  contract  became  due  by  the  terms  thereof.  Did  she  have  the 
right  to  do  this?  In  answering  this  question  we  shall  assume  for 
the  purposes  of  this  review  only,  that  the  breach  of  the  testatrix's 
contract  was  of  such  a  character  as  to  amount  to  a  notice  to  the 
plaintiff  that  she  would  not  carry  out  the  provision  with  reference 
to  the  giving  her  $20,000  at  the  testatrix's  decease,  and  that  an  action 
for  damages  could  have  been  maintained  immediately  after  such 
breach.  The  question  thus  arises  as  to  whether  the  plaintiff  was 
bound  to  treat  the  contract  as  broken  and  bring  her  action,  or  might 
she  at  her  option  treat  the  contract  as  still  in  force  and  wait  until 
the  sum  specified  became  due  under  its  terms? 

In  this  case,  as  we  have  seen,  the  breach  occurred  after  partial 
performance.  This  fact  was  deemed  of  importance  in  the  case  of 
Henry  v.  Rowell  {supra),  but  we  fail  to  see  how  it  affects  the  right 
of  the  plaintiff  to  exercise  her  option.  It  is  quite  true  that  there  is 
a  distinction  made  in  the  authorities  with  reference  to  contracts  which 
still  are  wholly  executory  and  are  to  be  performed  in  the  future; 
but  the  distinction  pertains  to  that  which  would  constitute  a  breach 
of  such  contracts.  Where  the  contract  is  wholly  executory  there  must 
be  some  express  and  absolute  refusal  to  perform,  or  some  voluntary 
act  on  the  part  of  the  individual  which  renders  it  impossible  for 
him  to  perform,  in  order  to  constitute  an  anticipatory  breach  for 
which  an  action  will  lie.  Whereas  in  a  partially  executed  contract 
the  breach  may  result  from  a  failure  to  perform  some  of  the  pro- 
visions of  the  contract.  But  in  either  case,  after  a  breach  by  one 
party,  the  rights  of  the  other  party  and  his  remedies  are  the  same 
as  to  the  unexecuted  provisions  of  the  contract.  (Howard  v.  Daly, 
61  K  Y.  362.) 

In  the  ease  of  Heery  v.  Reed  (80  Kans.  380)  it  was  held  that  the 
fact  that  there  was  a  renunciation  of  the  contract  by  the  decedent 
before  his  death  did  not  compel  plaintiff  to  end  the  contract  relation. 
She  was  at  liberty  to  keep  the  contract  and  await  the  time  for  final 
performance  specified  in  the  contract. 

In  the  case  of  Foss-Schneider  Brewing  Co.  v.  Bullock  (59  Fed. 
Rep.  83)  Taft,  J.,  said:  "It  is  true  that,  where  a  contracting  party 
gives  notice  of  his  intention  not  to  comply  with  the  obligation  of  his 
contract,  the  other  contracting  party  may  accept  this  as  an  antici- 
patory breach  of  the  contract,  and  sue  for  damages  without  waiting 
until  the  time  mentioned  for  the  completion  and  fulfilment  of  the 
contract  by  its  terms;  but,  in  order  to  enable  the  latter  to  sue  on 
such  an  anticipatory  breach,  he  must  accept  it  as  such,  and  consider 
the  contract  at  an  end." 

Tn  (lie  case  of  Pakas  v.  Hollingshead  (184  T^.  Y.  211)  it  was  held 
that  ulierr-  the  vendor  of  goods  to  be  delivered  and  paid  for  on  instal- 


SECT.    II  ]  GA    NUN    V.    PALMER  679 

ments  refuses  to  deliver  an  instalment,  a  breach  of  the  entire  con- 
tract is  thereby  established  for  which  the  vendee,  if  he  so  elects, 
may  immediately  recover  all  his  damages;  or  he  may  wait  until  the 
expiration  of  the  time  for  the  delivery  of  all  the  goods  and  then 
recover.  While  Cullen,  Ch.  J.,  filed  a  dissenting  opinion  in  this 
case,  he  did  not  dissent  as  to  so  much  of  the  decision  as  is  stated 
above ;  but,  on  the  contrary,  expressly  stated  that  the  aggrieved  party 
had  the  option  to  treat  the  contract  as  still  continuing  in  force,  not- 
withstanding the  breach  thereof  by  the  other  party. 

A  further  citation  of  authority  hardly  seems  necessary,  for  the 
general  rule  is  that  a  right  of  action  does  not  accrue  upon  a  con- 
tract until  it  is  executed,  or  payment  thereunder  becomes  due  by 
its  terms,  and  the  Statute  of  Limitations  does  not  commence  to  run 
until  that  event  happens.  The  right  to  bring  an  action  previous  to 
that  event  is  exceptional,  and  is  only  permitted  in  cases  of  a  breach 
of  a  contract  by  one  of  the  parties  which  permits,  the  aggrieved  party, 
at  his  option,  to  maintain  an  action  for  such  breach  and  recover 
the  damages  he  has  suffered  on  account  thereof.  In  reaching  this 
conclusion  we  have  assumed,  as  above  stated,  that  the  breach  was  of 
such  a  character  as  to  permit  the  bringing  of  an  action  for  damages. 
We  do  not,  however,  wish  to  be  understood  as  deciding  that  question, 
for  the  rule  that  renunciation  of  a  continuous  executory  contract 
by  one  party  before  the  day  of  performance  giving  the  other  the 
right  to  use  at  once  for  damages  is  usually  applied  only  to  contracts 
of  a  special  character;  and  the  question  whether  it  applies  to  such 
a  contract  as  we  have  under  review  we  leave  undetermined.  (Kelly 
V.  Security  Mutual  Life  Ins.  Co.,  186  N.  Y.  16;  Adenaw  v.  Piifard, 
202  N.  Y.  122-129;  25  Cyc.  1074.) 

We  do  not  deem  it  our  duty  to  undertake  a  construction  of  the 
contract  at  this  time  and  determine  whether  it  contains  an  absolute 
promise  to  pay  a  specified  sum  upon  the  death  of  the  testatrix;  or 
whether  it  be  in  the  nature  of  a  specific  legacy,  as  defined  in  the  case 
of  Crawford  v.  McCarthy  (159  N".  Y.  514-519),  or  the  intention  of 
the  parties  with  reference  thereto.  It  appears  that  the  testatrix,  at 
the  time  of  executing  the  instrument,  was  an  aged  maiden  lady,  pos- 
sessed of  a  fortune  sufficient  for  her  necessities.  It  may  be  that  her 
distant  relatives  were  over  anxious  to  possess  the  surplus  which  she 
might  leave.  But  all  of  these  questions  are  for  the  trial  court  and 
are  not  at  this  time  properly  before  us  for  determination. 

The  judgment  should  be  reversed  and  a  new  trial  granted,  with 
costs  to  abide  the  event. 

OuLLEN,  Ch.  J.,  Gray,  Vann,  Werneb,  Hiscock  and  Collin,  JJ., 
concur.  Judgment  reversed,  etc} 

^  A  portion  of  the  opinion  is  omitted  and  the  statement  of  facts  abbreviated. 


680  CLARK    V.    MARSIGLIA  [CHAP.   V 


CLARK  V.  MAESIGLIA 

N'Ew  YoBK  Supreme  Coubt,  July,  1845 
\_Reported  in  1  Denio,  317.] 

Eeeoe  from  the  iN'ew  York  Common  Pleas.  Marsiglia  sued  Clark 
in  the  court  below  in  assumpsit,  for  work,  labor,  and  materials,  in 
cleaning,  repairing,  and  improving  sundry  paintings  belonging  to 
the  defendant.    The  defendant  pleaded  non  assumpsit. 

The  plaintiff  proved  that  a  number  of  paintings  were  delivered 
to  him  by  the  defendant  to  clean  and  repair,  at  certain  prices  for 
each.  They  were  delivered  upon  two  occasions.  As  to  the  first  par- 
cel, for  the  repairing  of  which  the  price  was  seventy-five  dollars,  no 
defence  was  offered.  In  respect  to  the  other,  for  which  the  plaintiff 
charged  one  hundred  and  fifty-six  dollars,  the  defendant  gave  evi- 
dence tending  to  show  that  after  the  plaintiff  had  commenced  work 
upon  them,  he  desired  him  not  to  go  on,  as  he  had  concluded  not  to 
have  the  work  done.  The  plaintiff,  notwithstanding,  finished  the 
cleaning  and  repairing  of  the  pictures,  and  claimed  to  recover  for 
doing  the  whole,  and  for  the  materials  furnished,  insisting  that  the 
defendant  had  no  right  to  countermand  the  order  which  he  had 
given.  The  defendant's  counsel  requested  the  court  to  charge  that 
he  had  the  right  to  countermand  his  instructions  for  the  work,  and 
that  the  plaintiff  could  not  recover  for  any  work  done  after  such 
countermand. 

The  court  declined  to  charge  as  requested,  but  on  the  contrary,  in- 
structed the  jury  that  inasmuch  as  the  plaintiff  had  commenced  the 
work  before  the  order  was  revoked,  he  had  a  right  to  finish  it,  and 
to  recover  the  whole  value  of  his  labor  and  for  the  materials  fur- 
nished. The  jury  found  their  verdict  accordingly,  and  the  defend- 
ant's counsel  excepted.     Judgment  was  rendered  upon  the  verdict, 

C.  P.  KirMand,  for  the  plaintiff  in  error. 

A.  Taher,  for  the  defendant  in  error. 

Per  Curiam.  The  question  does  not  arise  as  to  the  right  of  the 
defendant  below  to  take  away  these  pictures,  upon  which  the  plain- 
tiff had  performed  some  labor,  without  payment  for  what  he  had 
done,  and  his  damages  for  the  violation  of  the  contract,  and  upon 
that  point  we  express  no  opinion.  The  plaintiff  was  allowed  to  re- 
cover as  though  there  had  been  no  countermand  of  the  order;  and  in 
this  the  court  erred.  The  defendant,  by  requiring  the  plaintiff  to 
stop  work  upon  the  paintings,  violated  his  contract,  and  thereby  in- 
curred a  liability  to  pay  such  damages  as  the  plaintiff  sliould  sus- 
tain. Such  damages  would  include  a  recompense  for  the  labor  done 
and  mat(!rials  used  and  such  further  sum  in  damages  as  might,  upon 
l(!gal  jjrinciples,  he  assessed  for  th(!  breach  of  the  contract;  but  the 
I)laintifr  b.'id  md  rij^lit,  by  obstinately  persisting  in  the  work,  to  make 


SECT.    II  ]  CLARK    V.    MARSIGLIA  681 

the  penalty  upon  the  defendant  greater  than  it  would  otherwise  have 
been. 

To  hold  that  one  who  employs  another  to  do  a  piece  of  work  is 
bound  to  suffer  it  to  be  done  at  all  events,  would  sometimes  lead  to 
great  injustice.  A  man  may  hire  another  to  labor  for  a  year,  and 
within  the  year  his  situation  may  be  such  as  to  render  the  work 
entirely  useless  to  him.  The  party  employed  cannot  persist  in  work- 
ing, though  he  is  entitled  to  the  damages  consequent  upon  his  dis- 
appointment. So  if  one  hires  another  to  build  a  house,  and  subse- 
quent events  put  it  out  of  his  power  to  pay  for  it,  it  is  commendable 
in  him  to  stop  the  work,  and  pay  for  what  has  been  done  and  the  dam- 
ages sustained  by  the  contractor.  He  may  be  under  a  necessity  to 
change  his  residence;  but  upon  the  rule  contended  for,  he  would  be 
obliged  to  have  a  house  which  he  did  not  need  and  could  not  use.  In 
all  such  cases  the  just  claims  of  the  party  employed  are  satisfied  when 
he  is  fully  recompensed  for  his  part  performance  and  indemnified 
for  his  loss  in  respect  to  the  part  left  unexecuted;  and  to  persist  in 
accumulating  a  larger  demand  is  not  consistent  with  good  faith 
towards  the  employer.  The  judgment  must  be  reversed,  and  a  venire 
de  novo  awarded.  Judgment  reversed.^ 

1  "We  think  the  learned  circuit  judge  was  right  as  to  the  rule  of  damages  in  this 
case.  As  said  by  the  learned  counsel  for  the  appellant,  the  plamtiffs  took  no  steps  to 
perform  the  contract  after  they  were  notified  by  the  defendant  that  he  refused  to  per- 
form it  on  his  part.  The  rights  of  the  parties  under  the  contract  were  fixed  at  that 
time.  Whatever  the  plaintiffs  did  with  the  logs  after  that  was  wholly  immaterial  to 
the  defendant,  except  that  the  plaintiffs  could  not  refuse  to  do  anything  more  with  the 
logs,  and  then  charge  the  defendant  in  damages  for  their  loss.  That  the  profit  which 
the  plaintiffs  could  have  made  on  the  contract,  if  they  had  been  permitted  to  perform 
the  same,  is  the  correct  rule  of  damages,  and  the  one  most  in  accordance  with  equity, 
is  apparent  from  many  considerations.  Suppose  the  defendant  had  notified  the  plain- 
tiffs that  he  repudiated  the  contract  before  anything  had  been  done  under  it.  In  such 
case  could  the  plaintiffs  have  voluntarily  gone  on  and  got  out  the  logs  and  converted 
them  into  money,  and  charged  the  defendant  with  the  difference  between  the  contract 
price  and  the  price  they  sold  them  for?  It  seems  to  us  they  could  not.  Their  loss  in 
such  case  would  necessarily  be  the  price  the  defendant  had  agreed  to  pay  for  the  lum- 
ber, less  the  cost  of  its  production  by  the  plaintiffs.  Can  they  enhance  such  damage 
against  the  defendant  by  going  on  and  manufacturing  the  lumber  and  selhng  it  at  a 
price  which  would  not  pay  for  the  cost  of  such  manufacture,  and  charge  the  loss  to  the 
defendant?  We  think  not.  In  the  case  of  the  sale  of  merchandise  the  damages  are 
limited  by  the  difference  in  value  of  the  articles  sold  and  the  price  agreed  to  be  paid 
therefor,  and  if  the  vendor  retains  the  goods  sold  after  the  date  of  delivery  fixed  on, 
and  afterwards  sells  the  goods  for  less  than  they  were  worth  at  the  time  fixed  for  the 
delivery,  he  cannot  charge  such  loss  to  the  defaulting  vendee.  Chapman  v.  Ingram, 
30  Wis.  290,  295."     Cameron  v.  White,  74  Wis.  42.5,  431. 

See  many  American  decisions  to  the  same  effect  collected  in  3  WiUiston  Contracts, 
§  1298. 


682  ZUCK    V.    McCLURE    &    CO.  [CHAP.   V 


ZUCK  &  HENEY  v.  McCLURE  &  CO 

Pennsylvania  Supkeme  Court,  October  13,  1881 

[Reported  in  98  Pennsylvania  State,  541] 

Assumpsit  by  Zuck  &  Henry  against  G.  T.  Rafferty  et  at.,  trading 
as  McClure  &  Co.  The  action  was  brought  Nov.  29,  1879,  the  writ 
served  and  narr.  filed  the  same  day,  to  recover  $1,500  due  plaintiffs 
for  coke  delivered  to  the  defendants  during  the  month  of  October, 

1879,  under  a  written  contract.  The  fact  of  delivery  and  the  price 
was  not  disputed. 

On  the  trial,  before  Collier,  J.,  the  defendants  claimed  to  set  off 
damages  sustained  by  them  by  reason  of  the  failure  of  the  plaintiffs 
to  comply  with  a  subsequent  contract  for  the  delivery  of  coke  from 
and  after  Dec.  1,  1879,  at  a  stipulated  price.  The  last-mentioned 
contract  was  consummated  by  correspondence  ISTov.  11,  1879,  per- 
formance to  begin  Dec.  1,  1879.  The  plaintiff  objected  to  the  ad- 
mission of  any  evidence  relating  to  the  second  contract,  upon  the 
ground  that  the  time  of  its  performance  did  not  commence  until 
after  the  bringing  of  this  action,  and  that  consequently  damages 
arising  from  any  breach  thereof  could  not  be  set  off  in  this  action. 
The  court,  however,  admitted  the  evidence,  which  showed  the  exist- 
ence of  said  second  contract,  and  notice  given  on  Nov.  19,  1879, 
by  plaintiffs  to  the  defendants  that  they  could  not  comply  with  the 
same,  to  which  notice  the  defendants  replied  in  the  following  letter :  — 

Pittsburg,  Dec.  4,  1879 
Messrs.  Zuck  &  Henry,  Connellsville,  Pa: 

Gents,  —  We  beg  to  draw  your  attention  to  contract  between  us 
by  which  you  agree  to  furnish  us  the  product  of  the  Eldorado  Coke 
Works  (forty  ovens) ;  also  product  of  ovens  that  may  be  built  dur- 
ing the  continuance  of  the  contract  from  Dec.  1,  1879,  to  May  31, 

1880,  inclusive,  and  to  advise  you  that  we  have  been  and  are  now 
prepared  to  receive  the  coke  under  said  contract.  If  shipments  on 
our  account  are  not  at  once  commenced,  we  will  go  into  the  market 
and  buy  an  equal  amount  of  coke  which  you  fail  to  deliver  us,  and 
will  hold  you  responsible  for  any  difference  in  price  which  we  may 
have  to  pay,  and  will  retain  the  balance  which  we  now  have  in  our 
hands  to  secure  us  against  any  loss  or  damage  which  we  may  sus- 
tain from  your  failure  to  comply  with  contract.  Yours  most  re- 
spectfully, 

McClure  &  Co. 

Tbf  defendants  then  proved,  under  objection,  the  failure  of  the 
plaintiffs  to  deliver  coke  under  the  second  contract,  and  the  purchase 
by  the  defendants  of  coke  in  the  market  at  an  advanced  price,  where- 


SECT.    II ]  ZUCK    V.    McCLURE   &    CO.  683 

by  they  suffered  damages  largely  exceeding  in  amount  the  plaintiff's 
claim,  for  which  they  asked  a  verdict  and  certificate  in  their  favor 
against  the  plaintiffs. 

The  plaintiffs  presented,  inter  alia,  the  following  point :  — 

A  notice  of  an  intended  breach  of  contract  will  operate  as  a  breach 
only  if  accepted  and  acted  upon  by  the  other  party,  who  may,  if  he 
pleases,  disregard  the  notice  and  insist  upon  performance  according 
to  the  contract,  and  if  he  does  so  insist  upon  performance,  he  cannot 
afterwards  rely  on  such  notice  as  a  breach. 

The  defendants'  letter  of  Dec.  4,  1879  (Exhibit  12),  shows  that 
defendants  did  insist  upon  performance  by  plaintiffs  according  to 
the  contract.  No  cause  of  action  therefore  accrued  to  the  defendants 
until  after  the  suit  was  brought,  and  the  defendants  are  not  entitled 
to  set  off  the  damage  in  the  action  for  that  reason. 

Answer:  As  a  whole,  this  point  is  refused. 

The  court  charged  the  jury,  in  substance,  that  the  defendants 
were  entitled  to  set  off  damages  sustained  by  reason  of  the  plaintiff's 
breach  of  the  second  contract,  and  that  the  damages  were  to  be  meas- 
ured by  the  difference  between  the  price  at  which  the  plaintiffs  agreed 
to  deliver  the  coke  and  the  market  price  during  the  period  of  the 
contract. 

The  jury  found  a  verdict  for  the  defendants,  and  certified  a  bal- 
ance in  their  favor  of  $36,150.12,  and  judgment  was  entered  thereon. 
The  plaintiff  thereupon  took  this  writ  of  error,  assigning  for  error 
the  refusal  of  the  above  point. 

/.  S.  Cooke  (I.  P.  Hays,  with  him),  for  the  plaintiffs  in  error, 

Welty  McCuUough,  for  the  defendant  in  error. 

Mr.  Justice  Paxson  delivered  the  opinion  of  the  court,  Nov.  7, 
1881. 

This  action  was  commenced  in  the  court  below  on  the  29th  day  of 
l^Tovember,  1879,  and  was  to  recover  about  $1,500  for  coke  delivered 
by  the  plaintiffs  to  the  defendants  during  the  previous  October. 
There  was  no  serious  dispute  as  to  either  the  delivery  of  the  coke  or 
the  amount;  but  the  defendants  set  up  as  a  defence  the  breach  of  a 
contract  on  the  part  of  the  plaintiffs  for  the  future  deliveries  of  coke. 
To  state  said  contract  briefly,  the  plaintiffs  had  agreed  to  sell  and 
deliver  to  the  defendants  the  entire  product  of  their  Eldorado  works, 
comprising  forty  ovens,  at  a  fixed  price  per  ton,  and  also  the  product 
of  all  other  ovens  built  by  them  during  the  continuance  of  the  con- 
tract. This  contract  plainly  appears  by  the  correspondence  between 
the  parties,  and  was  finally  closed  on  Nov.  11,  1879.  On  the  19th 
of  the  same  month  the  plaintiffs  notified  the  defendants  in  writing 
that  they  would  not  deliver  the  coke.  On  the  4th  of  December,  four 
days  after  the  delivery  was  to  have  commenced  under  the  contract, 
the  defendants  wrote  to  the  plaintiffs  as  follows:  "We  beg  to  draw 
your  attention  to  contract  between  us  by  which  you  agree  to  furnish 
us  the  product  of  the  Eldorado  Coke  "Works  (forty  ovens)  ;  also 
product  of  ovens  that  may  be  built  during  the  continuance  of  the 


684  ZUCK    V.    McCLURE    &    CO.  [CHAP.   V 

contract  from  Dec.  1,  1879,  to  May  31,  1880,  inclusive,  and  to  ad- 
vise you  that  we  have  been  and  are  now  prepared  to  receive  the  said 
coke  under  said  contract.  If  shipments  on  our  account  are  not  at 
once  commenced,  we  will  go  into  the  market  and  buy  an  equal  amount 
of  coke  which  you  fail  to  deliver  us,  and  will  hold  you  responsible 
for  any  difference  in  price  which  we  may  have  to  pay,  and  will  re- 
tain the  balance  which  we  now  have  in  our  hands  to  secure  us  against 
any  loss  or  damage  which  we  may  sustain  from  your  failure  to  com- 
ply with  contract." 

The  defendants  upon  the  trial  below  were  allowed  to  set  off  their 
damages  by  reason  of  the  breech  of  the  above  contract,  and  the  jury 
found  a  verdict  in  their  favor  for  $36,150.  The  single  specification 
of  error  raises  the  question  whether  there  was  any  breach  at  the  time 
the  suit  was  commenced. 

A  mere  notice  of  an  intended  breach  is  not  of  itself  a  breach  of 
the  contract.  It  may  become  so  if  accepted  and  acted  on  by  the  other 
party.  If  the  defendants  had  accepted  the  plaintiffs'  notice  of  breach 
contained  in  their  letter  of  November  19  and  acted  upon  it,  there 
would  plainly  have  been  a  breach  of  the  contract.  The  plaintiffs  in 
such  case  could  not  have  relieved  themselves  by  commencing  to  de- 
liver the  coke  on  December  1,  but  must  have  been  held  to  all  the 
legal  consequences  of  the  breach.  The  defendants,  however,  on  De- 
cember 4,  still  insist  upon  compliance.  They  say  "they  are  now  pre- 
pared to  receive  said  coke  under  said  contract."  This  certainly  kept 
the  contract  alive  as  to  both  parties.  The  plaintiffs  could  have  gone 
on  and  delivered  the  coke  on  December  4,  in  which  case  there  would 
have  been  no  breach  and  no  damages.  The  notice  of  an  intention 
not  to  perform  the  contract,  if  not  accepted  by  the  other  party  as 
a  present  breach,  remains  only  a  matter  of  intention,  and  may  be 
withdrawn  at  any  time  before  the  performance  is  in  fact  due;  but 
if  not  in  fact  withdrawn  it  is  evidence  of  a  continued  intention  to 
refuse  performance  down  to  and  inclusive  of  the  time  appointed  for 
performance.  Ripley  v.  McClure,  4  Ex.  345;  Lake  on  the  Law  of 
Contracts,  873.  The  promisee  may  treat  the  notice  of  intention  as 
inoperative,  and  await  the  time  when  the  contract  is  to  be  executed, 
and  then  hold  the  other  party  responsible  for  all  the  consequences 
of  Yion-performance.  But  in  that  case  he  keeps  the  contract  alive 
for  the  benefit  of  the  other  party  as  well  as  his  own ;  he  remains  sub- 
ject to  all  his  own  obligations  and  liabilities  under  it,  and  enables 
tbe  otber  party  not  only  to  complete  the  contract,  if  so  advised,  not- 
withstanding his  previous  repudiation  of  it,  but  also  to  take  advan- 
tage of  any  supervening  circumstance  which  would  justify  him  in 
declining  to  complete  it.     Leake  on  Contracts,  supra. 

It  follows  from  the  foregoing  principles  that  on  November  29  when 
the  action  was  commenced  below,  there  was  no  breach  of  the  con- 
tract which  the  defendants  could  set  up  as  a  set-off  to  the  plaintiffs' 
claim.    Nor  does  it  help  the  defendants  that  when  the  cause  was  tried 


SECT.    II]  ZUCK    V.    McCLURE    &    CO.  685 

the  breach  was  complete.  The  date  of  the  commencement  of  the 
suit  is  the  obvious  test  in  such  cases.  Morrison  v.  Moreland  15  S. 
&  R.  61;  Carpenter  v.  Butterfield,  3  Johns,  Cases,  144. 

There  was  error  in  not  affirming  the  plaintiffs'  eighth  point. 

Judgment  reversed  and  a  venire  facias  de  novo  awarded} 

\  "The  learned  counsel  for  the  plaintiff  does  not  insist  that  the  contract  must  neces- 
sarily be  construed  to  authorize  the  plaintiff  to  continue  his  work  until  completion,  in 
the  spring  and  summer  of  1878,  irrespective  of  the  consequences  to  the  defendant,  but 
that  the  question  of  the  construction  of  the  contract  upon  that  point  was  wholly  im- 
material in  determining  the  issues  between  the  parties.  He  insists  that  the  defendant 
by  his  notice  of  March  30,  1878,  put  an  end  to  the  contract  absolutely,  without  any 
reference  to  the  time  when  the  work  should  or  might  be  done  under  the  contract; 
that  he  did  not  forbid  the  plaintiff  from  going  on  and  completing  the  work  at  that 
time  but  forbade  his  doing  it  at  any  time,  either  presently  or  at  any  future  time;  and 
that  the  defendant  did  not  claim  to  stop  the  plaintiff  in  his  work  because  he  was  doing 
it  at  an  unseasonable  time,  and  thereby  unnecessarily  damaging  him  in  the  enjoyment 
of  his  farm. 

"There  is  great  force  in  the  argument,  and  if  the  defendant  did  forbid  the  plain- 
tiff without  cause  to  continue  the  work  at  that  time  or  at  any  other  time,  and  there 
was  no  withdrawal  on  his  part  from  that  position,  it  wovild  be  quite  immaterial  what 
the  construction  of  the  contract  should  be  as  to  when  the  work  could  be  lawfully 
done  by  the  plaintiff.  Looking  alone  at  the  written  notice  to  quit,  given  by  the  de- 
fendant, bearing  date  March  30,  1878,  the  refusal  of  the  defendant  to  permit  the  plain- 
tiff to  do  any  further  work  under  the  contract  would  be  absolute;  but  there  is  evi- 
dence showing  that  the  plaintiff  did  work  after  the  notice  to  quit  was  given,  with  the 
consent  of  the  defendant.  The  plaintiff  admits  this  in  his  evidence,  but  he  says  that 
the  defendant  told  him  to  quit  when  he  had  completed  pulling  certain  stumps  which 
had  been  theretofore  marked  for  pulling  by  the  plaintiff.  It  also  appears  that  the 
defendant  offered  to  show  that  after  the  written  notice  was  given,  and  whilst  plaintiff 
wafe  still  alt  work,  he  told  him  he  did  not  intend  to  terminate  the  contract,  but  to  stop 
his  work  until  after  he  got  his  crops  off,  and  that  he  could  then  go  eta  and  pull  the 
remainder  of  the  stumps,  and  that  the  plaintiff  assented  to  that  arrangement. 

"  The  evidence  offered  on  the  part  of  the  defendant  we  think  should  have  been 
admitted,  under  the  pleadings,  as  tending  to  show  that,  notwithstanding  the  written 
notice  to  quit  was  absolute  and  unqualified,  still  the  plaintiff  was  informed  before 
he  quit  work,  and  before  he  had  suffered  any  injury  from  such  notice,  that  it  was  not 
intended  as  an  absolute  refusal  on  the  part  of  the  defendant  to  prevent  the  plaintiff 
from  performing  the  contract,  and  that  he  was  at  liberty  to  perform  the  same  at  a 
proper  and  seasonable  time.  This  evidence  was,  it  seems,  ruled  out  because  it  was 
supposed  not  to  be  admissible  under  the  pleadings.  We  think  it  was  clearly  admissible 
under  the  pleadings.  The  plaintiff  alleges  that  the  defendant  had  forbidden  him 
absolutely,  and  without  assigning  any  cause,  from  doing  any  further  work  under  the 
contract,  and  sets  out  in  his  complaint  the  written  notice  of  the  defendant  of  March 
30,  1878.  The  defendant,  in  his  answer,  does  not  deny  that  he  gave  the  written  notice 
as  alleged  in  the  complaint,  but  alleges  'that  the  plaintiff  insisted  upon  going  on  and 
puUing  the  stumps  at  the  time  when  the  land  was  ordinarily  used  for  sowing  grain  and 
for  pasture,  and  during  the  season  when  the  same  was  required  for  pasturing  purposes 
and  for  sowing  and  raising  grain  thereon,  contrary  to  the  express  agreement  of  the 
parties;  and  that,  because  plaintiff  so  insisted  upon  going  on  with  the  work,  he  for- 
bade him,  because  the  land  was  needed  for  the  ordinary  purposes  of  farming.'  Under 
this  state  of  the  pleadings,  we  do  not  think  the  defendant  was  estopped  from  showing 
that  he  notified  the  plaintiff,  after  the  giving  of  the  written  notice,  of  the  reason  why 
he  gave  the  same,  and  that  he  did  not  mean  by  such  notice  to  absolutely  refuse  to  per- 
mit him  to  do  the  work  at  a  proper  season.  Such  explanation  of  the  written  notice, 
being  given  before  the  plaintiff  had  acted  upon  it  and  quit  work,  and  before  he  had 
sustained  any  damage  from  such  notice,  was  a  withdrawal  of  the  absolute  notice  to 
terminate  the  contract  contained  in  the  written  notice;  and  thereafter  the  plaintiff 
would  not  be  justified  in  abandoning  the  contract,  relying  upon  such  written  notice 
as  his  justification  therefor."  Nilson  v.  Morse,  52  Wis.  240,  250.  See  also  Perkins  v. 
Frazier,  107  La.  390.    Compare  Ault  v.  Dustin,  100  Tenn.  366. 


686  RAYBURN    V.    COMSTOCK  [CHAP.    V 


EGBERT  RAYBUEN  AKD  FRED  W.  EAYBUEN  v.  ANDEEW 

W.  COMSTOCK  ET  AL. 

Michigan  Supreme  Court,  April  22,  23-May  2,  1890 

[Reported  in  80  Michigan,  488] 

Ekrok  to  Alpena.  Simpson,  J.,  presiding.  Argued  April  22  and 
23,  1890.    Decided  May  2,  1890. 

Assumpsit.  Defendants  bring  error.  Eeversed.  The  facts  are 
stated  in  the  opinion. 

Tumbull  &  Dafoe,  for  appellants. 

Depew  &  Rutherford  and  George  H.  Sleator,  for  plaintiffs. 

Morse,  J.  The  plaintiffs  entered  into  a  contract  with  defendants, 
]^ov.  13,  1885,  in  which  they  agreed  to  go  upon  certain  lands  of 
defendants,  and  cut,  haul,  and  deliver  at  the  west  branch  of  Hub- 
bard Lake,  upon  what  is  known  as  the  "Lockwood  Landing,"  all  the 
timber  suitable  for  saw-logs,  for  the  sum  of  $3  per  1,000  feet.  From 
two  to  three  millions  of  said  timber  was  to  be  delivered  each  year 
until  all  was  delivered.  The  timber  was  to  be  cut  clear,  and  in  a 
prudent  manner,  and  all  to  be  cut  that  was  suitable  for  lumber  or 
shingles.  Said  logs  were  to  be  well  landed  and  on  skids,  and  well 
rolled  up.  Supplies  were  to  be  furnished  out  of  the  store  of  defend- 
ants, and  money  provided  to  pay  the  employed  by  plaintiffs,  April 
1,  1886,  and  the  balance,  if  any,  to  be  paid  June  1,  1886,  for  the  logs 
cut  and  delivered  the  first  winter.  The  timber  put  in  the  second 
year  was  to  be  paid  for  April  1  and  June  1  of  1887,  as  above. 

The  plaintiffs  went  onto  the  job  in  the  fall  of  1885,  and  that  winter 
cut  and  delivered  about  two  million  feet,  and  were  paid  for  it  ac- 
cording to  contract.  The  plaintiffs  claim  that  they  faithfully  per- 
formed their  contract  for  the  first  year,  and  were  always  ready  and 
willing  to  perform  the  whole  contract,  but  that  they  were  prevented 
from  doing  so  by  the  defendants.  They  bring  this  suit,  alleging  a 
breach  of  the  contract  on  the  part  of  the  defendants,  and  claiming 
damages  for  such  breach.  They  also  count  upon  an  agreement  with 
defendants  in  relation  to  picking  up  and  gathering  about  2,500,000 
feet  of  saw-logs  scattered  around  the  shores  of  Hubbard  Lake,  and 
putting  them  in  booms  ready  to  be  towed  across  said  lake.  They 
allege  that  defendants  agreed  to  ])ay  them  ten  cents  per  1,000  feet 
for  such  picking  up;  that  they  have  completed  the  work,  and  have 
not  been  paid.  The  declaration  also  contains  a  claim  for  $5,000, 
based  upon  the  common  counts  in  assumpsit.  The  plea  is  the  gen- 
eral issue,  with  notice  of  recoupment. 

Upon  the  first  contract  the  testimony  upon  the  part  of  the  plain- 
tiffs tended  to  show  that  the  first  year  they  performed  their  con- 
tract substantially,  and  that  defendants  settled  up  with  them,  finding 
no  fault  at  any  time  with  the  manner  of  their  performance;  that 


SECT.    II  ]  RAYBURN    V.    COMSTOCK  687 

when  they  were  ready  to  commence  again,  in  the  fall  of  1886,  and 
went  to  defendants  for  supplies,  they  were  informed  by  one  of  the 
defendants,  Andrew  W.  Comstock,  that  they  could  not  cut  another 
stick  of  timber  upon  the  lands,  —  he  calling  up  a  clerk  to  witness 
that  he  forbade  their  going  on  with  the  job.  They  waited  until  about 
Dec.  1,  1886,  when  they  took  another  job,  upon  which  they  lost  money. 
There  was  left  when  they  quit  upon  the  contract  about  4,000,000  feet 
of  timber  uncut.  The  defendants'  measure  showed  3,900,000.  The 
plaintiffs  testified  that  they  could  have  put  this  timber  in  at  $2  per 
1,000,  or  at  a  profit  of  $1  per  1,000. 

The  defendants  claim  that  plaintiffs  did  not  properly  perform  their 
contract  in  the  following  respects:  Did  not  bank  all  the  logs  upon 
the  "Lockwood  Landing ;"  did  not  cut  the  timber  clean  as  they  went ; 
did  not  place  all  the  logs  on  skids,  and  left  over  3,000  logs  in  the 
woods,  cut  but  not  hauled,  some  being  on  skids  and  some  on  the 
ground;  that,  by  reason  of  the  timber  not  being  cut  clean,  the  fire 
got  in  and  damaged  it,  and  that  the  same  fire  burned  up  and  de- 
stroyed a  large  number  of  the  logs  left  in  the  woods,  and  damaged 
those  that  were  not  destroyed.  The  defendants  denied  that  they  ever 
refused  to  let  the  plaintiffs  go  on  with  the  job,  and  testify  that,  Dec. 
24,  1886,  they  served  a  written  notice  upon  plaintiffs  to  proceed  at 
once  and  complete  their  contract.  The  plaintiffs  admit  receiving 
this  notice,  but  say  that  they  did  not  recive  it  until  they  had  taken 
the  other  job,  and  were,  therefore,  not  in  a  condition  to  go  on  with 
it.    The  plaintiffs  recovered  a  verdict  of  $1,560. 

The  defendants  bring  error,  and  claim,  first,  that,  there  being 
4,000,000  feet  of  timber  upon  the  lands  after  the  first  year's  work, 
the  plaintiffs  could  not  have  completed  the  job  in  less  than  two  years 
more,  as  the  contract  did  not  authorize  them  to  put  in  over  3,000,000 
in  any  one  year;  that,  as  the  defendants  notified  them  in  December, 
1886,  to  go  on  with  the  job,  the  only  damages  they  could  recover 
would  be  what  they  suffered  between  the  time  they  were  forbidden 
to  go  on  and  the  date  they  were  notified  to  proceed;  and  that,  under 
the  most  favorable  view,  they  could  only  get  damages  for  the  expenses 
of  one  year's  delay  and  the  interest  upon  the  profits  of  one  year's 
work. 

We  think  the  court  charged  the  jury  correctly  in  this  respect.  He 
said,  in  substance,  that  when  plaintiffs  were  notified  to  proceed  with 
the  contract,  as  no  suit  had  been  commenced  at  that  time,  it  was 
their  duty  to  go  on  with  the  contract,  if  they  were  in  a  situation  to 
do  so,  and  that,  if  the  jury  believed  the  testimony  of  the  defendants, 
the  plaintiffs  were  never  prevented  from  going  on  with  the  job,  they 
could  not  recover,  in  any  event.  This  question  was  in  dispute,  and 
the  jury  evidently  found  with  the  plaintiffs. 

The  testimony  shows  that  plaintiffs,  when  this  notice  was  served, 
had  taken  another  contract,  which  employed  all  their  teams  and 
means.     Under  their  theory,  that  up  to  this  time  defendants  had 


688  RAYBURN    V.    COMSTOCK  [CHAP.   V 

forbidden  their  going  on  with  the  contract,  it  was  too  late  for  this 
notice  to  have  any  eifect  whatever  upon  the  rights  of  the  parties.  Cer- 
tainly the  defendants  could  not  refuse  to  furnish  supplies,  and  forbid 
plaintiffs  cutting  any  timber  on  the  land,  and  wait  until  plaintiffs 
had  taken  another  job,  and  then  withdraw  their  refusal  to  permit 
plaintiffs  to  finish  the  contract,  and,  by  a  notice  to  them  to  go  on 
and  perform,  force  plaintiffs  to  proceed,  or  lose  all  claim  for  damages 
thereafter.  The  plaintiffs  had  a  right  to  take  the  refusal  as  it  was 
given,  and  to  seek  other  employment  upon  the  strength  of  it,  and 
they  were  not  obliged  to  break  the  other  contract  they  had  made  in 
order  to  save  their  rights  under  this  one  wath  the  defendants.  In 
view  of  the  fact  that  the  defendants  went  on  the  premises  themselves 
in  the  winter  of  1886  and  1887,  and  took  off  500,000  feet,  and  let 
the  contract  to  take  off  the  balance  to  one  Mulvaney,  in  1887,  at 
$2.50  per  1,000  feet,  we  are  satisfied  that  if  it  be  true,  as  claimed  by 
plaintiffs,  that  defendants  refused  to  let  them  go  on  with  the  contract 
until  they  had  taken  another  job  for  the  winter  of  1886  and  1887, 
plaintiffs  were  fully  justified  in  treating  the  contract  as  broken  by 
the  defendants,  and  were  authorized  to  recover  damages  for  the  breach 
of  the  same  as  if  no  notice  to  proceed  had  ever  been  served  upon  them. 

The  claim  that  the  contract  had  not  been  fully  performed  by  the 
plaintiffs  the  first  year  was,  under  the  testimony,  fairly  submitted 
to  the  jury.  There  was  a  dispute  as  to  the  lines  of  what  was  known 
as  the  "Lockwood  Landing."  The  plaintiffs'  testimony  showed  that 
a  few  thousand  feet  were  piled  beyond  what  Comstock  claimed  to 
be  the  line  of  the  landing,  the  plaintiffs  supposing  the  line  extended 
further  up  the  creek.  After  Comstock  pointed  out  the  line,  no  more 
logs  were  banked  above  it.  If  the  jury  believed  this,  there  was  a 
substantial  compliance  with  the  contract  in  this  respect. 

Plaintiffs'  testimony  also  showed  the  timber  cut  clean,  and  in  a 
prudent  manner.  They  admitted  that  a  few  logs  were  left  in  the 
woods,  some  of  which  were  not  skidded;  but  this  was  owing  to  the 
fact  that  the  season  broke  up  with  a  big  rain-storm,  which,  with  the 
piling  of  logs  by  defendants  upon  a  pond  that  plaintiffs'  road  crossed, 
prevented  their  getting  all  the  logs  out.  Plaintiffs'  testimony  showed 
that  this  piling  of  logs  by  the  defendants  upon  this  pond,  along  the 
sides  of  their  road  across  it,  not  only  prevented  plaintiffs'  getting 
out  all  the  logs  they  cut,  but  also  from  cutting  and  hauling  more. 
This  was  denied  by  defendants;  but,  if  so  found  by  the  jury,  it  Avas 
a  sufficient  excuse  for  not  banking  all  the  logs  cut. 

The  evidence  upon  all  the  points  in  which  a  non-performance  of 
the  contract  was  averred  by  defendants,  coupled  with  the  testimony 
of  plaintiffs  that  defendants  settled  Avith  and  paid  them  for  the  first 
year's  work  without  finding  any  fault  whatever,  and  that  they  never 
complained  of  the  contract  being  broken  in  any  way  by  plaintiffs 
until  thf'Y  rf^fuaed  to  permit  further  performance  by  plaintiffs  in 
September,  1886,  was  sufficient  to  go  to  the  jury,  and  was  properly 


SECT.    II ]  RAYBURN    V.    COMSTOCK  689 

submitted  to  them.  They  found  against  the  defendants,  and  we  are 
not  prepared  to  say  they  were  not  warranted  in  so  finding. 

The  true  rule  of  damages  was  also  laid  down  by  the  court.  The 
plaintiffs  testified  that  it  cost  them  $2.10  per  1,000  to  put  in  what 
they  delivered  the  first  year,  and  that,  as  part  of  the  work,  such  as 
getting  camps  and  roads  in  order,  was  done  the  first  year,  so  as  to 
cheapen  the  work  on  the  job  thereafter,  they  could  have  put  the 
balance  in  for  $2  per  1,000.  They  were  therefore  entitled,  under 
their  testimony,  to  $1  per  1,000  profit.  They  did  not  get  50  cents 
per  1,000,  however,  by  the  verdict;  the  jury,  evidently  taking  into 
consideration  the  evidence  upon  the  part  of  defendants,  some  of 
which  tended  to  show  that  there  would  have  been  no  profit.  There 
is  no  reason  shown  in  the  record  why  the  plaintiffs  should  not  re- 
cover, upon  a  proper  showing,  the  difference  between  the  contract 
price  and  the  cost  of  putting  in  the  logs.  There  is  no  particular  ele- 
ment of  uncertainty  regarding  the  profits  the  plaintiffs  would  have 
realized  from  the  performance  of  the  contract.  See  Goodrich  v. 
Hubbard,  51  Mich.  70;  Burrell  v.  Salt  Co.,  14  id.  34;  Loud  v.  Camp- 
bell, 26  id.  239;  Leonard  v.  Beaudry,  68  id.  312,  80  id.  163. 

But  the  court  committed  error  in  relation  to  the  picking  up  of 
the  logs  in  Hubbard  Lake.  Both  parties  admitted  that  there  was 
a  contract  in  relation  to  this  work,  but  differed  as  to  the  compensa- 
tion to  be  paid  therefor.  The  plaintiffs  claim  they  were  to  have  10 
cents  extra  per  1,000;  and  the  defendants  testify  that  they  were  to 
pay  only  2  cents  extra  above  the  25  cents  for  towing,  and  that  they 
had  settled  with  plaintiffs,  and  paid  them  in  full  upon  that  basis. 
Yet  the  circuit  judge  permitted  evidence  to  be  given  that  it  was 
worth  50  cents  per  1,000  to  pick  them  up,  and  instructed  the  jury  as 
follows :  — 

"The  second  element  in  this  case  is  the  question  in  regard  to  pick- 
ing up  these  logs  on  Hubbard  Lake.  The  plaintiffs  claim  that  de- 
fendants agreed  to  give  them  10  cents  a  thousand  feet  extra,  over 
and  above  the  25  cents  that  they  were  to  receive  for  towing.  If  there 
was  a  contract  between  the  defendants  and  plaintiffs  in  this  case,  and 
they  understood  it,  that  the  Rayburns  were  to  receive  10  cents  a 
thousand  for  picking  up  those  logs,  they  were  entitled  to  it,  if  there 
was  such  a  contract,  and  it  was  understood  by  all  the  parties.  There 
could  not  be  any  contract  unless  they  did  understand  each  other.  But 
the  defendants  claim  that  thei  contract  was  different.  The  defendants 
claim  that  the  plaintiffs  agreed  to  pick  them  up  for  two  cents  extra. 
If  that  was  the  contract,  and  the  parties  understood  it,  then  they 
were  bound  by  that,  because  when  they  make  their  contracts  they  are 
bound  by  them.  It  does  not  make  any  difference  how  hard  it  is  for 
one  side  or  good  for  the  other,  when  we  enter  into  contracts;  if  we 
do  enter  into  them,  we  are  bound  by  them.  So  that  here  are  two 
separate  claims  as  to  the  contract,  —  one  for  two  cents,  and  one  for 
ten  cents.    You  are  to  judge.    You  have  heard  the  testimony  as  to 


690  TRI-BULLION   SMELTING    CO.    V.    JACOBSEN       [CHAP.   V 

whether  there  was  any  contract  at  all,  and  if  so,  which  of  these  parties 
is  right.  If  it  was  for  two  cents  per  thousand  feet,  then  the  Ray- 
burns  will  have  to  be  satisfied  with  that;  and  it  seems  from  the  evi- 
dence that  they  have  received  that.  If  it  was  ten  cents  per  thousand 
feet,  then  they  are  entitled  to  receive  it;  and,  if  they  have  not  re- 
ceived it,  then  they  are  entitled  to  receive  it  at  your  hands  in  this 
suit.  But,  if  you  find  that  these  parties  did  not  agree  on  anything, 
or  if  they  did  talk  about  it,  they  were  both  mistaken  when  they  quit, 
and  their  minds  did  not  meet  upon  this  question,  then  there  was  no 
contract  at  all,  because  it  takes  as  many  as  two  parties  to  make  a 
contract,  and  their  minds  must  meet.  If  you  should  find  that  there 
wasn't  any  contract,  and  the  work  was  done,  —  and  that  is  admitted, 
—  in  that  case  the  Rayburns  would  be  entitled  to  receive  whatever 
in  your  judgment  the  work  was  reasonably  worth;  because  when  we 
work  for  a  man,  and  there  is  no  agreement  as  to  what  we  shall  re- 
ceive, the  law  gives  us  what  it  is  worth." 

There  was  no  ground  in  the  evidence  from  which  the  jury  might 
infer  that  there  was  no  contract,  —  that  the  minds  of  the  parties  did 
not  meet.  There  was  undoubtedly  a  parol  arrangement  as  to  the 
picking  up  of  these  logs;  and  the  only  question  for  the  jury  to  de- 
termine was  the  price  to  be  paid  for  the  work.  There  was  no  misun- 
derstanding about  it.  Either  the  defendant  agreed  to  pay  ten  cents 
or  two  cents.  The  burden  of  proof  was  upon  plaintiffs  to  show  that 
the  price  was  ten  cents.  Failing  in  this,  they  could  not  recover,  as 
they  had  been  paid  the  two  cents.  As  there  is  no  way  of  ascertaining 
what  conclusion  the  jury  arrived  at  as  to  this  matter,  the  judgment 
must  be  reversed  and  a  new  trial  granted,  with  costs  of  this  court 
to  defendants. 

The  other  justices  concurred. 


TRI-BULLION  SMELTING  &  DEVELOPING  CO.  v. 
JACOBSEN 

Circuit  Court  of  Appeals  for  the  Second  Circuit,  May  9,  1916 

[Reported  in  233  Federal  Reporter,  646] 

This  action  was  brought  in  the  District  Court  of  the  United  States 
for  the  Southern  District  of  New  York,  by  Ernest  O.  Jacobsen 
against  Tri-Bullion  Smelting  &  Development  Co.,  for  breach  of  a  con- 
tract by  which  the  Development  Company  was  to  sell,  and  Jacobsen 
to  buy  the  output  of  zinc  concentrates  of  the  Development  Company's 
plant  for  two  years  from  Nov.  22,  1911.  The  agreement  contained 
the  following  clause: 

"Force  Majeure.  —  fVllnrH  will  he  rnliovofl  from  rlnlivorind,  and  huyorH  from  tak- 
inK  the  concf-ntrat^H  in  caHt;  of  strikos,  firfs,  wurs,  rovoltitiona,  accidonts  to  m.ichinery 
etc.,  <'tc.,  and  in  caac  of  events  of  auperior  force  of  nature  over  which  they  have  no 
control.  ..." 


SECT.    II  ]      TRI-BULLION    SMELTING    CO.    V.    JACOBSEN  691 

After  a  year  and  a  half  the  Development  Company  closed  its 
mines  and  ceased  delivery,  asserting  it  could  no  longer  mine  ore  at 
a  profit.  Jacobsen  in  conversation  protested  against  this  attitude  of 
the  Development  Company,  and  in  several  letters  in  July,  1913,  de- 
manded fulfilment  of  the  contract,  or,  as  he  stated,  he  would  enter 
the  market  and  charge  the  defendant  whatever  difference  he  might 
be  compelled  to  pay  between  the  contract  price  and  the  market  price. 

Before  Ward  and  Rogeks,  Circuit  Judges,  and  Mayer,  District 
Judge. 

Mayer,  District  Judge. 

The  theory  of  Tri-Bulliou  seems  to  be  that  because,  in  the  letter 
of  July  8th,  Jacobsen  urged  Tri-Bullion  to  proceed  to  fulfil  the  con- 
tract, he  was  thereby  precluded  from  bringing  action  for  an  antici- 
patory breach,  but  must  perform  all  of  the  provisions  of  the  contract 
called  for  on  his  part,  one  of  which  was  to  pay  the  amount  thereafter 
due  for  ore  theretofore  delivered  and  that  Jacobsen  could  sue  only 
for  failure  to  deliver  any  installment  as  the  installment  became  due 
month  by  month. 

(1)  The  question  of  fact  in  the  trial  court  was  whether  Tri- 
Bullion  had  breached  its  contract.  Both  parties  having  moved  for 
the  direction  of  a  verdict,  and  the  court  having  directed  a  verdict  in 
favor  of  plaintiff,  that  question  is  disposed  of  by  the  verdict,  and 
what  the  verdict  amounts  to  is  a  finding  that  Tri-Bullion  broke  its 
contract,  and  it  matters  not  whether  the  breach  was  actual  or  antici- 
patory. Wilson  V.  Knowles,  213  Fed.  782,  130  C.  C.  A.  440 ;  Eeis  v. 
Rosenfeld,  204  Fed.  282,  122  C.  C.  A.  480;  United  States  v.  Two 
Baskets,  205  Fed.  37,  123  C.  C.  A.  310;  Allegheny  Valley  Brick  Co. 
V.  C.  W.  Raymond  Co.,  219  Fed.  477,  135  C.  C.  A.  189. 

(2)  Viewed,  however,  as  an  anticipatory  breach,  the  action  of 
Jacobsen  in  writing  the  letter  of  July  8th,  1913,  insisting  that  Tri- 
Bullion  should  carry  out  his  contract,  did  not,  in  any  manner,  cure 
such  anticipatory  breach  by  Tri-Bullion.  The  persistent  position  of 
Tri-Bullion  was  that  it  was  excused  by  the  force  majeure  clause  — 
an  obvious  pretense  to  avoid  the  obligations  of  a  contract  which  had 
become  unprofitable.  Jacobsen's  letter  of  July  8th  as  the  District 
Judge  said,  "was  an  ordinary  business  letter  in  which  the  plaintiff 
said  in  substance:  *You  ought  to  perform  your  contract,  and  I  re- 
quest you  to  do  so;  but,  if  you  do  not,  I  will  enter  the  market,  buy 
zinc  concentrates,  and  hold  you  for  the  difference  between  the  cost 
to  me  and  the  contract  price.'  " 

Where  a  party  to  a  contract  insists  that  he  is  not  under  legal  obli- 
gation to  perform  the  contract,  and  that  insistence  is  coupled  with 
a  continuance  of  his  original  stand  and  refusal  to  perform,  the  breach 
is  plain,  and  he  cannot  successfully  take  refuge  in  the  plea  that  he 
must  be  excused  because  the  other  party  urges  that  the  contract  be 
carried  out,  failing  which  such  other  party  states  he  will  be  compelled 
to  purchase  goods  in  a  rising  market.    Roehm  v.  Horst,  178  TJ.  S.  1, 


692  TRI-BULLION    SMELTING    CO.    V.    JACOBSEN       [CHAP.   V 

20  Sup.  Ct.  780,  44  L.  Ed.  953 ;  Marks  v.  Van  Eeghen,  85  Fed.  853, 
30  C.  C.  A.  208. 

(3)  It  is  claimed  by  Tri-Bullion  that  Jacobsen  was  first  iu  de- 
fault, for  the  reason  that,  several  days  after  July  7th,  Jacobsen,  in 
the  ordinary  conduct  of  the  contract,  would  have  been  indebted  to 
Tri-Bullion  in  an  amount  of,  in  round  numbers,  less  than  $2,000  (or 
about  $1,871.35),  representing  the  price  of  five  cars  of  zinc  concen- 
trates shipments.  We  think  the  question  as  to  who  was  first  in  de- 
fault was  settled  by  the  verdict;  but,  in  any  event,  this  claim  was 
clearly  an  afterthought. 

Jacobsen's  responsibility  was  not  questioned;  he  had  already  paid 
Tri-Bullion  over  $250,000  under  the  contract  during  a  period  when 
it  was  unprofitable  to  him ;  no  demand  was  ever  made  for  this  —  to 
them  —  trifling  sum  of  less  than  $2,000,  and  the  practice  of  the 
parties  was  that  payment  was  made  when  convenient,  and  that  was 
usually  several  days  after  the  price  had  been  fixed  by  the  rather 
elaborate  method  for  determining  price  provided  for  in  the  contract. 
If  Tri-Bullion  was  guilty  of  anticipatory  breach  on  July  7th,  there 
was  no  obligation  on  Jacobsen's  part  to  pay  over  this  small  amount 
of  money  to  Tri-Bullion,  and  especially  in  the  face  of  every  reason- 
able expectation  that  Tri-Bullion  would  be  called  upon  to  respond 
in  substantial  damages  to  Jacobsen  because  of  loss  suffered  by  Jacob- 
sen  in  a  rising  market.  Sperry  &  Hutchinson  Co.  v.  O'lSTeill-Adams 
Co.,  185  Fed.  231,  107  C.  C.  A.  337;  Whitcomb  v.  Shultz,  215  Fed. 
75,  131  C.  C.  A.  383. 

(4)  The  only  other  question  in  the  case  relates  to  the  rule  of 
damages  which  the  District  Judge  applied.  There  was  no  market 
value  for  Kelly  ore  because  the  mine  was  closed,  and  the  only  substi- 
tute in  the  market  was  ore  from  the  Joplin  mines  in  Missouri.  This 
ore  was  purchased  by  National  Zinc  Company  under  a  business  ar- 
rangement between  it  and  Jacobsen.  It  is  well  settled  that,  where 
there  is  no  market,  the  value  may  be  otherwise  determined  by  the 
price  of  the  best  substitute  procurable.  Benjamin  on  Sales  (5th 
Ed.)  page  987;  Sedgwick  on  Damages  (9th  Ed.)  §  734;  Williston 
on  Sales,  §  599 ;  Hinds  v.  Liddell,  L.  R.  10  Q.  B.  Div.,  265 ;  Gruen  v. 
Ohl,  81  N.  J.  Law,  626,  80  Atl.  547;  E.  W.  Bliss  Co.  v.  Buffalo  Tin 
Can  Co.,  131  Fed.  51,  65  C.  C.  A.  289.  A  proper  rule  of  damages 
having  been  applied,  the  amount  of  the  damages  was  a  question  of 
fact,  disposed  of  by  the  verdict,  and  not  reviewable  in  this  court. 

The  judgment  is  affirmed,  with  costs} 

'  An  abbreviated  statement  of  facts  has  been  substituted  for  the  statement  in  the 
opinion  of  the  court. 


SECT.    II]  CHICAGO   WASHED    COAL    V.    WHITSETT  693 


THE  CHICAGO  WASHED  COAL  COMPANY,  Appellant,  v. 
K.  C.  WHITSETT  et  al.,  Appellees 

Illinois  Supbeme  Court,  April  19- June  7,  1917 

[^Reported  in  278  Illinois,  623] 

Craig,  C.  J.  The  appellant  brought  suit  to  recover  damages  for 
an  alleged  breach  of  contract  to  furnish  it  coal  from  December  28th, 
1909,  to  March  30th,  1910.  The  contract  was  entered  into  December 
24,  1909,  and  provided  for  the  daily  delivery  of  150  tons  of  coal. 
Payment  was  to  be  made  on  or  before  the  tenth  day  of  each  month 
for  all  shipments  made  the  preceding  month.  The  appellant  failed 
to  pay  on  or  before  January  10th,  1910,  for  coal  received  in  De- 
cember, and  the  appellees  thereupon  stopped  delivery,  the  last  de- 
livery being  made  on  January  9th.  On  January  15th,  the  appellant 
paid  its  account  for  coal  delivered  in  December,  and  on  January  17th 
wrote  demanding  continuance  of  shipments  at  the  agreed  daily  rate. 
The  appellees  replied  on  January  18th,  that  they  had  cancelled  the 
contract  on  the  11th  inst,  for  breach  of  the  provision  as  to  payment. 
For  shipments  of  coal  made  during  January,  prior  to  January  9th, 
the  appellant  subsequently  failed  and  refused  to  pay  on  or  before 
February  10th. 

Appellees  rely  upon  the  failure  of  appellant  to  pay  its  December 
account  on  or  before  January  10th  and  their  letter  of  January  17 
notifying  appellant  of  the  cancellation  of  the  contract  as  constituting 
a  recission  of  the  contract;  also  the  failure  of  appellant  to  pay  the 
January  account  on  or  before  February  10th  as  such  an  abandonment 
of  the  contract  as  to  preclude  a  recovery  thereon  by  appellant  at  this 
time  even  if  the  prior  rescission  was  wrongful,  which  they  do  not 
concede.  Appellant  insists  that  the  acceptance  of  the  payment  for 
the  December  delivery  on  January  15th  was  a  waiver  of  its  failure  to 
pay  on  or  before  the  10th  of  the  month,  and  the  letter  notifying  it 
of  the  cancellation  of  the  contract  was  such  a  repudiation  of  the 
contract  by  appellees  as  to  excuse  appellant  from  a  further  perform- 
ance of  the  contract  on  its  part.  Both  the  trial  and  Appellate  Courts 
adopted  the  view  of  appellees,  and  we  concur  in  their  views.  When 
appellees  ceased  to  make  deliveries  on  the  contract  after  January  8th, 
1910,  and  thereafter  notified  appellant  the  contract  had  been  canceled, 
the  contract  was  terminated  for  all  purposes  so  far  as  appellees  were 
concerned.  Their  repudiation  of  the  agreement  could  not  have  been 
made  more  emphatic  or  complete.  The  acceptance  of  the  payment 
for  the  past  due  account  did  not  estop  them  from  insisting  upon  a 
rescission  of  the  contract,  when  they  were,  at  the  time  of  accepting 
such  payment,  refusing  to  further  comply  with  such  contract.  They 
had  the  right  to  receive  or  accept  payment  for  coal  already  delivered 
in  any  event,  whether  the  contract  was  canceled  or  not.    If  appellant 


694  CHICAGO   WASHED    COAL    V.    WHITSETT  [CHAP.    V 

deemed  the  contract  still  valid  and  binding  it  then  had  the  right  to 
treat  the  contract  as  terminated  for  all  purposes  and  bring  an  action 
for  its  breach  and  for  the  damages  which  it  had  sustained  by  reason 
of  non-performance  or  being  prevented  from  performing  the  con- 
tract, or  it  had  a  right  to  treat  the  contract  as  subsisting  and  keep 
it  alive  for  the  benefit  of  both  parties,  keeping  itself  at  all  times  ready, 
able  and  willing  to  perform  its  part  of  the  contract  and  at  the  ex- 
piration of  the  term  of  the  contracts  sue  for  its  damages  sustained 
by  reason  of  the  wrongful  non-performance  by  appellees,  but  it  could 
not  do  both.  (Lake  Shore  and  Michigan  Southern  Railway  Co.  v. 
Richards,  152  111.  59.)  If  it  elected  to  keep  the  contract  alive  and 
in  force  for  the  purpose  of  recovering  damages  for  future  profits  it 
must  do  so  for  the  benefit  of  both  parties,  and  must  both  allege  and 
prove  performance  of  the  contract  upon  its  part  or  a  legal  excuse 
for  its  non-performance  before  there  could  be  a  recovery  on  the  con- 
tract. (Lake  Shore  and  Michigan  Southern  Railway  Co.  v.  Richards, 
supra;  Kadish  v.  Young,  108  111.  170.)  In  the  present  instance 
appellant  did  neither,  although  it  evidently  tried  to  do  both.  It 
treated  the  contract  as  subsisting  in  so  far  as  its  right  to  demand 
delivery  of  coal  thereunder  was  concerned,  and  broken  in  so  far  as 
appellees'  right  to  demand  payment  of  the  coal  previously  delivered 
was  concerned.  This  was  fatal  to  appellant's  right  of  action  on  the 
contract.  If  it  elected  to  keep  the  contract  alive  it  must  show  per- 
formance on  its  part  or  legal  excuse  for  its  non-performance.  In 
order  to  do  this  it  was  incumbent  upon  appellant  to  show  payment 
for  the  coal  previously  delivered  or  an  offer  to  do  so,  or  set  the  same 
off  against  its  damages  on  the  contract  and  at  the  time  and  in  the 
manner  provided  by  such  instrument.  (Hess  Co.  v.  Dawson,  149  111. 
138.)  This  appellant  failed  to  do,  as  the  evidence  shows  conclusively 
it  refused  to  pay  for  the  coal  delivered  in  January,  prior  to  the  can- 
cellation of  the  contract,  until  suit  was  brought  on  the  account  and 
judgment  rendered  against  it  for  the  amount.  Therefore  the  most 
that  can  be  said  for  appellant's  case  is  that  its  proofs  show  that  both 
parties  were  in  default.  In  this  condition  of  the  record  there  could 
be  no  recovery  by  either  against  the  other  on  the  contract.  (Harber 
Bros.  Co.  V.  Moffat  Cycle  Co.  151  111.  84.)  In  this  respect  appellant 
is  very  much  in  the  same  situation  as  the  defendant  in  Purcell  Co. 
v.  Sago,  200  Til.  342.  In  that  case  the  contract  provided  for  the  sale 
and  delivery  of  1500  tons  of  anthracite  coal  in  car  lots,  as  required, 
from  September  1,  1895,  to  September  1,  1896,  all  payments  to  be 
made  the  10th  of  the  month  following  shipment.  For  a  time  the 
coal  delivered  was  paid  for  according  to  the  terms  of  the  contract. 
On  March  10th,  1896,  the  buyer  refused  to  pay  for  the  February  de- 
livery and  T)otified  the  seller  it  would  not  pay  for  such  coal  unless 
more  coal  was  delivered.  Thereupon,  on  the  following  day,  the 
seller  reseinded  the  contract,  gave  the  buyer  notice  of  such  rescission, 
and  later  brought  its  action  in  assumpsit  by  reason  of  the  coal  de- 


SECT.    II  ]  KADISH    V.    YOUNG  695 

livered.  The  buyer  then  sought  to  recoup  its  damages  alleged  to 
have  been  sustained  by  reason  of  the  seller's  refusal  to  furnish  more 
coal.  We  there  said :  "The  appellant  was  not  entitled  to  recoup  dam- 
ages for  a  breach  of  the  contract  unless  it  had  performed  its  part 
of  the  contract  or  was  ready  and  willing  to  do  so  at  the  time  required, 
but  by  refusing  to  make  payment  when  demanded  on  March  10th, 
1896,  it  failed  to  perform  its  part  of  the  contract.  Before  appellant 
could  recoup  for  a  breach  of  contract  it  was  required  to  prove  that 
it  had  performed  the  essential  requirements  of  the  contract  or  was 
ready  and  willing  to  do  so.  If  aijpellant,  after  the  making  of  the 
contract,  had  on  the  10th  day  of  each  month  paid,  or  offered  to  pay, 
for  all  coal  delivered  during  the  preceding  month,  and  the  appellees 
had  failed  on  their  part  to  deliver  coal,  then  the  appellant  would  have 
been  in  a  position  to  recover  damages  for  the  failure  of  appellees  to 
perform  their  contract.  The  record,  however,  shows  a  violation  of 
the  contract  by  the  appellant  in  the  manner  above  stated.  (Harber 
Bros.  Co.  V.  Moffat  Cycle  Co.  151  111.  84;  Hess  Co.  v.  Dawson,  149 
id.  138.)  In  the  latter  case  of  Hess  Co.  v.  Dawson,  supra,  it  was 
held  that  a  defendant,  when  sued  for  articles  sold  and  delivered  to 
him  by  the  plaintiff,  will  not  be  entitled  to  recoup  damages  for  a 
'  breach  of  the  contract  unless  he,  the  defendant,  has  performed  his 
part  thereof  or  has  been  ready  and  willing  to  do  so  at  the  time  re- 
quired. It  is  also  there  held  that  where  the  purchaser  of  articles 
fails  to  pay  for  the  same  as  he  agreed  to,  the  vendor  may  abandon 
the  special  contract  and  sue  and  recover  in  an  action  of  assumpsit 
for  the  value  of  the  articles  sold  and  delivered  to  the  defendant." 

For  the  reason  given,  the  judgment  of  the  Appellate  Court  will  be 
affirmed.^  Judgment  ajfirmed. 


L.  J.  KADISH  V.  A.  N.  YOUN'G 

Illinois  Supreme  Couet,  I^ovember  20,  1883 

[Reported  in  108  Illinois,  170] 

Appeal  from  the  Appellate  Court  for  the  First  District ;  —  heard 
in  that  court  on  appeal  from  the  Superior  Court  of  Cook  County; 
the  Hon.  Joseph  E.  Gary,  Judge,  presiding. 

This  was  an  action  of  assumpsit,  brought  by  A.  IST.  Young  and 
George  Bullen,  against  L.  J.  Kadish  and  Charles  Fleischman.  A 
trial  was  had,  resulting  in  a  verdict  and  judgment  of  $20,000  dam- 
ages against  the  defendants. 

Mr.  John  Woodhridge  and  Mr.  Francis  Laclcner  for  the  appellant 
Kadish;  Messrs.  TToadley.  Johnson  &  Colson,  for  the  appellant 
Fleischman. 

^  The  statement  of  facts  in  the  opinion  of  the  court  has  been  abbreviated. 


696  KADISH    V.   YOUNG  [CHAP.   V 

Mr.  William  A.  Montgomery,  for  the  appellees. 

Mr,  Justice  Scholfield  delivered  the  opinion  of  the  court : 

This  was  assumpsit,  by  appellees,  against  appellants,  to  recover 
damages  sustained  by  the  breach  of  an  alleged  contract,  whereby,  on 
the  15th  of  December,  1880,  appellees  sold  to  appellants  100,000 
bushels  of  ISTo.  2  barley,  at  one  dollar  and  twenty  cents  per  bushel,  to 
be  delivered  to  appellants,  and  paid  for  by  them,  at  such  time  during 
the  month  of  January,  1881,  as  appellees  should  elect.  Appellees 
tendered  to  appellants  warehouse  receipts  for  100,000  bushels  of  No. 
2  barley  on  the  12th  of  January,  1881,  but  appellants  refused  to  re- 
ceive the  receipts  and  pay  for  the  barley.  Within  a  reasonable  time 
thereafter  appellees  sold  the  barley  upon  the  market,  and  having 
credited  appellants  with  the  proceeds  thereof,  they  brought  this  suit, 
and  on.  the  trial  in  the  circuit  court  they  recovered  the  difference  be- 
tween the  contract  price  and  the  value  of  the  barley  in  the  market 
on  the  day  it  was  to  have  been  delivered  by  the  terms  of  the  contract. 
Upon  the  trial  appellants  denied  the  making  of  the  alleged  contract, 
that  they  were  partners,  or  that  any  purchase  of  the  barley  was  made 
for  their  joint  account;  and  they  also  contended,  if  a  contract  was 
shown,  then  that  on  the  next  day  after  it  was  made  they  gave  notice 
to  appellees  that  they  did  not  consider  themselves  bound  by  the  con- 
tract, and  they  would  not  comply  with  its  terms,  and  evidence  was 
given  tending  to  sustain  this  contention. 

The  questions  of  fact  contested  upon  the  trial  in  the  circuit  court, 
and  to  some  extent  discussed  in  argument  here,  are,  by  the  judgment 
of  the  Appellate  Court,  conclusively  settled  against  appellants,  and 
we  are  denied  the  power  of  inquirins;  whether  they  are  rightly  or 
wrongly  settled.  Bridge  Co.  v.  Commissioners  of  Highways,  101  111. 
519;  Edgerton  v.  Weaver,  105  id.  43;  Indianapolis  and  St.  Louis 
R.  R.  Co.,  V.  Morganstern,  106  id.  216;  Missouri  Furnace  Co.  v. 
Abend,  107  id.  44. 

The  questions  of  law  to  which  our  attention  has  been  directed  by 
the  arguments  of  counsel,  arise  upon  the  rulings  of  the  circuit  judge 
in  giving  and  refusing  instructions.  He  thus  ruled,  among  other 
things,  that  appellants,  by  giving  notice  to  appellees  on  the  next 
day  after  the  making  of  the  contract  that  they  would  not  receive  the 
barley  and  comply  with  the  terms  of  the  contract,  did  not  create  a 
breach  of  such  contract  which  appellees  were  bound  to  regard,  or 
impose  upon  them  the  legal  obligation  to  resell  the  barley  on  the 
market,  or  make  a  forward  contract  for  the  purchase  of  other  barley 
of  like  amount  and  time  of  deliverv,  within  a  reasonable  time  there- 
after, and  fredit  appellants  with  the  amount  of  such  sale,  or  give 
them  the  benefit  of  such  forward  contract,  but  that  appellees  had 
the  legal  right,  notwithstanding  such  notice,  to  wait  until  the  day  for 
the  deliverv  of  the  barlev  by  the  terms  of  the  contract,  and  then, 
upon  aT)pfllants'  failure  to  receive  and  pay  for  it  on  its  being  ten- 
dered, to  resell  it  on   the  market,  and  recover  from  appellants  the 


SECT.    II  ]  KADISH    V.    YOUNG  697 

difference  between  the  contract  price  of  the  barley  and  its  market 
value  on  the  day  it  was  to  have  been  delivered. 

That  in  ordinary  cases  of  contract  of  sale  of  personal  property  for 
future  delivery,  and  failure  to  receive  and  pay  for  it  at  the  stipu- 
lated time,  the  measure  of  damages  is  the  difference  between  the 
contract  price  and  the  market  or  current  value  of  the  property  at 
the  time  and  place  of  delivery,  has  been  settled  by  previous  decisions 
of  this  court  (see  McNaught  v.  Dodson,  49  111.  446,  Larrabee  v. 
Badger,  45  id.  440,  and  Saladin  v.  Mitchell,  id  79),  and  is  not  con- 
tested by  appellants'  counsel.  But  their  contention  is,  that  in  case  of 
such  contract  of  sale  for  future  delivery,  where,  before  the  time  of 
delivery,  the  buyer  gives  the  seller  notice  that  he  will  not  receive  the 
property  and  comply  with  the  terms  of  the  contract,  this,  whether 
the  seller  assents  thereto  or  not,  creates  a  breach  of  the  contract,  or, 
at  all  events,  imposes  the  legal  duty  on  the  seller  to  thereafter  take 
such  steps  with  reference  to  the  subject  of  the  contract,  as,  by  at 
once  reselling  the  property  on  the  market  on  account  of  the  buyer, 
or  making  a  forward  contract  for  the  purchase  of  other  property  of 
like  amount  and  time  of  delivery,  shall  most  effectually  mitigate  the 
damages  to  be  paid  by  the  buyer  in  consequence  of  the  breach,  with- 
out imposing  loss  upon  the  seller.  If  the  buyer  may  thus  create  a 
breach  of  the  contract  without  the  consent  of  the  seller,  we  doubt 
not  the  duty  to  sell  (where  the  property  is  in  the  possession  of  the 
seller  at  the  time),  at  least  within  a  reasonable  time  after  such  breach, 
will  result  as  a  necessary  consequence  of  the  breach.  When  the  breach 
occurs  by  a  failure  to  accept  and  pay  for  property  tendered  pursuant 
to  the  terms  of  a  contract  at  the  day  specified  for  its  delivery,  this 
is  doubtless  the  duty  of  the  seller,  and  no  reason  is  now  perceived 
why  it  should  not  equally  result  from  any  breach  of  the  contract 
upon  which  the  seller  is  legally  bound  to  act. 

But  the  well  settled  doctrine  of  the  English  courts  is,  that  a  buyer 
cannot  thus  create  a  breach  of  contract  upon  which  the  seller  is 
bound  to  act.  In  Leigh  v.  Patterson,  8  Taunt.  540  (4  Eng.  C.  L. 
267),  Phillpotts  et  al.  v.  Evans,  5  M.  &  W.  475,  Eipley  v.  McClure, 
4  Exch.  359,  and,  it  may  be,  also  in  other  early  cases,  it  was  held 
a  party  to  a  contract  to  be  performed  in  the  future  cannot,  by  merely 
giving  notice  to  the  opposite  party  that  he  will  not  perform  his  part 
of  the  contract,  create  a  breach  of  the  contract.  Subsequently,  how- 
ever, in  Cort  V.  Ambergate,  N"ottingham,  &c.  Ey.  Co.  17  Q.  B.  127, 
and  more  explicitly  in  Hochster  v.  De  la  Tour,  2  E.  &  B.  678,  the 
doctrine  was  announced  as  not  in  conflict  with*  previous  decisions, 
that  the  party  to  whom  notice  is  given  in  such  cases  will  be  justified 
in  acting  upon  the  notice,  provided  it  is  not  withdrawn  before  he 
acts.  Lord  Campbell,  C.  J.,  in  delivering  his  opinion  in  the  latter 
case,  and  speaking  for  the  court,  used  this  language :  "The  man  who 
wrongfully  renounces  a  contract  into  which  he  has  deliberately  en- 
tered, cannot  justly  complain  if  he  is  immediately  sued  for  a  compen- 


698  KADISH    V.   YOUNG  [CHAP.    V 

sation  in  damages  by  the  man  whom  he  has  injured,  and  it  seems 
reasonable  to  allow  an  option  to  the  injured  party  either  to  sue  im- 
miediately  or  to  wait  till  the  time  when  the  act  was  to  be  done,  still 
holding  it  as  prospectively  binding  for  the  exercise  of  this  option, 
which  may  be  advantageous  to  the  innocent  party,  and  cannot  be 
prejudicial  to  the  wrong-doer." 

The  leading  text-writers  who  treat  of  this  question  follow  the 
authority  of  these  cases,  and  the  rule  they  announce  is  thus  expressed 
in  Sedgwick  on  Damages,  (6th  ed.)  340,  *284:  "An  effort  has  been 
made  in  many  cases  by  the  purchaser  to  relieve  himself  from  the 
contract  of  sale  before  the  time  fixed  for  performance  by  giving  notice 
that  he  would  not  be  ready  to  complete  the  agreement,  and  in  these 
cases  it  has  been  insisted  that  the  damages  should  be  estimated  as  at 
the  time  of  giving  notice;  but  the  English  courts  have  justly  denied 
the  right  of  either  party  to  rescind  the  agreement,  and  have  adhered 
to  the  day  of  the  breach  as  the  period  for  estimating  damages."  To 
like  effect  see  Chitty  on  Contracts,  (11th  Am.  ed.)  1079;  2  Parsons 
on  Contracts,  (6th  ed.)  676;  Benjamin  on  Sales,  (1st  ed.)  559,  (4th 
Am.  ed.)  973;  Addison  on  Contracts,  *952;  Wood's  Mayne  on  Dam- 
ages, 250,  *150. 

The  question  came  before  this  court  in  Fox  v.  Kitton,  19  111.  519, 
whether,  when  a  party  agrees  to  do  an  act  at  a  future  day,  and  be- 
fore the  day  arrives  he  declares  he  will  not  keep  his  contract  or  do 
the  act,  the  other  party  may  act  on  such  declaration,  and  bring  an 
action  before  the  day  arives ;  and  it  was  held,  on  the  authority  of 
Phillpotts  V.  Evans,  and  Hochster  v.  De  la  Tour,  supra,  that  he 
may;  and  in  that  case  it  is  said,  in  the  opinion  of  the  court,  that 
there  is  no  conflict  in  the  cases  referred  to  by  counsel  in  the  discus- 
sion thereof,  and  to  prove  it,  this  language  from  the  opinion  of  Parke, 
Baron,  in  Phillpotts  v.  Evans,  is  quoted:  "The  notice  (that  he  will 
not  receive  the  wheat)  amounts  to  nothing  until  the  time  when  the 
buyer  ought  to  receive  the  goods,  unless  the  seller  acts  on  it  in  the 
meantime,  and  rescinds  the  contract."  And  it  is  then  added :  "This 
is  in  strict  accordance  with  the  principles  recognized  in  the  leading 
case  relied  on  by  the  plaintiff,  —  Hochster  v.  De  la  Tour." 

In  McPherson  v.  "Walker,  40  111.  371,  the  question  before  the  court 
was,  whether  it  was  error  to  say  in  an  instruction  that  where  there 
is  a  contract  for  the  sale  of  property  to  be  delivered  in  the  future,  a 
tender  or  offer  of,  the  property  by  the  seller  on  the  day  of  delivery  is 
excused  by  a  previous  notice  of  the  buyer  that  he  would  not  accept 
the  property,  and  it  was  held  that  it  was.  In  the  opinion  of  the 
court  it  is  said :  "The  rule  is,  if  one  bound  to  perform  a  future  act, 
before  the  time  for  doing  it  declares  his  intention  not  to  do  it,  this, 
of  itself,  is  not  breach  of  his  contract;  but  if  this  declaration  be  not 
withdrawn,  when  \\w.  time;  arrives  for  the  act  to  be  done  it  constitutes 
a  Hufficient  excuse  for  the  default  of  the  other  party,"  —  referring 
to  2  Parsons  on  Contracts,  188,  Hochster  v.  De  la  Tour,  supra,  and 
Crist  V.  Armour,  34  Barb.  378. 


SECT.    II  ]  KADISH    V.    YOUNG  699 

In  Chamber  of  Commerce  v.  Sollitt,  43  111.  519,  the  character  of 
question  is  the  same  as  in  the  two  preceding  cases  to  which  we  have 
just  referred,  and  it  was  decided  the  same  way.  Cort  v.  Ambergate 
Ry.  Co.,  supra,  Hochster  v.  De  la  Tour,  supra,  and  Fox  v.  Elitton, 
supra,  are  referred  to  as  sustaining  the  decision. 

In  Cummings  v.  Tilton,  44  111.  173,  one  of  the  points  decided  was, 
if  the  party  who  is  to  receive  informs  the  party  who  is  to  deliver 
that  he  cannot  pay  the  money,  the  latter  is  excused  from  offering  to 
deliver,  —  but  there  is  no  discussion  of  the  question. 

Follansbee  v.  Adams,  86  111.  13,  involved  the  same  question  as  that 
decided  in  Fox  v.  Kitton,  supra,  and  on  the  authority  of  that  case, 
and  Chamber  of  Commerce  v.  Sollitt,  supra,  it  was  decided  the  same 
way. 

While  it  is  true  that  in  none  of  these  cases  was  the  question  whether 
one  party  to  a  contract  may,  by  only  a  notice  of  his  intention  not 
to  comply  with  its  terms,  create  a  breach  of  the  contract,  before 
the  court,  still,  in  all  of  them  it  is  assumed  that  he  cannot;  for  if 
he  could,  the  questions  they  decide  would  have  been  immaterial,  and 
the  English  cases  which  they  profess  to  follow,  as  has  been  seen,  ex- 
pressly hold  that  he  cannot. 

But  counsel  insist  this  court  has  held  the  contrary  in  Gale  v.  Dean, 
20  111.  320,  and  in  Trustees  v.  Shaffer,  63  id.  244.  This  is  a  mis- 
apprehension. Neither  case  professes  to  discuss  the  question  before 
us,  and  no  notice  is  taken  in  either  of  the  decisions  or  dicta  to  which 
we  have  above  referred.  In  Gale  v.  Dean  no  time  was  fixed  by  the 
terms  of  the  contract  for  its  performance,  and  in  view  of  this  omission 
the  court,  held  it  reasonable  that  after  the  lapse  of  a  reasonable  time 
either  party  might  declare  a  breach  of  the  contract,  if  not  performed ; 
and  it  was  in  reference  to  this  omission  and  these  reciprocal  rights 
of  the  parties  under  the  contract,  solely,  that  the  court  used  the  lan- 
guage quoted  and  relied  upon  by  counsel  for  appellants,  namely, 
that  "we  do  not  think  that  Gale,  when  he  found  he  could  not  perform, 
was  absolutely  at  the  mercy  of  Dean  for  the  determination  of  the 
time  when  his  liability  should  be  fixed  and  the  measure  of  that  lia- 
bility determined."  It  had  not  the  slightest  reference  to  the  character 
of  question  now  before  us.  In  the  other  case  (Trustees  v.  Shaffer), 
the  time  for  the  performance  of  the  contract  had  arrived.  There  was 
no  question  in  that  respect.  If  the  plaintiff  was  improperly  dis- 
charged, there  was  a  clear  breach  of  the  contract.  There  was  no  con- 
troversy in  regard  to  the  question  whether  one  party  to  a  contract 
to  be  performed  in  the  future,  can,  by  a  mere  notice  in  advance  of 
the  time  of  performance  that  he  does  not  intend  to  perform,  create 
a  breach  of  the  contract;  nor  was  there  any  question  as  to  what 
acts  a  party  may  be  required  to  do  in  advance  of  a  breach  of  con- 
tract to  mitigate  the  damages  of  the  adverse  party,  because  of  notice 
that  there  would  be  a  breach  by  him.  After  breach  of  a  contract, 
as  before  herein  intimated,  we  do  not,  at  present,  question  that  it  is 


700  KADISH    V.    YOUNG  [CHAP.    V 

the  duty  of  the  party  entitled  to  damages  to  do  what  he  reasonably 
may,  without  prejudice  to  his  rights,  to  lighten  the  burden  falling 
on  his  adversary. 

There  is  nothing  in  the  more  recent  English  cases,  as  we  under- 
stand them,  repugnant  to  those  to  which  we  have  referred  upon  this 
question. 

In  Frost  v.  Knight,  L.  E.  7  Exch.  Ill  (1  Moak,  218),  decided  in 
the  Exchequer  Chamber  in  Ferbruary,  1872,  the  suit  was  for  breach 
of  a  marriage  contract,  whereby  the  defendant  had  promised  to  marry 
the  plaintiff  upon  the  death  of  his  father,  but  the  father  still  living, 
the  defendant  had  announced  his  intention  of  not  fulfilling  his 
promise  on  his  father's  death,  and  broke  off  the  engagement.  Cock- 
burn,  C.  J.,  in  delivering  the  opinion  of  the  court,  thus  states  the 
law,  after  referring  to  the  previous  decisions:  "The  promisee,  if 
he  pleases,  may  treat  the  notice  of  intention"  (i.  e.  not  to  perform 
the  contract)  "as  inoperative,  and  await  the  time  when  the  contract 
is  to  be  executed,  and  then  hold  the  other  party  responsible  for  all  the 
consequences  of  non-performance;  but  in  that  case  he  keeps  the 
contract  alive  for  the  benefit  of  the  other  party  as  well  as  his  own. 
He  remains  subject  to  all  his  own  obligations  and  liabilities  under  it, 
and  enables  the  other  party  not  only  to  complete  the  contract,  if  so 
advised,  notwithstanding  his  previous  repudiation  of  it,  but  also  to 
take  advantage  of  any  supervening  circumstances  which  would  justify 
him  in  declining  to  complete  it.  On  the  other  hand,  the  promisee 
may,  if  he  thinks  proper,  treat  the  repudiation  of  the  other  party 
as  a  wrongful  putting  an  end  to  the  contract,  and  may  at  once  bring 
his  action  as  on  a  breach  of  it,  and  in  such  action  he  will  be  entitled 
to  such  damages  as  would  have  arisen  from  the  non-performance  of 
the  contract  at  the  proper  time,  subject,  however,  to  abatement  in 
respect  of  any  circumstance  which  may  have  afforded  him  the  means 
of  mitigating  his  loss."  This  was  followed,  and  its  doctrine  reiter- 
ated, in  Brown  v.  Miller,  L.  E.  7  Exch.  319  (3  Moak,  429),  decided 
in  the  Court  of  Exchequer  in  June,  1872,  and  Eoper  v.  Johnson, 
L.  E.  8  C.  P.  167  (4  Moak,  397),  decided  in  the  Common  Pleas  in 
February,  1873. 

Counsel  for  appellants  refer  to  the  fact  that  Keating,  J.,  in  Eoper 
V.  Johnson,  says :  "If  there  had  been  any  fall  in  the  market,  or  any 
other  circumstances  calculated  to  diminish  the  loss,  it  would  be  for 
defendant  to  show  it,"  —  and  then  cites  with  approval  from  the 
opinion  of  Cockburn,  C.  J.,  in  Frost  v.  Knight,  supra,  to  the  effect 
that  "the  damages  are  subject  to  abatement  in  respect  of  any  cir- 
cumstances which  would  entitle  him  to  a  mitigation,"  etc.,  and  in- 
sist they  recogniz-e  the  duty,  here,  of  appellees,  upon  receiving  notice, 
etc.,  to  liave  sold  upon  the  market  or  have  entered  into  another  con- 
tract for  January  delivery,  etc.  It  is  enough  to  observe,  in  answer 
to  this,  that  in  both  Frost  v.  Kniglit  nnd  Eoper  v.  Johnson,  supra, 
the  notice  that  dctfendant  would  not  comply  with  the  contract  was 


SECT.    II  ]  KADISH    V.   YOUNG  701 

accepted  and  acted  upon  by  tlie  plaintiff  as  a  breach  of  the  contract; 
and  so  what  was  said  in  respect  of  the  duty  of  the  plaintiff  to  miti- 
gate damages  was  said  with  reference  to  a  case  wherein  he  recognized 
the  contract  as  having  been  broken  by  the  notice  of  the  adverse  party, 
and  with  reference  to  what  was  to  be  done  by  him  upon  and  after 
the  recognition  of  that  breach,  and  hence  can  have  no  application 
here.  If  a  party  is  not  compelled  to  accept  the  declarations  of  the 
other  party  to  a  contract  that  he  will  not  perform  it,  as  a  breach, 
it  must  logically  follow  that  he  is  under  no  obligation  to  regard  that 
declaration  for  any  purpose;  for,  as  we  have  seen,  the  theory  in 
such  case,  as  laid  down  by  Cockburn,  C.  J.,  in  Frost  v.  Knight, 
supra,  is:  "He  keeps  the  contract  alive  for  the  benefit  of  the  other 
party  as  well  as  his  own.  He  remains  subject  to  all  his  own  obliga- 
tions and  liabilities  under  it,  and  enables  the  other  party  not  only 
to  complete  the  contract,  if  so  advised,  notwithstanding  his  previous 
repudiation  of  it,  but  also  to  take  advantage  of  any  supervening  cir- 
cumstance which  would  justify  him  in  declining  to  complete  it." 

Nothing  would  seem  to  be  plainer  than  that  while  the  contract  is 
still  subsisting  and  unbroken,  the  parties  can  only  be  compelled  to 
do  that  which  its  terms  require.  This  contract  imposed  no  duty  upon 
appellees  to  make  other  contracts  for  January  delivery,  or  to  sell 
barley  in  December,  to  protect  appellants  from  loss.  It  did  not  even 
contemplate  that  appellees  should  have  the  barley  ready  for  delivery 
until  such  time  in  January  as  they  should  elect.  If  appellees  had 
then  the  barley  on  hand,  and  had  acted  upon  appellants'  notice,  and 
accepted  and  treated  the  contract  as  then  broken,  it  would,  doubtless, 
then  have  been  their  duty  to  have  resold  the  barley  upon  the  market, 
precisely  as  they  did  in  January,  and  have  given  appellants  credit  for 
the  proceeds  of  the  sale;  but  it  is  obviously  absurd  to  assume  that  it 
could  have  been  appellees'  duty  to  have  sold  barley  in  December  to 
other  parties  which  it  was  their  duty  to  deliver  to  appellants,  and 
which  appellants  had  a  legal  right  to  accept  in  January. 

"We  have  been  referred  to  Dillon  v.  Anderson,  43  IST.  Y.  231,  Dan- 
forth  et  al.  v.  "Walker,  37  "Vt.  240  (and  same  case  again  in  40  Vt. 
357),  and  Collins  v.  Delaporte,  115  Mass.  159,  as  recognizing  the 
right  of  either  party  to  a  contract  to  create  a  breach  of  it  obligatory 
upon  the  other  party,  by  giving  notice,  in  advance  of  the  time  for 
the  commencement  of  the  performance  of  the  contract,  that  he  will 
not  comply  with  its  terms.  An  examination  of  the  cases  will  disclose 
that  they  do  not  go  so  far,  but  that  they  are  entirely  in  harmony 
with  what  we  have  heretofore  indicated  is  our  opinion  in  respect  of 
the  law  applicable  to  the  present  question. 

In  Dillon  v.  Anderson,  the  action  was  for  a  breach  of  contract  for 
the  construction  of  a  pair  of  boilers  for  a  steamboat.  After  work 
had  been  commenced  under  the  contract,  and  a  certain  amount  of 
material  had  been  purchased  therefor  by  the  plaintiff,  notice  was 
given  by  the  defendant  to  stop  work,  that  the  contract  was  rescinded 


702  KADISH    V.    YOUNG  [CHAP.    V 

by  the  defendant,  and  that  he  would  make  the  plaintiff  whole  for  any 
loss  he  might  suffer.  The  court  held  that  it  was  the  duty  of  the 
plaintiff,  as  soon  as  he  received  the  notice,  to  have  so  acted  as  to 
save  the  defendant  from  further  damage,  so  far  as  it  was  in  his 
power. 

In  Danforth  et  al.  v.  Walker,  37  and  40  Vt.,  the  defendant  made 
a  contract  with  the  plaintiffs  to  purchase  of  them  five  car-loads  of 
potatoes,  being  fifteen  hundred  bushels,  to  be  delivered  at  a  desig- 
nated place  as  soon  as  the  defendant  should  call  for  them,  and  as  soon 
as  he  could  get  them  away,  some  time  during  the  winter.  Soon 
after  the  first  car-load  was  taken,  potatoes  fell  in  the  market,  and 
the  defendant  thereupon  w^rote  the  plaintiffs  not  to  purchase  any 
more  potatoes  until  they  should  hear  from  him.  The  court  held  this 
created  a  breach  of  the  contract,  and  that  plaintiffs  were  not  author- 
ized to  purchase  any  more  potatoes,  on  account  of  the  defendant  after 
they  received  the  notice.  The  court,  in  the  case  in  37  Vt.,  on  page 
244,  use  this  language:  "While  a  contract  is  executory  a  party  has 
the  power  to  stop  performance  on  the  other  side  by  an  explicit  direc- 
tion to  that  effect,  by  subjecting  himself  to  such  damages  as  will 
compensate  the  other  party  for  being  stopped  in  the  performance  on 
his  part  at  that  point  or  stage  in  the  execution  of  the  contract.  The 
party  thus  forbidden  cannot  afterwards  go  on,  and  thereby  increase 
the  damages,  and  then  recover  such  increased  damages  of  the  other 
party."  And  this  same  rule,  lipon  the  authority  of  these  cases,  is 
laid  down  in  2  Sutherland  on  Damages,  361. 

The  points  in  issue  in  Collins  v.  Delaporte  are  not  pertinent  to 
the  present  question,  but  in  the  opinion  the  court  quotes  the  rule  as 
above  laid  down,  upon  the  authority  of  Danforth  et  al.  v.  Walker, 
and  other  cases. 

It  will  be  observed  that  in  each  of  these  cases  the  time  for  the 
performance  of  the  contract  had  arrived,  and  its  performance  had 
been  entered  upon.  In  neither  of  them  was  the  defendant  at  liberty, 
after  notifying  the  plaintiff  not  to  proceed  further  in  the  performance 
of  the  contract,  to  demand  that  he  should  proceed  to  perform  it,  as 
it  was  said  in  Frost  v.  Knight,  supra,  the  defendant  was,  in  case  of 
notice,  not  to  perform  a  contract  the  time  of  the  performance  of 
which  is  to  commence  in  the  future.  In  these  cases  there  is  no  time 
or  opportunity  for  repentence  or  change  of  mind,  —  in  those  there 
was.  That  it  was  not  intended,  by  these  cases,  to  trench  upon  the 
doctrine  of  Leigh  r.  Patterson,  Phillpotts  v.  Evans,  and  other  cases 
of  like  character,  is  manifest  from  the  fact  that  they  make  no  ref- 
erence to  those  cases,  or  to  the  rule  they  announce;  and  in  Collins  v. 
Dolfiporte,  no  rofcrenco  is  made  to  Dnniols  v.  T^cwton,  reported  in  the 
iH'xt  preceding  volume  (114  Mass.  530),  wherein  that  court  refused 
to  follow  the  modification  made  in  TTochster  v.  De  la  Tour,  and 
Frost  V.  Knight,  of  the  rule  recogTiizod  by  the  preceding  English 
decisions,  but  held  that  an  action  for  the  breach  of  a  written  agree- 


SECT.    II  ]  KADISH    V.   YOUNG  703 

ment  to  purchase  land,  brought  before  the  expiration  of  the  time 
given  for  the  purchase,  cannot  be  maintained  by  proof  of  an  absolute 
refusal,  on  the  defendant's  part,  ever  to  purchase.  It  follows  that, 
in  our  opinion,  the  ruling  on  the  point  in  question  was  free  of  sub- 
stantial objection. 

Objection  is  urged  because  the  circuit  judge  gave  an  instruction, 
at  the  instance  of  appellees,  with  reference  to  the  obligations  and 
duties  of  the  parties  under  the  alleged  contract  of  sale,  in  which  no 
mention  is  made  of  a  custom  effecting  those  obligations  and  duties, 
of  which  custom  proof  was  introduced  on  the  trial.  The  existence  of 
this  custom  was  not  conceded.  Appellants  claimed  its  existence,  and 
appellees  denied  it.  There  was  evidence  both  ways.  This  instruc- 
tion presented  the  law  correctly  upon  appellees'  theory  of  the  case, 
and  the  seventh  instruction,  given  at  the  instance  of  appellants, 
presented  the  law,  —  including  the  hypothesis  of  a  custom  being 
proved,  —  upon  the  theory  of  the  case.  There  is  no  repugnance  be- 
tween them.  Each  simply  presents  a  different  theory  of  the  case, 
having  evidence  tending  to  sustain  it,  —  and  in  this  there  is  no 
error.  City  of  Chicago  v.  Schmidt,  Admx.  107  111.  186;  Illinois 
Central  K.  E.  Co.  v.  Swearingen,,  47  id.  206. 

There  was  proof,  upon  the  trial,  tending  to  show  that  although 
appellees  owned  and  had  in  their  possession,  at  the  time  of  the  mak- 
ing of  the  alleged  contract,  an  amount  and  kind  of  barley  equal  to 
or  greater  than  that  professed  thereby  to  be  sold,  yet  that  they  then 
only  had  of  the  warehouse  receipts,  which  they  actually  tendered  to 
appellants  in  January,  those  for  48,500  bushels,  and  that  they  sub- 
sequently obtained  from  Huck  &  Lefens  the  warehouse  receipts  for 
the  remaining  51,500  bushels,  upon  a  contract,  whereby  appellees 
agreed  to  pay  Huck  &  Lefens  therefor,  at  all  events,  one  dollar  per 
bushel,  and  one  dollar  and  twenty  cents  per  bushel  if  appellees  shall 
recover  from  appellants  in  this  suit.  The  court,  in  giving  and  re- 
fusing instructions,  ruled  that  this  in  no  wise  concerned  appellants, 
—  that  if  the  facts  were  as  claimed,  it  did  not  make  Huck  &  Lefens 
necessary  parties  to  the  suit,  nor  entitle  appellants  to  any  reduction 
in  the  measure  of  damages.  In  this  there  was  surely  no  error.  Huck 
&  Lefens  have  no  privity  of  contract  with  appellants,  and  whether 
appellees  pay  much  or  little  for  the  barley  with  which  to  comply  with 
their  contract,  cannot  concern  appellants.  It  was  sufficient  they 
owned  and  tendered  the  barley  at  the  appointed  time.  If  it  had 
been  given  them,  their  measure  of  damages  must  be  precisely  the 
same  as  it  would  be  had  they  paid  ten-fold  more  than  it  was  worth. 
The  only  effect  of  the  transactions  by  which  they  obtained  the  barley 
is  to  vest  title  in  them,  and  when  it  was  thus  vested  it  was  absolutely 
theirs  to  do  with  as  they  pleased.  ISTo  court,  so  far  as  our  researches 
have  enabled  us  to  know^,  ever  held  that  the  price  paid  by  the  seller 
for  an  article  sold  and  contracted  to  be  delivered  in  the  future,  was- 
a  circumstance  to  be  taken  into  consideration  by  the  jury  in  deter- 


704  BORROWMAN    V.    FREE  [CHAP.   V 

mining  the  amount  of  damages  the  seller  is  entitled  to  recover  upon 
the  buyer's  refusing  to  receive  and  pay  for  the  property,  and  the 
distinguished  counsel  representing  appellants  have  been  unable  to 
refer  us  to  any  such  decision. 

Objection  is  also  taken  to  the  language  of  the  instruction  with 
reference  to  the  joint  liability  of  appellants.  The  language  of  the 
instruction  is  objectionable,  but,  in  our  opinion,  it  is  not  possible 
that  it  could  have  misled  the  jury.  The  question  was  put  in  issue 
whether  appellants  were  partners  in  the  transaction,  by  proper  plead- 
ings. Evidence  was  introduced  by  each  party  on  that  question. 
There  was  not  a  particle  of  evidence  tending  to  show  that  appellants 
were  jointly  interested  in  the  transaction,  if  interested  at  all,  other- 
wise than  as  partners.  If  the  evidence  in  behalf  of  appellees  pre- 
vailed, appellants  were  partners  in  the  transaction;  if  that  in  be- 
half of  appellants  prevailed,  they  were  not. 

Upon  the  whole,  we  perceive  no  error  of  law  in  the  rulings  below. 
The  judgment  is  therefore  affirmed.  Judgment  affirmed. 


BORROWMAN",  PHILLIPS  &  CO.  v.  FREE  &  HOLLIS 

In  the  Queen's  Bench  Division,  Court  of  Appeal, 
ISTovember  25,  1878 

[Reported  in  4   Queen's  Bench  Division,   500] 

Action  for  damages  for  not  accepting  any  paying  for  a  cargo  of 
maize. 

The  plaintiffs  sued  upon  a  contract  the  benefit  of  which,  with  all 
rights  under  it,  had  been  assigned  to  them;  the  following  were  the 
material  portions :  — 

London,  May  7th,  1877 

"Sold  to  Messrs.  Free  &  Hollis  a  cargo  of  mixed  American  maize 
.  .  .  say  three  to  four  thousand  quarters  of  480  lbs.,  as  per  bill 
of  lading,  to  be  dated  between  the  15th  of  May  and  30th  of  June, 
inclusive,  at  the  price  of  thirty  shillings  and  sixpence  per  480  lbs. 
Payment  by  cash  in  London  in  exchange  for  shipping  documents 
.  .  .  or  by  the  buyer's  acceptances  at  sixty  days'  sight  from  date 
of  arrival  of  bill  of  lading  in  London,  with  shipping  documents 
attached,  as  usual.  Sellers  to  render  invoice  within  seven  days  of 
arrival  of  bill  of  lading  in  England." 

Tlif  contract  contained  a  clause  providing  that  any  dispute  should 
be  referred  to  arbitration. 

At  the  trial  before  Denman,  T.,  it  was  proved  that  the  plaintiffs 
offered  to  the  defendants  a  cargo  to  arrive  by  a  vessel  called  the 
CharJp.s  PJaft,  and  atatofi  that  they  had  not  then  received  the  ship- 
ping documents.     The  defendants  refused  to  take  this  cargo,  on  the 


SECT.    II  ]  BORROWMAN    V.    FREE  705 

ground  that  the  shipping  documents  had  not  arrived;  the  plaintiffs, 
however,  persisted  in  their  offer.  Under  the  provision  in  the  con- 
tract this  dispute  was  referred  to  arbitration,  and  the  arbitrator  de- 
cided that  the  defendants  were  not  bound  to  accept  the  cargo  of  the 
Charles  Piatt  in  performance  of  the  contract.  The  plaintiffs  after- 
wards, on  the  9th  of  July,  offered  the  cargo  of  a  vessel  called  the 
Maria  D.,  stating  in  their  letter,  "bill  of  lading  to  hand  to-day,  and 
dated  about  the  24th  of  June,"  and  asking  the  defendants  which  of 
the  modes  of  payment  provided  in  the  contract  they  preferred.  The 
defendants  refused  to  accept  the  cargo  of  the  Maria  D.,  on  the  ground 
that  they  were  not  bound  to  accept  any  cargo  in  substitution  for  that 
of  the  Charles  Piatt,  the  offer  of  which  the  arbitrator  had  decided 
to  be  invalid.  The  plaintiffs  did  not,  in  point  of  fact,  receive  the 
shipping  documents  of  the  Maria  D.  until  the  4th  of  August,  and 
there  was  some  evidence  that  on  the  9th  of  July  her  cargo  did  not 
belong  to  them.  The  plaintiffs  having  sustained  a  loss  upon  the  sale 
of  the  cargo,  sued  the  defendants  to  indemnify  themselves  against  it. 

The  defendants  contended  that  there  had  been  no  valid  tender  of 
the  cargo  of  the  Maria  D.,  inasmuch  as  the  shipping  documents  were 
not  tendered  at  the  same  time.  The  plaintiffs  alleged  that  the  tender 
had  been  waived.  Denman,  J.,  found  for  the  plaintiffs  upon  the 
question  of  waiver;  but  he  gave  judgment  for  the  defendants  on  the 
ground  that  the  plaintiffs  had  appropriated  the  cargo  of  the  Charles 
Piatt  in  satisfaction  of  the  contract,  and  that  after  the  arbitrator 
had  decided  that  the  defendants  were  not  bound  to  accept  it,  the 
plaintiffs  could  not  lawfully  tender  the  cargo  of  any  other  vessel. 

The  plaintiffs  appealed. 

November  23,  25.  Herschell,  Q.  C,  and  A.  L.  Smith,  foF  the 
plaintiffs. 

Benjamin,  Q.  C,  Philhrich,  Q.  C,  and  Reginald  Brown,  for  the 
defendants. 

The  arguments  are  sufficiently  noticed  in  the  judgments. 

Brown  v.  Royal  Insurance  Co.^  was  cited  as  to  the  effect  of  an 
election  made  in  pursuance  of  a  contract. 

Bramwell,  L.  J.^  I  think  that  this  judgment  cannot  be  supported. 
I  will  deal  first  with  the  second  point,  which  has  been  made  before 
us  on  behalf  of  the  defendants,  namely,  that  the  plaintiffs  were  not 
in  a  condition  to  tender  the  cargo  of  the  Maria  D.,  because  it  did  not 
then  belong  to  them.  I  think  that  this  point  was  not  taken  at  the 
trial,  and  if  it  had  been  the  plaintiffs  would  have  been  able  to  meet  it. 
I  think  that  that  Is  clear  upon  the  construction  of  the  documents  and 
upon  the  facts  before  the  Court.  All  that  the  sellers  were  bound 
to  do  under  the  contract  of  sale  was  to  name  the  ship  and  to  send  on 
the  invoice  within  the  proper  time.  This  they  did,  and  the  buyers 
were  then  to  declare  their  option  as  to  the  mode  of  payment.    It  was 

1  1  E.  &  E.  853;  28  L.  J.  (Q.  B.)  275. 

^  Brett,  L.  J.,  and  Cotton,  L.  J.,  delivered  concurring  opinions. 
23 


706  BORROWMAN    V.    FREE  [CHAP.   V 

contended  at  the  trial  that  the  tender  was  insufficient,  because  it  was 
not  accompanied  with  the  shipping  documents  of  the  Maria  D.  I 
think  it  clear  that  it  was  unnecessary  that  at  the  time  of  the  tender 
the  sellers  should  have  them  in  their  possession.  The  performance 
of  the  contract  does  not  depend  upon  that  circumstance.  As  I  have 
already  said,  before  us  the  contention  has  been  urged  that  the  cargo 
of  the  Maria  D.  was  not  the  plaintiflfs'.  Now,  I  quite  allow  that 
although  a  contention  is  not  formally  made  at  the  trial,  yet  if  it  is 
obvious  upon  the  face  of  the  evidence  it  may  be  urged  before  us 
when  the  case  is  considered  in  all  its  aspects.  This  objection,  how- 
ever, is  of  a  doubtful  nature.  Moreover,  the  plaintiffs  might  have 
met  it  by  evidence  that  they  had  previously  bought  it;  but,  even  if 
they  had  not  bought  it,  the  objection  seems  to  me  unsustainable;  it 
is  quite  competent  for  a  man  to  sell  what  does  not  belong  to  him: 
before  the  time  for  performance  he  may  have  bought  it  or  procured 
the  assignment  of  it,  and  be  ready  to  fulfil  his  contract.  The  con- 
tention for  the  defendants  is  not  maintainable  either  in  the  shape 
taken  at  the  trial  or  in  the  form  urged  before  us. 

As  to  the  main  point  in  the  case  I  cannot  agree  with  the  view  of 
Denman,  J.  In  due  course  after  the  contract  had  been  entered  into 
the  Charles  Piatt  arrived,  but  the  shipping  documents  had  not  reached 
the  plaintiffs  when  they  offered  her  cargo  to  the  defendants.  The 
latter  objected  that  under  the  contract  they  were  not  bound  to  take 
it  without  the  shipping  documents.  This  objection  was  not  allowed 
by  the  plaintiffs,  and  the  question  was  referred  to  arbitration.  The 
arbitrator  was  of  opinion  that  the  plaintiffs  could  not  insist  upon 
the  tender.  It  is  unnecessary  to  express  any  opinion  as  to  the  de- 
cision of  the  arbitrator.  The  plaintiffs  then  offered  a  second  ship, 
the  Maria  D.,  within  the  time  limited  by  the  contract.  It  has  been 
argued  that  by  the  tender  of  the  Charles  Piatt  the  option  of  the 
plaintiffs  was  determined,  and  that  the  position  of  the  parties  is  the 
same  as  if  the  Charles  Piatt  had  been  named  in  the  contract,  and 
that  no  other  ship  could  be  declared.  I  do  not  think  this  argument 
maintainable.  Suppose  that  a  clause  had  been  inserted,  that  no 
ship  was  to  be  declared  whose  shipping  documents  had  not  then 
arrived  in  England.  A  clause  of  that  kind  would  be  repugnant  to 
the  theory  that  the  contract  is  to  be  treated  as  if  the  Charles  Piatt 
had  been  the  ship  named  in  it.  The  case  may  be  shortly  stated  as 
follows :  if  the  Charles  Piatt  was  a  proper  ship,  the  plaintiffs  were 
rrititled  to  tender  her  cargo;  if  she  was  not,  they  were  entitled  to 
witliflraw  the  tender,  and  instead  of  the  cargo  of  the  Charles  Piatt 
to  offer  that  of  the  Maria  D.  The  defendants  have  relied  upon 
Gath  V.  Lees,'^  but  the  decision  is  distinguishable.  In  that  case  cotton 
was  "to  be  delivered  at  seller's  option  in  August  or  September,  1864." 
The  seller  elected  to  exercise  that  option  in  August,  and  notice  that 
it  would  be  so  exercised  was  accepted  by  the  buyers.     The  seller  had 

»  3  H.  &  C.  558. 


SECT.    II]  GRAY    V.    SMITH  707 

a,  right  to  exercise  that  option ;  but  in  this  case,  upon  the  defendants' 
hypothesis,  the  plaintiffs  by  naming  the  Charles  Piatt,  exercised 
their  option  in  an  improper  manner;  therefore  they  had  a  right  to 
withdraw  their  tender,  and  to  exercise  it  in  a  proper  manner.  That 
case  shows  that  this  action  is  maintainable.  The  judgment  of  Den- 
man,  J.,  must  be  reversed.^ 


GRAY  V.  SMITH  et  al 

Circuit  Court  foe  the  Northern  District  of  California, 
August  10,  1896 

Circuit  Court  of  Appeals,  Ninth  Circuit,  October  4,  1897 

[Reported  in  76  Federal  Reporter,  525,  and  83  Federal  Reporter,  824] 

This  was  an  action  for  damages  for  breach  of  contract  brought 
against  the  executors  of  Edgar  Mills.  A  jury  trial  was  waived  and 
the  Court  found  the  following  facts.  On  September  16,  1891,  Edgar 
Mills  made  to  the  plaintiff  a  written  offer  to  buy  a  lot  on  Market 
Street,  San  Francisco,  for  $240,000,  $125,000  payable  in  cash  and 
the  remainder  in  several  specified  tracts  of  land.  The  offer  by  its 
terms  was  to  hold  good  for  three  weeks.  On  October  6,  1891,  the 
plaintiff  accepted  in  writing  the  offer.  The  title  to  the  lot  on  Market 
Street  was  at  the  time  and  throughout  the  time  covered  by  the  deal- 
ings of  the  parties  with  each  other  in  Joseph  A.  Donohoe,  Sr.  On 
September  4,  1891,  the  plaintiff  and  one  J.  H.  Cavanaugh  had  agreed 
with  one  another  to  share  equally  any  commission  or  profit  which 
could  be  obtained  from  the  sale  of  this  lot.  On  September  18,  Cava- 
naugh began  negotiations  to  buy  the  lot,  and  on  October  7,  Joseph  A. 
Donohoe,  Jr.,  executed  as  agent  for  his  father  a  writing  by  which  he 
agreed  to  sell  to  Edgar  Mills  the  lot  for  $165,000  and  a  portion  of  the 
taxes  payable  on  delivery  of  deed  after  examination  of  title,  say  fif- 
teen days  from  date.  On  October  8,  Edgar  Mills  was  first  informed 
that  the  title  of  the  lot  was  in  Donohoe  and  that  the  agreement  to  sell 
it  to  him.  Mills,  had  been  executed.  Mills  never  accepted  the  offer  of 
Donohoe,   and   neither   Mills,    Cavanaugh,   nor   the   plaintiff.    Gray, 

1  Ashmore  v.  Cox,  [1899]  1  Q.  B.  436,  440,  ace.  Compare  Kurtz  v.  Frank,  76  Ind. 
594;  Hallwood  Cash  Register  Co.  v.  Lufkin,  179  Mass.  143;  Bell  v.  Hoffman,  92 
N.  C.  273;    Ault  v.  Dustin,  100  Tenn.  366. 

In  Rose  v.  Hawley,  133  N.  Y.  315,  320,  the  court  said:  "Let  us  suppose  a  suit  on 
a  contract  in  which  the  plaintiff  recovers,  but  on  appeal  to  the  General  Term  the 
judgment  is  reversed,  because  when  the  suit  was  brought  the  debt  was  not  due  or 
could  not  be  enforced  without  a  demand;  that  the  plaintiff  doubting  the  law  and 
faced  with  a  difficulty  which  he  cannot  cure  on  a  new  trial,  appeals  to  this  Court, 
where  the  reversal  is  affirmed  and  judgment  absolute  is  ordered  for  the  defendant.  Is 
it  true  that  such  judgment  prevents  utterly  a  future  recovery  on  the  contract?  May 
not  the  plaintiff  sue  when  the  debt  does  mature  or  make  the  needed  demand,  and 
then  maintain  his  action?" 

See  further  Van  Fleet's  Former  Adjudication,  §§  55,  56. 


70S  GRAY    V.    SMITH  [CHAP.   V 

complied  or  offered  to  comply  with  the  terms  of  the  offer.  Prior  to 
October  23,  Donohoe  delivered  an  abstract  of  his  title  to  attorneys 
for  Mills.  On  November  18,  the  attorneys  reported  to  Mills  that 
the  title  was  fatally  defective.  Whereupon  Mills  declined  to  com- 
plete the  purchase  and  notified  Donohoe  and  the  plaintiff  of  his 
refusal.  On  November  23,  Donohoe  executed  three  several  deeds  to 
the  lots,  one  to  Mills,  one  to  Cavanaugh,  and  one  to  the  plaintiff, 
and  made  tender  of  them,  demanding  $165,000  at  the  same  time. 
Each  tender  was  refused.  In  fact,  the  title  was  not  defective.  Fur- 
ther facts  appear  in  the  opinion.^ 

Sidney  V.  Smith  and  Vincent  Neale,  for  the  plaintiff. 

S.  C.  Denson,  J.  J.  De  Haven,  and  Richard  Bayne,  for  the  de- 
fendants. 

McKenna^  C  J.  The  covenants  between  Gray  and  Mills  were 
mutual  and  dependent,  and  hence  defendants  urge  that  Gray  must 
show  not  only  a  willingness  to  perform,  but  an  ability  to  perform, 
as  a  condition  of  the  recovery  of  damages,  and  have  cited  a  number 
of  cases  illustrating  the  principle.  The  contract  of  Donohoe  was 
to  convey  to  Mills  upon  the  payment  of  $165,000  and  the  taxes.  The 
contract  of  Mills,  however,  was  to  pay  $125,000  and  certain  lands. 
There  was  then  $45,000,  besides  the  taxes,  to  be  paid  by  Gray  (I  omit 
Cavanaugh's  name  for  convenience),  and  this  money  he  expected  to 
raise  on  the  country  lands  conveyed  to  them  by  Mills.  This  makes 
Gray's  ability  to  perform  not  independent  of  Mills'  performance,  as 
the  principle  would  seem  to  require,  but  dependent  on  Mills'  per- 
formance. Concurrent  and  dependent  covenants  are  defined  by 
Bouvier  as  follows :  "Concurrent  covenants  are  those  which  are  to 
be  performed  by  the  parties  to  each  other  at  the  same  time.  A  de- 
pendent covenant  is  one  which  it  is  not  the  duty  of  the  covenantor 
to  perform  until  some  other  covenant  contained  in  the  same  agree- 
ment has  been  performed  by  the  opposite  party.  When  covenants 
are  dependent  or  concurrent,  the  covenantee  is  not  entitled  to  recover 
for  the  breach  of  such  a  covenant  until  after  he  has  performed  the 
covenants  on  his  part." 

The  application  of  these  principles  seems  to  be  obvious.  The  ob- 
ligations between  Gray  and  Mills  were  mutual,  —  as  binding  on  one 
as  the  other ;  they  were  dependent,  —  the  performance  by  one  being 
the  consideration  of  the  performance  by  the  other ;  concurrent,  —  that 
is,  the  performance  by  each  must  be  at  the  same  time  as  that  by 
the  other.  Could  this  be  if  tlio  ability  be  not  also  concurrent,  but 
may  wait  on  either  side  the  performance  on  the  other?  The  doctrine 
of  waiver  does  not  apply.  There  may  be  a  waiver  of  tender  of  per- 
formance,—  of  preparation  of  the  steps  to  make  the  ability  im- 
mediatfly  available.  But  efficiont  ability  is  back  of,  and  is  essential 
to,  the  obligations  of  the  parties,  and  must  actually  exist  in  each 

'  Tho  fltat-rmont  of  facts  has  been  abbreviated  iind  ouly  so  much  of  the  opinions 
hiiH  been  printed  aH  relutf^s  to  one  defence. 


SECT.    II ]  GRAY    V.    SMITH  709 

independent  of  the  other.  Most  of  the  adjudged  cases  turn  on  excuses 
for  non-tender  of  performance,  or  of  non-preparation,  but  there  are 
some  which  depend  on  and  clearly  decide  the  principle  I  have  ex- 
pressed. See  Eddy  v.  Davis,  116  N.  Y.  247,  22  N.  E.  362,  and  cases 
cited;  Grandy  v.  McCleese,  2  Jones  (K.  C),  142;  Grandy  v.  Small, 
5  Jones  (N.  C),  55;  Brown  v.  Davis,  138  Mass.  458;  M'Gehee  v. 
Hill  4  Port.  (Ala.)  170.  The  latter  case  was  an  action  by  a  vendee 
for  a  breach  of  a  contract  for  the  delivery  of  a  large  quantity  of 
corn  and  fodder,  and  the  Court  said :  "It  is  a  well-settled  rule  of  law 
that  when  a  contract  is  dependent,  as  where  one  agrees  to  sell  and 
deliver  and  the  other  agrees  to  pay  on  delivery,  in  an  action  for 
non-delivery  it  is  necessary  for  the  plaintiff  to  prove  a  readiness  to 
pay  on  his  part,  whether  the  other  party  was  ready  at  the  place  to 
deliver  or  not.  .  .  .  The  instruction  of  the  Court,  therefore,  that 
if  the  party  believed  that  the  credit  which  the  corn  and  fodder  when 
delivered  might  give,  together  with  the  other  means  of  the  plaintiff, 
would  have  enabled  him  to  raise  the  money  so  as  to  have  been  pre- 
pared to  pay,  that  would  be  sufficient  evidence  of  readiness,  was 
erroneous." 

These  cases  are  not  opposed  by  Smith  v.  Lewis,  24  Conn.  624,  or 
South  worth  v.  Smith,  7  Cush,  391.  The  instance  in  the  latter  was 
the  failure  to  count  money  which  was  present  at  the  proper  place 
for  payment.  The  Court  held  that  the  defendant's  absence  excused 
it.  A  real  ability  existed.  It  required  but  a  trifling  physical  act  to 
make  it  available  for  the  tender  or  the  performance  of  the  obliga- 
tion to  pay.  In  Smith  v.  Lewis,  there  was  also  a  real  and  substan- 
tive ability  to  perform.  To  make  it  available  for  actual  performance, 
certain  preparations  were  necessary,  and  these  preparations  were 
held  to  have  been  excused  under  the  circumstances  of  the  case.  There 
was  a  time  and  place  agreed  upon  to  perform  the  contract,  where 
it  was  understood  that  certain  preparations  were  to  be  made.  It 
was  held  that  the  wilful  absence  of  one  of  the  parties  excused  the 
want  of  these  preparations.  The  Court  remarked,  stating  the  prin- 
ciple, and  summarizing  the  facts :  "But  it  is  justly  said  that  the  proof 
must  show  that  the  plaintiff  was  'ready  and  willing'  to  perform; 
and,  the  disposition  and  ability  being  proved,  the  only  remaining  ob- 
jection relates  to  the  degree  of  preparation.  The  plaintiff  had  not 
his  money  in  his  formal  possession.  He  had  not  cleared  his  own 
estate  from  incumbrances,  and  had  not  prepared  the  title-deeds  of 
his  property.  All  these  preparations  he  had  suspended  in  view  of 
his  arrangement  to  meet  the  defendant,  at  which  he  had  expected 
some  facilities  to  be  furnished  by  the  defendant,  not  necessary,  but 
convenient  to  himself;  but  all  of  which  preparations  he  was  able  to 
complete,  and  would  have  completed,  if  the  defendant  had  not,  by 
his  absence,  under  the  peculiar  circumstances  of  the  case,  induced 
him  to  desist." 

The  only  resemblance  of  the  case  quoted  to  the  case  at  bar  is  that 


710  GRAY    V.    SMITH  [CHAP.    V 

facilities  were  to  be  furnished  by  the  defendant.  Here  the  resem- 
blance stops.  In  the  quoted  case  these  facilities  were  convenient, 
not  necessary.  In  the  case  at  bar,  for  aught  that  appears,  they 
were  absolutely  necessary.  They  alone  could  make  the  readiness.  In 
the  quoted  case  the  plaintiff  had  provided  for  the  money,  and  wit- 
nesses testified  that  it  would  have  been  ready.  As  to  the  $2,000, 
the  party  who  was  to  furnish  it  said  that  he  knew  the  plaintiff  must 
have  a  title  to  the  place  before  security  could  be  given  witness,  but 
lie  would  have  paid  the  money  to  plaintiff  before  the  latter  had  re- 
ceived the  deed,  and  relied  on  him  afterwards.  In  the  case  at  bar 
there  is  no  ability  —  readiness  —  in  plaintiff  shown,  of  which  it  could 
be  said  that  the  facility  which  Mills'  performance  would  have  fur- 
nished Gray  was  "convenient,  but  not  necessary."  There  is  no  testi- 
mony that  Gray  or  Cavanaugh  had  either  property  or  credit,  or  that 
they  had  ever  been  promised  a  loan  on  Mills'  land.  All  the  evidence 
on  the  subject  comes  from  a  witness  by  the  name  of  Minto,  who 
testified  that  he  was  a  surveyor,  —  civil  engineer,  —  and  that  he  re- 
ported on  land  values  for  the  Savings  Union.  After  stating  the 
value  of  the  lands,  the  following  question  and  answer  were  given, 
after  some  correction :  "Q.  By  whose  instructions  or  orders  were  you 
valuing  those  lands?  A.  The  Savings  Union."  That  an  application 
had  been  made  for  a  loan  to  that  institution  by  Gray  or  Cavanaugh, 
we  may  assume;  and  also  that  it  was  so  far  entertained  by  the  bank 
that  it  sent  its  surveyor  to  look  at  it.  But  whether  its  quality  or 
value  reported  was  satisfactory,  there  is  no  proof  whatever.  There- 
fore the  case  at  bar  does  not  satisfy  the  rule  of  Smith  v.  Lewis,  even 
regarding  it  as  a  sound  one.  But  the  case  has  been  criticised.  The 
editors  of  Smith's  Lending  Cases,  in  a  note  to  Cutter  v.  Powell 
(volume  2,  p.  29),  say  of  it:  "There  is  no  doubt  that  the  case  as 
decided  by  the  majority  goes  to  the  verge  of  the  law,  and  opens  the 
door  for  experiments  and  tricks.  .  .  .  It  is  only  by  assuming  as 
a  certain  fact  that  which  the  majority  of  the  court  did  so  assume, 
though,  perhaps,  on  an  insufficient  finding,  that  the  plaintiff  could 
unquestionably  have  performed  every  item  of  his  engagement,  and 
would  so  have  performed  them,  that  the  decision  comes  within  safe 
principles." 

The  case,  being  an  extreme  one,  should  not  be  extended  beyond 
its  exact  facts. 

It  follows  that  the  last  contention  of  defendants  is  correct,  and 
there  was  not  an  ability  to  perform  shown,  which  is  a  necessary  con- 
dition of  the  recovery  of  daniagos. 

Judgment  will  be  entered  for  the  defendants. 

On  writ  of  error  the  case  was  brought  before  the  Circuit  Court  of 
Ap[)('als,  and  aft(!r  arguments  before  Gilbert,  Ross,  and  Morrow, 
(-inuiit  Judg(!3, 

Gilbkkt,  C/Mrcuit  Judge,  delivered  the  opinion  of  the  Court. 

In  the  bill  of  exceptions  it  is  stated  that  there  was  no  evidence 


SECT.    II  ]  GRAY    V.    SMITH  711 

whatever  that  plaintiff  had  any  financial  ability,  or  that  it  would 
have  been  possible  for  him  to  have  raised  an  amount  sufficient  to 
pay  the  price  asked  by  Donohoe  for  the  Market  Street  lot,  or  that 
he  had  completed  any  arrangement  to  procure  a  loan  for  any  amount 
whatever  upon  the  lands  which,  under  the  contract  alleged  in  the 
complaint.  Mills  was  to  convey  to  him  in  exchange  for  the  Market 
Street  lot.  Upon  the  writ  of  error  in  this  court  it  is  urged  that  the 
Circuit  Court  ruled  erroneously  upon  the  law  of  the  case  in  holding 
that  the  plaintiff  could  not  recover,  for  the  reason  that  he  failed  to 
prove  that  he  had  the  "independent  ability"  to  perform  the  contract, 
by  showing  that  he  had  the  means  to  purchase  the  Market  Street 
lot  from  Donohoe,  apart  from  any  benefit  to  be  derived  through  the 
cash  and  the  land  which  were  to  come  from  Mills  in  exchange  there- 
for. If  we  concede  that  that  ruling  was  error,  it  does  not  follow  thalt 
the  judgment  of  the  Circuit  Court  must  be  reversed.  It  becomes  our 
duty  to  consider  the  whole  of  the  findings,  and  to  determine  whether, 
upon  a  proper  view  of  the  law  applicable  thereto,  the  judgment  is 
sustainable.  The  findings,  in  brief,  are  that  the  plaintiff  and  Mills 
had  entered  into  a  valid  contract,  whereby  the  former  was  to  convey 
land  estimated  in  the  contract  at  $235,000,  in  exchange  for  lands  of 
the  latter,  estimated  at  $115,000,  and  $120,000  in  cash.  The  land 
which  the  plaintiff  was  to  convey  did  not  belong  to  him,  and  he  had 
not  then,  nor  did  he  afterwards  acquire,  any  estate  or  interest  therein. 
He  had  received  a  written  offer  from  the  owner  of  the  property  to 
sell  it  for  $165,000  cash  and  one-half  the  taxes  of  the  current  year. 
The  offer  was  never  accepted.  It  was  without  consideration.  It 
was  a  bare  offer  to  sell,  and  could  have  been  rescinded  at  any  time. 
In  fact,  the  offer  has  no  bearing  upon  the  decision  of  this  case. 
It  left  the  property  in  the  same  relation  to  the  contract  in  which  it 
would  have  stood  had  there  been  no  such  instrument.  When  Mills 
withdrew  from  the  contract,  he  had  discovered  that  the  title  to  the 
land  he  was  to  purchase  was  not  in  the  plaintiff,  but  was  in  Donohoe. 
It  is  true  that  he  did  not  place  his  refusal  to  perform  upon  that 
ground,  but  on  the  ground  that  the  title  in  Donohoe  was  found  to 
be  defective;  but  that  fact  is  immaterial  so  far  as  this  case  is  con- 
cerned. The  case  presented  for  our  consideration,  therefore,  is  one 
in  which  the  plaintiff  made  a  contract  to  sell  real  estate  of  which  he 
was  not  the  owner,  and  in  which  he  had  no  right,  title,  nor  interest, 
nor  the  ability  to  compel,  by  the  law  or  otherwise,  a  conveyance  from 
the  owner. 

It  is  contended  by  the  plaintiff  in  error  that  the  refusal  of  Mills 
to  be  bound  by  his  contract,  before  the  time  for  its  completion  had 
arrived,  excuses  the  plaintiff  from  showing  or  proving  that  he  had 
the  ability  to  perform  the  contract  upon  his  part.  It  is  true  that 
where  the  vendor  of  property,  before  the  arrival  of  the  time  for 
the  completion  of  his  contract  of  sale  or  conveyance,  disables  him- 
self from  performing  by  disposing  of  the  property  to  another,  the 


712  GRAY    V.    SMITH  [CHAP.   V 

purchaser  may  at  once  bring  his  action,  and  he  need  not  aver  or 
prove  tender  of  the  purchase  money  upon  his  part,  nor  his  ability 
to  carry  out  the  contract ;  and,  where  either  party  to  a  contract  gives 
notice  to  the  other  that  he  will  not  comply  with  its  terms,  the  other 
is  excused  from  averring  or  proving  a  tender  of  performance.  But, 
in  any  case  of  action  apon  a  contract,  the  elements  of  the  plaintiff's 
damage  must  be  certain,  and  the  facts  must  exist  from  which  it  may 
be  deduced  that  he  has  suffered  loss.  One  who  makes  a  contract  to 
sell  property  of  which  he  has  no  title,  nor  the  certain  means  of  pro- 
curing title,  presents  no  facts  upon  which  damage  to  him  may  be 
predicated  if  the  purchaser  withdraws  from  the  contract.  The  plead- 
ings and  the  finding  in  this  case  leave  it  uncertain  whether  the  plain- 
tiff could  ever  have  acquired  title  to  the  Market  Street  lot.  So  far 
as  the  performance  of  his  contract  was  concerned,  he  was  in  no  better 
attitude  than  one  who  has  disabled  himself  from  carrying  out  a  con- 
tract of  sale  by  selling  the  property  to  another. 

In  Bigler  v.  Morgan,  77  JNT.  Y.  312,  the  Court  said :  "However  posi- 
tively a  vendee  may  have  refused  to  perform  his  contract,  and  how- 
ever insufficient  the  reason  assigned  for  his  refusal,  he  cannot  be 
subjected  to  damages  without  showing  that  he  would  have  received 
what  he  contracted  for  had  he  performed,"  —  citing  Heron  v.  Hoff- 
ner,  3  Rawle,  393,  400;  Bank  of  Columbia  v.  Hagner,  1  Pet.  464; 
Traver  v.  Halsted,  23  Wend.  66. 

In  Eddy  v.  Davis,  116  K  Y.  247,  251,  22  K  E.  362,  363,  the 
Court  said :  "The  formal  requisite  of  a  tender  may  be  waived,  but 
to  establish  a  waiver,  there  must  be  an  existing  capacity  to  perform. 
Here  there  was  no  existing  capacity,  as,  having,  sold  all  the  ad- 
jacent lands  plaintiffs  could  not  perform  their  covenant  to  keep 
open  a  right  of  way  back  of  defendant's  store." 

In  Townsend  v.  Goodfellow,  40  Minn.  312,  41  N.  W.  1056,  the 
Court  said :  "And  one  who  sj)eculates  upon  that  of  which  he  has  no 
control  or  the  means  of  acquiring  it  is  not  a  bona  fde  contractor. 
But  the  general  rule  is  that,  where  a  contract  is  entered  into  in  good 
faith,  it  is  not  necessary  that  the  vendor  be  actually  in  the  situation 
to  perform  it  at  the  time  it  is  entered  into,  provided  he  be  able  at 
the  proper  time  to  place  himself  in  that  situation." 

In  Burks  v.  Davies,  85  Cal.  110,  24  Pac.  613,  the  Court  cited 
with  approval  the  rule  of  the  English  courts  that :  "Where  a  person 
takes  upon  himself  to  contract  for  the  sale  of  an  estate,  and  is  not 
absolute  owner  of  it,  nor  is  it  in  his  power,  by  the  ordinary  course  of 
law  or  equity,  to  make  himself  so,  though  the  owner  offer  to  make 
the  seller  a  title,  yet  equity  will  not  force  the  buyer  to  take :  for  any 
seller  ought  to  be  a  hona  fide  contractor,  and  it  would  lead  to  infinite 
misfliicf  if  an  owner  were  permitted  to  speculate  upon  the  sale  of 
another's  estate.     Tendring  v.  London,  2  Eq.  Cas.  Abr.  680." 

Of  similar  import  are  Carpenter  v.  Holcomb,  105  Mass.  285;  Law- 
rence V.  Miller,  8G  K  Y.  131 ;  Nelson  v.  Elevating  Co.,  55  N.  Y.  480. 


SECT.    Ill]  BAILY    V.   DE   CRESPIGNY  713 

None  of  the  cases  cited  by  the  plaintiff  in  error  sustain  the  doctrine 
which  he  contends  for.  Among  others  is  cited  the  case  of  ISTorth's 
Adm'r.  v.  Pepper,  21  "Wend.  636,  where  it  was  held,  that  if  a  pur- 
chaser of  property  gives  notice  to  the  vendor  that  he  has  abandoned 
the  contract,  and  will  not  accept  a  conveyance,  it  is  sufficient  to  sup- 
port an  action  of  the  covenant  by  the  vendor  to  allege  the  fact  that 
he  has  received  such  notice,  and  it  is  not  necessary  that  he  aver  a 
tender  of  the  deed  or  readiness  to  perform,  nor  that  he  had  title  to 
the  premises  which  he  had  agreed  to  convey.  But  the  Court  in  that 
case  expressly  recognized  the  principle  that,  if  the  vendor  had  not 
the  title  nor  such  contractual  relation  thereto  as  to  render  it  certain 
that  he  could  procure  the  same,  he  had  no  ground  upon  which  to  re- 
cover damages,  and  held  that,  in  the  case  of  notice  of  refusal  to  per- 
form the  contract  upon  the  part  of  the  purchaser,  it  would  be  a  suffi- 
cient defence  to  an  action  by  the  vendor  to  plead  that  the  latter  had 
no  title.  The  case  at  bar  comes  directly  within  the  principle  declared 
in  that  case.  It  is  alleged  in  the  answer  in  the  record  in  this  case 
that  the  plaintiff  had  no  title  to  the  Market  Street  lot,  and  that  alle- 
gation is  affirmatively  sustained  by  the  findings.  Judgment  will  be 
affirmed,  with  costs  to  the  defendants  in  error.  ^ 


SECTION  III 
IMPOSSIBILITY 


BAILY  V.  DE  CEESPIGNY 

In  the  Queen's  Bench^  January  20,  1869 

[Reported  in  Law  Reports,  4  Queen's  Bench,  180] 

The  judgment  of  the  Court  (Cockburn,  C.  J.,  Lush,  and  Hayes, 
JJ.)  was  delivered  by  — 

Hannen,  J.  This  was  an  action  on  a  covenant  contained  in  a 
lease  of  certain  premises  granted  by  the  defendant  to  the  plaintiff  in 
1840,  for  a  term  of  eighty-nine  years,  whereby  the  defendant  cove- 
nanted that  "neither  he  nor  his  assigns  should  or  would,  during  the 
term,  permit  to  be  built  any  messuage,  etc.,  on  a  paddock  fronting 

1  In  Gerli  v.  Poidebard  SUk  Mfg.  00.^57  N.  J.  L.  432,  the  plaintiff  sued  the  de- 
fendant for  breach  of  a  contract  to  buy  silk  on  August  15th.  The  court  said:  " Conced- 
ing that  the  defendant's  repudiation  of  the  whole  contract  before  August  15th  absolved 
the  sellers  from  the  duty  of  tendering  an  instalment  on  that  date  and  gave  them  a 
immediate  right  of  action  against  the  defendant  for  a  breach  of  contract,  nevertheless 
when  it  appeared,  as  it  did  on  the  trial,  that  by  no  possibility  could  the  sellers  have 
made  tender  of  the  silk  due  August  15th,  because  the  silk  did  not  arrive  in  New  York 
until  a  later  day,  it  became  evident  that  as  to  that  instalment  the  sellers  suffered  no 
loss  by  the  breach."  Compare  Bradley  v.  Benjamin,  46  L.  J.  Q.  B.  590;  Lowe  v. 
Harwood,  139  Mass.  133;  Foternick  v.  Watson,  184  Mass.  187,  193;  Dosch  v.  Andrus, 
111  Mum.  287. 


714  BAILY    V.    DE    CRESPIGNY  [CHAP.   V 

the  demised  premises."  The  breaches  alleged  are:  1.  That  the  de- 
fendant during  the  term  permitted  a  railway  station  to  be  built  on 
the  paddock.  2.  That  the  defendant  assigned  the  paddock  to  the 
London  and  Brighton  Railway  Company,  who  erected  the  railway 
station  on  the  paddock. 

To  this  declaration  the  defendant  pleaded  that,  after  the  making 
of  the  deed,  the  railway  company  required  to  take  the  paddock  under 
powers  given  them  by  act  of  Parliament,  1862,  for  purposes  for 
which  they  were  by  the  act  empowered  to  take  the  same;  that  the 
paddock  was  land  which  the  company  were  empowered  to  take  com- 
pulsorily  for  the  purposes  of  the  undertaking  authorized  by  the  act; 
and  that  the  company  under  the  powers  so  conferred,  did  compul- 
sorily  purchase  and  take  the  paddock;  and  that  the  assignment  by 
defendant  to  the  company  was  the  assignment  in  completion  of  such 
compulsory  purchase ;  that  the  company  afterwards  built  on  the  pad- 
dock the  erections  complained  of,  which  were  erections  reasonably 
required  for  the  purposes  of  the  undertaking  authorized  by  the  act, 
and  that,  except  as  aforesaid,  the  defendant  did  not  permit  the  said 
erections  to  be  built.  The  plaintiff  demurred  to  this  plea;  and  also 
replied  that  the  erections,  though  reasonable,  were  not  necessary  or 
compulsory  for  the  company  to  build.  To  this  replication  there  was 
a  demurrer. 

It  must  be  taken  on  these  pleadings  that  the  assignment  by  the 
defendants  to  the  railway  company  was  altogether  made  under  the 
requirements  of  the  act  of  Parliament,  and  without  any  stipulation 
introduced  into  the  conveyance  of  the  vendor  or  the  purchaser,  which 
would  alter  its  character  as  an  act  done  by  the  defendant  in  obedience 
to  the  command  of  the  legislature.  The  75th  section  of  the  Lands 
Clauses  Consolidation  Act,  1845,  is  imperative  that  the  owner  of 
lands  shall,  on  the  performance  of  the  conditions  imposed  on  the 
company,  when  required  so  to  do,  duly  convey  the  lands  to  the  pro- 
moters, or  as  they  shall  direct,  and  in  default  thereof  it  shall  be  law- 
ful for  the  promoters  to  execute  a  deed  poll  declaring  the  fact  of 
such  default  having  been  made,  and  thereupon  all  the  estate  and 
interest  in  such  lands,  capable  of  being  sold  and  conveyed  by  such 
owner  shall  vest  absolutely  in  the  promoters  of  the  undertaking. 

We  think  that  no  distinction  can  be  drawn  between  the  case  of  an 
owner  of  lands  who  does  that  which  it  is  his  duty  to  do  —  namely, 
conveys  to  the  company  —  and  one'  who  by  refusing  to  convey  obliges 
the  company  to  obtain  a  title  to  the  lands  by  the  execution  of  a  deed 
poll.  In  the  one  case,  as  in  the  other,  the  transfer  of  the  title  is 
r'omy)r'ned  by  the  legislature,  and  it  cannot  be  supposed  that  it  was 
intended  that  the  Iniidowner  who  acts  solely  in  obedience  to  the  law 
.shonld  be  in  a  worse  position  tlnin  one  who  refuses  complinnce.  In 
eitber  case  the  railway  company  must  be  regarded  as  the  assignee  of 
the  land,  not  by  the  voluntary  act  of  the  former  owner,  but  by  com- 
pnlsion  of  law. 


SECT.    Ill]  BAILY    V.   DE    CRESPIGNY  715 

The  substantial  question,  therefore,  raised  on  this  record  is  whether 
the  defendant  is  discharged  from  his  covenant  by  the  subsequent  act 
of  Parliament,  which  put  it  out  of  his  power  to  perform  it. 

"We  are  of  opinion  that  he  is  so  discharged  on  the  principle  ex- 
pressed in  the  maxim  Lex  non  cog  it  ad  impossihilia. 

We  have  first  to  consider  what  is  the  meaning  of  the  covenant 
which  the  parties  have  entered  into.  There  can  be  no  doubt  that 
a  man  may  by  an  absolute  contract  bind  himself  to  perform  things 
which  subsequently  become  impossible,  or  to  pay  damages  for  the 
non-performance;  and  this  construction  is  to  be  put  upon  an  un- 
qualified undertaking,  where  the  event  which  causes  the  impossibility 
was  or  might  have  been  anticipated  and  guarded  against  in  the  con- 
tract, or  where  the  impossibility  arises  from  the  act  or  default  of  the 
promisor.^ 

But  where  the  event  is  of  such  a  character  that  it  cannot  reason- 
ably be  supposed  to  have  been  in  the  contemplation  of  the  contract- 
ing parties  when  the  contract  was  made,  they  will  not  be  held  bound 
by  general  words  which,  though  large  enough  to  include,  were  not 
used  with  reference  to  the  possibility  of  the  particular  contingency 
which  afterwards  happens.^  It  is  on  this  principle  that  the  act  of 
God  is  in  some  cases  said  to  excuse  the  breach  of  a  contract.  This 
is  in  fact  an  inaccurate  expression,  because,  where  it  is  an  answer 
to  a  complaint  of  an  alleged  breach  of  contract  that  the  thing  done 
or  left  undone  was  so  by  the  act  of  God,  what  is  meant  is  that  it  was 
not  within  the  contract ;  for,  as  is  observed  by  Maule,  J.,  in  Canham 
V.  Barry,  15  C.  B.  at  p.  619;  24  L.  J.  (C.  P.)  at  p.  106,  a  man 
might  by  apt  words  bind  himself  that  it  shall  rain  tomorrow  or  that 
he  will  pay  damages.  This  is  the  explanation  of  the  case  put  by 
Lord  Coke  in  Shelley's  case,  1  Kep.  at  p.  98,  a:  "If  a  lessee  cove- 
nants to  leave  a  wood  in  as  good  a  plight  as  the  wood  was  at  the  time 
of  the  lease,  and  afterwards  the  trees  are  blown  down  by  tempest, 
he  is  discharged  of  his  covenant,"  because  it  was  thought  that  the 
covenant  was  intended  to  relate  only  to  the  tenant's  own  acts,  and 
not  to  an  event  beyond  his  control,  producing  effects  not  in  his  power 
to  remedy.  (See  Shep.  Touch.  173).  It  is  on  this  principle  that  it 
has  been  held  that  an  impossibility,  arising  from  an  act  of  the  legis- 
lature subsequent  to  the  contract,  discharges  the  contractor  from  lia- 
bility. Again,  to  quote  an  observation  of  Maule,  J.,  in  Mayor  of 
Berwick  v.  Oswald,  3  E.  &  B.  665;  23  L.  J.  (Q.  B.)  at  324,  there 
is  nothing  "to  prevent  parties,  if  they  choose  by  apt  words  to  express 
an  intention  so  to  do,  from  binding  themselves  by  a  contract  as  to 
any  future  state  of  the  law;  .  .  .  but  people  in  general  must  al- 
ways be  considered  as  contracting  with  reference  to  the  law  as  ex- 
isting at  the  time  of  the  contract.    .    .    .   And  the  words  showing  a 

1  See  Kelley  i'.  Insurance  Co.,  109  Fed.  Rep.  56,  114  Fed.  Rep.  268. 
'  The  preceding  thirteen  lines  are  quoted  by  Jackson,  J.,  in  Chicago,  &c.  Ry.  Co. 
V.  Hoyt,  149  U.  S.  1,  14. 


716  BAILY    V.   DE    CRESPIGNY  [CHAP.   V 

contrary  intention  ought  to  be  pretty  clear  to  rebut  that  presump- 
tion." To  hold  a  man  liable  by  words,  in  a  sense  affixed  to  them  by 
legislation  subsequent  to  the  contract,  is  to  impose  on  him  a  con- 
tract he  never  made.  This  is  the  principle  of  that  which  was  laid 
down  in  Brewster  v.  Kitchell,  1  Salk.  198,  that  "where  H.  covenants 
not  to  do  an  act  or  thing  which  was  lawful  to  do,  and  an  act  of  Par- 
liament comes  after  and  compels  him  to  do  it,  the  statute  repeals  the 
covenant.  So  if  H.  covenants  to  do  a  thing  which  is  lawful,  and  an 
act  of  Parliament  comes  in  and  hinders  him  from  doing  it,  the  cove- 
nant is  repealed." 

To  apply  the  foregoing  observations  to  the  present  case :  The  de- 
fendant has  covenanted  that  his  "assigns"  shall  not  build.  The  word 
^'assigns"  is  a  term  of  well-known  signification,  comprehending  all 
those  who  take  either  immediately  or  remotely  from  or  under  the 
assignor,  whether  by  conveyance,  devise,  descent,  or  act  of  law. 
Spencer's  case,  5  Rep.  16.  The  defendant  when  he  contracted  used 
the  general  word  "assigns,"  knowing  that  it  had  a  definite  meaning, 
and  he  was  able  to  foresee  and  guard  against  the  liabilities  which 
might  arise  from  his  contract  so  interpreted.  The  legislature,  by 
compelling  him  to  part  with  his  land  to  a  railway  company,  whom 
he  could  not  bind  by  any  stipulation,  as  he  could  an  assignee  chosen 
by  himself,  has  created  a  new  kind  of  assign,  such  as  was  not  in  the 
contemplation  of  the  parties  when  the  contract  was  entered  into. 
To  hold  the  defendant  responsible  for  the  acts  of  such  an  assignee  is 
to  make  an  entirely  new  contract  for  the  parties.  On  the  other  hand, 
to  confine  the  word  "assigns"  to  those  who  take  by  the  voluntary 
act  of  the  assignor  would  not,  as  was  suggested  in  argument,  limit 
the  operation  of  the  covenant  to  his  immediate  grantee;  because  all 
those  who  take  from  the  first  assignee  do  so  in  consequence  of  the 
original  voluntary  act  of  the  assignor,  and  it  was  his  own  fault  that 
he  assigned  at  all,  or  that  he  did  not  in  the  original  conveyance  guard 
against  the  acts  of  subsequent  assignees.  To  exempt  him  from  lia- 
bility for  such  acts  would  be  contrary  to  the  intention  of  the  parties, 
to  be  collected  from  their  woi'ds,  interpreted  according  to  their  known 
ordinary  signification. 

It  was,  indeed,  conceded  on  the  argument  by  the  plaintiff's  counsel, 
that  the  defendant  would  not  be  liable  for  all  acts  of  the  railway 
company,  as  he  would  have  been  for  the  acts  of  any  other  assignee; 
but  it  was  contended  that  the  defendant  was  relieved  from  liability 
on  his  covenant  as  to  those  acts  only  which  the  company  was  required 
by  the  act  of  Parliament  to  do,  and  not  as  to  those  which  the  company 
was  mercily  empow<!red  to  do. 

Wc  do  not  think  that  this  distinction  is  well  founded.  The  rule 
laid  down  in  Brewster  v.  Kitchell,  1  Salk.  198,  rests  upon  this 
ground,  that  it  is  not  reasonable  to  suppose  that  the  legislature,  while 
altfring  thf  conflitiori  of  things  with  rofpronco  to  which  the  cove- 
nanlor  contracted,  intended  that  he  should  remain  liable  on  a  cove- 


SECT,    III]  BAILY    V.    DE   CRESPIGNY  717 

nant  which  the  legislature  itself  prevented  his  fulfilling;  but  the 
covenantor  in  this  case  is  equally  disabled  from  preventing  the  rail- 
way company  from  doing  those  things  which  it  is  empowered  to  do, 
as  those  which  it  is  required  to  do;  why,  then,  should  there  be  a 
difference  in  the  liability  of  the  covenantor  with  respect  to  the  one 
and  the  other? 

But,  assuming  that  the  imposing  on  the  defendant  by  the  legis- 
lature of  assigns  whom  he  could  not  control  would,  without  more, 
free  him  from  the  engagements  which  he  entered  into  with  reference 
to  assigns  whom  he  could  control,  it  remains  necessary  to  deal  with 
the  argument  that,  though  the  company  was  empowered  to  take  the 
lands  free  from  the  restrictions  upon  building,  this  was  only  on  con- 
dition of  paying  full  compensation  for  what  they  got,  and  that  it 
must  be  supposed  that  the  defendant  obtained  from  the  company  not 
only  the  value  of  the  land  as  he  held  it,  encumbered  with  a  covenant 
not  to  build,  but  also  what  was  deemed  a  fair  consideration  for  the 
right  to  build. 

It  appears  to  be  assumed  in  this  argument  that  the  difference 
between  the  price  of  the  land  encumbered  with  the  covenant  not  to 
build  and  the  price  of  it  freed  from  that  covenant,  would  be  the 
amount  of  damages  to  be  paid  by  the  defendant  to  the  plaintiff  in 
the  present  action.  But  that  is  not  so;  the  plaintiff,  if  entitled  to 
recover  at  all  in  this  action,  would  be  entitled  to  the  damage  he  had 
sustained  by  the  breach  of  the  covenant,  even  if  these  damages  should 
exceed  the  whole  value  of  the  land  taken.  No  doubt,  if  the  legisla- 
ture had  in  express  terms,  or  by  necessary  implication  from  its  lan- 
guage, given  to  persons  in  the  defendant's  situation  a  remedy  over 
against  the  railway  company  in  respect  of  acts  done  by  the  company, 
this  would  have  indicated  that  the  legislature  did  not  intend  that 
the  defendant  should  be  freed  from  liability  on  his  covenant,  al- 
though he  was  disabled  from  performing  it.  But  we  cannot  find  in 
the  railway  acts  any  express  or  implied  enactment  to  this  effect.  It 
has  been  already  pointed  out  that  there  is  no  relation  between  the 
compensation  which  the  defendant  would  be  entitled  to  for  his  land 
and  the  damages  for  which  he  would  be  liable  to  the  plaintiff.  How 
could  it  be  possible  for  the  defendant  to  lay  before  the  compensation 
jury  evidence  of  the  extent  of  his  liability  on  such  a  covenant  as  that 
under  consideration?  How  could  he,  in  an  inquiry  to  which  the 
plaintiff  was  no  party,  offer  evidence  of  the  injury  which  the  plain- 
tiff might  by  any  possibility  sustain  in  the  uncertain  event  of  the 
company  erecting  a  station  or  other  building  on  the  land  taken? 

Further,  if  the  covenant  of  the  defendant  is  to  be  considered  as 
broken  by  the  act  of  the  railway  company  so  as  to  entitle  the  plain- 
tiff to  damages,  it  must  be  deemed  to  carry  with  it  the  other  con- 
sequences of  a  breach  of  contract.  Thus,  if  the  situation  of  the 
plaintiff  and  the  defendant  in  this  case  had  been  reversed,  and  the 
covenant  not  to  build  on  land  adjoining  the  demised  premises  had 


718  HOWELL    V.    COUPLAND  [CHAP.    V 

been  entered  into  by  a  lessee,  with  the  usual  proviso  for  re-entry  in 
the  event  of  breach  of  any  covenant,  the  lessee  would  have  been 
liable  to  forfeiture  of  his  whole  interest  by  reason  of  an  act  over 
which  he  had  no  control;  and  the  railway  company  would  be  liable, 
if  the  plaintiif's  contention  be  correct,  to  pay,  by  way  of  compensa- 
tion for  a  piece  of  land  taken,  the  whole  value  of  the  interest  of  the 
lessee  in  the  adjoining  estate. 

The  solution  of  the  case  appears  to  be  that  the  plaintiff  is  one  of 
a  numerous  class  of  persons  injured  by  the  construction  of  a  railway, 
for  whom  the  legislature  has  not  provided  compensation.  This  may 
be  illustrated  by  reference  to  the  special  damage  claimed  in  the 
declaration.  It  is  there  alleged  that  the  amenity  and  comfort  of  the 
land  demised  have  been  diminished  by  reason  of  the  prospect  there- 
from being  interfered  with,  and  by  being  overlooked  by  the  windows 
of  the  station  with  the  appurtenances,  including  water-closets  and 
urinals.  These  are  heads  of  damage  for  which  railway  companies 
are  not  in  ordinary  circumstances  bound  to  give  compensation,  but 
for  which  the  defendant  would  be  liable  in  an  action  on  his  covenant. 

We  do  not  think  that  it  was  the  intention  of  the  legislature  to 
make  a  railway  company  liable  for  such  damages  in  the  exceptional 
case  of  a  person,  in  the  position  of  the  plaintiff,  having  taken  a 
covenant  from  his  lessor  on  the  terms  of  that  under  consideration, 
or  that,  if  such  had  been  the  intention  of  the  legislature,  so  peculiar 
a  head  of  compensation  as  that  now  suggested,  namely,  for  liability 
to  damages  for  breach  of  collateral  covenants  resulting  from  the 
taking  of  lands,  would  have  been  left  to  be  conjectured  from  the  vague 
language  of  the  Lands  Clauses  Consolidation  Act. 

For  these  reasons  we  are  of  opinion  that  our  judgment  ought  to 
be  for  the  defendant.  Judgment  for  the  defendant. 


HOWELL  V.  COUPLAND 

In  the  Queen's  Bench  Division^  Court  of  Appeal^  January  18, 

1876 

[Reported  in  Law  Reports,  1  Queen  s  Bench  Division,  258] 

Appeal  by  the  plaintiff  from  the  decision  of  the  Court  of  Queen's 
Bench  making  absolute  a  rule  to  enter  the  verdict  for  the  defendant. 

The  plaintiff  is  a  potato  merchant  at  Holbeach,  Lincolnshire,  and 
the  df'fendaiit  a  farmer  at  Whaplodo  in  the  same  county. 

In  1872  the  defendant,  at  thr;  ])roper  season,  and  in  the  due  course 
of  huHbandry,  appropriated  between  eighty  and  ninety  acres  of  land 
for  the  growth  of  potatoes,  —  sixty-eight  acres  at  Whaplode,  and 
about  twenty  at  TTolbeach. 

In  Miircli  of  tlin  same  year  the  f)laintiff  and  the  defendant  entered 
into  the  following  contract:  "A  memorandum  of  agreement,  made 


SECT.    Ill]  HOWELL    V.    COUPLAND  719 

this  day  of  ,  1872,  between  Eobert  Coupland,  of  Whap- 

lode,  and  John  Howell,  of  Holbeach,  whereby  Robert  Coupland 
agrees  to  sell,  and  the  said  John  Howell  agrees  to  purchase,  200  tons 
of  regent  potatoes  grown  on  land  belonging  to  the  said  Robert  Coup- 
land  in  Whaplode,  at  and  after  the  rate  of  £3  10s.  Qd.  per  ton,  to  be 
riddled  on  If -in.  riddle,  and  delivered  at  Holbeach  railway  station, 
good  and  marketable  ware,  during  the  months  of  September  or  Oc- 
tober, as  the  said  John  Howell  may  direct,  and,  under  his  direction, 
the  purchaser  to  find  riddles.  It  is  further  agreed  between  the  said 
Robert  Coupland  and  the  said  John  Howell  that  the  said  potatoes 
shall  be  paid  for  when  and  as  they  are  taken  away." 

At  the  time  of  making  the  contract,  out  of  the  sixty-eight  acres 
in  Whaplode,  twenty-five  were  actually  sown  with  potatoes,  and  the 
remaining  forty-three  acres  were  ready  for  sowing.  The  forty-three 
acres  were  afterwards  sown  in  due  course,  and  the  whole  sixty-eight 
acres  together  were  amply  sufficient,  in  an  ordinary  season  and  in 
the  ordinary  course  of  cultivation,  to  produce  a  much  larger  quantity 
than  two  hundred  tons,  the  land  producing,  on  an  average,  seven 
tons  to  the  acre. 

In  July  and  August,  without  any  fault  on  the  part  of  defendant, 
a  disease,  which  no  skill  or  care  on  the  part  of  the  defendant  could 
have  prevented,  attacked  the  crop  and  caused  it  to  fail;  and  when 
the  time  for  taking  it  up  arrived,  the  whole  marketable  produce  of  the 
crop  of  the  lands  of  the  defendant,  both  in  Whaplode  and  Holbeach 
together,  amounted  to  no  more  than  79  tons  8  cwt.,  and  this  quantity 
the  defendant  delivered  to  the  plaintiif.  The  rest  of  the  crop  had 
perished  from  the  disease. 

If  the  defendant  had  had  other  land  to  plant  with  potatoes  at  the 
time  when  the  disease  was  discovered,  which  in  fact  he  had  not,  it 
would  have  been  too  late  to  sow  it. 

The  present  action  was  brought  to  recover  damages  for  the  non- 
delivery of  the  residue  of  the  two  hundred  tons,  and  the  verdict  at 
the  trial  was  entered  for  £432  5s.,  leave  being  reserved  to  move  to 
enter  the  verdict  for  the  defendant,  on  the  ground  that  he  was  not 
liable  to  deliver  the  ungrown  potatoes. 

A  rule  having  been  obtained  accordingly,  it  was  made  absolute  by 
the  Court  of  Queen's  Bench  on  the  22d  of  May,  1874. 

D.  Seymour,  Q.  C,  and  Waddy,  Q.  C,  in  support  of  the  motion. 

Herschell,  Q.  C,  and  Beasley,  contra,  were  not  heard. 

LoBD  Coleridge,  C.  J.  I  am  of  opinion  that  the  judgment  ought 
to  be  affirmed.  [The  Lord  Chief  Justice  read  the  contract  and  facts.] 
The  Court  of  Queen's  Bench  held  that,  under  these  circumstances, 
the  principle  of  Taylor  v.  Caldwell,  3  B.  &  S.  826;  32  L.  J.  (Q.  B.) 
164  and  Appleby  v.  Myers,  L.  R.  2  C.  P.  651,  applied,  and  the  de- 
fendant was  excused  from  the  performance  of  his  contract.  The 
true  ground,  as  it  seems  to  me,  on  which  the  contract  should  be  in- 
terpreted, and  which  is  the  ground  on  which,  I  believe,  the  Court 


720  HOWELL    V.    COUPLAND  [CHAP.    V 

of  Queen's  Bencli  proceeded,  is  that  by  the  simple  and  obvious  con- 
struction of  the  agreement,  both  parties  understood  and  agreed  that 
there  should  be  a  condition  implied  that  before  the  time  for  the  per- 
formance of  the  contract  the  potatoes  should  be,  or  should  have  been, 
in  existence,  and  should  still  be  existing  when  the  time  came  for  the 
performance.  They  had  been  in  existence,  and  had  been  destroyed 
by  causes  over  which  the  defendant,  the  contractor,  had  no  control, 
and  it  became  impossible  for  him  to  perform  hi§  contract;  and,  ac- 
cording to  the  condition  which  the  parties  had  understood  should  be 
in  the  contract,  he  was  excused  from  the  performance.  It  was  not 
an  absolute  contract  of  delivery  under  all  circumstances,  but  a  con- 
tract to  deliver  so  many  potatoes,  of  a  particular  kind,  grown  on  a 
specific  place,  if  deliverable  from  that  place.  On  the  facts  the  con- 
dition did  arise  and  the  performance  was  excused.  I  am,  therefore, 
of  opinion  that  the  judgment  of  the  Queen's  Bench  should  be  affirmed. 
James,  L.  J.  I  think  the  case  was  rightly  considered  in  the  court 
below  to  turn  upon  the  construction  of  the  contract.  Is  it  a  contract 
for  a  certain  quantity  of  potatoes  of  a  particular  sort,  with  a  war- 
ranty that  they  shall  be  supplied;  or  is  it  a  contract  to  deliver  two 
hundred  tons  of  potatoes  out  of  a  specific  crop?  I  am  of  opinion  it 
is  the  latter;  and  if  so,  the  principle  of  the  cases  relied  on  applies, 
and  the  defendant  is  excused  by  reason  of  his  being  prevented  by 
causes  for  which  he  is  not  answerable. 

Mellish,  L.  J.  I  am  of  the  same  opinion.  The  words  of  the 
contract  are  clear :  the  defendant  "agrees  to  sell  two  hundred  tons  of 
regent  potatoes  grown  on  land  belonging  to  him  in  "Whaplode."  That 
is,  potatoes  which  shall  be  grown  in  "Whaplode.  They  are  to  be 
grown  there,  and  delivered  to  the  plaintiff  provided  they  are  grown 
there.  Is  not  that  a  condition,  —  so  that,  according  to  the  cases  on 
which  the  Court  of  Queen's  Bench  acted,  if  the  thing  perishes  be- 
fore the  time  for  performance,  the  vendor  is  excused  from  perform- 
ance by  the  delivery  of  the  thing  contracted  for?  No  doubt  there 
is  a  distinction  in  the  present  case,  that  the  potatoes,  the  things  con- 
tracted for,  were  not  in  existence  at  the  time  the  contract  was  en- 
tered into.  But  can  that  make  any  real  difference  in  principle?  Sup- 
pose the  potatoes  had  been  full  grown  at  the  time  of  the  contract, 
and  afterwards  the  disease  had  come  and  destroyed  them;  according 
to  the  authorities  it  is  clear  that  the  performance  would  have  been 
excused ;  and  I  cannot  think  it  makes  any  difference  that  the  po- 
tatoes were  not  then  in  existence.  This  is  not  like  the  case  of  a  con- 
tract to  deliver  so  many  goods  of  a  particular  kind,  where  no  specific 
goods  are  to  be  sold.  Here  there  was  an  agreement  to  sell  and  buy 
two  hundred  tons  out  of  a  crop  to  be  grown  on  specific  land,  so  that 
it  is  an  agreement  to  sell  what  will  be  and  may  be  called  specific 
things;  therefore  neither  party  is  liable  if  the  performance  becomes 
impossible.  The  language  of  this  contract  is  much  easier  to  imply 
a  rondition  from  than  in  most  former  cases  where  it  has  been  held 
to  be  implied. 


SECT.    Ill]  ANDERSON    V.    MAY  721 

Baggallay,  J.  A.  I  at  first  doubted  whether  the  contract  excluded 
the  possibility  of  the  defendant  being  able  to  perform  his  contract 
by  delivering  potatoes  grown  on  other  land;  but  on  consideration 
it  is  clear  the  contract  is  confined  to  particular  land;  and  the  state- 
ment in  the  case  is  that  sixty-eight  acres,  the  amount  actually  sown 
with  potatoes,  was  a  due  proportion  to  enable  the  defendant  to  per- 
form his  contract  in  an  ordinary  season. 

Cleasby,  B.  I  am  of  the  same  opinion.  I  put  my  decision,  not 
so  much  on  the  ground  that  the  defendant  was  excused  by  the  act 
of  God  rendering  the  performance  impossible,  as  upon  the  terms  of 
the  contract  itself.  This  is  not  like  a  contract  where  the  parties 
have  agreed  to  deliver  a  cargo  of  grain  at  Odessa  or  any  other  port 
by  a  given  time,  in  which  case  the  parties  are  bound  by  the  contract, 
although  its  performance  has  become  impossible  by  vis  major.  Here 
there  was  not  an  absolute  contract  to  deliver  two  hundred  tons  of 
potatoes  in  September  and  October,  but  two  hundred  tons  of  po- 
tatoes grown  on  particular  land.  !N"ot  two  hundred  tons  of  potatoes 
simply,  but  two  hundred  tons  off  particular  land.  The  crop  on 
this  particular  land  has  failed,  and  there  is  nothing  to  which  the 
promise  can  apply.  If  the  crop  had  existed  at  the  time  of  the  con- 
tract, and  had  afterwards  failed,  there  can  be  no  doubt  that  the  prin- 
ciple of  the  decided  cases  would  apply  and  the  defendant  would  be 
excused;  and  I  cannot  see  any  difference  in  principle  from  the  fact 
that  the  crop  had  not  been  sown  at  the  date  of  the  contract. 

Appeal  dismissed.^ 


ANDERSON  V,  MAY  et  al. 

Minnesota  Supreme  Court,  June,  1892 

[Reported  in  52  Northwestern  Reporter,  530] 

GiLFiLLAN,  C.  J.  The  defendant  having  alleged  as  a  counterclaim 
a  contract  in  June,  1890,  between  him  and  plaintiff,  whereby  the 
latter  agreed  to  sell  and  deliver  to  the  former,  on  or  before  November 
15th,  certain  quantities  of  specified  kinds  of  beans,  and  that  he  failed 
so  to  do  except  as  to  a  part  thereof,  the  plaintiff,  in  his  reply,  alleged 
in  substance  that  the  contract  was  to  deliver  the  beans  from  the  crop 
that  he  should  raise  that  year  from  his  market-gardening  farm  near 
Red  Wing.  Upon  the  trial  the  contract  was  proved  by  letters  pass- 
ing between  the  parties.  From  these  it  fairly  appears  that  the  beans 
to  be  delivered  were  to  be  grown  by  plaintiff,  though  it  cannot  be 
gathered  from  them  that  he  was  to  grow  the  beans  on  any  particular 

^  Browne  v.  United  States,  30  Ct.  CI.  124;  Ontario  Fruit  Assoc,  v.  Cutting  Pack- 
ing Co.,  134  Cal.  21;    Losecco  v.  Gregory,  108  La.  648,  ace. 

See  also  Nickoll  v.  Ashton,  [1901]  2  K.  B.  126;  Stewart  v.  Stone,  127  N.  Y.  500. 
Compare  Ashmore  v.  Cox,  [1899]  1  Q.  B.  436;  Jones  v.  United  States,  96  U.  S.  24; 
Summers  v.  Hibbard,  153  III.  102;   Booth  v.  MiU  Co.,  60  N.  Y.  487. 


722  ANDERSON    V.    MAY  [CHAP.   V 

land.  They  contain  no  restriction  in  that  respect.  There  can  be 
no  question  that,  if  grown  by  him,  and  of  the  kinds  and  quality 
specified,  defendant  would  have  been  obliged  to  accept  the  beans, 
though  not  grown  on  any  land  previously  cultivated  by  plaintiff. 
The  contract,  therefore,  was,  in  effect,  to  raise  and  sell  and  deliver 
the  quantities,  kinds,  and  quality  of  beans  specified,  —  a  contract  in 
its  nature  possible  of  performance.  As  an  excuse  for  not  delivering 
the  entire  quantity  contracted  for,  the  plaintiff  relies  on  proof  of 
the  fact  that  an  early,  unexpected  frost  destroyed  or  injured  his  crop 
to  such  extent  that  he  was  unable  to  deliver  the  entire  quantity. 
What,  in  the  way  of  subsequently  arising  impossibility  for  the  party 
to  perform,  will  suffice  as  excuse  for  non-performance  of  a  contract, 
is  well  settled  in  the  decisions;  the  only  apparent  difference  in  them 
arising  from  the  application  of  the  rules  to  particular  circumstances. 
The  general  rule  is  as  well  stated  as  anyr^^here  in  2  Chit.  Cont.  1074, 
thus :  "Where  the  contract  is  to  do  a  thing  which  is  possible  in  itself, 
or  where  it  is  conditioned  on  any  event  which  happens,  the  promisor 
will  be  liable  for  a  breach  thereof,  notwithstanding  it  was  beyond 
his  power  to  perform  it ;  for  it  was  his  own  fault  to  run  the  risk  of 
undertaking  to  perform  an  impossibility,  when  he  might  have  pro- 
vided against  it  by  his  contract.  And  therefore,  in  such  cases,  the 
performance  is  not  excused  by  the  occurrence  of  an  inevitable  acci- 
dent, or  other  contingency,  although  it  was  not  foreseen  by,  or  within 
the  control  of,  the  party."  An  application  of  this  rule  is  furnished 
by  Cowley  v.  Davidson,  13  Minn.  92.  What  is  sometimes  called  an 
"exception  to  the  rule"  is  where  the  contract  is  implied  to  be  made 
on  the  assumed  continued  existence  of  a  particular  person  or  thing, 
and  the  person  or  thing  ceases  to  exist,  as  where  it  is  for  personal 
service,  and  the  person  dies,  or  it  is  for  repairs  upon  a  particular 
ship  or  building,  and  the  ship  or  building  is  destroyed.  An  agree- 
ment to  sell  and  deliver  at  a  future  time  a  specific  chattel  existing 
when  the  agreement  is  made  would  come  under  this  exception.  The 
exception  was  extended  further  than  in  any  other  case  we  have  found 
in  Howell  v.  Coupland,  L.  E.  9  Q.  B.  462.  That  was  a  contract  to 
sell  and  deliver  a  certain  quantity  from  a  crop  to  be  raised  on  a 
particular  piece  of  land,  and  the  entire  crop  was  destroyed  by  blight. 
The  court  held  the  contract  to  be  to  deliver  part  of  a  specific  thing, 
to  wit,  of  the  crop  to  be  grown  on  a  given  piece  of  land,  and  held 
it  to  come  within  the  rule  that,  where  the  obligation  depends  on 
the  assumed  existence  of  a  specific  thing,  performance  is  excused 
by  the  destruction  of  the  thing  without  the  parties'  fault.  Without 
intimating  whether  we  would  follow  that  decision  in  a  similar  case, 
we  will  say  that  the  case  is  unlike  this,  in  that  in  this  case  the  plain- 
tiff was  not  Umitod  or  restricted  to  any  particular  land.  It  was 
not  an  nndertaking  to  soil  and  dfiliver  part  of  a  specific  crop,  but 
a  general  undertaking;  to  raise,  sell,  and  deliver  the  specified  quantity 
of  beans.     We  have  been  cited  to  and  found  no  case  holding  that. 


SECT.    Ill]  STEES    V.    LEONARD  723 

where  one  agrees  generally  to  produce,  by  manufacture  or  otherwise, 
a  particular  thing,  performance  being  possible  in  the  nature  of 
things,  he  may  be  excused  from  performance  by  the  destruction,  be- 
fore completion  or  delivery,  of  the  thing,  from  whatever  cause,  ex- 
cept the  act  of  the  other  party.  Applications  of  the  general  rule, 
where  the  thing  agreed  to  be  produced  was,  before  completion,  de- 
stroyed without  the  party's  fault,  are  furnished  in  Adams  v.  Nichols, 
19  Pick.  275,  279;  School  Dist.  v.  Dauchy,  25  Conn.  530;  and  Trus- 
tees V.  Bennett,  27  IN".  J.  Law,  513,  approved  and  followed  in  Stees 
V.  Leonard,  20  Minn.  494.  Where  such  causes  may  intervene  to 
prevent  a  party  performing,  he  should  guard  against  them  in  his 
contract.  Order  reversed} 


JOHN"  A.  STEES  v.  CHAKLES  LEONAKD 

Minnesota  Supreme  Court,  April,  1874 

[Reported  in  20  Minnesota,  494] 

The  defendants,  who  are  architects  and  builders,  having,  at  plain- 
tiff's request,  furnished  them  with  plans  and  specifications  for  a 
building  proposed  to  be  erected  by  them  on  their  own  land,  after- 
wards, and  on  the  18th  August,  1868,  the  plaintiffs  and  defendants 
made  and  executed  a  contract  under  seal,  in  which  they  are  all  de- 
scribed as  "of  the  city  of  St.  Paul,"  etc.  By  the  terms  of  the  con- 
tract, the  defendants  "agree  to  and  with  the  said  John  A.  and  Wash- 
ington M.  Stees,  to  well  and  truly  build,  erect,  and  complete  the  three- 
story  business  house  proposed  to  be  erected  by  the  said  J.  A.  &  W. 
M.  Stees,  on  Minnesota  Street,  between  Third  and  Fourth  streets; 
all  in  accordance  with  the  plans  and  specifications  of  the  same,  with 
such  alterations  as  are  mentioned  in  said  specifiations,  prepared  by 
M.  Sheire  &  Bro.,  architects,  and  signed  by  both  parties;  the  build- 
ing, with  the  exception  of  painting,  to  be  completed  on  or  before 
the  first  day  of  January,  1869.  In  consideration  whereof  the  said 
John  A.  &  W.  M.  Stees  .  .  .  agree  to  pay,  or  cause  to  be  paid, 
unto  the  said  Charles  Leonard,  Monroe  and  Romaine  Sheire,  .  .  . 
the  sum  of  $6,735  in  payments  as  follows :  $500  when  the  excavation 
is  completed;  $800  when  the  basement  walls  are  up;  $800  when 
the  first-story  walls  are  up;  $1,000  when  the  second-story  walls  are 
up;  $1,200  when  the  third-story  walls  are  up  and  the  roof  on;  $1,200 
when  the  plastering  is  done;  and  the  balance  when  the  building  is 
completed."  The  specifications  annexed  to  the  contract  are  very 
full,  and  provide  (among  other  things)  that  "All  the  walls  shall  be 
the  following  thickness :  foundation  walls,  two  feet  thick,  and  shall 
have  footings  six  inches  thick,  which  shall  run  clear  across  walls  and 
project  six  inches  on  each  side  of  wall  above  it,"  The  specifications 
^  Compare  Rice  v.  Weber,  48  111.  App.  573. 


724  STEES    V.    LEONARD  [CHAP.   V 

contain  no  other  provisions  relating  to  tlie  cliaracter  of  the  founda- 
tion for  the  building. 

The  defendants  entered  upon  the  performance  of  the  contract  and 
erected  the  proposed  building  to  a  height  of  three  stories,  when  it 
fell  to  the  ground,  on  the  1st  JSTovember,  1868.  In  the  following 
year  the  defendants  again  attempted  to  perform  the  contract,  and 
again  erected  the  building  to  the  same  height  as  before,  when  it  again 
fell,  on  the  1st  August,  1869,  whereupon  the  defendants  abandoned 
the  work,  and  refused  to  perform  the  contract.^ 

At  the  trial  in  the  district  court  for  Ramsey  County,  the  defend- 
ants made  the  following  offers  of  proof :  — 

That  at  the  time  when  plaintiffs  applied  to  defendants  to  draw 
plans  and  specifications  for  the  buildings  mentioned  in  the  complaint, 
the  matter  of  draining  the  lot  on  which  the  building  was  to  be  erected 
was  talked  over  between  the  parties;  and  that  the  plaintiffs  then 
stated  that  they  did  not  think  that  such  a  lot  would  need  draining, 
but  if  any  draining  should  be  needed,  they  would  do  it. 

To  which  the  plaintiffs  objected  as  incompetent,  immaterial,  and 
irrelevant,  and  because  the  contract  was  in  writing. 

That  in  architecture  and  building,  ''footings,"  when  used  in  a 
building,  are  the  lowest  portion  of  the  structure,  and  the  only  arti- 
ficial foundation  employed  for  the  building,  when  footings  are  em- 
ployed. 

That  they  constructed  each  of  these  buildings  that  fell,  in  all  re- 
spects as  required  by  the  contract  and  specifications. 

The  evidence  thus  offered,  as  well  as  that  contained  in  two  other 
offers  of  proof,  stated  in  the  opinion,  was  objected  to  as  incompe- 
tent, irrelevant,  and  immaterial,  and  in  each  case  the  objections  were 
sustained,  and  the  defendants  excepted. 

The  jury  found  for  the  plaintiffs.  The  defendants  moved,  upon 
a  bill  of  exceptions,  for  a  new  trial,  and  appeal  from  the  order  deny- 
ing their  motion. 

Lampreys,  and  Gilfillan  &  Williams,  for  appellants. 

Bigelow,  Flandrau,  <Sc  Clarh,  for  respondents. 

Young,  J.  The  general  principle  of  law  which  underlies  this  case 
is  well  established.  If  a  man  bind  himself,  by  a  positive,  express 
contract,  to  do  an  act  in  itself  possible,  he  must  perform  his  engage- 
ment, unless  prevented  by  the  act  of  God,  the  law,  or  the  other 
party  to  the  contract.  ]^o  hardship,  no  unforeseen  hindrance,  no 
difficulty  short  of  absolute  impossibility,  will  excuse  him  from  doing 
what  ho  has  expressly  agreed  to  do.  This  doctrine  may  sometimes 
seem  to  bear  heavily  upon  contractors;  but,  in  such  cases,  the  hard- 
ship is  attributable,  not  to  the  law,  but  to  the  contractor  himself,  who 
has  improvidently  assumed  an  absolute,  when  ho  might  have  under- 
taken ordy  a  ruiulififid  liability.  The  law  does  no  more  than  enforce 
the  oontract  as  the  parties  themselves  have  made  it.  Many  cases 
'  A  statement  of  tho  plca<linKs  is  hero  Riven  in  the  case  as  reported. 


SECT.    Ill]  STEES    V.    LEONARD  725 

illustrating  the  application  of  the  doctrine  to  every  variety  of  con- 
tract, are  collected  in  the  note  to  Cutter  v.  Powell,  2  Smith  Lead. 
Cas.  1. 

The  rule  has  been  applied  in  several  recent  cases,  closely  analo- 
gous to  the  present  in  their  leading  facts.  In  Adams  v.  Nichols, 
19  Pick.  275,  the  defendant  Nichols  contracted  to  erect  a  dwelling- 
house  for  plaintiff  on  plaintiff's  land.  The  house  was  nearly  com- 
pleted, when  it  was  destroyed  by  accidental  fire.  It  was  held  that 
the  casualty  did  not  relieve  the  contractor  from  his  obligation  to 
perform  the  contract  he  had  deliberately  entered  into.  The  court 
clearly  state  and  illustrate  the  rule,  as  laid  down  in  the  note  to  Wal- 
ton V.  Waterhouse,  2  Wms.  Saunders,  422,  and  add :  "In  these  and 
similar  cases,  which  seem  hard  and  oppressive,  the  law  does  no  more 
than  enforce  the  exact  contract  entered  into.  If  there  be  any  hard- 
ship, it  arises  from  the  indiscretion  or  want  of  foresight  of  the  suf- 
fering party.  It  is  not  the  province  of  the  law  to  relieve  persons 
from  the  improvidence  of  their  own  acts." 

In  School  Dist.  v.  Dauchy,  25  Conn.  530,  the  defendant  contracted 
to  build  and  complete  a  schoolhouse.  When  nearly  finished,  the 
building  was  struck  by  lightning,  and  consumed  by  the  consequent 
fire;  and  the  defendant  refused  to  rebuild,  although  plaintiffs  offered 
to  allow  him  such  further  time  as  should  be  necessary.  It  was  held 
that  this  non-performance  was  not  excused  by  the  destruction  of 
the  building.  The  court  thus  state  the  rule:  "If  a  person  promise 
absolutely,  without  exception  or  qualification,  that  a  certain  thing 
shall  be  done  by  a  given  time,  or  that  a  certain  event  shall  take  place, 
and  the  thing  to  be  done,  or  the  event,  is  neither  impossible  nor  un- 
lawful at  the  time  of  the  promise,  he  is  bound  by  his  promise,  unless 
the  performance,  before  that  time,  becomes  unlawful." 

School  Trustees  v.  Bennett,  3  Dutcher,  513,  is  almost  identical  in 
its  material  facts  with  the  present  case.  The  contractors  agreed  to 
build  and  complete  a  schoolhouse,  and  find  all  materials  therefor, 
according  to  specifications  annexed  to  the  contract;  the  building  to 
be  located  on  a  lot  owned  by  plaintiff,  and  designated  in  the  con- 
tract. When  the  building  w^as  nearly  completed  it  was  blown  down 
by  a  sudden  and  violent  gale  of  wind.  The  contractors  again  began 
to  erect  the  building,  when  it  fell,  solely  on  account  of  the  soil  on 
which  it  stood  having  become  soft  and  miry,  and  unable  to  sustain 
the  weight  of  the  building ;  although,  when  the  foundations  were  laid, 
the  soil  was  so  hard  as  to  be  penetrated  with  difficulty  by  a  pickaxe, 
and  its  defects  were  latent.  The  plaintiff  had  a  verdict  for  the  amount 
of  the  instalments  paid  under  the  contract  as  the  work  progressed. 
The  verdict  was  sustained  by  the  Supreme  Court,  which  held  that 
the  loss,  although  arising  solely  from  a  latent  defect  in  the  soil,  and 
not  from  a  faulty  construction  of  the  building,  must  fall  on  the  con- 
tractor. 

In  the  opinion  of  the  court,  the  question  is  fully  examined,  many 


726  STEES    V.    LEONARD  [CHAP.    V 

cases  are  cited,  and  the  rule  is  stated,  "that  where  a  party  by  his 
own  contract  creates  a  duty  or  charge  upon  himself,  he  is  bound  to 
make  it  good  if  he  may,  notwithstanding  any  accident  by  inevitable 
necessity,  because  he  might  have  provided  against  it  by  his  con- 
tract. ...  If  before  the  building  is  completed  or  accepted,  it  is 
destroyed  by  fire  or  other  casualty,  the  loss  falls  upon  the  builder; 
he  must  rebuild.  The  thing  may  be  done,  and  he  has  contracted 
to  do  it.  .  .  .  No  matter  how  harsh  and  apparently  unjust  in  its 
operation  the  rule  may  occasionally  be,  it  cannot  be  denied  that  it 
has  its  foundations  in  good  sense  and  inflexible  honesty.  He  that 
agrees  to  do  an  act  should  do  it,  unless  absolutely  impossible.  He 
should  provide  against  contingencies  in  his  contract.  Where  one  of 
two  innocent  persons  must  sustain  a  loss,  the  law  casts  it  upon  him 
who  has  agreed  to  sustain  it.  or  rather,  the  law  leaves  it  where  the 
agreement  of  the  parties  has  put  it.  .  .  .  Neither  the  destruction 
of  the  incomplete  building  by  a  tornado,  nor  its  falling  by  a  latent 
softness  of  the  soil,  which  rendered  the  foundation  insecure,  neces- 
sarily prevented  the  performance  of  the  contract  to  build,  erect,  and 
complete  this  building  for  the  specified  price.  It  can  still  be  done, 
for  aught  that  was  opened  to  the  jury  as  a  defence,  and  overruled 
by  the  court." 

In  Dermott  v.  Jones,  2  Wall.  1,  the  foundation  of  the  building 
sank,  owing  to  a  latent  defect  in  the  soil,  and  the  owner  was  com- 
pelled to  take  down  and  rebuild  a  portion  of  the  work.  The  con- 
tractor having  sued  for  his  pay,  it  was  held  that  the  owner  might 
recoup  the  damages  sustained  by  his  deviation  from  the  contract. 
The  court  refer  with  approval  to  the  cases  cited,  and  say :  "The  prin- 
ciple which  controlled  them  rests  upon  a  solid  foundation  of  reason 
and  justice.  It  regards  the  sanctity  of  contracts.  It  requires  a  party 
to  do  what  he  has  agreed  to  do.  If  unexpected  impediments  lie  in  the 
way,  and  a  loss  ensue,  it  leaves  the  loss  where  the  contract  places  it. 
If  the  parties  have  made  no  provision  for  a  dispensation,  the  rule  of 
law  gives  none.  It  does  not  allow  a  contract  fairly  made  to  be  an- 
nulled, and  it  does  not  permit  to  be  interpolated  what  the  parties 
themselves  have  not  stipulated." 

Nothing  can  be  added  to  the  clear  and  cogent  arguments  we  have 
quoted,  in  vindication  of  the  wisdom  and  justice  of  the  rule,  which 
must  govern  this  case  unless  it  is  in  some  way  distinguishable  from 
the  cases  cited. 

It  is  argued  that  the  spot  on  which  the  building  is  to  be  erected 
is  not  designated  with  precision  in  the  contract,  but  is  left  to  be 
selected  by  the  owner;  that,  under  the  contract,  the  right  to  desig- 
nate the  particular  spot  being  reserved  to  plaintiffs,  they  must  select 
one  that  will  sustain  the  building  described  in  the  specifications,  and 
if  the  spot  they  select  is  not,  in  its  natural  state,  suitable,  they  must 
make  it  ho;  that  in  this  respect  he  present  case  differs  from  School 
Trustees  v.  Bennett. 


SECT.    Ill]  STEES    V.    LEONARD  727 

The  contract  does  not,  perhaps,  designate  the  site  of  the  proposed 
building  with  absolute  certainty;  but  in  this  particular  it  is  aided 
by  the  pleadings.  The  complaint  states  that  defendants  contracted 
to  erect  the  proposed  building  on  "a.  certain  piece  of  land  of  which 
the  plaintiifs  then  were  and  now  are  the  owners  in  fee,  fronting  on 
Minnesota  Street,  between  Third  and  Fourth  streets,  in  the  city  of 
St.  Paul."  The  answer  expressly  admits  that  the  defendants  entered 
into  a  contract  to  erect  the  building,  according  to  the  plans,  &c., 
"on  that  certain  piece  of  land  in  said  complaint  described,"  and 
that  they  "entered  upon  the  performance  of  said  contract,  and  pro- 
ceeded with  the  erection  of  said  building,"  &c.  This  is  an  express 
admission  that  the  contract  was  made  with  reference  to  the  identical 
piece  of  land  on  which  the  defendants  afterwards  attempted  to  per- 
form it,  and  leaves  no  foundation  in  fact  for  the  defendants'  argu- 
ment. 

It  is  no  defence  to  the  action,  that  the  specifications  directed  that 
"footings"  should  be  used  as  the  foundation  of  the  building,  and 
that  the  defendants,  in  the  construction  of  these  footings,  as  well  as 
in  all  other  particulars,  conformed  to  the  specifications.  The  de- 
fendants contracted  to  "erect  and  complete  the  building."  Whatever 
was  necessary  to  be  done  in  order  to  complete  the  building,  they  were 
bound  by  the  contract  to  do.  If  the  building  could  not  be  completed 
without  other  or  stronger  foundations  than  the  footings  specified, 
they  were  bound  to  furnish  such  other  foundations.  If  the  building 
could  not  be  erected  without  draining  the  land,  then  they  must  drain 
the  land,  "because  they  have  agreed  to  do  everything  necessary  to 
erect  and  complete  the  building."  (3  Dutcher,  525;  and  see  Dermott 
V.  Jones,  supra,  where  the  same  point  was  made  by  the  contractor, 
but  ruled  against  him  by  the  court.) 

As  the  draining  of  the  land  was,  in  fact,  necessary  to  the  erection 
and  completion  of  the  building,  it  was  a  thing  to  be  done,  under  the 
contract,  by  the  defendants.  The  prior  parol  agreement  that  plain- 
tiffs should  drain  the  land,  related,  therefore,  to  a  matter  embraced 
within  the  terms  of  the  written  contract,  and  was  not,  as  claimed 
by  defendants'  counsel,  collateral  thereto.  It  was,  accordingly,  under 
the  familiar  rule,  inadmissible  in  evidence  to  vary  the  terms  of  the 
written  contract,  and  was  properly  excluded.^ 

1  In  United  States  v.  Spearin,  248  United  States,  132,  136,  Brandeis,  J.  for  the  court 
said: 

Where  one  agrees  to  do,  for  a  fixed  sum,  a  thinst  possible  to  be  performed,  he 
will  not  be  excused  or  become  entitled  to  additional  compensation,  because  un- 
foreseen difficulties  are  encountered.  Day  v.  United  States,  245  U.  S.  159;  Phoenix 
Bridge  Co.  v.  United  States,  211  U.  S.  188.  Thus  one  who  undertakes  to  erect 
a  structure  upon  a  particular  site,  assumes  ordinarilv  the  risk  of  subsidence  of 
the  soil.  Simpson  v.  United  States,  172  U.  S.  372;  Dermott  v.  Jones,  2  Wall.  1. 
But  if  the  contractor  is  bound  to  build  according  to  plans  and  specifications  pre- 
pared by  the  owner,  the  contractor  will  not  be  responsible  for  the  consequences 
of  defects  in  the  plans  and  specifications.  MacKnight  Flintic  Stone  Co.  v.  The 
Mayor,  160  N.  Y.  72:  Filbert  v.  Philadelphia,  181  Pa.  St.  530:  Bentley  v.  State, 
73  Wisconsin,  416.     See  Sundstrom  v.   New  York,  213  N.  Y.   68.     This  responsi- 


728  STEES    V.    LEONARD  [CHAP.   V 

In  their  second  and  third  offers,  the  defendants  proposed  to  prove 
that  after  the  making  of  the  written  contract,  and  when  the  defend- 
ants, in  the  course  of  their  excavation  for  the  cellar  and  foundation, 
first  discovered  that  the  soil,  being  porous  and  spongy,  would  not 
sustain  the  building,  unless  drained,  the  plaintiffs  proposed  and 
promised  to  keep  the  soil  well  drained  during  the  construction  of 
the  building;  that,  in  consequence,  the  defendants  did  not  drain  the 
same;  that  plaintiffs  for  a  time  kept  the  soil  drained,  but  afterwards 
and  just  before  the  fall  of  the  building,  they  neglected  to  drain,  in 
consequence  of  which  neglect  the  soil  became  saturated  with  water, 
and  the  building  fell;  and  that  a  like  promise  w^as  made  by  plain- 
tiffs at  the  beginning  of  the  erection  of  the  second  building,  followed 
by  like  part  performance  and  neglect,  and  subsequent,  and  conse- 
quent, fall  of  the  building. 

The  rule  that  a  sealed  contract  cannot  be  varied  by  a  subsequent 
parol  agreement  is  of  great  antiquity,  the  maxim  on  which  it  rests, 
unumquodque  dissolvitur  eodem  modo  quo  ligatur,  being  one  of  the 
most  ancient  in  our  law.  (Broom  Leg.  Max.  877 ;  5  Eep.  26  a,  citing 
Bracton,  lib.  2,  fol.  28;  and  see  Bracton,  fol.  101.)  In  early  days 
the  rigor  with  which  it  was  enforced  in  the  courts  of  law  led  to  the 
interference  of  chancery  to  prevent  injustice.  (Per  Lord  Ellesmere, 
Earl  of  Oxford's  case,  2  Lead.  Cas.  in  Eq.  508* ;  1  Spence,  Eq.  Jur. 
636.)  In  later  times  that  rigor  has  become  much  relaxed,  although 
the  English  courts  of  law  have  refused  to  permit  sealed  contracts  to 
be  varied  by  parol  in  cases  of  great  hardship.  Littler  v.  Holland,  3 
T.  R.  590;  Gwynne  v.  Davy,  1  Man.  &  Gr.  857;  West  v.  Blakeway, 
2  id.  729 ;  and  see)  Albert  v.  Grosvenor  Investment  Co.,  L.  R.  3  Q.  B. 
123. 

But  in  this  country  it  has  become  a  well  settled  exception  to  the 
rule,  that  a  sealed  contract  may  be  modified  by  a  subsequent  parol 
agreement,  if  the  latter  has  been  executed,  or  has  been  so  acted  on 
that  the  enforcing  of  the  original  contract  would  be  inequitable. 
Monroe  v.  Perkins,  9  Pick.  298;  Mill-dam  Foundry  v.  Hovey,  21 
Pick.  417;  Blasdell  v.  Souther,  6  Gray,  149;  Foster  v.  Dawber,  6 
Ex.  854,  and  note ;  Thurston  v.  Ludwig,  6  Ohio  St.  1 ;  Delacroix  v. 
Bulkley,  13  Wend.  71;  Allen  v.  Jaquish,  21  Wend.  628;  Vicary  v. 
Moore,  2  Watts,  451;  Lawall  v.  Bader,  24  Penn.  St.  283;  Carter  v. 
Dilworth,  59  id.  406;  Richardson  v.  Cooper,  25  Me.  450;  Lawrence  v. 
Dole,  n  Vt.  549;  Patrick  v.  Adams,  29  Vt.  376;  Siebert  v.  Leonard, 
17  Minn.  436;  Very  v.  Levy,  13  How.  345;  1  Sm.  Lead.  Cas.  (6th 
ed.)  576. 

Wbotlier  the  evidence  offered  shoAvs  a  valid  consideration  for  the 


bility  of  the  owner  is  not  overcomo  V)y  th<'  usual  clause  requirinR  builders  to  visit 
the  site,  in  ohfck  the  plans,  anci  <n  inform  thcmselvos  of  the  requirements  of  the 
v/ork,  as  is  shown  by  Christif  v.  United  States,  237  U.  S.  2,34;  Hollerbach  v. 
Vn'\U'(\  RtatfM.  233  U.  R.  lO.'',,  anfl  United  States  v.  ITt.ah,  ete.  Rta!?e  Co.,  100  U.  S. 
414.  424,  wherr-  it  was  held  that  thf  eontrarfor  should  be  relieved,  if  he  was  mis- 
led by  c!rronef)us  statoments  in  the  si)eeifieations. 


SECT.    Ill]  BUTTERFIELD    V.    BYRON  729 

plaintiff's  promise,  or  whether  it  shows  that  such  promise,  though 
without  consideration,  has  been  so  acted  on  as  to  enure,  by  way  of 
estoppel  or  otherwise,  to  release  defendants  from  their  obligation  to 
drain,  are  questions  that  were  fully  discussed  at  the  bar,  but  which 
we  are  not  called  upon  to  determine;  for  the  objection  is  well  taken 
by  counsel  for  the  plaintiffs,  that  the  evidence  embraced  in  the  second 
and  third  offers  is  inadmissible  under  the  pleadings. 

In  their  answer,  the  defendants  allege  an  offer  and  promise  by 
plaintiffs  (made  after  the  defendants  had  commenced  work  under 
the  contract),  to  keep  the  land  drained  during  the  erection  of  the 
building.  'No  consideration  is  alleged  for  this  promise,  and,  as 
nudum  pactum,  it  could  of  itself,  have  no  effect  to  vary  the  obliga- 
tions imposed  on  the  defendants  by  the  sealed  contract.  The  answer 
proceeds  to  allege  "that  the  plaintiffs  wholly  and  wrongfully  failed 
and  neglected  to  drain  or  cause  to  be  drained  the  said  piece  of  land, 
or  any  part  of  the  same."  It  is  clear  that  the  defendants  would  have 
no  right  to  rely  on  this  naked  promise,  followed  by  no  acts  of  plain- 
tiffs in  part  performance.  If  the  defendants  went  on  with  the  build- 
ing, without  taking  the  precaution  to  drain  the  land,  they  proceeded 
at  their  own  risk.  The  answer  sets  up  no  facts  on  which  an  estoppel 
can  be  founded,  and  shows  no  defence  to  the  action. 

But  the  defendants,  at  the  trial,  offered  to  prove,  not  only  that 
the  plaintiffs  offered  to  drain  the  land,  but  also  "that  the  plaintiffs 
did,  for  a  time,  keep  the  same  drained,  .  .  .  but  afterwards  they 
neglected  to  do  so,"  &c.  Assuming  that  the  facts  offered  to  be  proved 
would  constitute  a  defence  (and  we  are  not  prepared  to  say  they 
would  not)  no  such  defence  is  pleaded  in  the  answer.^ 


ALONZO  M.  BUTTERFIELD  v.  NAPOLEON  L.  BYRON 

Supreme  Judicial  Coukt  of  Massachusetts,  September  23,  1890- 

May  19,  1891 

[Reported  in  153  Massachusetts,  517] 

Contract,  brought  in  the  name  of  the  plaintiff  for  the  benefit  of 
certain  insurance  companies,  for  breach  of  a  building  contract  en- 
tered into  between  the  plaintiff  and  the  defendant.  At  the  trial^  in 
the  Superior  Court,  before  Barker,  J.,  there  was  evidence  tending 
to  show  the  following  facts :  — 

On  November  13,  1888,  the  plaintiff,  who  owned  a  parcel  of  land 
In  the  town  of  Montgomery,  on  which  he  intended  to  build  a  hotel, 
and  the  defendant,  who  was  a  builder,  entered  into  the  contract  in 
question,  which  contained  the  following  provisions:  — 

"The  said  N.  Byron  covenants  and  agrees  to  and  with  the  said  A. 
M.  Butterfield  to  make,  erect,  build,  and  finish  in  a  good,  substantial, 
1  A  small  part  of  the  opinion  is  omitted. 


730  BUTTERFIELD  V.    BYRON  [CHAP.  V 

and  workmanlike  manner,  a  three  and  one  half  story  frame  hotel  upon 
lot  of  land  situated  in  Montgomery,  Mass.,  said  hotel  to  be  built 
agreeable  to  the  draught,  plans,  explanations,  or  specifications  fur- 
nished, or  to  be  furnished,  to  said  A.  M.  Butterfield  by  Richmond 
and  Seabury,  of  good  and  substantial  materials,  and  to  be  finished 
complete  on  or  before  the  twentieth  day  of  May,  1889. 

"And  said  A.  M.  Butterfield  covenants  and  agrees  to  pay  to  said 
IN^.  Byron  for  the  same  eight  thousand  five  hundred  dollars,  as 
follows :  seventy-five  per  cent  of  the  amount  of  work  done  and  ma- 
terials furnished  during  the  preceding  month  to  be  paid  for  on  the 
first  of  the  following  month,  and  the  remaining  twenty-five  per  cent 
to  be  paid  thirty  days  after  the  entire  completion  of  the  building." 

By  the  specifications  referred  to,  the  plaintiff  was  to  do  the  grad- 
ing, excavating,  stone-work,  brick-work,  painting,  and  plumbing. 

The  time  for  completing  the  contract  was  subsequently  extended 
to  June  10,  1889,  and  a  provision  was  made  that  the  defendant  should 
forfeit  $15  for  every  day's  default  after  that  date.  Up  to  May  25, 
1889,  the  defendant  had  complied  with  the  contract  as  far  as  he 
had  gone,  and  had  almost  finished  the  building.  The  plaintiff,  who 
had  insured  his  interest  in  the  building  with  the  companies  for  whose 
benefit  the  action  was  brought,  had  up  to  the  same  time  made  pay- 
ments to  the  defendant  amounting  to  $5,652.30,  for  work  done  and 
materials  furnished.  On  May  25  the  building  was  struck  by  light- 
ning and  burned  to  the  ground,  by  which  event  it  was  rendered  im- 
possible for  the  defendant  to  complete  the  building  within  the  re- 
quired time.  The  companies  in  which  the  plaintiff  had  insured  paid 
him  the  sum  of  $6,914.08,  viz.  $5,652.30  for  advances  made  to  the 
defendant,  and  $1,261.78  for  work  done  and  materials  furnished  by 
the  plaintiff  in  laying  the  foundations;  and  the  plaintiff  assigned 
to  the  companies  whatever  claims  he  might  have  against  the  defend- 
ant for  breach  of  the  contract.  The  plaintiff  never  made  any  demand 
upon  the  defendant  to  rebuild,  nor  offered  to  lay  the  necessary  foun- 
dations for  a  new  building.  The  defendant  never  called  upon  the 
plaintiff  to  lay  such  foundations,  nor  offered  to  rebuild. 

At  the  trial,  the  plaintiff  contended  that  he  was  entitled  to  recover 
in  his  action  (1)  the  whole  of  the  sum  of  $6,914.08,  (2)  $38  for 
certain  shingles  and  windoAV  weights  that  had  been  saved  from  the 
fire  and  carried  away  by  the  defendant,  and  (3)  the  amount  forfeited 
under  the  contract  at  the  rate  of  $15  a  day  from  June  10,  1889,  to 
the  date  of  the  writ. 

Upon  those  facts  the  judge  directed  a  verdict  for  the  defendant,  and 
reported  the  case  for  the  detnnninntion  of  this  court,  such  order  to 
be  made  as  this  court  might  direct. 

The  case  was  argued  at  the  bar  in  September,  1890,  and  afterwards, 
in  February,  1891,  was  sul)mitted  on  the  briefs  to  all  the  judges, 

C   T).   Rohinson.  for  the  plaintiff. 

0.  M.  Sl.rnrns  (W.  B.  Stone  with  him),  for  the  defendant. 


SECT.    Ill]  BUTTERFIELD    V.    BYRON  731 

Knowlton,  J.  It  is  well-established  law  that  where  one  contracts 
to  furnish  labor  and  materials,  and  construct  a  chattel  or  build  a 
house  on  land  of  another,  he  will  not  ordinarily  be  excused  from  per- 
formance of  his  contract  by  the  destruction  of  the  chattel  or  building,- 
without  his  fault,  before  the  time  fixed  for  the  delivery  of  it.  Adams 
V.  Nichols,  19  Pick.  275;  Wells  v.  Calnan,  107  Mass.  514;  Dermott 
V.  Jones,  2  Wall.  1 ;  School  Trustees  of  Trenton  v.  Bennett,  3  Dutcher, 
513;  Tompkins  r.  Dudley,  25  N.  Y.  272.  It  is  equally  well- 
settled  that  when  work  is  to  be  done  under  a  contract  on  a  chattel 
or  building  which  is  not  wholly  the  property  of  the  contractor,  or 
for  which  he  is  not  solely  accountable,  as  where  repairs  are  to  be 
made  on  the  property  of  another,  the  agreement  on  both  sides  is 
upon  the  implied  condition  that  the  chattel  or  building  shall  continue 
in  existence;  and  the  destrution  of  it  without  fault  of  either  of  the 
parties  will  excuse  performance  of  the  contract,  and  leave  no  right 
of  recovery  of  damages  in  favor  of  either  against  the  other.  Taylor 
V.  Caldwell,  3  B.  &  S.  826 ;  Lord  v.  Wheeler,  1  Gray,  282 ;  Gilbert  & 
Barker  Manuf.  Co.  v.  Butler,  146  Mass.  82;  Eliot  N'ational  Bank 
V.  Beal,  141  Mass.  566,  and  cases  there  cited;  Dexter  v.  Norton,  47 
N.  Y.  62;  Walker  v.  Tucker,  70  111.  527.  In  such  cases,  from  the 
very  nature  of  the  agreement  as  applied  to  the  subject-matter,  it  is 
manifest  that,  while  nothing  is  expressly  said  about  it,  the  parties 
contemplated  the  continued  existence  of  that  to  which  the  contract 
relates.  The  implied  condition  is  a  part  of  the  contract,  as  if  it 
were  written  into  it,  and  by  its  terms  the  contract  is  not  to  be  per- 
formed if  the  subject-matter  of  it  is  destroyed,  without  the  fault  of 
either  of  the  parties,  before  the  time  for  complete  performance  has 
arrived. 

The  fundamental  question  in  the  present  case  is.  What  is  the 
true  interpretation  of  the  contract?  Was  the  house  while  in  the 
process  of  erection  to  be  in  the  control  and  at  the  sole  risk  of  the  de- 
fendant, or  was  the  plaintiff  to  have  a  like  interest,  as  the  builder 
of  a  part  of  it?  Was  the  defendant's  undertaking  to  go  and  build 
and  deliver  such  a  house  as  the  contract  called  for,  even  if  he  should 
be  obliged  again  and  again  to  begin  anew  on  account  of  the  repeated 
destruction  of  a  partly  completed  building  by  inevitable  accident,  or 
did  his  contract  relate  to  one  building  only,  so  that  it  would  be  at  an 
end  if  the  building,  when  nearly  completed,  should  perish  without  his 
fault  ?  It  is  to  be  noticed  that  his  agreement  was  not  to  build  a  house, 
furnishing  all  the  labor  and  materials  therefor.  His  contract  was  of  a 
very  different  kind.  The  specifications  are  incorporated  into  it, 
and  it  appears  that  it  was  an  agreement  to  contribute  certain  labor 
and  materials  towards  the  erection  of  a  house  on  land  of  the  plaintiff, 
towards  the  erection  of  which  the  plaintiff  himself  was  to  contribute 
other  labor  and  materials,  which  contributions  would  together  make 
a  completed  house.  The  grading,  excavating,  stone-work,  brick-work, 
painting,  and  plumbing  were  to  be  done  by  the  plaintiff. 


732  BUTTERFIELD  V.    BYRON  [CHAP.  V 

Immediately  before  the  fire,  when  the  house  was  nearly  completed 
the  defendant's  contract,  so  far  as  it  remained  unperformed,  was 
to  finish  a  house  on  the  plaintiff's  land,  which  had  been  constructed 
from  materials  and  by  labor  furnished  in  part  by  the  plaintiff  and 
in  part  by  himself.  He  was  no  more  responsible  that  the  house 
should  continue  in  existence  than  the  plaintiff  was.  Looking  at  the 
situation  of  the  parties  at  that  time,  it  was  like  a  contract  to  make 
repairs  on  the  house  of  another.  His  undertaking  and  duty  to  go 
and  finish  the  work  was  upon  an  implied  condition  that  the  house, 
the  product  of  their  joint  contributions,  should  remain  in  existence. 
The  destruction  of  it  by  fire  discharged  him  from  his  contract.  The 
fact  that  the  house  was  not  in  existence  when  the  contract  was  made 
is  immaterial.     Howell  v.  Coupland,  1  Q.  B.  D.  258. 

It  seems  very  clear  that,  after  the  building  was  burned,  and  just 
before  the  day  fixed  for  the  completion  of  the  contract,  the  defendant 
could  not  have  compelled  the  plaintiff  to  do  the  grading,  excavating, 
stone-work,  brick-work,  painting,  and  plumbing  for  another  house 
of  the  same  kind.  The  plaintiff  might  have  answered,  "I  do  not 
desire  to  build  another  house  which  cannot  be  completed  until  long 
after  the  date  at  which  I  wished  to  use  my  house.  My  contract  re- 
lated to  one  house.  Since  that  has  been  destroyed  without  my  fault 
I  am  under  no  further  obligation."  If  the  plaintiff  could  successfully 
have  made  this  answer  to  a  demand  by  the  defendant  that  he  should 
do  his  part  towards  the  erection  of  a  second  building,  then  certainly 
the  defendant  can  prevail  on  a  similar  answer  in  the  present  suit. 
In  other  words,  looking  at  the  contract  from  the  plaintiff's  position, 
it  seems  manifest  that  he  did  not  agree  to  furnish  the  work  and  ma- 
terials required  of  him  by  the  specifications  for  more  than  one  house, 
and  if  that  was  destroyed  by  inevitable  accident,  just  before  its  com- 
pletion, he  was  not  bound  to  build  another,  or  to  do  anything  further 
under  his  contract.^  If  the  plaintiff  was  not  obliged  to  make  his 
contribution  of  work  and  materials  towards  the  building  of  a  second 
house,  neither  was  the  defendant.  The  agreement  of  each  to  com- 
plete the  performance  of  the  contract  after  a  building,  the  product 
of  their  point  contributions,  had  been  partly  erected,  was  on  an  im- 
plied condition  that  the  building  should  continue  in  existence. 
!N"either  can  recover  anything  of  the  other  under  the  contract,  for 
neither  has  performed  the  contract  so  that  its  stipulations  can  be 
availed  of.  The  case  of  Cook  v.  McCabe,  53  Wis.  250,  was  very 
similar  in  its  facts  to  the  one  at  bar,  and  identical  with  it  in  prin- 
ciple. There  the  court,  in  an  eln borate  opinion,  after  a  full  consid- 
eration of  the  authorities,  held  that  the  contractor  could  recover  of 
the  owner  a  pro  rata  share  of  the  contract  price  for  the  work  per- 
formed and  the  materials  furnished  before  the  fire.  Clark  v.  Frank- 
lin, 7  Leigh,  1,  is  of  similar  purport. 

'  KrfiiiHf  V.  Roiml  of  Tnistnns,  162  Ind.  270,  ace.    But  see  Chapman  v.  Beltz  Co., 
48  W.  Va.  1.    Sec  also  Weis  v.  Devlin,  67  Tex.  507. 


SECT.    Ill]  BUTTERFIELD    V.    BYRON  733 

What  are  the  rights  of  the  parties  in  regard  to  what  has  been  done 
in  part  performance  of  a  contract  in  which  there  is  an  implied  con- 
dition that  the  subject  to  which  the  contract  relates  shall  continue  in 
existence,  and  where  the  contemplated  work  cannot  be  completed  by 
reason  of  the  destruction  of  the  property  without  default  of  either 
of  the  parties,  is  in  dispute  upon  the  authorities.  The  decisions  in 
England  differ  from  those  of  Massachusetts,  and  of  most  of  the  other 
States  of  this  country.  There  the  general  rule,  stated  broadly,  seems 
to  be  that  the  loss  must  remain  where  it  first  falls,  and  that  neither 
of  the  parties  can  recover  of  the  other  for  anything  done  under  the 
contract.  In  England,  on  authority,  and  upon  original  grounds  not 
very  satisfactory  to  the  judges  of  recent  times,  it  is  held  that  freight 
advanced  for  the  transportation  of  goods  subsequently  lost  by  the 
perils  of  the  sea  can  not  be  recovered  back.  Allison  v.  Bristol  Ins. 
Co.,  1  App.  Cas.  209,  226;  Byrne  v.  Schiller,  L.  K.  6.  Ex.  319.  In 
the  United  States  and  in  continental  Europe  the  rule  is  different. 
Griggs  V.  Austin  3  Pick.  20,  22;  Brown  v.  Harris,  2  Gray,  359.  In 
England  it  is  held  that  one  who  has  partly  performed  a  contract  on 
property  of  another,  which  is  destroyed  without  the  fault  of  either 
party,  can  recover  nothing;  and  on  the  other  hand,  that  one  who 
has  advanced  payments  on  account  of  labor  and  materials  furnished 
under  such  circumstances  cannot  recover  back  the  money.  Appleby 
V.  Myers,  L.  E.  2  C.  P.  651 ;  Anglo-Egyptian  ISTavigation  Co  v. 
Rennie,  L.  R.  10  C.  P.  271. ^  One  who  has  advanced  money  for  the 
instruction  of  his  son  in  trade  cannot  recover  it  back  if  he  who  re- 
ceived it  dies  without  giving  the  instruction.  Whincup  v.  Hughes, 
L.  R.  6  C.  P.  78.  But  where  one  dies  and  leaves  unperformed  a  con- 
tract which  is  entire,  his  administrator  may  recover  any  instalments 
which  were  due  on  it  before  his  death.  Stubbs  v.  Holywell  Railway, 
L.  R.  2  Ex.  311. 

In  this  country,  where  one  is  to  make  repairs  on  a  house  of  an- 
other under  a  special  contract,  or  is  to  furnish  a  part  of  the  work 
and  materials  used  in  the  erection  of  a  house,  and  his  contract  be- 
comes impossible  of  performance  on  account  of  the  destruction  of  the 
house,  the  rule  is  uniform,  so  far  as  the  authorities  have  come  to 
our  attention,  that  he  may  recover  for  what  he  has  done  or  furnished. 
In  Cleary  v.  Sohier,  120  Mass.  210,  the  plaintiff  made  a  contract 
to  lath  and  plaster  a  certain  building  for  forty  cents  per  square  yard. 
The  building  was  destroyed  by  a  fire  which  was  an  unavoidable 
casualty.  The  plaintiff  had  lathed  the  building  and  put  on  the  first 
coat  of  plaster,  and  would  have  put  on  the  second  coat,  according 
to  his  contract,  if  the  building  had  not  been  burned.  He  sued  on 
an  implied  assumpsit  for  work  done  and  materials  found.     It  was 

1  See  also  Brumby  v.  Scott,  3  Ala.  123;  Clark  v.  Collier,  100  Cal.  256;  Siegel  v. 
Eaton  &  Prince  Co.",  165  HI.  550;  Huyett  Mfg.  Co.  v.  Chicago  Edison  Co.,  167  111. 
233;  Taulbee  v.  McCarty,  144  Ky.  190;  Fairbanks  v.  Richardson  Dnig  Co.,  42  Mo. 
App.  262;  Pike  Electric  Co.  v.  Ilichard.son  Drug  Co.,  42  Mo.  App.  272;  Murphy  v. 
Forget,  Rap.  Jud.  Quebec  19  C.  S.  135. 


734  BUTTERFIELD    V.    BYRON  [CHAP.    V 

agreed  that,  if  he  was  entitled  to  recover  anything,  the  judgment 
should  be  for  the  price  charged.  It  was  held  that  he  could  recover. 
See  also  Lord  v.  Wheeler,  1  Gray,  282 ;  Wells  v.  Calnan,  107  Mass. 
514,  517.  In  Cook  v.  McCabe,  ubi  supra,  the  plaintiff  recovered  pro 
rata  under  his  contract ;  that  is,  as  we  understand,  he  recovered  on 
an  implied  assumpsit  at  the  contract  rate.  In  Hollis  v.  Chapman, 
36  Texas,  1,  and  in  Clark  v.  Franklin,  7  Leigh,  1,  the  recovery  was 
a  proportional  part  of  the  contract  price.  To  the  same  effect  are 
Schwartz  v.  Saunders,  46  111.  18;  Eawson  v.  Clark,  70  111.  656;  and 
Clark  V.  Busse,  82  111.  515,  The  same  principle  is  applied  to  dif- 
ferent facts  in  Jones  v.  Judd,  4  Comst.  411,  and  in  Hargrave  v.  Con- 
roy,  4  C.  E.  Green,  281.  If  the  owner  in  such  a  case  has  paid  in  ad- 
vance, he  may  recover  back  his  money,  or  so  much  of  it  as  was  an 
overpayment.  The  principle  seems  to  be  that  when,  under  an  im- 
plied condition  of  the  contract,  the  parties  are  to  be  excused  from  per- 
formance if  a  certain  event  happens,  and  by  reason  of  the  happening 
of  the  event  it  becomes  impossible  to  do  that  which  was  contemplated 
by  the  contract,  there  is  an  implied  assumpsit  for  what  has  properly 
been  done  by  either  of  them,  the  law  dealing  with  it  as  done  at  the 
request  of  the  other,  and  creating  a  liability  to  pay  for  it  its  value, 
to  be  determined  by  the  price  stipulated  in  the  contract,  or  in  some 
other  way  if  the  contract  price  cannot  be  made  applicable.^  Where 
there  is  a  bilateral  contract  for  an  entire  consideration  moving  from 
each  party,  and  the  contract  cannot  be  performed,  it  may  be  held 
that  the  consideration  on  each  side  is  the  performance  of  the  con- 
tract by  the  other,  and  that  a  failure  completely  to  perform  it  is 
a  failure  of  the  entire  consideration,  leaving  each  party,  if  there  has 
been  no  breach  or  fault  on  either  side,  to  his  implied  assumpsit  for 
what  he  has  done. 

The  only  question  that  remains  in  the  present  case  is  one  of  plead- 
ing. The  defendant  is  entitled  to  be  compensated  at  the  contract 
price  for  all  he  did  before  the  fire.  The  plaintiff  is  to  be  allowed  for 
all  his  payments.  If  the  payments  are  to  be  treated  merely  as  ad- 
vancements on  account  of  a  single  entire  consideration,  namely,  the 
completion  of  the  whole  work,  the  work  not  having  been  completed, 
they  may  be  sued  for  in  this  action,  and  the  defendant's  only  remedy 
available  in  this  suit  is  by  a  declaration  in  set-off.  If,  on  the  other 
hand,  each  instalment  due  was  a  separate  consideration  for  the  pay- 
ment made  at  the  time,  then  as  to  those  instalments  and  the  pay- 
ments of  them  the  contract  is  completely  executed,  and  the  plaintiff 
can  recover  nothing,  and  the  implied  assumpsit  in  favor  of  the  de- 
fendant can  be  only  for  the  part  which  remains  unpaid. 

^  KecliriK  v.  SchaHtcy,  18  Cal.  App.  764;  AnRus  v.  Scully,  176  Mass.  357;  Young 
r.  Chiropoo,  186  Ma.sH.  518;  GanonR  ?>.  Brown,  88  Miss.  53;  Hayncs  v.  Second  Baptist 
Hhurch.  KK  Mo.  2H5:  Damn  r.  Wood,  75  N.  H.  38;  Niblo  r.  Binssr.  1  Koyes,  476; 
Whflan  V.  Ansonia  Clock  Co.,  97  N.  Y.  293;  Dolan  v.  Rogers,  140  N.  Y.  489,  494; 
Hayc'H  r.  C,rn»»,  9  N.  Y.  App.  Div.  12  (afF'd  without  opinion,  162  N.  Y.  610);  Weis 
V.  Devlin,  67  Tex.  .507;  Halsey  v.  Waukesha  Sprinp;a  Sanitarium  Co.  125  Wis.  311,  ace. 


SECT.    Ill]         MINERAL   PARK   LAND    CO.    V.    HOWARD  735 

We  are  of  opinion  that  the  consideration  which  the  defendant  was 
to  receive  was  an  entire  sum  for  the  performance  of  the  contract, 
and  that  the  payments  made  were  merely  advances  on  account  of  it, 
and  that,  on  his  failure  to  perform  the  contract,  there  was  a  failure 
of  consideration  which  gave  the  plaintiff  a  right  to  sue  for  money 
had  and  received,  and  that  the  like  failure  of  consideration  on  the 
other  side  gave  the  defendant  a  right  to  sue  on  an  implied  assumpsit 
for  work  done  and  materials  found. 

The  $38  due  from  the  defendant  to  the  plaintiff  cannot  be  recovered 
in  this  action.  The  report  and  the  pleadings  show  that  the  suit  was 
brought  under  an  assignment  for  the  benefit  of  the  insurers,  to  re- 
cover damages  for  a  breach  of  the  contract  for  the  erection  of  the 
building,  and  not  to  recover  the  value  of  the  shingles  or  weights 
carried  away  from  the  ruins. 

According  to  the  terms  of  the  report,  the  ruling  being  wrong,  such 
order  may  be  made  as  this  court  shall  direct.  A  majority  of  the 
court  are  of  opinion  that  the  verdict  should  be  set  aside,  and  the 
defendant  be  given  leave  to  file  a  declaration  in  set-off,  if  he  is  so 
advised,  on  such  terms  as  the  Superior  Court  deems  reasonable. 

Verdict  set  aside. 


MIN'ERAL  PARK  LAND  COMPANY  v.  P.  A.  HOWARD,  et  al. 
California  Supreme  Court,  March  13,  1916 

l^Reported  in  172  California,  289] 

Sloss,  J.  The  defendants  appeal  from  a  judgment  in  favor  of 
plaintiff  for  $3,650.     The  appeal  is  on  the  judgment-roll  alone. 

The  plaintiff  was  the  owner  of  certain  land  in  the  ravine  or  wash 
known  as  the  Arroyo  Seco  in  South  Pasadena,  Los  Angeles  County. 
The  defendants  had  made  a  contract  with  the  public  authorities  for 
the  construction  of  a  concrete  bridge  across  the  Arroyo  Seco.  In 
August,  1911,  the  parties  to  this  action  entered  into  a  written  agree- 
ment whereby  the  plaintiff  granted  to  the  defendants  the  right  to 
haul  gravel  and  earth  from  plaintiff's  land,  the  defendants  agreeing 
to  take  therefrom  all  of  the  gravel  and  earth  necessary  in  the  con- 
struction of  the  fill  and  cement  work  on  the  proposed  bridge,  the 
required  amount  being  estimated  at  approximately  one  hundred  and 
fourteen  thousand  cubic  yards.  Defendants  agreed  to  pay  five  cents 
per  cubic  yard  for  the  first  eighty  thousand  yards,  the  next  ten 
thousand  yards  were  to  be  given  free  of  charge,  and  the  balance  was 
to  be  paid  for  at  the  rate  of  five  cents  per  cubic  yard. 

The  complaint  was  in  two  counts.  The  first  alleged  that  the 
defendants  had  taken  50,131  cubic  yards  of  earth  and  gravel,  thereby 
becoming  indebted  to  plaintiff  in  the  sum  of  $2,506.55,  of  which  only 
nine  hundred  dollars  had  been  paid,  leaving  a  balance  of  $1,606.55 
due.    The  findings  support  plaintiff's  claim  in  this  regard,  and  there 


736  MINERAL   PARK   LAND    CO.    V.    HOWARD  [CHAP.    V 

is  no  question  of  the  propriety  of  so  much  of  the  judgment  as  re- 
sponds to  the  first  count. 

The  second  count  sought  to  recover  damages  for  the  defendants' 
failure  to  take  from  plaintiff's  land  any  more  than  the  50,131  yards. 

It  alleged  that  the  total  amount  of  earth  and  gravel  used  by  de- 
fendants was  one  hundred  and  one  thousand  cubic  yards,  of  which 
they  procured  50,869  cubic  yards  from  some  place  other  than  plain- 
tiff's premises.  The  amount  due  the  plaintiff  for  this  amount  of 
earth  and  gravel  would,  under  the  terms  of  the  contract,  have  been 
$2,043.45.  The  count  charged  that  plaintiff's  land  contained  enough 
earth  and  gravel  to  enable  the  defendants  to  take  therefrom  the  en- 
tire amount  required,  and  that  the  50,869  yards  not  taken  had  no 
value  to  the  plaintiff.  Accordingly  the  plaintiff  sought,  under  this 
head,  to  recover  damages  in  the  sum  of  $2,043.45. 

The  answer  denied  that  the  plaintiff's  land  contained  any  amount 
of  earth  and  gravel  in  excess  of  the  50,131  cubic  yards  actually  taken, 
and  alleged  that  the  defendants  took  from  the  said  land  all  of  the 
earth  and  gravel  available  for  the  work  mentioned  in  the  contract. 

The  court  found  that  the  plaintiff's  land  contained  earth  and 
gravel  far  in  excess  of  one  hundred  and  one  thousand  cubic  yards  of 
earth  and  gravel,  but  that  only  50,131  cubic  yards,  the  amount  actu- 
ally taken  by  the  defendants,  was  above  the  water-level.  No  greater 
quantity  could  have  been  taken  "by  ordinary  means,"  or  except  by 
the  use,  at  great  expense,  of  a  steam-dredger  and  the  earth  and 
gravel  so  taken  could  not  have  been  used  without  first  having  been 
dried  at  great  expense  and  delay.  On  the  issue  raised  by  the  plea 
of  defendants  that  they  took  all  the  earth  and  gravel  that  was  avail- 
able, the  court  qualified  its  findings  in  this  way:  It  found  that  the 
defendants  did  take  all  of  the  available  earth  and  gravel  from  plain- 
tiff's premises,  in  this,  that  they  took  and  removed  "all  that  could 
have  been  taken  advantageously  to  defendants,  or  all  that  was  prac- 
tical to  take  and  remove  from  a  financial  standpoint";  that  any 
greater  amount  could  have  been  taken  only  at  a  prohibitive  cost, 
that  is,  at  an  expense  of  ten  or  twelve  times  as  much  as  the  usual 
cost  per  yard.  It  is  also  declared  that  the  word  "available"  is  used 
in  the  findings  to  mean  capable  of  being  taken  and  used  advanta- 
geously. It  was  not  "advantageous  or  practical"  to  have  taken  more 
material  from  plaintiff's  land,  but  it  was  not  impossible.  There  is 
a  finding  that  the  parties  were  not  under  any  mutual  misunderstand- 
ing regarding  the  amount  of  available  gravel,  but  that  the  contract 
was  entered  into  without  any  calculation  on  the  part  of  either  of 
the  parties  witli  reference  to  the  amount  of  available  earth  and  gravel 
on  the  premises. 

The  single  question  is  whether  the  facts  thus  found  justified  the 
defendants  in  their  failure  to  take;  from  the  plaintiff's  land  all  of 
the  earth  and  gravel  required.  This  question  was  answered  in  the 
negative  by  the  court  below.     The  case  was,  apparently,  thought  to 


SECT.    Ill]         MINERAL   PARK   LAND    CO.    V.    HOWARD  737 

be  governed  by  the  principle  —  established  by  a  multitude  of  au- 
thorities —  that  where  a  party  has  agreed,  without  qualification,  to 
perform,  an  act  which  is  not  in  its  nature  impossible  of  performance, 
he  is  not  excused  by  difficulty  of  performance,  or  by  the  fact  that  he 
becomes  unable  to  perform.  (1  Beach  on  Contracts,  sec.  217;  Klauber 
V.  San  Diego  Street  Car  Co.,  95  Cal.  353,  [30  Pac.  555] ;  Wilming- 
ton Trans.  Co.  v.  O'Neil,  98  Cal.  1,  [32  Pac.  705]  ;  The  Harriman, 
9  Wall.  172,  [19  L.  Ed.  629].) 

It  is,  however,  equally  well  settled  that  where  performance  de- 
pends upon  the  existence  of  a  given  thing,  and  such  existence  was 
assumed  as  the  basis  of  the  agreement,  performance  is  excused  to  the 
extent  that  the  thing  ceases  to  exist  or  turns  out  to  be  non-existent. 
(1  Beach  on  Contracts,  sec.  217;  9  Cyc.  631.)  Thus,  where  the  de- 
fendants had  agreed  to  pasture  not  less  than  three  thousand  cattle 
on  plaintiff's  land,  paying  therefor  one  dollar  for  each  and  every 
head  so  pastured,  and  it  developed  that  the  land  did  not  furnish 
feed  for  more  than  717  head,  the  number  actually  put  on  the  land 
by  defendant,  it  was  held  that  plaintiff  could  not  recover  the  stipu- 
lated sum  for  the  difference  between  the  cattle  pastured  and  the 
minimum  of  three  thousand  agreed  to  be  pastured.  (Williams  v. 
Miller,  68  Cal,  291,  [9  Pac.  166].  Similarly,  in  Brick  Co.  v.  Pond, 
38  Ohio  St.  65,  where  the  plaintiff  had  leased  all  the  "good  No.  1 
fire  clay  on  his  land,"  subject  to  the  condition  that  the  lessees  should 
mine  or  pay  for  not  less  than  two  thousand  tons  of  clay  every  year, 
paying  therefor  twenty-five  cents  per  ton,  the  court  held  that  the 
lessees  were  not  bound  to  pay  for  two  thousand  tons  per  year,  unless 
there  was  No.  1  clay  on  the  land  in  such  quantities  as  would  justify 
its  being  taken  out.  In  Ridgely  v.  Conewago  Iron  Co.,  53  Ped.  988, 
the  holding  was  that  a  mining  leaset  requiring  the  lessee  to  mine  four 
thousand  tons  of  ore  annually,  and  to  pay  therefor  a  fixed  sum  per 
ton,  or,  failing  to  take  out  such  quantity,  to  pay  therefor,  imposed 
no  obligation  on  the  lessee  to  pay  for  such  stipulated  quantity  after 
the  ore  in  the  demised  premises  had  become  exhausted.  There  are 
many  other  cases  dealing  with  mining  leases  of  this  character,  and 
the  general  course  of  decision  is  to  the  effect  that  the  performance  of 
the  obligation  to  take  out  a  given  quantity  or  to  pay  royalty  thereon, 
if  it  be  not  taken  out,  is  excused  if  it  appears  that  the  lands  do  not 
contain  the  stipulated  quantity.  (Brooks  v.  Cook,  135  Ala.  219; 
[34  South.  960]  ;  Muhlenberg  v.  Henning,  116  Pa.  St.  138,  [9  Atl. 
144];  McCahan  v.  Wharton,  121  Pa.  St.  424,  [15  Atl.  615]  ;  Boyer 
V.  Fulmer,  176  Pa.  St.  282,  35  Atl.  235;  Bannan  v.  Graeff,  186  Pa. 
St.  64«,  1  Water  &  Min.  Cas.  648,  49  Atl.  805 ;  Gribben  v.  Atkinson, 
64  Mich.  651,  31  N.  W.  570;  Blake  v.  Lobb's  Estate,  110  Mich.  608, 
68  N".  W.  427;  Hewitt  Tron  M.  Co.  v.  Dessau  Co.,  129  Mich.  590; 
89  N.  W.  365 ;  Diamond  I.  M.  Co.  v.  Buckeye  I.  M.  Co.,  70  Minn. 
500,  73  :N".  W.  507.) 

We  think  the  findings  of  fact  make  a  case  falling  within  the  rule 

24 


738  WHITMAN    V.    ANGLUM  [CHAP.   V 

of  these  decisions.  The  parties  were  contracting  for  the  right  to 
take  earth  and  gravel  to  be  used  in  the  construction  of  the  bridge. 
When  they  stipulated  that  all  of  the  earth  and  gravel  needed  for 
this  purpose  should  be  taken  from  plaintiff's  land,  they  contemplated 
and  assumed  that  the  land  contained  the  requisite  quantity,  available 
for  use.  The  defendants  were  not  binding  themselves  to  take  what 
was  not  there.  And,  in  determining  whether  the  earth  and  gravel 
were  ''available,"  we  must  view  the  conditions  in  a  practical  and 
reasonable  way.  Although  there  was  gravel  on  the  land,  it  was  so 
situated  that  the  defendants  could  not  take  it  by  ordinary  means, 
nor  except  at  a  prohibitive  cost.  To  all  fair  intents  then,  it  was 
impossible  for  defendants  to  take  it.  "A  thing  is  impossible  in  legal 
contemplation  when  it  is  not  practicable;  and  a  thing  is  impracti- 
cable when  it  can  only  be  done  at  an  excessive  and  unreasonable  cost." 
(1  Beach  on  Contracts,  sec.  216.)  We  do  not  mean  to  intimate  that 
the  defendants  could  excuse  themselves  by  showing  the  existence  of 
conditions  which  would  make  the  performance  of  their  obligation 
more  expensive  than  they  had  anticipated,  or  which  would  entail  a 
loss  upon  them.  But  where  the  difference  in  cost  is  so  great  as  here, 
and  has  the  effect,  as  found,  of  making  performance  impracticable, 
the  situation  is  not  different  from  that  of  a  total  absence  of  earth 
and  gravel. 

On  the  facts  found,  there  should  have  been  no  recovery  on  the 
second  count. 

The  judgment  is  modified  by  deducting  therefrom  the  sum  of 
$2,043.45,  and  as  so  modified,  it  stands  affirmed. 

Shaw,  J.,  and  Lawlor,  J.,  concurred. 


BEN-JAMIN"  WHITMAN  v.  JERRY  F.  ANGLUM 

Supreme  Court  of  Errors  of  Connecticut,  January  2-March  12, 

1918 

[Reported  in  92  Connecticut,  392] 

On  the  5th  of  March,  1914,  the  parties  entered  into  a  contract  in 
writing,  whereby  the  plaintiff  agreed  to  purchase  and  the  defendant 
agreed  to  sell  at  least  one  hundred  and  seventy-five  quarts  of  milk 
each  day  from  April  1st,  1914,  to  April  1st,  1915.  The  contract 
contniiied  the  following:  "The  said  Whitman  is  to  come  and  get  the 
milk  at  No.  1  Wawarme  Avenue,  in  the  City  of  Hartford."  The 
yircniisf's  of  the  defendant  are  known  as  No.  1  Wawarme  Avenue. 

On  the  23d  of  November,  1914,  by  an  order  of  the  Commissioner 
of  Domestic  Animals  for  the  State,  all  the  defendant's  cattle  and 
products  of  his  farm  were  quarantined.  The  defendant  wns  quaran- 
tined and  he  was  not  allowed  to  go  from  the  premises.  Shortly  after 
th(!  qnarantine  order,  all  the  cows  on  the  farm  were  killed. 


SECT.    Ill]  SPAULDING    V.    ROSA  739 

The  quarantine  was  intended  to  prevent,  as  far  as  possible,  all 
persons  and  animals  from  going  on  or  off  the  premises,  as  well  as 
to  prevent  the  removal  of  products  of  all  kinds  that  might  carry  in- 
fection of  the  "hoof  and  mouth  disease,"  then  prevalent  among  the 
defendant's  cattle.  From  JSTovember  22d,  1914,  the  defendant  failed 
to  furnish,  or  offer  to  furnish,  milk  until  March  13th,  1915.  From 
a  judgment  in  favor  of  the  plaintiff'  the  defendant  has  appealed. 

Francis  P.  Rokrmayer,  for  the  appellant   (defendant). 

James  B.  Henry,  for  the  appellee  (plaintiff). 

Shumway^  J.  This  was  an  absolute,  an  unconditional  undertak- 
ing by  the  defendant  to  sell  and  deliver  milk  daily,  of  the  specified 
quality  and  amount.  The  defendant's  claim  is  that  he  was  excused 
from  the  performance  of  the  contract  by  reason  of  the  quarantine, 
which  made  it  illegal  for  him  to  leave  his  premises  and  carry  away 
any  products  of  his  farm  or  any  articles  that  might  carry  infection. 
The  quarantine  order  did  not  make  it  illegal  to  deliver  milk,  nor 
make  it  illegal  for  the  defendant  to  procure  its  delivery.  This  much 
is  conceded. 

But  the  defendant  contends  that  the  clause  in  the  contract,  to  wit, 
"The  said  Whitman  is  to  come  and  get  the  milk  at  Wo.  1  "Wawarme 
Avenue,"  is  an  essential  part  of  the  contract,  and  as  delivery  was  to 
be  made  at  the  place  named,  therefore  delivery  under  the  terms  of 
the  contract  was  illegal.  There  is  nothing  in  the  record  to  show 
that  the  defendant  could  not  perform  his  contract.  While  it  may 
be  true  that  the  plaintiff  could  not  enter  the  defendant's  house  or 
go  upon  other  parts  of  the  premises  which  were  under  quarantine, 
it  does  not  follow  that  the  contract  could  not  be  performed  substan- 
tially if  not  literally.  The  contract  was  not  to  deliver  milk  pro- 
duced on  the  premises.  All  that  can  be  said  is  that  the  defendant 
was  under  a  temporary  disability  to  perform  his  contract.  He  is 
not,  however,  released  from  the  obligations  of  his  contract  because 
it  was  difficult  or  impossible  to  perform  them,  so  long  as  the  per- 
formance was  not  illegal.  School  District  No.  1  v.  Dauchy,  25 
Conn.  530;  Worthington  v.  Charter  Oak  Life  Ins.  Co.,  41  Conn. 
373,  401. 

There  is  no  error. 

In  this  opinion  the  other  judges  concurred. 


GILBERT  R.  SPALDING  et  al.,  Appellants,  v.  CARL  ROSA 

ET  AL.,  Respondents 

New  York  Court  of  Appeals,  September  26-October  2.  1877 

[Reported  in  71  New  Yorlc,  40] 
Appeal  from  judgment  of  the  General  Term  of  the  Supreme  Court, 
in  the  third  judicial  department,  in  favor  of  defendants,  entered  upon 
an  order  overruling  exceptions  and   directing  a  judgment  upon  an 
order  on  trial  dismissing  plaintiffs'  complaint. 


740  SPAULDING    V.   ROSA  [CHAP.   V 

This  action  was  brought  by  plaintiffs,  who  were  the  owners  and 
managers  of  the  Olympic  Theatre  in  St.  Louis,  to  recover  damages 
for  an  alleged  breach  of  contract  by  defendants.  By  the  contract 
defendants  agreed  to  furnish  the  Wachtel  Opera  Troupe  to  give  four 
performances  per  week  at  plaintiffs'  theatre  for  two  weeks^  commenc- 
ing the  26th  or  27th  February,  1872,  plaintiffs  to  receive  twenty 
per  cent  of  the  gross  receipts,  up  to  $1,800  per  week,  and  defendants 
the  balance.  Prior  to  the  time  specified  in  the  contract,  Wachtel, 
who  was  the  chief  singer  and  attraction,  and  who  gave  the  name 
to  the  troupe,  was  taken  sick,  and  at  the  time  was  unable  to  sing. 
Defendants  in  consequence  did  not  furnish  the  troupe  at  the  time 
specified. 

Further  facts  appear  in  the  opinion. 

The  court  at  the  close  of  the  evidence  directed  a  dismissal  of  the 
complaint,  to  which  plaintiffs'  counsel  duly  excepted.  Exceptions 
were  ordered  to  be  heard  at  first  instance  at  General  Term. 

P.  Gantine,  for  appellants. 

Erastus  Cooke,  for  respondents. 

Allen,  J.  The  contract  of  the  defendants  was  for  four  perform- 
ances per  week  for  two  weeks,  commencing  on  the  26th  or  27th  of 
February,  1872,  by  the  Wachtel  Opera  Troupe,  at  the  plaintiffs' 
theatre  in  St.  Louis. 

The  Wachtel  Opera  Troupe  was  well  known  by  its  name  as  the 
company,  at  the  time  of  making  the  contract,  performing  in  operas, 
under  temporary  engagements,  at  the  principal  theatres  and  opera 
houses  in  the  larger  cities  of  the  United  States,  and  composed  of 
Wachtel  as  the  leader  and  chief  attraction,  and  from  whom  the  com- 
pany took  its  name,  and  those  associated  with  him  in  different  ca- 
pacities, and  taking  the  different  parts  in  the  operatic  exhibitions  for 
which  they  were  engaged.  The  proof  of  the  fact  that  there  was  a 
troupe  or  company  known  by  that  name  was  competent  as  showing 
what  particular  company  was  in  the  minds  of  the  contracting  parties, 
and  intended,  by  the  terms  used;  and  as  there  was  no  controversy 
upon  this  subject,  and  no  ambiguity  arising  out  of  the  extrinsic  evi- 
dence, there  was  no  question  of  fact  for  the  jury. 

Wachtel  had  acquired  a  reputation  in  this  country,  as  well  as  in 
Europe,  as  a  tenor  singer  of  superior  excellence,  and,  in  the  language 
of  the  witnesses,  had  made  a  "decided  hit"  in  his  professional  per- 
formances here.  It  was  his  name  and  capabilities  that  gave  char- 
acter to  the  company,  and  constituted  its  chief  attraction  to  con- 
noisseurs and  lovers  of  music,  filling  the  houses  in  which  he  appeared. 
His  connection  with  the  company  was  the  inducement  to  the  plaintiffs 
to  enter  into  the  contract,  and  give  the  troupe  eighty  per  centum  of 
tbe  gross  receipts  of  the  honsca.  one-hnlf  of  which  went  to  Wachtel. 
Botli  the  plaintiffs  testifiefl  that  it  was  Wachtel's  popularity  and  capa- 
bilities ,'is  a  singer  upon  which  they  relied  to  fill  their  theatre  and 
reimburse   themselves  for   their  expenses  and  make  a  profit.     The 


SECT.    Ill]  SPAULDING    V.   ROSA  741 

appearance  of  Wachtel  in  the  operas  was  the  principal  thing  con- 
tracted for,  and  the  presence  of  the  others  of  the  company  was  but 
incidental  to  the  employment  and  appearance  of  the  "famous  German 
tenor."  The  place  of  any  other  member  of  the  company  could  have 
been  supplied,  but  not  so  of  Wachtel.  His  presence  was  of  the  es- 
sence of  the  contract,  and  his  part  in  the  performances  could  not 
be  performed  by  a  deputy  or  any  substitute.  The  plaintiffs  would 
not  have  been  bound  to  accept,  and  would  not  have  accepted  the 
services  of  the  troupe  under  the  contract  without  Wachtel;  it  v/ould 
not  have  been  the  Wachtel  Opera  Troupe  contracted  for  without  him. 
There  is  no  dispute  as  to  the  facts.  The  only  question  is  one  of 
law  as  to  the  effect  of  the  sickness,  and  consequent  inability  of  Wach- 
tel to  fulfil  the  engagement,  upon  the  obligations  of  the  defendants. 
So  far  as  this  question  is  concerned,  it  must  be  treated  as  if  the 
contract  was  for  the  performance  by  Wachtel  alone,  as  if  he  was  the 
sole  performer  contracted  for.  This  follows  from  the  conceded  fact 
that  his  presence  was  indispensable  to  the  performance  of  the  serv- 
ices agreed  to  be  rendered  by  the  entire  company.  In  this  view  of 
the  case,  the  legal  question  is  very  easy  of  solution,  and  can  receive 
but  one  answer.  The  sickness  and  inability  of  Wachtel  occurring 
without  the  fault  of  the  defendants  constitutes  a  valid  excuse  for 
the  non-performance  of  the  contract.  Contracts  of  this  character, 
for  the  personal  services,  whether  of  the  contracting  party  or  of  a 
third  person,  requiring  skill,  and  which  can  only  be  performed  by 
the  particular  individual  named,  are  not  in  their  nature  of  absolute 
obligation  under  all  circumstances.  Both  parties  must  be  supposed 
to  contemplate  the  continuance  of  the  ability  of  the  person  whose 
skilled  services  are  the  subject  of  the  contract  as  one  of  the  condi- 
tions of  the  contract.  Contracts  for  personal  services  are  subject 
to  this  implied  condition,  that  the  person  shall  be  able  at  the  time 
appointed  to  perform  them;  and  if  he  dies,  or  without  fault  on 
the  part  of  the  covenantor  becomes  disabled,  the  obligation  to  per- 
form is  extinguished.  This  is  so  well  settled  by  authority  that  it  is 
unnecessary  to  do  more  than  refer  to  a  few  of  the  authorities  directly 
in  point.  People  v.  Manning,  8  Cow.  297;  Jones  v.  Judd,  4  N.  Y. 
411;  Clark  v.  Gilbert,  26  N.  Y.  279;  Wolfe  v.  Howes,  24  Barb,  174, 
666;  20  N.  Y.  197;  Gray  v.  Murray,  3  J.  C.  E.  167;  Robinson  v. 
Davison,  L.  R.  6  Ex.  268;  Boast  v.  Firth,  L.  R.  4  C.  P.  1.  The  same 
principle  was  applied  in  Dexter  v.  Norton,  47  IST.  Y.  62,  and  for  the 
same  reasons,  to  a  contract  for  the  delivery  of  a  quantity  of  speci- 
fied cotton  destroyed  by  fire,  without  the  fault  of  the  vendor,  inter- 
mediate the  time  of  making  the  executory  contract  of  sale  and  the 
time  for  the  delivery. 

The  judgment  must  be  affirmed. 

All  concur,  except  Folger,  J.,  absent.  Judgment  affirniPcU 

*  Boast  V.  Firth,  L.  R.  4  C.  P.  1:  Robinson  v.  Davison,  L.  R.  6.  Ex  269:  Baxter 
V.  Billings,  83  Fed.  Rep.  790:  Sohultz  v.  Johnson's  Adm.,  5  B.  Mon.  497:  Marvel  v. 


742  LACY    V.    GETMAN  [CHAP.   V 

THOMAS  LACY  v.   SOPHEONIA  A.  GETMAN 

New  York  Court  of  Appeals,  December  19,  1889-Januarj  14,  1890 
[Reported  in  119  New  York,  109] 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme 
Court  in  the  fourth  judicial  department,  entered  upon  an  order 
made  July  2,  1888,  which  affirmed  a  judgment  in  favor  of  plain- 
tiff, entered  upon  a  verdict,  and  affirmed  an  order  denying  a  motion 
for  a  new  trial. 

The  nature  of  the  action  and  the  facts  are  sufficiently  stated  in  the 
opinion. 

Elon  R.  Brown,  for  appellant. 

W.  A.  Nims,  for  respondent. 

Finch,  J.  The  relation  of  master  and  servant  is  no  longer  hounded 
by  its  original  limits.  It  has  broadened  with  the  advance  of  civiliza- 
tion until  the  law  recognizes  its  existence  in  new  areas  of  social  and 
business  life,  and  yields  in  many  directions  to  the  influence  and  ne- 
cessities of  its  later  surroundings.  When,  therefore,  it  is  said,  gen- 
erally, as  the  commentators  mostly  agree  in  saying,  that  the  contract 
relations  of  principal  and  agent,  and  of  master  and  servant,  are 
dissolved  by  the  death  of  either  party,  it  is  very  certain  that  the  state- 
ment must  be  limited  to  cases  in  which  the  relation  may  be  deemed 
purely  personal,  and  involves  neither  property  rights  nor  independent 
action.  Beyond  that,  a  further  limitation  of  the  doctrine  is  asserted, 
which  approaches  very  near  to  its  utter  destruction,  and  is  claimed 
to  be  the  result  of  modern  adjudication.  That  limitation  is  that  the 
rule  applies  only  to  the  contract  of  the  servant,  and  not  to  that  of 
the  master,  and  not  at  all,  unless  the  service  employed  is  that  of 
skilled  labor  peculiar  to  the  capacity  and  experience  of  the  servant 
employed,  and  not  the  common  possession  of  men  in  general;  and 
it  is  proposed  to  adopt  as  a  standard  or  test  of  the  limitation  an  in- 
quiry in  each  case  whether  the  contract  on  the  side  of  the  master 
can  be  performed  after  his  death  by  his  representatives  substantially, 
and  in  all  its  terms  or  requirements,  or  cannot  be  so  performed 
without  violence  to  some  of  its  inherent  elements. 

The  agitation  of  that  question  has  kept  the  present  case  passing 
like  a  shuttle  between  the  trial  and  the  appellate  courts,  until  it  has 
been  tried  four  times  at  the  circuit  and  reviewed  four  times  at  Gen- 


Phillips,  102  Mass.  300;  Rilor  v.  Cray.  86  N.  C.  566;  Dickinson  v.  Calahan,  10  Pa. 
227:  Rlakoly  v.  RoiiHa,  107  Pa.  305;  Yorrincton  v.  Groono,  7  R.  I.  580;  Landa  v. 
Shook.  87  Tox.  008;  Hubbard  v.  Boldon,  27  Vt.  645;  Oroen  v.  Gilbert,  21  Wi.s.  395, 
ncc.  Comparo  .TonninKs  v.  Lyons,  30  Wis.  553.  Soo  also  the  following  cases  of  con- 
tracts to  marry:  Hall  v.  WriKht,  3  E.  B.  &  E.  746;  Viorline:  ?..  Bender,  113  Iowa, 
3.37;  Slir.cklfford  ?).  Hamilton,  03  Ky.  SO;  G.-irdnor  r.  ,\rnott,  50  S.  W.  Rep.  (Kv.) 
840:  rjodfliird  v.  Westcott,  82  Mich.  ISO;  Trammel!  ?).  Vansihan  (Mo."),  .50  S.  W. 
Rep.  70;  Allien  v.  Baker,  86  N.  C.  91;  Gring  v.  Lorch,  112  Pa.  244;  Sanders  v.  Cole- 
man, 07  Va.  600. 


SECT.    Ill]  LACY    V.    GETMAN  743 

eral  Term,  and  at  last  has  been  sent  here  in  the  hope  of  securing  a 
final  repose. 

The  facts  are  few  and  undisputed  on  this  appeal.  The  plaintiff, 
Lacy,  contracted  orally  with  defendant's  testator,  McMahan,  to  work 
for  the  latter  upon  his  farm,  doing  its  appropriate  and  ordinary  work 
for  a  period  of  one  year  at  a  compensation  of  two  hundred  dollars. 
Lacy  entered  upon  the  service  in  March,  doing  from  day  to  day  the 
work  of  the  farm  under  the  direction  of  its  owner,  until  about  the 
middle  of  July,  when  McMahan  died.  By  his  will  he  made  the  de- 
fendant executrix,  but  devised  and  bequeathed  to  his  widow  a  life 
estate  in  the  farm,  and  the  use  and  control  of  all  his  personal  prop- 
erty whatsoever  in  the  house  and  on  the  farm,  during  the  term  of 
her  natural  life.  Lacy  knew  in  a  general  way  the  terms  of  the  will. 
He  testifies  that  he  knew  that  it  gave  to  the  widow  the  use  of  the 
farm,  and  that  she  talked  with  him  about  the  personal  property. 
It  is  admitted  that  the  executrix  did  not  hire  or  employ  him,  but 
he  continued  on  to  the  close  of  the  year,  doing  the  farm  work  under 
the  direction  of  the  widow  until  the  end  of  his  full  year.  He  sued 
the  executrix  upon  his  contract  with  the  testator,  and  has  recovered 
the  full  amount  of  his  year's  wages.  From  that  decision  the  execu- 
trix appeals,  claiming  that  the  judgment  should  have  been  limited 
to  the  proportionate  amount  earned  at  the  death  of  McMahan,  and 
that  the  death  of  the  master  dissolved  the  contract. 

It  is  obvious  at  once  that  an  element  has  come  into  the  case  as 
now  presented,  which  was  not  there  when  the  General  Term  first 
held  that  the  contract  survived.  It  now  appears  that  the  executrix 
could  not  have  performed  her  side  of  the  contract  at  all  after  the 
death  of  McMahan,  by  force  of  her  official  authority,  because  she  had 
neither  the  possession  of  the  farm  nor  personal  property  upon  it,  and 
no  right  to  such  possession  during  the  life  of  the  widow.  She  had 
no  power  to  put  her  servant  upon  the  land,  or  employ  him  about  it, 
and  in  her  representative  character  she  had  not  the  slightest  interest 
in  his  service  and  could  derive  no  possible  benefit  from  it.  The 
plaintiff's  labor,  after  the  death  of  McMahan,  was  necessarily  on  the 
farm  of  the  widow,  by  her  consent,  for  her  benefit,  and  under  her 
direction  and  control,  and  equitably  and  justly  should  be  a  charge 
against  her  alone.  The  test  of  power  to  perform  on  the  part  of  the 
personal  representative  of  the  deceased  fails  in  the  emergency  pre- 
sented by  the  facts,  except  possibly  upon  proof  of  the  consent  of  the 
widow. 

We  have,  then,  the  peculiar  case  of  a  contract  made  to  work  for 
McMahan  and  under  his  direction  and  control,  which  could  not  be 
performed  because  of  his  death,  transmuted  into  a  contract  to  work 
for  Mrs.  Getman  upon  a  farm  which  she  did  not  possess  and  had  no 
right  to  enter;  and  performed  by  working  for  the  widow  and  under 
her  direction  and  control  alone;  and  this  because  of  the  supposed 
rule  that  the  contract  survived  the  death  of  the  master  and  remained 
binding  upon  his  personal  representatives. 


744  LACY    V.    GETMAN  [CHAP.   V 

It  is  true  that  some  interest  in  the  personal  property  on  the  farm 
is  claimed  to  have  vested  in  the  executrix,  notwithstanding  the  terms 
of  the  will;  and  the  inventory  filed  by  her  is  appealed  to,  and  the 
necessity  of  a  resort  to  the  personal  property  with  which  to  pay 
debts.  There  is  no  proof  that  the  testator  owed  any  debts,  and  the 
inventory  covers  nothing  as  to  which  Lacy's  labor  was  requisite  or 
necessary,  except  possibly  some  corn  on  the  ground  valued  at  eighteen 
dollars.  All  the  grain  inventoried  was  in  the  barn,  needing  only  to 
be  threshed,  and  must  be  assumed  to  have  been  there  when  testator 
died;  and  the  other  property  consisted  of  farm  tools  and  a  cow  and 
horse,  to  the  use  of  which  the  widow  was  entitled,  and  which,  if  sold 
to  pay  possible  debts,  would  liave  left  the  servant  without  means  of 
doing  his  work  and  with  nothing  to  do,  unless  for  the  widow.  So 
that  the  bald  question  is  presented  whether  the  contract  survived  the 
testator's  death  and  bound  his  executrix,  who  Avas  without  power  or 
authority  of  her  own  to  perform,  and  had  no  interest  in  performance. 

It  seems  to  be -conceded  that  the  death  of  the  servant  dissolves  the 
contract.  Wolfe  v.  Sowes,  20  IST.  Y.  197;  Spaulding  v.  Eosa,  71  id, 
40;  Devlin  v.  Mayor,  etc.,  63  id.  14;  Fahy  v.  North,  19  Barb.  341; 
Clark  V.  Gilbert,  32  id.  576;  Seymour  v.  Cagger,  13  Hun,  29;  Boast 
V.  Firth,  L.  R.  4  C.  P.  1.  Almost  all  of  these  cases  were  marked  by 
the  circumstances  that  the  services  belonged  to  the  class  of  skilled 
labor.  In  such  instances  the  impossibility  of  a  substituted  service 
by  the  representative  of  the  servant  is  very  apparent.  The  master 
has  selected  the  servant  by  reason  of  his  personal  qualifications,  and 
ought  not,  when  he  dies,  to  abide  the  choice  of  another  or  accept  a 
service  which  he  does  not  want.  While  these  cases  possess,  with  a 
single  exception,  that  characteristic,  I  do  not  think  they  depend  upon 
it.  Fahy  v.  N^orth  was  a  contract  for  farm  labor,  ended  by  the  sick- 
ness of  the  servant;  and  quite  uniformly  the  general  rule  stated  is 
that  the  servant's  agreement  to  render  personal  services  is  dissolved 
by  his  death.  There  happens  a  total  inability  to  perform;  it  is  with- 
out the  servant's  fault;  and  so  further  performance  is  excused  and 
the  contract  is  apportioned.  If  in  this  case.  Lacy  had  died  on  that 
day  in  Tuly,  his  representative  could  not  have  performed  his  con- 
tract. McMahan,  surviving,  would  have  been  free  to  say  that  he 
bargained  for  Lacy's  services,  and  not  for  those  of  another  selected 
and  chosen  by  strangers,  and  either  the  contract  would  be  broken  or 
else  dissolved.  I  have  no  doubt  that  it  must  be  deemed  dissolved, 
and  that  the  death  of  the  servant,  bound  to  render  personal  services 
under  a  personal  control,  ends  the  contract,  and  irrespective  of  the 
inquiry  whether  those  services  involve  skilled  or  common  labor.  For, 
even  as  it  respects  the  latter,  the  servant's  character,  habits,  capacity, 
inclnstry,  and  temper,  all  enter  into  and  affect  the  contract  which 
the  mast(T  makes,  and  are  material  and  essential  where  the  service 
rendered  is  to  bo  personal  and  subject  to  the  daily  direction  and 
choice  and  control  of  tlie  master.     He  was  willing  to  hire  Lacy  for  a 


SECT.    Ill]  LACY    V.   GETMAN  745 

year;  but  Lacy's  personal  representative,  or  a  laborer  tendered  by 
him,  be  might  not  want  at  all,  and  at  least  not  for  a  fixed  period, 
preventing  a  discharge.  And  so  it  must  be  conceded  that  the  death 
of  the  servant,  employed  to  render  personal  services  under  the  master's 
daily  direction,  dissolves  the  contract,  Babcock  v.  Goodrich,  3  How. 
Pr.  (N.  S.)  53. 

But  if  that  be  so,  on  what  principle  shall  the  master  be  differently 
and  more  closely  bound?  And  why  shall  not  his  death  also  dissolve 
the  contract?  There  is  no  logic  and  no  justice  in  a  contrary  rule. 
The  same  reasoning  which  relieves  the  servant's  estate  relieves  also 
the  master's,  for  the  relation  constituted  is  personal  on  both  sides 
and  contemplates  no  substitution.  If  the  master  selects  the  servant, 
tlie  servant  chooses  the  master.  It  is  not  every  one  to  whom  he  will 
bind  himself  for  a  year,  knowing  that  he  must  be  obedient  and  render 
the  services  required.  Submission  to  the  master's  will  is  the  law 
of  the  contract  which  he  meditates  making.  He  knows  that  a  promise 
by  the  servant  to  obey  the  lawful  and  reasonable  orders  of  his  master 
within  the  scope  of  his  contract  is  implied  by  law;  and  a  breach  of 
this  promise  in  a  material  matter  justifies  the  master  in  discharging 
him.  King  v.  St.  John,  Devizes,  9  B.  &  C.  896.  One  does  not  put 
himself  in  such  relation  for  a  fixed  period  without  some  choice  as 
to  whom  he  will  serve.  The  master's  habits,  character,  and  temper 
enter  into  the  consideration  of  the  servant  before  he  binds  himself 
to  the  service,  just  as  his  own  personal  characteristics  materially 
affect  the  choice  of  the  master.  The  service,  the  choice,  the  contract 
are  personal  upon  both  sides,  and  more  or  less  dependent  upon  the 
individuality  of  the  contracting  parties;  and  the  rule  applicable  to 
one  should  be  the  rule  which  governs  the  other. 

If  now,  to  such  a  case,  —  that  is,  to  the  simple  and  normal  relation 
of  master  and  servant,  involving  daily  obedience  on  one  side  and 
constant  direction  on  the  other  —  we  apply  the  suggested  test  of  pos- 
sibility of  performance  in  substantial  accord  with  the  contract,  the 
result  is  not  different.  It  is  said  that  if  the  master  dies  his  repre- 
sentatives have  only  to  pay,  and  any  one  may  do  that.  But  under 
the  contract,  that  is  by  no  means  all  that  remains  to  be  done.  They 
must  take  the  place  of  the  master  in  ordering  and  directing  the  work 
of  the  farm,  and  requiring  the  stipulated  obedience.  That  may  prove 
to  effect  a  radical  change  in  the  situation  of  the  servant,  as  it  seems 
to  have  done  in  the  present  case,  leading  the  plaintiff  to  the  verge 
of  refusing  to  work  further  for  either  widow  or  executrix,  whose 
views  apparently  jangled.  The  new  master  cannot  perform  the  em- 
ployer's side  of  the  contract  as  the  deceased  would  have  performed 
it,  and  may  vary  so  far,  from  incapacity  or  fitful  temper  or  selfish 
greed,  as  to  make  the  situation  of  the  servant  materially  and  seri- 
ously different  from  that  which  he  contemplated  and  for  which  he 
contracted. 

We  are,  therefore,  of  opinion  that  in  the  case  at  bar  the  contract  of 


k: 


746  LAKEMAN    V.    POLLARD  [CHAP.    V 

service  was  dissolved  by  the  death  of  McMahan,  and  his  estate  was 
only  liable  for  the  services  rendered  to  the  date  of  his  death. 

The  judgment  should  be  reversed  and  a  new  trial  granted  with  costs 
to  abide  the  event. 

All  concur.  Judgment  reversed} 


,     ^  A^  *      P^TER  C.  LAKEMAN  v.  JOSEPH  W.  POLLARD 

^'^'^  xJ-  Maine  Supreme  Court,  1857 

j^  [Reported  in  43  Maine,  463] 

Hatha  WAT,  J.     The  plaintiff  labored  for  the  defendants  at  their 
mills  in  St.  Johns,  and  by  this  action  claims  to  recover  his  wages. 

AA^'  The  defence  is,  that  the  labor  was  performed  under  a  contract, 

JL  on  his  part,  to  work  for  the  defendants  during  the  sawing  season  of 

^      .  1854,  Avhich  he  did  not  fulfil. 

>-    ^  The  testimony  of  Bagley,  JSTute,  and  Stone  that  "they  were  not 

\^  jL^  hired  by  the  season,  but  only  to  remain  there  as  long  as  they  pleased," 

,         jL.  could  have  no  legitimate  effect  upon  the  rights  of  the  parties  in  this 

W-*''^^  '  suit,  and  was  improperly  admitted.     That  testimony  was  introduced 

^^^  by  the  plaintiff  as  tending  to  show  that  he  was  not  hired  for  a  speci- 

5*\  fied  time.    But  the  jury  found  that  he  was  so  hired.    Else  they  could 

-  not  have  found,  as  they  did,  specially,  that  "he  quit  the  defendants' 


>^. 


J^ 


.   ^employ,  without  their  leave  or  consent,  before  the  expiration  of  the 
^yy^       time  for  which  he  was  hired."     The  defendants  were  not  aggrieved 
SJ^^^J  the  admission  of  that  testimony,  for  the  special  findings  of  the 
y-*^      jury  show  that  it  produced  no  effect. 

i*>  The  plaintiff  contends  that  he  was  excused  from  the  performance 

«V^of  his  contract,  and  justified  in  quitting  when  he  did,  by  reason  of 
Uiy  "      the  alarm  and  danger  occasioned  by  the  prevalence  of  the  cholera  in 
^       the  vicinity  -of  the  mills,  and  that  he  is  entitled  to  a  reasonable  com- 
V^  pensation  for  the  labor  performed.     If  the  fulfilment  of  the  plain- 

^J^     tiff's  contract  became  impossible  by  the  act  of  God,  the  obligation  to 
1^  perform  it  was  discharged.     If  he  was  prevented  by  sickness  or  simi- 

lar inability  he  may  recover  for  what  he  did,  on  ii  (luantam  meruit^ 
1  Parsons  on  Contracts,  524. 

1  Farrow  v.  Wilson,  L.  R.  4  C.  P.  744;  Whincup  v.  Hughes,  L.  R.  6  C.  P.  78;  Harris 
V.  JohnHon,  98  Ga.  4M;  Wecdon  v.  Watcrhouse,  10  Hawaii,  696;  Yerrington  v.  Greene, 
7  R.  I.  589,  ace.     Compare  Volk  v.  Stowell,  98  Wis.  385. 

Thf!  death  of  one  member  of  a  partnership  is  generally  held  to  dissolve  a  contract 
of  errii>loyment  made  with  the  firm.  Task(!r  v.  Shepherd,  6  H.  &  N.  575;  Cowasjee 
Nanabhoy  v.  Lallbhoy  Vullubhoy,  3  Ind.  App.  200;  Brace  v.  Calder,  [1895]  2  Q.  B. 
253;  Hoey  v.  McEwan,  5  Scss.  Cas.  .3(1  Ser.  814;  Griggs  v.  Swift,  82  Ga.  392;  Green- 
burg  V.  Early,  30  Abb.  N.  C.  .300,  .30.3.  But  see  Phillips  v.  Alhambra  Palace  Co., 
C1901]  1  Q.  B.  .59;  Hiiu'he.s  v.  Gro.ss,  106  M;is.s.  61;  Nickorson  v.  Russell,  172  Mass. 
584:    Ferfira  v.  Sayron,  5  W.  &  S.  210;  3  Williston,  Contracts,  §1941. 

The  Louisiana  f'ivil  Code,  Art.  2007,  i)rovi<l<M  that  "all  contracts  for  the  hire  of 
labor,  skill,  or  industry,  without  any  distinction,  whether  thay  can  be  as  well  per- 
formefl  by  any  other  as  by  the  obligor,  utiless  tlicre  be  some  spc^cial  agreement  to  the 
contriiry,  are  consiflered  as  personal  on  th(^  part  of  the  obligor,  but  heritable  on  the 
part  of  the  obligee."     See  Tote  v.  Lanaux,  45  La.  Ann.  1343. 


SECT.    Ill]  LAKEMAN    V.   POLLARD  747 

The  plaintiff  was  under  no  obligation  to  imperil  his  life  by  re- 
maining at  work  in  the  vicinity  of  a  prevailing  epidemic  so  dangerous 
in  its  character  that  a  man  of  ordinary  care  and  prudence,  in  the 
exercise  of  those  qualities,  would  have  been  justified  in  leaving  byj 
reason  of  it;  nor  does  it  make  any  difference  that  the  men  who  re- 
mained there  at  work  after  the  plaintiff  left  were  healthy,  and  con- 
tinued to  be  so.  He  could  not  then  have  had  any  certain  knowledge 
of  the  extent  of  his  danger.  He  might  have  been  in  imminent  peril, 
or  he  might  have  been  influenced  by  unreasonable  apprehensions.  He 
must,  necessarily,  have  acted  at  his  peril,  under  the  guidance  of  his 
judgment. 

The  propriety  of  his  conduct  in  leaving  his  work  at  that  time  must 
be  determined  by  examining  the  state  of  facts  as  then  existing.  When 
the  laborer  has  adequate  cause  to  justify  an  omission  to  fulfil  his 
contract,  such  omission  cannot  be  regarded  as  his  fault.  Whether 
or  not  the  plaintiff  had  such  cause  was  a  question  of  fact,  to  be  de- 
termined by  the  jury,  upon  the  evidence. 

"Where  there  are  conflicting  proofs,  or  some  necessary  facts  are 
to  be  inferred  from  others  which  are  proved,  then  it  is  the  province 
of  the  jury  to  decide  the  cause,  under  instructions  from  the  judge, 
as  to  the  principles  of  law  which  should  govern  them."  Sherwood  v. 
Maverick,  5  Me.  K.  295. 

The  question  was  rightly  submitted  to  the  jury,  and  with  appro- 
priate instructions. 

'No  question  is  presented  by  the  exceptions  concerning  the  rulings 
of  the  court  upon  the  subject  of  damages,  or  the  amount,  if  any, 
recoverable  for  wages. 

A  report  of  the  whole  evidence,  signed  by  the  presiding,  judge,  as 
the  law  requires,  has  not  been  furnished  to  the  court.  Therefore  the 
motion  for  a  new  trial  cannot  be  entertained. 

Exceptions  and  motion  overruled. 

Judgment  on  the  verdict. 

Tennet^  C.  J.,  and  Appleton,  J.,  concurred. 

GooDENOw,  J.,  concurred  in  the  result  only. 

May,  J.,  concurred,  remarking  that  the  testimony  of  Bagley,  Nute, 
and  Stone  was  admitted  as  contradictory  of  other  witnesses  intro- 
duced by  the  defendant,  and  not  upon  the  main  question;  and  for 
"^^uch  purpose  was  clearly  admissible.^ 

^  Walsh  V.  Fisher,  102  Wis.  172,  ace.  As  to  an  employer's  liability  on  quantum 
meruit  for  the  services  rendered  by  an  employee  who  becomes  ill  or  dies  before  com- 
pleting performance,  see  Ryan  v.  Dayton,  25  Conn.  188;  Coe  v.  Smith,  4  Ind.  79; 
Hargrave  v.  Conroy,  19  N.  J.  Ea.  281;  Wolfe  v.  Howes,  20  N.  Y.  197;  Clark  v.  Gil- 
bert, 26  N.  Y.  279;  Parker  v.  Macomber,  17  R.  I.  674;  Hubbard  v.  Belden,  27  Vt. 
645;  Patrick  v.  Putnam,  27  Vt.  769;  Green  v.  Gilbert,  21  Wis.  395;  3  Williston,. 
Contracts,  §1973. 


748  DEWEY    V.    CITY   OF   ALPENA  [CHAP.   V 

FEATfKLIN"  S.  DEWEY  v.  THE  UNION  SCHOOL  DISTRICT 
OF  THE  CITY  OF  ALPENA 

Michigan  Supreme  Court,  April  23-April  30,  1880 

[Reported  in  43  Michigan,  480] 

Graves,  J.  The  plaintiff  was  regularly  hired  hy  the  district  to 
serve  as  teacher  in  its  public  schools  for  ten  months  for  $130  per 
month.  He  entered  on  his  duties  on  the  2d  of  September,  and  con- 
tinued up  to  the  10th  of  December,  at  which  time  the  district  officers 
closed  the  schools  on  account  of  the  prevalence  of  small-pox  in  the 
city,  and  kept  them  closed  thereafter  for  the  same  reason  until  the 
17th  of  March.  They  were  then  reopened  and  the  plaintiff  resumed 
his  duties.  He  was  subsequently  hired  for  the  next  school  year,  and 
his  compensation  was  increased  $100.  The  district  refused  to  pay 
him  for  the  period  of  suspension,  and  he  brought  this  action  to  re- 
cover it. 

The  claim  was  resisted  on  two  grounds :  first,  that  on  the  second 
hiring  it  was  mutually  agreed  that  the  addition  of  $100  to  his  com- 
pensation for  incoming  service  should  stand  and  be  allowed  and 
accepted  in  full  satisfaction  of  all  claim  for  pay  during  the  time 
in  question;  and,  second,  that  the  suspension  was  the  effect  of  an 
overruling  necessity,  or,  in  other  words,  the  act  of  God,  and  that 
all  parts  of  the  contract  were  suspended  for  the  time  being. 

The  circuit  judge  submitted  to  the  jury  both  questions  in  a  very 
clear  manner,  and  instructed  them  to  find  against  the  plaintiff  in 
case  they  were  satisfied  the  alleged  compromise  was  in  fact  entered 
into;  or  in  case  they  should  find  that  the  small-pox  was  so  preva- 
lent that  it  became  obligatory  on  the  board  to  close  the  schools  as 
a  necessary  step  to  prevent  the  spread  of  the  disease  and  save  human 
life. 

The  jury  returned  a  verdict  in  favor  of  the  district.  But  we  can- 
not know  with  legal  certainty  whether  they  determined  only  one  of 
these  questions  in  favor  of  the  district,  or  whether  they  so  deter- 
mined botb  ;  and  of  course  if  one  only  was  so  decided,  it  is  impos- 
sible to  say  which  one.  The  evidence  on  the  compromise  was  con- 
flicting, and  as  it  appears  in  the  record  the  advantage  was  with  the 
plaintiff.  Still,  if  no  other  ground  of  defence  had  been  laid,  the 
verdict  must  have  been  conclusive;  as  just  explained,  it  is  not  so 
now. 

Tbe  second  objection  must  be  briefly  considered.  Beyond  con- 
troversy tbe  closing  of  the  schools  was  a  wise  and  timely  expedient, 
but  tbe  dr'fenco  interposed  cannot  rest  on  that.  It  must  appear 
tbat  ftbHcrvance  of  the  contract  by  tbe  district  was  caused  to  be  im- 
possible by  act  of  God.  It  was  not  enough  that  great  difficulties 
were  encountered,  or  tlint  there  existed  urgent  and  satisfactory 
reasons  for  Htof)!)!?!!";  the  scliools.    But  this  is  all  the  evidence  tended 


SECT.    Ill]  TURNER    V.    GOLDSMITH  749 

to  sliow.  The  contract  between  the  parties  was  positive  and  for 
lawful  objects.  On  one  side  school  buildings  and  pupils  were  to 
be  provided,  and  on  the  other  personal  service  as  teacher.  The 
plaintiff  continued  ready  to  perform,  but  the  district  refused  to 
open  its  houses  and  allow  the  attendance  of  pupils,  and  it  thereby 
prevented  performance  by  the  plaintiff.  Admitting  that  the  circum- 
stances justified  the  officers,  and  yet  there  is  no  rule  of  justice  which 
will  entitle  the  district  to  visit  its  own  misfortune  upon  the  plain- 
tiff. He  was  not  at  fault.  He  had  no  agency  in  bringing  about 
the  state  of  things  which  rendered  it  eminently  prudent  to  dismiss 
the  schools.  It  was  the  misfortune  of  the  district,  and  the  district 
and  not  the  plaintiff  ought  to  bear  it. 

The  occasion  which  was  presented  to  the  district  was  not  within 
the  principle  contended  for.  It  was  not  one  of  absolute  necessity, 
but  of  strong  expediency.  To  let  in  the  defence  that  the  suspen- 
sion precluded  recovery,  the  agreement  must  have  provided  for  it. 
But  the  district  did  not  stipulate  for  the  right  to  discontinue  the 
plaintiff's  pay  on  the  judgment  of  its  officers,  however  discreet  and 
fair,  that  a  stoppage  of  the  schools  is  found  a  needful  measure  to 
prevent  their  invasion  by  disease,  or  to  stay  or  oppose  its  spread  or 
progress  in  the  community;  and  the  contract  cannot  be  regarded 
as  tacitly  subject  to  such  a  condition. 

The  judgment  must  be  reversed,  with  costs,  and  a  new  trial 
granted. 

The  other  justices  concurred.^ 


TURNEE  V.  GOLDSMITH 

In   the  Queen's  Bench  Division,   Court   of  Appeal,   January 

23,  1891 

{^Reported  in   [1891]   1   Queens  Bench,  544] 

LiNDLEY,  L.  J.  This  is  an  action  for  breach  of  contract  in  not 
employing  the  plaintiff  for  the  period  of  five  years.  The  contract 
turns  upon  the  construction  of  the  agreement  entered  into  by  the 
parties,  and  the  application  of  it  in  the  events  which  have  hap- 
pened. The  plaintiff  wished  to  act  as  traveller  to  the  defendant, 
and  the  defendant  wished  to  engage  him  in  that  capacity.  An 
agreement,  dated  Jan.  31,  1887,  was  entered  into  between  them, 
which  contained  this  recital:  "Whereas,  in  consideration  of  the 
agreement  of  the  said  A.  S.  Turner,  the  said  company"  (i.  e.,  Mr. 
Goldsmith,  and  any  partner  he  might  have)   "agree  to  employ  the 

*  Gear  v.  Gray,  10  Ind.  App.  428,  ace;  Stewart,  v.  Loring,  5  Allen,  306,  contra. 
See  also  Ellis  v.  Midland  Ry.  Co.,  7  Ont.  App.  464;  Libby  v.  Douglas,  175  Mass. 
128,  and  cases  cited  in  3  Williston,  Contracts,  §  1958. 


750  TURNER    V.    GOLDSMITH  [CHAP.   V 

said  A.  S.  Turner  as  their  agent,  canvasser,  and  traveller,  upon  tlie 
terms  and  subject  to  the  stipulations  of  the  conditions  hereinafter 
contained ;  and  in  consideration  of  the  premises  the  said  A,  S.  Turner 
hereby  agrees  with  the  said  company  that  he,  the  said  A.  S.  Turner 
shall  and  will  diligently,  faithfully,  and  honestly  serve  the 
said  company  as  their  agent,  canvasser,  and  traveller,  upon  the  terms 
and  subject  to  the  stipulations  and  conditions  hereinafter  con- 
tained." Stopping  there,  we  have  a  clear  agreement  by  the  com- 
pany to  employ  the  plaintiff,  and  by  the  plaintiff  to  serve  the 
company  —  and  on  what  terms?  (1)  That  the  agency  shall  com- 
mence as  from  Jan.  31,  1887,  and  shall  be  determinable  either  by 
the  company  or  Turner  at  the  end  of  five  years  from  the  date  of 
the  agreement  upon  giving  such  notice  as  therein  mentioned.  (2) 
"The  said  A.  S.  Turner  shall  do  his  utmost  to  obtain  orders  for 
and  sell  the  various  goods  manufactured  or  sold  by  the  said  com- 
pany as  shall  be  from  time  to  time  forwarded  or  submitted  by 
sample  or  pattern  to  him  at  list  price  to  good  and  substantial  cus- 
tomers." Clause  5  is  only  material  because  it  repeats  the  words 
"manufactured  or  sold  by  the  said  company."  The  8th  clause  pro- 
vides for  the  plaintiff's  remuneration  by  a  commission  on  the  goods 
sold  by  him.  The  other  clauses  are  not  material  as  regards  the 
question  before  us. 

It  was  contended  by  the  defendant  that  the  agreement  did  not 
contain  any  stipulation  that  the  company  should  furnish  the  plain- 
tiff with  any  samples,  and  that  there  was,  therefore,  no  agreement 
to  do  what  was  necessary  to  enable  him  to  earn  commission.  The 
answer  to  that  is,  that  the  company  would  not  be  employing  the 
plaintiff  within  the  meaning  of  the  agreement  unless  they  supplied 
him  with  samples  to  a  reasonable  extent.  Then  it  was  said  that 
there  is  no  undertaking  by  the  company  to  go  on  manufacturing. 
It  is  true  that  there  is  no  express,  nor,  so  far  as  I  see,  any  implied 
undertaking  by  the  company  to  manufacture  even  a  single  shirt; 
they  might  buy  the  articles  in  the  market.  The  defendant's  place 
of  business  was  burnt  down;  the  defendant  has  given  up  business, 
and  has  made  no  effort  to  resume  it.  The  plaintiff  then  says,  "I 
am  entitled  to  damages  for  your  breach  of  the  agreement  to  employ 
me  for  five  years."  The  defendant  pleads  that  the  agreement  was 
conditional  on  the  continued  existence  of  his  business.  On  the  face 
of  the  agreement  there  is  no  reference  to  the  place  of  business,  and 
no  condition  as  to  the  defendant's  continuing  to  manufacture  or 
sell.  IFow,  then,  can  such  a  condition  as  the  defendant  contends 
for  be  implied? 

It  was  contended  that  tlie  point  was  settled  by  authority.  I  will 
refer  to  three  cases  on  the  subject.  In  Rbodes  v.  Forwood,  1  App. 
Cas.  2r)f>,  it  was  held  that  an  action  very  similar  to  the  present  was 
not  maintainable.  But  that  case  went  on  the  ground  that,  there  not 
being  any  (txpress  contract  to  employ  the  agent,  such  a  contract  could 


SECT.    Ill]  TURNER    V.   GOLDSMITH  751 

not  be  implied.  In  the  present  case  we  find  an  express  contract  to 
employ  him. 

In  Cowasjee  ISTanabhoy  v.  Lallbhoy  Vullubhoy,  L.  E.  3  Ind.  App. 
200,  there  was  a  contract  in  a  partnership  deed  to  employ  one  of 
the  partners  during  his  life  as  sole  agent  to  effect  purchases  and 
sales  on  behalf  of  the  partnership,  at  a  commission  upon  his  sales. 
The  partnership  was  dissolved  by  decree  of  the  High  Court  of  Bom- 
bay on  the  ground  that  the  business  could  not  be  carried  on  at  a 
profit.  It  was  held  that  the  employment  was  to  sell  on  behalf  of 
the  partnership;  that,  the  partnership  having  come  to  an  end,  the 
employment  ceased,  and  that  the  partner  could  not  claim  any  com- 
pensation, for  that  a  contract  to  carry  on  the  partnership  during 
the  claimant's  life  under  all  circumstances  could  not  be  implied. 

Taylor  v.  Caldwell,  3  B.  &  S.  826,  833,  contains  some  observations 
which  are  very  much  in  point.  Blackburn,  J.,  there  says:  "There 
seems  no  doubt  that  where  there  is  a  positive  contract  to  do  a  thing 
not  in  itself  unlawful,  the  contractor  must  perform  it  or  pay  dam- 
ages for  not  doing  it,  although  in  consequence  of  unforeseen  acci- 
dents the  performance  of  his  contract  has  become  unexpectedly  bur- 
densome or  even  impossible.  .  .  .  But  this  rule  is  only  applicable 
when  the  contract  is  positive  and  absolute,  aiad  not  subject  to  any 
condition  either  express  or  implied;  and  there  are  authorities  which 
we  think  establish  the  principle  that  where  from  the  nature  of  the 
contract  it  appears  that  the  parties  must  from  the  beginning  have 
known  that  it  could  not  be  fulfilled  unless  when  the  time  for  the 
fulfilment  of  the  contract  arrived  some  particular  specified  thing 
continued  to  exist,  so  that  when  entering  into  the  contract  they 
must  have  contemplated  such  continuing  existence  as  the  foundation 
of  what  was  to  be  done,  then,  in  the  absence  of  any  express  or  im- 
plied warranty  that  the  thing  shall  exist,  the  contract  is  not  to  be 
construed  as  a  positive  contract,  but  as  subject  to  an  implied  con- 
dition that  the  parties  shall  be  excused  in  case  before  breach  per- 
formance becomes  impossible  from  the  perishing  of  the  thing  with- 
out default  of  the  contractor."  The  substance  of  that  is  that  the 
contract  will  be  treated  as  subject  to  an  implied  condition  that  it  is 
to  be  in  force  only  so  long  as  a  certain  state  of  things  continues,  in 
those  cases  only  where  the  parties  must  have  contemplated  the  con- 
tinuing of  that  state  of  things  as  the  foundation  of  what  was  to 
be  done.  Here  the  parties  cannot  be  taken  to  have  contemplated 
the  continuance  of  the  defendant's  manufactory  as  the  foundation 
of  what  was  to  be  done;  for,  as  I  have  already  observed,  the  plain- 
tiff's employment  was  not  confined  to  articles  manufactured  by  the 
defendant.     The  action  therefore,  in  my  opinion,  is  maintainable. 

The  plaintiff,  then,  is  entitled  to  damages,  and  in  my  opinion 
not  merely  to  nominal  damages;  for,  if  I  am  right  in  my  construc- 
tion of  the  agreement,  he  has  suffered  substantial  loss.  We  think, 
however,  that  1251.  is  too  much,  and  the  plaintiff's  counsel  having 


752  STATE   OF    NEW   YORK    V.    GLOBE   INS.    CO.       [CHAP.   V 

agreed  to  take  our  assessment  of  damages  rather  than  be  sent  to  a 
new  trial,  we  assess  them  at  501.,  and  direct  judgment  to  be  en- 
tered for  the  plaintiff  for  that  amount.^ 


PEOPLE  OF  THE  STATE  OF  NEW  YOKK  v.  THE  GLOBE 
MUTUAL  LIFE  II^SUKANCE  COMPANY 

;N"ew  York  Court  of  Appeals,  December  12,  1882- January  23,  1883 

[Reported  in  91  New  York,  174] 

Appeal  from  order  of  the  General  Term  of  the  Supreme  Court, 
in  the  third  judicial  department,  entered  upon  an  order  made  De- 
cember 1,  1882,  which  affirmed  an  order  of  Special  Term  dismissing 
a  claim  presented  by  James  C.  Mix  upon  the  fund  in  the  hands  of 
the  receiver  of  the  defendant. 

The  facts  were  stipulated  substantially  as  follows :  — 

Defendant  was  a  registered  policy  life  insurance  company,  or- 
ganized under  chapter  902,  Laws  of  1869.  In  December,  1876, 
said  Mix  entered  into  its  employment  as  general  agent,  under  a 
contract  by  which  he  was  to  receive  a  specified  annual  salary  for 
a  term  of  not  less  than  five  years.  In  May,  1879,  the  superintendent 
of  the  insurance  department  made  the  certificate  provided  for  by 
section  7  of  said  act,  and  delivered  it  to  the  attorney-general,  who 
thereupon  commenced  this  action  and  obtained  an  order  therein 
restraining  defendant,  its  officers,  etc.,  from  the  further  prosecution 
of  its  business  or  the  exercise  of  any  of  its  corporate  franchises.  A 
receiver  of  the  corporation  was  duly  appointed  and  it  was  dissolved. 
Mix  continued  in  the  discharge  of  his  duties  under  the  contract  until 
June  15,  1879,  when  he  was  notified  by  the  receiver  of  his  appoint- 
ment, and  of  the  dissolution  of  the  company. 

Edward  C.  James,  for  appellant. 

Geo.  W.  Wingate,  for  receiver. 

John  C.  Keeler,  for  attorney-general. 

Finch,  J.  There  was  no  breach  of  the  contract  between  Mix  and 
the  insurance  company  by  either  of  the  parties.  It  was  in  process 
of  continued  performance  according  to  its  terms,  and  was  unbroken 
at  the  moment  when  the  injunction  order  was  served.  That  operated 
upon  both  parties  at  the  same  instant,  and  perpetuated  the  then 
existing  rights  and  conditions.  Before  its  service  the  company  had 
done  nothing  to  prevent  performance,  and  we  must  assume  was  both 
ready  and  able  to  perform.  It  had  done  no  act  which  amounted  to 
a  refusal,  or  which  made  it  unable  to  carry  out  its  contract.  For 
aught  that  a7)pc'ar8  it  would  have  done  so  if  let  alone.     But  it  was 

•  Kay,  Ij.  J.,  flclivorcd  a  conourrini?  opinion,  and  Lopes,  L.  J.,  also  concurred  in 
thf  flf'fiHion, 

Mu'ldnn  V.  JacobH,  52  La.  Ann.  2107,  ace. 


SECT.    Ill]       STATE    OF    NEW    YORK    V.    GLOBE    INS.    CO.  753 

not  permitted  to  perform.  The  State,  by  the  injunction  order  oper- 
ating alike  upon  the  company  and  its  agents,  paralyzed  the  action 
of  both  the  contracting  parties,  so  that  neither  could  perform,  or 
put  the  other  in  the  wrong.  Thereupon  the  company  could  not  re- 
fuse, and  did  not  refuse.  To  put  it  in  the  wrong,  and  make  it  liable 
for  a  breach,  required  action  on  the  part  of  Mix.  As  a  condition 
precedent  he  was  bound  to  show  both  ability  and  readiness  to  per- 
form on  his  part.  Shaw  v.  Republic  Life  Ins.  Co.,  69  N.  Y.  286, 
292;  James  v.  Burchell,  82  id.  113.  He  could  do  neither.  Perform- 
ance by  him  had  become  illegal.  It  would  have  been  a  criminal 
contempt,  and  possibly  a  misdemeanor.  There  could  be  neither 
readiness  nor  ability  to  do  the  forbidden  and  unlawful  acts.  Jones 
V.  Knowles,  30  Me.  402.  So  that,  from  the  necessity  of  the  case, 
as  there  was  no  breach  on  either  side  before  the  injunction,  so  there 
could  be  none  after.  What  had  happened  was  a  dissolution  of  the 
contract  by  the  sovereign  power  of  the  State,  rendering  performance 
on  either  side  impossible.  And  this  result  was  within  the  contem- 
plation of  the  parties,  and  must  be  deemed  an  unexpressed  condi- 
tion of  their  agreement.  One  party  was  a  corporation.  It  drew  its 
vitality  from  the  grant  of  the  State,  and  could  only  live  by  its  per- 
mission. It  existed  within  certain  defined  limitations,  and  must 
die  whenever  its  creator  so  willed.  The  general  agent  who  con- 
tracted with  it  did  so  with  knowledge  of  the  statutory  conditions, 
and  these  must  be  deemed  to  have  permeated  the  agreement,  and 
constituted  elements  of  the  obligation.  People  v.  Security  Life 
Ins.  Co.,  78  ]Sr.  Y.  115.  Then,  too,  the  subject-matter  of  the  con- 
tract was  that  of  skilled  personal  services  to  be  rendered  by  one  and 
received  by  the  other.  It  was  inherent  in  the  bargain  that  a  sub- 
stituted service  would  not  answer.  The  company  were  not  bound 
to  accept  another's  performance  instead  of  the  chosen  agent's,  nor 
was  he  in  turn  bound  to  work  for  some  other  master.  The  contract 
in  its  own  nature  was  dependent  upon  the  continued  life  of  both 
parties.  With  the  natural  death  of  one,  or  the  corporate  death  of 
the  other,  the  contract  must  inevitably  end.  So  that,  in  its  own  in- 
herent nature,  by  the  unexpressed  conditions  subject  to  which  it  was 
made,  and  by  the  decree  enjoining  both  parties  at  the  same  moment 
from  further  performance,  the  contract  was  terminated  and  no 
breach  existed. 

It  is  easy  to  see  how  the  situation  of  Mix  differs  from  that  of 
the  policy-holders.  We  held  in  the  Security  case  that  the  latter 
were  creditors  and  stood  upon  a  breach  of  their  contract;  but  that 
breach  was  not  the  dissolution  of  the  company.  It  antedated  such 
dissolution,  and  was  the  prior  cause,  of  which  the  latter  was  the 
consequence.  The  reserve  required  by  law  was  essential  to  the  safety 
of  the  policy-holders.  A  covenant  to  maintain  it  was  implied  in 
every  contract  of  insurance.  That  covenant  the  company  broke  by 
its  own  neglect,  for  which  it  alone  was  assumed  to  be  responsible. 


754  STATE   OF    NEW   YORK    V.    GLOBE    INS.    CO.        [CHAP.   V 

The  State  found  these  contracts  broken  and  for  that  reason  inter- 
fered; and  when  its  decree  of  dissolution  came  it  had  to  deal  with 
broken  contracts,  and  treated  them  as  it  found  them.  The  same 
distinction  explains  the  English  cases  which  were  commended  to  our 
careful  attention.  Yelland's  case,  L.  R.  4  Eq.  350;  Clarke's  case, 
L.  E.  7  Eq.  550 ;  Logan's  case,  L.  E.  9  Eq.  149 ;  Maclure's  case, 
L.  E.  5  Ch.  App.  737;  Dean  &  Gilbert's  case,  L.  J.  41  Ch.  [n.  s.] 
476.  In  all  of  them  the  companies  stopped  payment  before  any 
intervention  of  the  law,  and  this,  being  done  by  open  and  public 
notice,  amounted  to  a  voluntary  refusal  of  performance,  and,  there- 
fore, a  breach  of  contract,  established  before  the  winding  up  orders 
were  made  and  the  liquidators  appointed.  When  the  court  inter- 
fered it  found  broken  contracts  and  a  liability  for  a  breach  already 
existing,  and  dealt  with  what  it  found.  It  did  not  itself  break  what 
was  already  broken.  Still  another  class  of  cases  is  obviously  dif- 
ferent. People  V.  National  Trust  Co.,  82  N.  Y.  283.  They  are 
such  as  aifect  property  rights  and  survive  the  death  of  the  parties. 
Performance  can  be  made  by  assignees  or  successors,  and  nothing 
in  the  essence  of  the  agreement  depends  upon  the  life  of  the  parties, 
or  forbids  its  complete  execution  by  others.  And  in  all  of  the  cases 
thus  cited  there  was  no  incapacity  affecting  both  parties  alike.  The 
one  suing  for  a  breach  was  free,  so  far  as  he  was  concerned,  to  offer 
performance,  and  had  the  necessary  ability.  He  could  thus  put  his 
adversary  in  the  wrong,  while  here  the  same  blow,  at  the  same  in- 
stant, stopped  performance  on  both  sides  and  made  it  illegal  on 
the  part  of  either. 

But  exactly  at  this  point  the  learned  counsel  for  the  appellant 
interposes  a  proposition  which  presents  a  difficulty.  Practically 
conceding  most  that  we  have  said,  he  insists  that  the  contract  is 
only  dissolved  when  its  destruction  comes  from  an  outside  and  in- 
dependent force,  operating  separately,  and  not  occasioned  directly 
or  indirectly  by  the  act  or  omission  of  the  party  pleading  it  as  an 
excuse.  In  other  words  such  party  must  be  innocent  and  blameless 
in  respect  to  the  vis  major  which  dissolves  the  contract,  and  if  not 
80,  caimot  plead  as  an  excuse  what  practically  is  his  own  fault  and 
act.  And  our  attention  is  directed  to  this  feature  as  characterizing 
the  cases  in  which  the  agreements  were  held  to  have  been  ended. 
They  are  grouped  in  the  appellant's  points  and  need  not  to  be  re- 
peated. He  has  stated  their  purport  correctly.  In  all  of  them  both 
parties  were  innocent  of  and  blainoless  for  the  outside  and  indepen- 
dent agency  which  dissolved  the  contract.  And  the  argument  is  now 
pressed  that  in  the  present  case  the  company  was  not  only  not  blame- 
less for  its  rlissolntion,  but  that  it  resulted  from  its  own  acts  or  omis- 
sions, was  directly  cansed  by  them,  anrl,  therefore,  such  dissolution 
miiflt  })e  deemfnl  its  own  act,  which  it  cannot  plead  as  an  excuse. 
Tliis  If'ads  to  tlifi  inquiry  whether  the  company  was  so  the  respon- 
sible rauso  of  the  action  r)f  the  State  as  to  make  the  dissolution  its 
own  act. 


SECT.    Ill]      STATE   OF    NEW   YORK    V.    GLOBE    INS.    CO.  755 

The  answer  is  that  no  such  fact  is  shown,  nor  is  it  a  necessary 
inference  from  the  facts  which  do  appear.  The  judgment  of  disso- 
lution is  not  here.  We  only  know  from  the  stipulation  of  the  parties 
that  the  company  was  organized  under  chapter  902  of  the  Laws  of 
1869,  and  that  the  superintendent  of  insurance  made  the  certificate 
provided  for  in  section  7  of  said  act,  and  the  attorney-general  there- 
upon commenced  the  action  for  dissolution.  The  superintendent 
probably  acted  because  the  company's  reserve  had  fallen  below  the 
lawful  and  safe  level.  Perhaps  we  ought  to  presume  as  much  as  that, 
but  if  so,  the  result  may  have  happened  from  causes  beyond  the 
company's  control  and  without  its  fault.  It  was  its  duty  to  invest 
the  reserve  and  keep  it  interest-bearing.  It  may  have  done  so  with 
entire  prudence  at  the  time,  and  in  strict  accordance  with  the  law, 
and  then  all  values  have  so  shrunk  and  dwindled  from  commercial 
causes  as  to  have  impaired  the  reserve.  In  such  case  the  dissolution 
would  have  come  from  outside  and  foreign  forces,  operating  inde- 
pendently and  both  beyond  control.  If  it  be  said  the  company  was 
still  the  indirect  cause  of  the  dissolution,  since  it  made  the  invest- 
ments and  failed  to  repair  and  strengthen  them  to  the  legal  limit, 
the  answer  may  be  that  it  could  not  do  it.  The  rule  must  not  be 
pushed  to  an  extreme.  Thus,  in  the  case  of  the  sailor  having  a 
running  contract  for  service  with  the  ship-owner,  and  sent  home 
by  a  naval  court  as  a  witness  against  the  captain  for  shooting  one 
of  the  crew,  and  unable  to  return  to  the  ship  after  the  trial,  and 
whose  contract  was  held  to  be  dissolved  (Melville  v.  De  Wolfe,  4 
E.  &  B.  844),  similar  suggestions  might  have  been  made.  It  could 
have  been  said  that  it  was  his  duty  to  return  to  the  ship,  but  that 
such  return  had  become  impossible,  without  his  fault,  or  that  of 
the  ship-owner,  was  held  sufficient.  Then,  too,  it  could  have  been 
argued  that  if  the  sailor  had  not  been  present  at  and  seen  the  murder, 
which  was  his  voluntary  act,  and  which  he  might  have  avoided,  the 
law  would  not  have  sent  him  home.  Of  course  nobody  thought  of 
pushing  the  rule  to  such  an  extreme;  nor  must  it  be  done  here.  The 
sailor  was  not  bound  to  foresee  that  his  innocent  and  blameless  pres- 
ence at  the  scene  of  the  murder  would  involve  a  dissolution  of  his 
contract  through  the  intervention  of  the  law;  nor  the  company  that 
its  investments,  honestly  and  prudently  made,  would  shrink  beyond 
repair,  and  bring  down  a  dissolution  by  the  State.  If,  in  such 
case,  in  some  sense,  such  dissolution  may  be  deemed  the  act  of  the 
company,  in  a  similar  sense,  and  through  the  same  mode  of  reason- 
ing, we  might,  in  a  case  of  master  and  servant,  trace  the  death  of 
the  former  to  his  own  negligence  in  eating  or  drinking,  or  exposure 
to  heat  and  cold,  and  so  determine  his  non-performance  to  be  in- 
excusable, and  to  draw  after  it  damages  for  a  breach.  As  it  is  thus 
evident  that  a  man  may  be,  in  some  sense,  the  occasion,  or  even  the 
indirect  cause  of  his  own  death,  and  in  the  same  sense  blamable  for 
it,  without  its  being,  in  a  legal  sense,  and  considered  as  a  vis  major. 


756  STATE   OF    NEW   YORK    V.    GLOBE   INS.    CO.        [CHAP.   V 

his  own  act,  so  a  corporation  may  be  said,  through  the  conduct  of 
its  officers,  to  have,  in  some  sort,  occasioned  its  own  corporate  death, 
while  yet  it  would  remain  true  that  its  dissolution  by  the  indepen- 
dent force  of  the  State  would  be  not  its  own  act,  not  at  all  the 
product  of  its  own  volition,  and  not  a  breach  by  it  of  its  contracts 
previously  unbroken.  Especially  is  this  true  as  between  the  com- 
pany and  its  own  officers  contracting  with  it.  One  of  these  may  be 
innocent  himself  of  any  wrongful  act  or  neglect,  and  yet  it  is  in- 
herent in  the  nature  of  his  contract  that  he  takes  the  risk  of  such 
act,  or  neglect,  on  the  part  of  the  other  officers,  as  may  tend,  under 
the  law,  to  produce  a  dissolution,  if  such  dissolution  in  fact  occurs. 
That  possibility  entered  into  his  contract  when  made,  and  belonged 
to  it  as  an  inevitable  condition,  for  its  complete  performance  de- 
pended upon  the  corporate  life,  and  that  under  the  law  upon  the 
fulfilment  of  the  law's  conditions.  In  the  event  of  such  corporate 
death  the  motive  of  the  State,  or  the  ground  of  its  act  is  wholly  im- 
material. Its  risk  was  upon  the  contractor,  whatever  its  cause  or 
occasion;  and,  however  it  may  have  been  provoked  or  induced,  it 
must  be  deemed  the  act  of  the  State^  and  not  of  the  corporate  body; 
and  is  the  independent  act  of  the  State,  for  although  the  reserve 
may  have  fallen  below  the  prescribed  level,  a  dissolution  is  not  the 
necessary  consequence.  That  may  follow,  or  may  not  follow.  The 
superi'ntendent  of  insurance  may  make  the  certificate  which  sets  the 
law  in  motion,  or  may  withhold  it.  The  matter  lies  within  his  sole 
discretion  and  control.  He  may  act  or  not,  as  he  chooses;  but  if 
he  does  it  is  his  act,  and  not  the  company's;  dependent  wholly  on 
his  volition,  and  not  on  that  of  the  corporation;  an  independent 
agency  guided  by  its  own  motives  and  not  the  act  of  the  company 
producing  its  own  death. 

If  it  be  asked  where  this  doctrine  leaves  the  policy-holders,  and 
their  claims  for  breach  of  contract,  the  answer  is  two-fold.  Where 
the  dissolution  follows  an  impaired  reserve,  their  contracts,  as  we 
have  already  said,  were  broken  by  the  company  before  the  State 
interposed.  But  their  rights  go  much  deeper  than  that.  For  while 
in  the  Security  case,  we  put  those  rights  upon  the  ground  of  breach 
of  contract,  we  did  not  at  all  decide  that  there  was  no  other.  If 
the  State  had  dissolved  this  company  while  its  contracts  with  the 
policy-holdors  were  entirely  unbroken,  and  by  an  exercise  of  sov- 
ereign power  founded  upon  motives  of  public  policy,  we  should  still 
recognize  and  enforce  the  rights  of  policy-holders  on  a  different 
ground.  The  assets  to  be  distributed  would  be  the  reserve,  or  so  much 
of  it  ns  r(>mained.  That  reserve,  as  we  sliowed  in  the  Security  case, 
is  mjide  up  of  the  excess  of  premiums  paid  by  the  policy-holders  in 
tlic  (Mrlier  years  of  their  policies  beyond  the  real  cost  of  insurance 
to  ('iiaF)le  them  to  he  carried  in  later  years  when  the  risks  should  be 
greater.  Practically,  therefore,  at  the  date  of  dissolution  the  reserve 
represejits  the  fiurningH  of  the  polici(!S  and  the  contributions  of  the 


SECT.    Ill]       STATE   OF    NEW   YORK    V.    GLOBE   INS.    CO.  757 

policy-holders.  And  as,  in  the  case  of  contracts  for  personal  serv- 
ices dissolved  without  fault  by  death  or  the  act  of  the  law,  the  con- 
tract is  apportioned,  and  the  servant  entitled  to  his  actual  earnings 
to  the  date  of  dissolution,  so  the  policy-holders  would  be  entitled  to 
the  just  earnings  of  their  policies  to  the  same  date,  and  have  an  un- 
doubted equity  upon  the  assets.  What  they  paid  in  excess  and  in 
advance  was  held  by  the  company  to  some  extent  as  their  trustee 
and  for  their  benefit,  and  when  it  is  dissolved  they  have  a  claim 
upon  the  assets  in  the  nature  of  an  equitable  ownership,  which  gives 
them  a  right  beyond  that  of  mere  creditors  seeking  damages  for  a 
breach  of  contract.  To  make,  and  to  carry  out  contracts  of  in- 
surance is  the  very  object  of  the  corporation,  and  the  sole  purpose 
of  and  excuse  for  its  existence.  The  State  gives  it  life  for  that  end, 
and  takes  it  away  when  the  result  is  not  reached.  It  watches  it 
during  life  to  see  that  it  fulfils  the  purpose  for  which  it  was  created, 
and  buries  it  when  that  purpose  fails.  And  as  in  the  creation  of 
the  company,  and  in  its  supervision  and  control  the  rights  of  the 
policy-holders  and  their  safety  are  the  paramount  considerations, 
so  they  remain  paramount  when  corporate  death  is  inflicted.  The 
blow  is  struck  in  their  interest,  and  their  equitable  claim  upon  the 
assets  is  evident  and  strong.  In  distributing  such  assets  a  court  of 
equity  may  and  must  give  heed  to  equitable  considerations.  The 
claimant  is  not  suing  the  company  at  law,  for  the  corporation  is 
dead.  He  comes  in  collision  with  the  policy-holders  in  equity;  and 
while  he  is  found  to  have  not  even  a  just  debt  for  damages  because 
of  his  relation  to  the  company  and  the  nature  of  his  contract,  and 
therefore  no  shadow  of  an  equity  against  the  assets,  the  policy- 
holders resisting  his  claim  are  protected  by  an  equity  not  to  be  over- 
looked or  disregarded. 

Other  considerations  of  very  serious  import  were  adverted  to  by 
the  courts  below,  which  we  need  not  here  discuss.  Wliat  has  been 
said  sufficiently  indicates  our  opinion  that  no  error  was  committed 
in  rejecting  the  claim  of  the  general  agent. 

The  order  should  be  affirmed. 

All    concur.  Order    affirmed.^ 

^  Malcolmson  v.  Wappoo  Mills,  88  Fed.  Rep,  680;  Lenoir  v.  LinviUe  Improvement 
Co.,  126  N.  C.  922,  ace.  Spader  v.  Mural  Decoration  Co.,  47  N.  J.  Eq.  18;  BoUes  v. 
Crescent  Drug  &  Chemical  Co.,  53  N.  J.  Eq.  614;  Rosenbaum  v.  United  States  Credit 
Co..  61  N.  J.  L.  543,  contra. 

It  a  corporation  voluntarily  winds  up  business  it  is  liable  for  failing  to  fulfil  its 
contracts.  Yelland's  Case,  L.  R.  4  Eq.  350;  Re  London,  &c.  Co.,  L.  R.  7  Eq.  550; 
Re  Dale,  43  Ch.  D.  255:  LoveU  v.  St.  Louis  Ins  Co.,  Ill  U.  S.  264;  Kalkhoff  ?;.  Nelson, 
60  Minn.  284;  Tiffin  Glass  Co.  v.  Stoehr,  54  Ohio  St.  157;  Seipel  v.  Insurance  Co. 
84  Pa.  47;  Potts  v.  Rose  Valley  Mills,  167  Pa.  310.  See  also  Ex  parte  Maclure,  L.  R. 
5  Ch.  737;  Ritter  v.  Mutual  Life  Ins.  Co.,  169  U.  S.  139.  See  further  3  WiUiston,  Con- 
tracts, §  1960. 


758  THE   KRONPRINZESSIN    CECILIE  [CHAP.   V 


THE    KKONPKINZESSIl^   CECILIE 

United  States   Supreme  Court,  April   16,   May   7,   1917 
[Reported  in  244  United  States,  12] 

Mk.  Justice  Holmes  delivered  the  opinion  of  the  court. 

This  writ  was  granted  to  review  two  decrees  that  reversed  decrees 
of  the  District  Court  dismissing  libels  against  the  Steamship  Kron- 
prinzessin  Cecilie.  238  Fed.  Kep.  668.  228  Fed.  Kep.  946,  965.  The 
libels  alleged  breaches  of  contract  by  the  steamship  in  turning  back 
from  her  voyage  from  ]^ew  York  and  failing  to  transport  kegs  of 
gold  to  their  destinations,  Plymouth  and  Cherbourg,  on  the  eve 
of  the  outbreak  of  the  present  war.  The  question  is  whether  the 
turning  back  was  justified  by  the  facts  that  we  shall  state. 

The  Kronprinzessin  Cecilie  was  a  German  steamship  owned  by 
the  claimant,  a  German  corporation.  On  July  27,  1914,  she  received 
the  gold  in  'New  York  for  the  above  destinations,  giving  bills  of 
lading  in  American  form,  referring  to  the  Harter  Act,  and,  we 
assume,  governed  by  our  law  in  .respect  of  the  justification  set  up. 
Early  on  July  28  she  sailed  for  Bremerhaven,  Germany,  via  the 
mentioned  ports,  having  on  board  1892  persons,  of  whom  867 
were  Germans,  passengers  and  crew;  406,  Austrians;  151,  Russians; 
8,  Bulgars;  7,  Serbs;  1,  Roumanian;  14,  English;  7,  French;  354, 
Americans ;  and  two  or  three  from  Italy,  Belgium,  Holland,  &c.  She 
continued  on  her  voyage  until  about  11.05  P.  M.  Greenwich  time. 
July  31,  when  she  turned  back;  being  then  in  46°  46'  ]Sr.  latitude 
and  30°  21'  W.  longitude  from  Greenwich  and  distant  from  Plym- 
outh about  1070  nautical  miles.  At  that  moment  the  master  knew 
that  war  had  been  declared  by  Austria  against  Servia  (July  28), 
that  Germany  had  declined  a  proposal  by  Sir  Edward  Grey  for  a 
conference  of  Ambassadors  in  London;  that  orders  had  been  issued 
for  the  German  fleet  to  concentrate  in  home  Avaters;  that  British 
battle  squadrons  were  ready  for  service;  that  Germany  had  sent  an 
ultimatum  to  Russia,  and  that  business  was  practically  suspended 
on  the  London  Stock  Exchange.  He  had  proceded  about  as  far  as 
he  could  with  coal  enough  to  return  if  that  should  prove  needful, 
and  was  of  opinion  that  the  proper  course  was  to  turn  back.  He 
reached  Bar  Harbor,  Maine,  on  August  4,  avoiding  New  York  on 
account  of  supposed  danger  from  British  cruisers,  and  returned  the 
gold  to  thc!  parties  entitled  to  the  same. 

On  July  31  tlu^  Gc^rman  Emperor  declared  a  state  of  war,  and 
the  directors  of  the  company  at  Bremen,  knowing  that  that  had 
been  or  forthwith  would  be  declared,  sent  a  wireless  message  to  the 
mastr-r :  "War  has  broken  out  with  England,  France  and  Russia. 
Return  to  New  York."  Thereupon  he  turned  l)nck.  Tbe  probability 
was  the  steamship,  if  not  interfered  with  or  prevented  by  accident 


SECT.    Ill]  THE    KRONPRINZESSIN    CECILIE  759 

or  unfavorable  weather,  would  have  reached  Plymouth  between 
11  P.  M.  August  2,  and  1  A.  M.  August  3,  and  would  have  delivered 
the  gold  destined  for  England  to  be  forwarded  to  London  by 
6  A.  M.,  August  3.  On  August  first  at  9.40  P.  M.,  before  the  earliest 
moment  for  probably  reaching  Plymouth,  had  the  voyage  kept  on, 
the  master  received  a  wireless  message  from  the  German  Imperial 
Marine  Office :  "Threatening  danger  of  war.  Touch  at  no  port  [of] 
England,  France,  Russia."  On  the  same  day  Germany  declared  war 
on  Russia.  On  August  2,  Germany  demanded  of  Belgium  passage 
for  German  troops,  and  seized  two  English  vessels  with  their  cargoes. 
Explanations  were  offered  of  the  seizures,  but  the  vessels  were  de- 
tained. The  German  Army  entered  Luxembourg,  and  there  were 
skimishes  with  French  troops.  On  August  3  Germany  was  at  war 
with  France,  and  at  11  P.  M.,  on  August  4,  with  England.  On 
August  4  some  German  vessels  were  detained  by  England,  and  early 
on  the  fifth  were  seized  as  prize,  e.  g.  Prinz  Adalbert  [1916]  P.  81. 
JSTo  general  history  of  the  times  is  necessary.  It  is  enough  to  add 
that  from  the  moment  Austria  declared  war  on  Servia  the  great 
danger  of  a  general  war  was  known  to  all. 

With  regard  to  the  principles  upon  which  the  obligations  of  the 
vessel  are  to  be  determined  it  is  plain  that,  although  there  was  a  bill 
of  lading  in  which  the  only  exception  to  the  agreement  relied  upon 
as  relevant  was  "arrest  and  restraint  of  princes,  rulers  or  people," 
other  exceptions  necessarily  are  to  be  implied,  at  least  unless  the 
phrase  restraint  of  princes  be  stretched  beyond  its  literal  intent. 
The  seeming  absolute  confinement  to  the  words  of  an  express  con- 
tract indicated  by  the  older  cases  like  Paradine  v.  Jane,  Aleyn,  26, 
has  been  mitigated  so  far  as  to  exclude  from  the  risks  of  contracts  for 
conduct  (other  than  the  transfer  of  fungibles  like  money),  some,  at 
least,  which,  if  they  had  been  dealt  with,  it  cannot  be  believed  that 
the  contractee  would  have  demanded  or  the  contractor  would  have 
assumed.  Baily  v.  Crespigny,  L.  R.  4  Q.  B.  180,  185.  Familiar 
examples  are  contracts  for  personal  service,  excused  by  death,  or  con- 
tracts depending  upon  the  existence  of  a  particular  thing.  Taylor  v. 
Caldwell,  8  Best  &  Smith,  826,  839.  It  has  been  held  that  a  laborer 
was  excused  by  the  prevalence  of  cholera  in  the  place  where  he 
had  undertaken  to  work.  Lakeman  v.  Pollard,  43  Maine,  463.  The 
same  principles  apply  to  contracts  of  shipment.  If  it  had  been 
certain  that  the  vessel  would  have  been  seized  as  prize  upon  reaching 
England  there  can  be  no  doubt  that  it  would  have  been  warranted  in 
turning  back.  See  Mitsui  &  Co.,  Limited,  ii.  Watts,  Watts  &  Co., 
Limited,  [1916]  2  K.  B.  826,  845.i     The  Styria,  186  U.  S.  1.     The 

*  In  this  case  the  defendants,  shipowners,  had  agreed  to  provide  a  steamer  to 
proceed  to  the  Sea  of  Azoff  and  load  a  cargo  and  carry  it  to  a  port  in  Japan.  The  load- 
ing was  not  to  commence  before  September  1,  1914,  and  the  charterers  had  the  option 
of  cancellation  if  the  steamer  was  not  ready  to  receive  cargo  before  noon  on  Septem- 
ber 20th.  The  exceptions  from  liability  in  the  charter  included  "arrests  and  restraint 
of  princes,  rulers,  and  people."    On  September  1,  the  defendants  declined  to  name  a 


760  THE    KRONPRINZESSIN    CECILIE  [CHAP.   V 

owner  of  a  cargo  upon  a  foreign  ship  cannot  expect  the  foreign 
master  to  run  greater  risks  than  he  would  in  respect  to  goods  of  his 
own  nation.  The  Teutonia,  L.  K.  4  P.  C.  171.  The  San  Roman, 
L.  R.  5  P.  C.  301,  307.  And  when  we  add  to  the  seizure  of  the 
vessel  the  possible  detention  of  the  German  and  some  of  the  other 
passengers  the  proposition  is  doubly  clear.  Cases  deciding  what  is 
and  what  is  not  within  the  risk  of  an  insurance  policy  throw  little 
light  upon  the  standard  of  conduct  to  be  applied  in  a  case  like  this. 
But  we  see  no  ground  to  doubt  that  Chief  Justice  Marshall  and 
Chief  Justice  Kent  would  have  concurred  in  the  views  that  we 
express.  Oliver  v.  Maryland  Insurance  Co.,  7  Cranch,  487,  493. 
Craig  V.  United  Insurance  Co.,  6  Johns.  226,  250,  253.  See  also 
British  &  Foreign  Marine  Ins.  Co.,  Limited,  v.  Samuel  Sanday 
&  Co.,  [1916]  A.  C.  650. 

What  we  have  said  so  far  we  hardly  suppose  to  be  denied.  But 
if  it  be  true  that  the  master  was  not  bound  to  deliver  the  gold  in 
England  at  the  cost  of  capture  it  must  follow  that  he  was  entitled 
to  take  reasonable  precautions  to  avoid  that  result,  and  the  question 
narrows  itself  to  whether  the  joint  judgment  of  the  master  and  the 
owners  in  favor  of  return  was  wrong.  It  was  the  opinion  very 
generally  acted  upon  by  German  shipowners.  The  order  from  the 
Imperial  Marine  Office  if  not  a  binding  command  at  least  shows  that 
if  the  master  had  remained  upon  his  course  one  day  longer  and  had 
received  the  message  it  would  have  been  his  duty  as  a  prudent  man  to 
turn  back.  But  if  he  had  waited  till  then  there  would  have  been  a 
question  whether  his  coal  would  hold  out.  Moreover  if  he  would  have 
been  required  to  turn  back  before  delivering,  it  hardly  could  change 
his  liability  that  he  prophetically  and  rightly  had  anticipated  the 
absolute  requirement  by  twenty-four  hours.  We  are  wholly  unable  to 
accept  the  argument  that  although  a  shipowner  may  give  up  his 


steamer,  giving  as  a  reason  that  the  British  Government  had  prohibited  steamers 
from  going  to  the  Black  Sea  to  load.  The  Government  in  fact  had  issued  no  such 
prohibition.  The  plaintiffs  accepted  the  repudiation  as  a  breach  and  were  unable 
to  charter  another  steamer.  The  Turkish  Government  closed  the  Dardanelles  on 
September  26,  or  27th.  If  the  defendants  had  sent  a  steamer  in  time  to  begin  to 
load  on  September  20th,  the  steamcsr  could  not  have  reached  the  Dardanelles  on  her 
voyage  to  Japan  before  the  passage  was  closed.  The  defendants  were  held  liable  on 
the  ground  that  on  September  1st,  there  was  no  existing  restraint  of  princes,  nor  did 
a  rea.sonable  apprehension  which  turned  out  to  be  well  founded  that  the  Dardanelles 
would  be  clos(!d  before  the  steamer  could  pass  through  on  her  voyage  to  Japan,  justify 
thf;  defendants  in  refusing  to  send  a  steamer.  Sul)stantial  damages  were  allowed,  it 
}>eing  fowrifl  .'is  a  fact  that  it  was  customary  to  insure  against  such  risks  and,  there- 
fore, that  the  plaintilTs  would  have  received  insurance  money,  if  the  defendants  had 
cndfiavored  to  fulfil  their  contract.  The  liability  of  the  defendants  was  affirmed  in 
Watts,  Watts  .^  fo.,  Limited,  v.  Mitsui  &  Co.  Limited,  [1917]  Appeal  Cases,  227. 

In  E'iaggio  v.  .Somerville,  110  Miss,  ft,  it  was  held  that  the  owners  of  a  vessel  were 
boiinfl  to  transport  a  cargo  from  the  Gulf  of  Mexico  to  Italj',  as  provided  in  a  charter 
purty,  notwithstanding  the  risk  of  sinking  by  submarines.  The  contract  was  made 
riuring  the  European  war,  but  before  Germany  began  unrestricted  submarine  warfare. 
The  dcfendantH  r<'i)iidiat(^d  the  contract  in  I'^ebniary,  1917,  after  Germany's  declara- 
tion of  her  itit<riti')ii  to  wage  Hiich  warfare;.  Tlx;  court  found,  commerce  was  not 
gouorally  miBpendod  on  tliut  account. 


SECT.    Ill]  KRELL    V.    HENRY  761 

voyage  to  avoid  capture  after  war  is  declared  he  never  is  at  liberty 
to  anticipate  war.  In  this  case  the  anticipation  was  correct,  and 
the  master  is  not  to  be  put  in  the  wrong  by  nice  calculations  that  if 
all  went  well  he  might  have  delivered  the  gold  and  escaped  capture  by 
the  margin  of  a  few  hours.  In  our  opinion  the  event  shows  that  he 
acted  as  a  prudent  man. 

We  agree  with  the  counsel  for  the  libellants  that  on  July  27  neither 
party  to  the  contract  thought  that  it  would  not  be  performed.  It 
was  made  in  the  usual  form  and,  as  we  gather,  charged  no  unusual  or 
additional  sum  because  of  an  apprehension  of  war.  It  follows,  in 
our  opinion,  that  the  document  is  to  be  construed  in  the  same  way 
that  the  same  regular  printed  form  would  be  construed  if  it  had 
been  issued  when  no  apprehensions  were  felt.  It  embodied  simply 
an  ordinary  bailment  to  a  common  carrier  subject  to  the  implied 
exceptions  which  it  would  be  extravagant  to  say  were  excluded 
because  they  were  written  in.  Business  contracts  must  be  construed 
with  business  sense,  as  they  naturally  would  be  understood  by  intel- 
ligent men  of  affairs.  The  case  of  The  Styria,  186  U.  S.  1,  although 
not  strictly  in  point  tends  in  the  direction  of  .the  principles  that 
we  adopt. 

Decree  reversed. 

Mr.  Justice  Pitney  and  Mr.  Justice  Clarke  dissent,  upon 
grounds  expressed  in  the  opinions  delivered  by  Circuit  Judges  Dodge 
and  Bingham  in  the  Circuit  Court  of  Appeals  —  238  Fed.  Eep.  668.^ 


KRELL  V.  HENRY 

In  the  Court  of  Appeal,  July  13-August  11,  1903 

[Reported  in  [1903]  2  King's  Bench,  740] 

By  a  contract  in  writing  of  June  20,  1902,  the  defendant  agreed 
to  hire  from  the  plaintiff  a  flat  in  Pall  Mall  for  June  26  and  27, 
on  which  days  it  had  been  announced  that  the  coronation  proces- 
sions would  take  place  and  pass  along  Pall  Mall.  The  contract  con- 
tained no  express  reference  to  the  coronation  procession,  or  to  any 
other  purpose  for  which  the  flat  was  taken.  A  deposit  was  paid 
when  the  contract  was  entered   into.     As  the  processions  did   not 

1  The  grounds  on  which  the  Circuit  Court  of  Appeals  held  the  defendant  liable 
were,  that  the  act  of  the  master  in  turning  his  vessel  back  on  receipt  of  a  message 
from  the  owner  that  war  had  broken  out  could  not  be  treated  as  an  exercise  of  the 
master's  discretion,  and  the  statement  that  war  had  broken  out  was  false.  More- 
over, the  vessel  had  accepted  the  shipment  under  a  contract  which  exonerated  the 
owner  for  loss  occasioned  by  arrest  and  restraint  of  princes,  rulers,  or  people;  and  no 
further  exception  of  similar  character  could  be  implied.  Furthermore,  the  contract 
was  made  when  the  imminence  of  war  was  known  to  the  parties,  and  the  specie  might 
have  been  delivered  eleven  hours  before  Germany  was  at  war  with  France,  and  more 
than  twenty-four  hours  before  Germany  was  at  war  with  England. 


762  KRELL    V.    HENRY  [CHAP.   V 

take  place  on  the  days  originally  fixed,  the  defendant  declined  to 
pay  the  balance  of  the  agreed  rent : 

Aug.  11.  Yaughan  Williams,  L.  J.,  read  the  following  written 
judgment :  The  real  question  in  this  case  is  the  extent  of  the| 
application  in  English  law  of  the  principle  of  the  Roman  law  which 
has  been  adopted  and  acted  on  in  many  English  decisions,  and 
notably  in  the  case  of  Taylor  v.  Caldwell.^  That  case  at  least 
makes  it  clear  that  ''where,  from  the  nature  of  the  contract,  it  ap- 
pears that  the  parties  must  from  the  beginning  have  known  that  it 
could  not  be  fulfilled  unless,  when  the  time  for  the  fulfilment  of 
the  contract  arrived,  some  particular  specified  thing  continued  to 
exist,  so  that  when  entering  into  the  contract  they  must  have  con- 
templated such  continued  existence  as  the  foundation  of  what  was 
to  be  done;  there,  in  the  absence  of  any  express  or  implied  warranty 
that  the  thing  shall  exist,  the  contract  is  not  to  be  considered  a  posi- 
tive contract,  but  as  subject  to  an  implied  condition  that  the  parties 
shall  be  excused  in  case,  before  breach,  performance  becomes  im- 
possible from  the  perishing  of  the  thing  without  default  of  the  con- 
tractor." Thus  far  it  is  clear  that  the  principle  of  the  Roman 
law  has  been  introduced  into  the  English  law.  The  doubt  in  the 
present  case  arises  as  to  how  far  this  principle  extends.  The  Roman 
law  dealt  with  ohligationes  de  certo  corpore.  Whatever  may  have 
been  the  limits  of  the  Roman  law,  the  case  of  Nickoll  v.  Ashton^ 
makes  it  plain  that  the  English  law  applies  the  principle  not 
only  to  cases  where  the  performance  of  the  contract  becomes  im- 
possible by  the  cessation  of  existence  of  the  thing  which  is  the  sub- 
ject matter  of  the  contract,  but  also  to  cases  where  the  event  which 
renders  the  contract  incapable  of  performance  is  the  cessation  or  non- 
existence of  an  express  condition  or  state  of  things,  going  to  the 
root  or  the  contract,  and  essential  to  its  performance.^  It  is  said, 
on  the  one  side,  that  the  specified  thing,  state  of  things,  or  condi- 
tion the  continued  existence  of  which  is  necessary  for  the  fulfilment 
of  the  contract,  so  that  the  parties  entering  into  the  contract  must 
have  contemplated  the  continued  existence  of  that  thing,  condition, 
or  state  of  things  as  the  foundation  of  what  was  to  be  done  under 
the  contract,  is  limited  to  things  which  are  either  the  subject-matter 
of  the  contract  or  a  condition  or  state  of  things,  present  or  antici- 
pated, which  is  expressly  mentioned  in  the  contract.  But,  on  the 
other  side,  it  is  said  that  the  condition  or  state  of  things  need  not 
be  expressly  specified,  but  that  it  is  sufficient  if  that  condition  or 
state  of  things  clearly  appears  by  extrinsic  evidence  to  have  been 
assumed  by  the  parties  to  be  the  foundation  or  basis  of  the  con- 
tract,  and   the  event  which   causes   the   impossibility  is   of   such   a 

>  3  B.  *  S.  S2fi. 
'  [10011  2  K.  ]'..  120. 

»  H  WilliMtf.M,  ContractH,  §1961;  Hackfeld  v.  Castle.  61  Cal.  Dec.  721,  198  Pac. 
Rop.  1011,  ace. 


SECT.    Ill]  KRELL    V.    HENRY  763 

character  that  it  cannot  reasonably  be  supposed  to  have  been  in 
the  contemplation  of  the  contracting  parties  when  the  contract  was 
made.  In  such  a  case  the  contracting  parties  will  not  be  held  bound 
by  the  general  words  which,  though  large  enough  to  include,  were 
not  used  with  reference  to  a  possibility  of  a  particular  event  ren- 
dering performance  of  the  contract  impossible.  I  do  not  think  that 
the  principle  of  the  civil  law  as  introduced  into  the  English  law 
is  limited  to  cases  in  which  the  event  causing  the  impossibility  of 
performance  is  the  destruction  or  non-existence  of  some  thing  which 
is  the  subject-matter  of  the  contract  or  of  some  condition  or  state 
of  things  expressly  specified  as  a  condition  of  it.  I  think  that  you 
first  have  to  ascertain,  not  necessarily  from  the  terms  of  the  con- 
tract, but,  if  required,  from  necessary  inferences,  drawn  from  sur- 
rounding circumstances  recognized  by  both  contracting  parties,  what 
is  the  substance  of  the  contract,  and  then  to  ask  the  question  whether 
that  substantial  contract  needs  for  its  foundation  the  assumption  of 
the  existence  of  a  particular  state  of  things.  If  it  does,  this  will 
limit  the  operation  of  the  general  words,  and  in  such  case,  if  the 
contract  becomes  impossible  of  performance  by  reason  of  the  non- 
existence of  the  state  of  things  assumed  by  both  contracting  parties 
as  the  foundation  of  the  contract,  there  will  be  no  breach  of  the 
contract  thus  limited.  JSTow  what  are  the  facts  of  the  present  case? 
The  contract  is  contained  in  two  letters  of  June  20  which  passed 
between  the  defendant  and  the  plaintiff's  agent,  Mr.  Cecil  Bisgood. 
These  letters  do  not  mention  the  coronation,  but  speak  merely  of 
the  taking  of  Mr.  KrelFs  chambers,  or,  rather,  of  the  use  of  them, 
in  the  daytime  of  June  26  and  27,  for  the  sum  of  75L,  251.  then 
paid,  balance  50?.  to  be  paid  on  the  24th.  But  the  affidavits,  which 
by  agreement  between  the  parties  are  to  be  taken  as  stating  the 
facts  of  the  case,  show  that  the  plaintiff  exhibited  on  his  premises, 
third  floor,  56A,  Pall  Mall,  an  announcement  to  the  effect  that  win- 
dows to  view  the  Royal  coronation  procession  were  to  be  let,  and 
that  the  defendant  was  induced  by  that  announcement  to  apply  to 
the  housekeeper  on  the  premises,  who  said  that  the  owner  was  will- 
ing to  let  the  suite  of  rooms  for  the  purpose  of  seeing  the  Royal  pro- 
cession for  both  days,  but  not  nights,  of  June  26  and  27.  In  my 
judgment  the  use  of  the  rooms  was  let  and  taken  for  the  purpose 
of  seeing  the  Royal  procession.  It  was  not  a  demise  of  the  rooms, 
or  even  an  agreement  to  let  and  take  the  rooms.  It  is  a  license  to 
use  rooms  for  a  particular  purpose  and  none  other.  And  in  my 
judgment  the  taking  place  of  those  processions  on  the  days  pro- 
claimed along  the  proclaimed  route,  which  passed  56A,  Pall  Mall, 
was  regarded  by  both  contracting  parties  as  the  foundation  of  the 
contract;  and  I  think  that  it  cannot  reasonably  be  supposed  to  have 
been  in  the  contemplation  of  the  contracting  parties,  when  the  con- 
tract was  made,  that  the  coronation  would  not  be  held  on  the  pro- 
claimed days,  or  the  processions  not  take  place  on  those  days  along 


764  KRELL    V.    HENRY  [CHAP.   V 

the  proclaimed  route;  and  I  think  that  the  words  imposing  on  the 
defendant  the  obligation  to  accept  and  pay  for  the  use  of  the  rooms 
for  the  named  days,  although  general  and  unconditional,  were  not 
used  with  reference  to  the  possibility  of  the  particular  contingency 
which  afterwards  occurred.  It  was  suggested  in  the  course  of  the 
argument  that  if  the  occurrence,  on  the  proclaimed  days,  of  the 
coronation  and  the  procession  in  this  case  were  the  foundation  of 
the  contract,  and  if  the  general  words  are  thereby  limited  or  quali- 
fied, so  that  in  the  event  of  the  non-occurrence  of  the  coronation  and 
procession  along  the  proclaimed  route  they  would  discharge  both 
parties  from  further  performance  of  the  contract,  it  would  follow 
that  if  a  cabman  was  engaged  to  take  some  one  to  Epsom  on  Derby 
Day  at  a  suitable  enhanced  price  for  such  a  journey,  say  \0l.,  both 
parties  to  the  contract  would  be  discharged  in  the  contingency  of 
the  race  at  Epsom  for  some  reason  becoming  impossible;  but  I  do 
not  think  this  follows,  for  I  do  not  think  that  in  the  cab  case  the 
happening  of  the  race  would  be  the  foundation  of  the  contract.  No 
doubt  the  purpose  of  the  engager  would  be  to  go  to  see  the  Derby, 
and  the  price  would  be  proportionally  high;  but  the  cab  had  no 
special  qualifications  for  the  purpose  which  led  to  the  selection  of 
the  cab  for  this  occasion.  Any  other  cab  would  have  done  as  well. 
Moreover,  I  think  that,  under  the  cab  contract,  the  hirer,  even  if  the 
race  went  off,  could  have  said,  "Drive  me  to  Epsom;  I  will  pay 
you  the  agreed  sum;  you  have  nothing  to  do  with  the  purpose  for 
which  I  hired  the  cab,"  and  that  if  the  cabman  refused  he  would 
have  been  guilty  of  a  breach  of  contract,  there  being  nothing  to 
qualify  his  promise  to  drive  the  hirer  to  Epsom  on  a  particular  day. 
Whereas  in  the  case  of  the  coronation,  there  is  not  merely  the  pur- 
pose of  the  hirer  to  see  the  coronation  procession,  but  it  is  the  cor- 
onation procession  and  the  relative  position  of  the  rooms  which  is 
the  basis  of  the  contract  as  much  for  the  lessor  as  the  hirer;  and  I 
think  that  if  the  King,  before  the  coronation  day  and  after  the  con- 
tract, had  died,  the  hirer  could  not  have  insisted  on  having  the 
rooms  on  the  days  named.  It  could  not  in  the  cab  case  be  reasonably 
said  that  seeing  the  Derby  race  was  the  foundation  of  the  contract, 
as  it  was  of  the  license  in  this  case.  Wliereas  in  the  present  case, 
whore  the  rooms  were  offered  and  taken,  by  reason  of  their  pe- 
culiar suitability  from  the  position  of  the  rooms  for  a  view  of  the 
coronation  procession,  surely  the  view  of  the  coronation  procession 
was  thf!  foundation  of  the  contract,  which  is  a  very  different  thing 
from  the  purpose  of  the  man  who  engaged  the  cab  —  namely,  to  see 
the  race  —  being  held  to  be  the  foundation  of  the  contract.  Each 
case  must  be  judged  by  its  own  circumstances.  In  each  case  one 
must  ask  oneself,  first,  what,  having  regard  to  all  the  circumstances, 
was  tlu!  fonn<hition  of  the  contract?  Secondly,  was  the  performance 
of  the  contract  prevented?  Thirdly,  was  the  event  which  prevented 
the  performance  of  tbe  contract  of  such  a  character  that  it  cannot 


SECT.    Ill]  KRELL    V.    HENRY  765 

reasonably  be  said  to  have  been  in  the  contemplation  of  the  parties 
at  the  date  of  the  contract?  If  all  these  questions  are  answered  in 
the  affirmative  (as  I  think  they  should  be  in  this  case),  I  think  both 
parties  are  discharged  from  further  performance  of  the  contract. 
I  think  that  the  coronation  procession  was  the  foundation  of  this 
(jontract,  and  that  the  non-happening  of  it  prevented  the  perform- 
ance of  the  contract;  and,  secondly,  I  think  that  the  non-happening 
of  the  procession,  to  use  the  words  of  Sir  James  Hannen  in  Baily 
V.  DeCrespigny,^  was  an  event  "of  such  a  character  that  it  cannot 
reasonably  be  supposed  to  have  been  in  the  contemplation  of  the 
contracting  parties  when  the  contract  was  made,  and  that  they  are 
not  to  be  held  bound  by  general  words  which,  though  large  enough 
to  include,  were  not  used  with  reference  to  the  possibility  of  the 
particular  contingency  which  afterwards  happened."  The  test 
seems  to  be  whether  the  event  which  causes  the  impossibility  was 
or  might  have  been  anticipated  and  guarded  against.  It  seems  diffi- 
cult to  say,  in  a  case  where  both  parties  anticipate  the  happening 
of  an  event,  which  anticipation  is  the  foundation  of  the  contract, 
that  either  party  must  be  taken  to  have  anticipated,  and  ought  to 
have  guarded  against,  the  event  which  prevented  the  performance 
of  the  contract.  In  both  Jackson  v.  Union  Marine  Insurance  Co.^ 
and  JSTickoll  v.  Ashton^  the  parties  might  have  anticipated  as  a  pos- 
sibility that  perils  of  the  sea  might  delay  the  ship  and  frustrate  the 
commercial  venture :  in  the  former  case  the  carriage  of  the  goods 
to  effect  which  the  charterparty  was  entered  into  ;  in  the  latter  case 
the  sale  of  the  goods  which  were  to  be  shipped  on  the  steamship 
which  was  delayed.  But  the  Court  held  in  the  former  case  that  the 
basis  of  the  contract  was  that  the  ship  would  arrive  in  time  to  carry 
out  the  contemplated  commercial  venture,  and  in  the  latter  that  the 
steamship  would  arrive  in  time  for  the  loading  of  the  goods  the 
subject  of  the  sale.  I  wish  to  observe  that  cases  of  this  sort  are 
very  different  from  cases  where  a  contract  or  warranty  or  repre- 
sentation is  implied,  such  as  was  implied  in  The  Moorcock,*  and 
refused  to  be  implied  in  Harmlyn  v.  Wood.^  But  The  Moorcock  * 
is  of  importance  in  the  present  case  as  shewing  that  whatever  is 
the  suggested  implication  —  be  it  condition,  as  in  this  case,  or  war- 
ranty or  representation  —  one  must,  in  judging  whether  the  impli- 
cation ought  to  be  made,  look  not  only  at  the  words  of  the  contract, 
but  also  at  the  surrounding  facts  and  the  knowledge  of  the  parties 
of  those  facts.  There  seems  to  me  to  be  ample  authority  for  this 
proposition.  Thus  in  Jackson  v.  Union  Marine  Insurance  Co.,*^  in 
the  Common  Pleas,  the  question  whether  the  object  of  the  voyage 

1  L.  R.  4  Q.  B.  185. 

2  (1873)  L.  R.  8  C.  P.  572. 

3  [1901]  2  K.  B.  126. 
«  14  P.  D.  64. 

s  [1891]  2  Q.  B.  488. 

6  L.  R.  8  C.  P.  572;    (1874)  10  C.  P.  125;   42  L.  J.  (C.  P.)  284. 


766  KRELL    V.    HENRY  [CHAP.    V 

had  been  frustrated  by  the  delay  of  the  ship  was  left  as  a  question 
of  fact  to  the  jury,  although  there  was  nothing  in  the  charterparty 
defining  the  time  within  which  the  charterers  were  to  supply  the 
cargo  of  iron  rails  for  San  Francisco,  and  nothing  on  the  face  of 
the  charterparty  to  indicate  the  importance  of  time  in  the  venture; 
and  that  was  a  case  in  which,  as  Bramwell  B.,  points  out  in  his 
judgment  at  p.  148,  Taylor  v.  Caldwell  ^  was  a  strong  authority  to 
support  the  conclusion  arrived  at  in  the  judgment  —  that  the  ship 
not  arriving  in  time  for  the  voyage  contemplated,  but  at  such  time 
as  to  frustrate  the  commercial  venture,  was  not  only  a  breach  of  the 
contract  but  discharged  the  charterer,  though  he  had  such  an  ex- 
cuse that  no  action  would  lie.  And,  again,  in  Harris  v.  Dreesman  - 
the  vessel  had  to  be  loaded,  as  no  particular  time  was  mentioned, 
within  a  reasonable  time;  and,  in  judging  of  a  reasonable  time,  the 
Court  approved  of  evidence  being  given  that  the  defendants,  the 
charterers,  to  the  knoAvledge  of  the  plaintiffs,  had  no  control  over 
the  colliery  from  which  both  parties  knew  that  the  coal  was  to  come ; 
and  that,  although  all  that  was  said  in  the  charterparty  was  that 
the  vessel  should  proceed  to  Spital  Tongue's  Spout  (the  spout  of  the 
Spital  Tongue's  Colliery),  and  there  take  on  board  from  the 
freighters  a  full  and  complete  cargo  of  coals,  and  five  tons  of  coke, 
and  although  there  was  no  evidence  to  prove  any  custom  in  the  port 
as  to  loading  vessels  in  turn.  Again  it  was  held  in  Mumford  v. 
Gething  -'  that,  in  construing  a  written  contract  of  service  under 
which  A.  was  to  enter  the  employ  of  B.,  oral  evidence  is  admissable 
to  shew  in  what  capacity  A.  was  to  serve  B.  See  also  Price  v. 
Mouat.*  The  rule  seems  to  be  that  which  is  laid  down  in  Taylor  on 
Evidence,  vol.  ii  s.  1082 :  "It  may  be  laid  down  as  a  broad  and  dis- 
tinct rule  of  law  that  extrinsic  evidence  of  every  material  fact  which 
will  enable  the  Court  to  ascertain  the  nature  and  qualities  of  the 
subject-matter  of  the  instrument,  or,  in  other  words,  to  identify  the 
persons  and  things  to  which  the  instrument  refers,  must  of  necessity 
be  received."  And  Lord  Campbell  in  his  judgment  says:  "I  am  of 
opinion  that,  when  there  is  a  contract  for  the  sale  of  a  specific  sub- 
ject-matter, oral  evidence  may  be  received,  for  the  purpose  of  shewing 
what  that  subject-matter  was,  of  every  fact  within  the  knowledge 
of  the  parties  before  and  at  the  time  of  the  contract."  Sec  per 
Campbell  C.  J.,  Macdonald  v.  Longbottom.'"'  It  seems  to  me  that  the 
language  of  Willes  J.  in  Lloyd  i\  Guibert "  points  in  the  same  direc- 
tion. T  myself  am  clearly  of  opinion  that  in  this  case,  where  we 
have  to  ask  ourselves  whether  the  object  of  the  contract  was  frus- 
trated  by  the  non-happcTung  of  the  coronation  and  its  procession 

»  .-^  B.  *  R.  R2B. 

«  (IS.W  2.S  L.  .).  (Kx.)  210. 

»  (IS.'iO)  7  C.  B.  (N.  S.~)  .^n.''). 

*  nKf)2)  11  r.  B.  (N.  R.)  r)Os. 

»  nS-W)  1  E.  <fe  E.  977,  Jit  p.  083. 

•  MKfi.'))  .35  L.  .1.  (Q.  B.)  74,75. 


SECT.    Ill]  INT.    PAPER   CO.    V.   ROCKEFELLER  767 

on  the  days  proclaimed,  parol  evidence  is  admissible  to 
skew  that  the  subject  of  the  contract  was  rooms  to  view 
the  coronation  procession,  and  was  so  to  the  knowledge  of  both 
parties.  When  once  this  is  established,  I  see  no  difficulty  what- 
ever in  the  case.  It  is  not  essential  to  the  application  of  the  prin- 
ciple of  Taylor  v.  Caldwell  ^  that  the  direct  subject  of  the  contract 
should  perish  or  fail  to  be  in  existence  at  the  date  of  performance 
of  the  contract.  It  is  sufficient  if  a  state  of  things  or  condition  ex- 
pressed in  the  contract  and  essential  to  its  performance  perishes 
or  fails  to  be  in  evidence  at  that  time.  In  the  present  case  the 
condition  which  fails  and  prevents  the  achievement  of  that  which 
was,  in  the  contemplation  of  both  parties,  the  foundation  of  the 
contract,  is  not  expressly  mentioned  either  as  a  condition  of  the 
contract  or  the  purpose  of  it;  but  I  think  for  the  reasons  which  I 
have  given  that  the  principle  of  Taylor  v.  Caldwell  ^  ought  to  be 
applied.  This  disposes  of  the  plaintiff's  claim  for  50L  unpaid 
balance  of  the  price  agreed  to  be  paid  for  the  use  of  the  rooms. 
The  defendant  at  one  time  set  up  a  cross-claim  for  the  return  of  the 
251.  he  paid  at  the  date  of  the  contract.  As  that  claim  is  now  with- 
drawn it  is  unnecessary  to  say  anything  about  it.  I  have  only  to 
add  that  the  facts  of  this  case  do  not  bring  it  within  the  principle 
laid  down  in  Stubbs  v.  Holywell  Ey.  Co.-;  that  in  the  case  of 
contracts  falling  directly  within  the  rule  of  Taylor  v.  CaldwelP  the 
subsequent  impossibility  does  not  affect  rights  already  acquired, 
because  the  defendant  had  the  whole  of  June  24  to  pay  the  balance, 
and  the  public  announcement  that  the  coronation  and  processions 
would  not  take  place  on  the  proclaimed  days  was  made  early  on  the 
morning  of  the  24th,  and  no  cause  of  action  could  accrue  till  the 
end  of  that  day.     I  think  this  appeal  ought  to  be  dismissed.* 


Il^TEENATIONAL    PAPER    COMPANY,    Respondent,    v. 
WILLIAM    ROCKEFELLER,    Appellant 

New  York  Supreme  Court,  Appellate  Division,  March  4,  1914 

[Reported  in  161  New   York  Appellate  Division,   180] 

Kellogg,  J. :  The  action  is  brought  to  recover  damages  on  account 
of  the  failure  of  the  defendant  to  deliver  pulp  wood  as  agreed. 
The  agreement  between  the  parties,  dated  July  5,  1899,  "Witnesseth: 
That  Whereas,  William  G.  Rockefeller  has  entered  into  a  contract 
with  the  Kingsley  Lumber  Company,  dated  June  9,  1899,  for  the 
purchase  of  certain  timber  lands  and  property  in  Eranklin  County, 

1  3  B.  &  S.  826. 

2  (1867)  L.  R.  2  Ex.  311. 

3  3  B.  &  S.  826. 

^  The  statement  of  facts  has  been  abbreviated  and  short  concurring  opinions  of 
Romer  and  Stirling,  L.JJ.  have  been  omitted. 


768  INT.    PAPER    CO.    V.   ROCKEFELLER  [CHAP.   V 

]^ew  York,  therein  more  particularly  described,   and  has  assigned 
the  same  to  the  party  of  the  first  part. 

''And  Whereas,  the  party  of  the  second  part  is  desirous  of  pur- 
chasing wood  now  on  said  lands  from  the  party  of  the  first  part, 
which  the  latter  is  willing  to  sell  if  he  acquires  the  title  to  the  said 
lands  under  the  said  contract. 

"Now,  therefore,  the  parties  hereto,  in  consideration  of  the 
premises,  and  of  the  sum  of  one  dollar  by  each  to  the  other  in  hand 
paid,"  etc. 

It  then  provides  that  if  the  defendant  acquires  the  land  he 
agrees  to  sell  and  deliver  on  the  cars,  at  the  mills  of  the  plain- 
tiff at  Cadyville,  during  the  year  1899,  6,000  cords  of  wood, 
and  during  each  of  the  next  five  years  from  January  1,  1900, 
to  January  1,  1905,  not  less  than  10,000  cords  of  woods  per 
year,  with  the  right  to  the  plaintiff  to  require  an  additional 
amount  in  any  year,  not  to  exceed  2,000  cords,  by  giving  the  notice 
required.  The  wood  was  to  be  cut  from  live  spruce  trees. 
Deliveries  for  the  year  1889  were  to  commence  not  earlier  than 
October  first  and  continue  on  an  average  of  about  1,000  cords  a  month 
"after  connection  has  been  established  by  the  Chateaugay  Eailroad 
Company."  In  the  successive  five  years  deliveries  were  to  be  on  the 
average  about  800  to  1,000  cords  of  wood  a  month,  commencing 
January  1,  1900.  The  plaintiff  agreed  "to  purchase  and  accept 
the  said  wood  as  hereinbefore  provided,  and  to  pay  for  the  same" 
five  dollars  and  fifty  cents  per  cord. 

The  defendant  did  not  in  any  year  deliver  the  amount  of  wood 
stated.  In  1899  no  wood  was  delivered.  In  1900  there  was  a 
deficiency  of  4,956.75  cords;  in  1901  of  5,679.86  cords;  in  1902  of 
5,597.75  cords;  in  1903  of  7,999.01  cords;  in  1904,  giving  credit 
for  the  deliveries  after  that  year,  the  deficiency  was  3,511.87  cords. 
The  defendant  has  in  fact  delivered  not  quite  one-half  the  amount 
of  wood  required.  In  the  year  1903,  the  particular  time  of  year 
not  appearing,  more  than  one-half  of  the  lands  referred  to  in  the 
contract,  the  part  not  cut,  was  burned  over  and  substantially  all 
the  spruce  killed  by  fire.  Aside  from  the  wood  delivered  to  the 
plaintiff  there  remains  about  550  cords  upon  the  top  of  the  high 
mountain  which  could  have  been  cut  and  furnished  as  pulp  Avood, 
but  the  expense  of  obtaining  and  delivering  it  would  have  been 
about  twenty  dollars  a  cord. 

The  contract  having  been  executed  under  seal,  the  plaintiff's 
remedy  is  not  barred  by  the  Statute  of  Limitations.  The  de- 
fendant Imving  defaulted  in  delivering  the  wood  at  Cadyville,  the 
mcfisnr'^  of  damnges  was  the  difference  between  the  contract  price 
and  tlic  prico  at  which  wood  could  bo  purchased  or  procured  at 
CfidyA'illf.  It  is  evident  that  tlierc  was  no  market  at  or  near  Cady- 
ville at  wliif'b  tbc  large  quantities  of  wood  required  to  fulfill  the  con- 
tract coiiM  he  bought,  iind  it  became  necessary  to  purchase  a  part  of 


SECT.    Ill]  INT.    PAPER    CO.    V.    ROCKEFELLER  769 

it  in  Canada,  which  apparently  was  the  next  most  favorable  market. 
The  charge  placed  the  matter  of  damages  before  the  jury  in  a 
manner  not  prejudicial  to  the  defendant.  The  defendant  was  en- 
titled to  show  his  understanding  at  the  time  he  executed  the 
contract,  of  the  amount  of  green  spruce  upon  the  tract.  This 
might  have  a  bearing  upon  the  interpretation  of  the  contract,  and 
might  explain  the  fact  that  some  spruce  from  the  tract,  during 
the  continuance  of  the  contract,  was  sold  to  others. 

The  difficulty  arises  with  reference  to  the  contention  of  the 
defendant  that  the  destruction  of  the  green  spruce  by  fire  excused  him 
from  making  deliveries  thereafter.  Clearly  he  is  liable  for  all 
deficiencies  occuring  prior  to  the  fire.  The  contract  was  made 
under  the  following  circumstances :  In  1899  the  De  Bar  mountain 
tract,  containing  about  16,000  acres,  belonging  to  the  Kingsley 
Lumber  Company,  was  for  sale.  It  was  woodland,  with  a  large 
quantity  of  growing  spruce.  It  was  connected  by  a  spur  with  the 
!N"ew  York  Central  railroad,  a  broad-gauge  road,  and  near  the 
Central  railroad  at  that  point  was  the  Chateaugay  railroad,  a  narrow- 
gauge  road.  From  the  lands  to  the  Cadyville  mill  by  the  Central 
road  was  a  long  and  circuitous  route;  by  the  Chateaugay  road  it  was 
substantially  a  direct  line.  The  accessibility  of  woodland  to  a 
railroad  connection,  and  the  freight  charges,  are  an  important  element 
in  furnishing  pulp  wood  to  a  given  mill.  The  defendant  owned  other 
spruce  lands  in  Franklin  county,  upon  which  no  lumbering  was 
being  done  except  the  cutting  and  marketing  of  wood  which  had  been 
killed  by  fires.  These  lands  were  about  30  miles  away  in  an  air  line, 
about  100  miles  by  rail,  and  lumbering  from  them  for  the  Cady^dlle 
miill  would  make  necessary  the  transfer  of  pulp  wood  from  a  broad- 
gauge  to  a  narrow-gauge  car  in  order  to  use  the  Chateaugay  road; 
otherwise  it  would  be  necessary  to  carry  it  a  much  greater  distance. 

One  Hibbard  applied  to  the  plaintiff  in  1899,  informing  it  that 
he  was  contemplating  purchasing  the  Kingsley  lands,  and  proposed 
a  pulp  wood  contract.  ISTegotiations  proceeded  between  them  which 
finally  resulted  in  the  contract  in  question,  which  was  prepared  by 
Hibbard  and  was  executed  by  the  defendant  and  the  plaintiff.  The 
defendant  had  nothing  to  do  with  the  plaintiff  in  the  making  of  the 
contract  and  had  made  no  examination  of  the  property.  Hibbard  was 
supposed  to  have  an  interest  in  the  De  Bar  mountain  tract,  and  was  to 
take  charge  of  the  management  of  it  and  the  getting  out  of  the 
pulp  wood.  He  was  to  receive  one-third  of  the  profit  and  the  de- 
fendant two-thirds  in  addition  to  interest  upon  his  investment. 
It  does  not  appear  that  Hibbard  and  the  defendant  had  any  other 
relations  except  with  reference  to  these  lands,  or  that  Hibbard  was 
interested  in  any  other  pulp  wood  or  pulp  wood  lands.  The  lands 
upon  which  green  spruce  was  growing  in  the  territory  fairly  trib- 
utary to  Cadwille  were  owned  principally  by  the  State  as  a 
part  of  the  Forest  Preserve,  by  the  plaintiff  and  by  parties  with 

25 


770  INT.    PAPER    CO.    V.   ROCKEFELLER  [CHAP.   V 

whoin  the  plaintiff  had  outstanding  contracts.     Apparently,   aside 

from  the  Kingsley  lands,  there  were  no  other  lands  from  which  the 

large  quantity  of  pulp  wood  agreed  to  be  furnished  by  the  contract 

could  be  supplied  by  defendant  in  the  territory  naturally  tributary 

to  the  Cadyville  mill  by  the  Chateaugay  railroad. 

!        The  contract  by  its  terms  is  conditional  upon  the  defendant's  ac- 

;    quiring    the    Kingsley    lands,    but    the    plaintiff    contends    it    is    a 

i   reasonable  inference  that   if  the  defendant   acquired  the  Kingsley 

^   lands  he  was  then  willing  to  contract  absolutely  for  the  delivery 

]    of  the  wood  and  that  the  contract  absolutely  does  not  show  that  the 

I    wood  was  to  be  taken  from  these  lands. 

While  not  free  from  doubt,  it  seems  to  me  that  it  was  contemplated 
that  the  wood  to  be  furnished  was  to  be  cut  on  the  Kingsley  lands. 
The  statement  that  the  plaintiff  was  desirous  of  purchasing  the 
wood  now  on  the  lands  and  that  the  defendant  was  willing  to  sell 
it  if  he  acquired  the  lands;  the  fact  that  the  contract  was  condi- 
tional upon  the  purchase  and  that  the  first  deliveries  in  1899  were 
dependent  upon  the  connection  with  the  Chateaugay  road  which  came 
within  a  A^ery  short  distance  but  would  not  immediately  serve  any 
other  wood  lands,  and  the  fact  that  Hibbard  was  the  moving  spirit 
in  the  matter,  was  understood  to  be  the  party  getting  out  the  wood  and 
apparently  had  no  other  relations  with  the  defendant  than  in  lum- 
bering this  tract,  indicate  that  the  parties  had  in  mind,  in  making 
the  contract,  the  lumbering  of  this  tract.  We  need  not  say  that 
the  defendant  could  not  have  furnished  live  wood  of  equal  quality 
from  other  lands,  but  the  contract,  read  in  connection  with  the 
known  facts,  shows  the  source  from  which  the  parties  contemplated 
the  wood  should  be  furnished,  and  when  the  source  is  destroyed 
the  defendant  is  excused  from  further  performance.  The  de- 
fendant did  not  contract  to  deliver  the  wood  unless  he  acquired 
the  Kingsley  lands.  If  all  the  wood  upon  the  Kingsley  lands  had  been 
destroyed  by  fire  immediately  after  the  contract  was  executed,  the 
parties  would  have  been  in  substantially  the  same  position  they  would 
have  occupied  if  the  defendant  had  not  acquired  the  lands.  The 
real  reason  which  induced  the  contract  and  upon  which  it  depended 
would  have  failed. 

In  an  undated  letter  from  Hibbard  to  the  defendant,  which  was 
apparently  received  about  December  26,  1899,  he  refers  to  the  con- 
tract as  one  "for  wood  from  the  De  Bar  Mountain  tract  for  the  Cady- 
villf  Mill."  Oil  October  22,  1901,  tbc  i)laiiitiff  wrote  to  the  defendant 
couiplaiiiiiig  that  some  spruce  logs  had  been  sold  from  the  lands, 
and  continued :  "We  entered  into  the  agreement  with  Mr.  Hibbard 
with  the  unflorstaiidiiig  that  we  Avere  to  have  all  the  spruce  wood  on 
this  land,  although  it  was  not  sjxicifically  stated  that  he  should 
not  take  u  .sjiiall  quantity  of  same  for  timber  purposes.  To  the 
best  of  my  judginerit,  you  will  not  have  on  this  land  any  more  spruce 
wood   than   the  contract  calls  for.     I   simply  call   this  matter  to 


SECT.    Ill],        MARKS   REALTY    CO.    V.    HERMITAGE    CO.  771 

your  attention  thinking  possibly  you  do  not  really  understand  the 
conditions  of  the  contract  as  they  are  being  carried  out  by  your 
representative." 

Under  all  the  circumstances  it  must  be  considered  that  the  de- 
liveries of  the  pulp  wood  from  time  to  time  were  conditional  upon  the 
continued  existence  of  the  green  spruce  upon  the  lands  not  cut  over. 
(Buffalo  &  L.  Land  Co.  v.  Bellevue  L.  &  I.  Co.,  165  N.  Y.  247; 
Dexter  v.  Norton,  47  id.  62;  Dolan  v.  Rodgers,  149  id.  489;  Herter 
V.  Mullen,  159  id.  28.) 

We  do  not  know  what  time  in  1903  the  fire  occurred,  nor  what 
the  jury  determined  the  damages  per  cord  were  during  the  respective 
years.  We  cannot,  therefore,  modify  the  judgment  by  apportioning 
the  damages  and  excusing  the  defendant  for  a  failure  to  deliver 
wood  after  the  fire.  The  defendant  is  not  excused  from  delivering 
the  live  spruce  suitable  for  pulp  wood  which  survived  the  fije 
by  the  mere  fact  that  its  location  upon  the  tract  is  such  that  it 
would  be  very  expensive  for  him  to  deliver  it. 

The  judgment  and  orders  are  reversed  upon  the  law  and  the  facts 
and  a  new  trial  granted,  with  costs  to  the  appellant  to  abide  the 
event.  All  concurred. 

Judgment  and  orders  reversed  on  law  and  facts  and  new  trial 
granted,  with  costs  to  appellant  to  abide  event.  The  findings  that  the 
defendant  agreed  unconditionally  to  deliver  all  the  pulp  wood  men- 
tioned in  the  contract,  and  that  the  plaintiff  has  suffered  damages 
in  the  amount  of  $48,000,  are  reversed  as  against  the  evidence, 
and  the  findings  are  made  that  considering  the  circumstances  under 
which  the  contract  was  made  the  deliveries  of  wood  from  time  to 
time  were  conditional  upon  the  continued  existence  of  the  green 
spruce  upon  the  Kingsley  lands  not  cut  over,  and  that  in  1903  the 
spruce  growing  upon  said  lands  was  substantially  destroyed  by 
fire,  and  that  the  evidence  does  not  show  that  the  destruction  of 
said  spruce  was  caused  by  the  negligence  or  fault  of  the  defendant. 


ALFRED    MARKS    REALTY    COMPAA^Y,  Respondent,  v. 
HOTEL    HERMITAGE    COMPANY,    Appellant 

New  York  Supreme  Court^  Appellate  Division 

\_Reporied  in  170  New  YorJc  Appellate  Division,  484] 

Putnam,  J. :  This  appeal  is  from  an  affirmance  of  a  judgment  for 
plaintiff.  In  January,  1914,  defendant  contracted  wath  plaintiff's 
assignor,  the  International  Yacht  Publishing  Company,  for  in- 
sertion of  its  advertisement  in  a  "Souvenir  and  Program  of  Interna- 
tional Yacht  Races,"  for  which  defendant  agreed  to  pay  "upon 
publication  and  delivery  of  one  copy  of  the  same." 

These  books,  priced  at  twenty-five  cents,  were  to  serve  as  an 
advertising  medium.     In  the   early  part  of   August  some  of  the 


772  MARKS   REALTY    CO.    V.    HERMITAGE    CO.         [CHAP.   V 

books  were  printed  and  bound  with  defendant's  hotel  advertisement 
opposite  the  picture  of  a  yacht.  About  2,500  copies  at  twenty-five 
cents  each  were  sold  and  distributed,  and  about  400  or  500  copies 
placed  on  newsstands  for  sale. 

About  August  fifteenth  or  seventeenth  the  yacht  club  committee 
having  charge  of  the  races  (in  which  this  publication  company  had 
no  voice  or  control)  declared  the  same  off,  because  of  the  war.  The 
challenger,  Shamroch  IV,  did  not  arrive  till  August  twentieth,  and 
at  this  time  three  American  yachts  were  having  trials  to  ascertain 
which  should  be  chosen  to  defend  the  cup  in  the  September  races. 

On  August  twenty-fifth  plaintiff's  assignor  wrote  defendant  that 
a  sample  copy  of  souvenir  and  program  of  the  international  yacht 
races,  with  defendant's  advertisement  inserted  therein,'  had  been 
mailed.  "As  you  are  no  doubt  aware  the  cup  races  have  been  post- 
poned until  1915  on  account  of  European  disturbances.  Even  with 
out  the  races  the  book  as  a  souvenir  is  a  good  seller  and  a  good 
advertisement.  We  expect  an  unprecedented  sale  before  and  after  the 
races.  Many  of  which  (sic)  have  already  subscribed  for  cash  in  ad- 
vance. We  claim  it  is  the  best  book  ever  for  the  price.  The  work  will 
be  placed  on  public  sale  later.    Kindly  remit  us  your  check." 

Obviously  defendant  and  the  publishing  company  had  in  view 
the  September  cup  racing.  Defendant's  advertisement  was  in  con- 
nection with  this  contest.  A  program  is  for  events  to  which  it  re- 
lates, and  a  souvenir  "cannot  recall  what  has  not  taken  place." 
(Marks  Realty  Co.  v.  "Churchills,"  90  Misc.  Eep.  370.)  The  issue 
of  the  exhibit  here,  though  styled  program  and  souvenir,  was  antici- 
patory. Such  an  issue  and  sale  for  the  convenience  of  plaintiff's 
assignor,  is  not  a  "publication"  in  the  sense  of  this  contract.  A 
condition  is  implied  of  two  contestants  being  named  for  the  time  and 
place  of  a  race;  and  where  this  feature  is  obvious,  a  failure,  by 
giving  up  the  expected  contests,  abrogates  the  contract.  (Lorillard 
V.  Clyde,  142  N.  Y.  456,  463.) 

This  is  not  where  a  promisor  has  failed  to  guard  himself  against 
a  vis  major.  It  is  not  a  performance  on  one  side,  the  other  having 
no  appropriate  clause  to  excuse  default.  But  it  is  where  the  situa- 
tion, as  it  turns  out,  has  frustrated  the  entire  design  on  which 
is  grounded  the  promise.  An  advance  issue  of  the  programs  cannot 
fairly  be  held  to  be  what  defendant  was  to  pay  for.  The  object 
in  mutual  contemplation  having  failed,  plaintiff  cannot  exact  the 
sti|)ulHt('d  ])aynK'iit. 

'I'lic  order  of  the  Appellate  Term  should  be  reversed,  and  the 
Jud^iiK'ut  of  fb(!  Municipal  Court  for  plaintiff  reversed,  with  costs 
of  flu;  afjpeals,  and   the  complaint  dismissed,  with  costs. 

Jknkh,  p.  T.,  Cauh,  Mit.t.h  and  TIiott,  TJ.,  concurred. 

Order  of  the  Ay)p(^llate  Term  reversed,  and  judgment  of  the 
Mnt:ifif)jil  Court  for  plaintiff  reversed,  with  costs  of  the  appeal,  and 
com[)l{ntif  dismissed,  with  costs. 


SECT.   Ill]  BLACKBURN    CO.    V.   ALLEN    &   SONS  773 

BLACKBUEN  BOBBIN  COMPANY  LTD.   v.   T.   W.   ALLEN 

&  SONS,  LTD. 

In  the  King's  Bench  Division^  February  5-12,  1918 

[Reported  in  [1918]   1  King's  Bench,  540] 

By  the  contract  made  in  the  early  part  of  1914  the  defendants 
sold  to  the  plaintiffs  timber  to  be  imported  from  Finland  and  to  be 
delivered  to  the  plaintiffs  free  on  rail  at  Hull,  deliveries  to  commence 
in  June  or  July,  1914,  and  to  continue  during  the  season  which  would 
terminate  in  November.  The  contract  did  not  contain  the  ex- 
ceptions of  war  or  force  majeure.  The  practice  before  the  war 
was  to  load  timber  into  vessels  at  ports  in  Finland  for  direct 
sea  carriage  to  England,  but  this  practice  was  not  known  to  the 
plaintiffs,  nor  did  they  know,  as  the  fact  was,  that  timber  mer- 
chants in  England  do  not  keep  Finland  timber  in  stock.  Up  to  the 
outbreak  of  the  war  in  August,  1914,  the  defendants  had  not  de- 
livered any  of  the  timber,  and  after  that  date,  owing  to  the  dis- 
organization of  transport  caused  by  the  war,  it  became  impossible 
for  the  defendants  to  obtain  any  Finland  timber  for  delivery  to  the 
plaintiffs,  and  the  defendants  contended  that  the  contract  had  been 
dissolved  by  the  outbreak  of  war : — 

McCabdie,  J.  It  is  obvious  that  the  principle  raised  by  the  case 
is  one  of  vital  and  general  importance.  The  question  at  issue  is 
this :  When  will  a  change  of  circumstances  (not  due  to  the  de- 
fault of  either  party)  cause  a  dissolution  of  contract?  The  law 
upon  the  matter  is  undoubtedly  in  process  of  evolution:  see  per 
Atkin  J.  in  Lloyd  Royal  Beige  Societe  Anonyme  v.  Stathatos  ^ 
and  per  Pickford  L.  J.  in  Hulton  &  Co.  v.  Chadwick  &  Taylor.^ 
The  point  must  presumably  be  solved  upon  broad  existing  principles 
of  contract  law.  Those  principles,  I  conceive,  should  be  the  same 
whether  the  case  be  one  of  charterparty,  building  contract,  or  sale 
of  goods :  see  per  Lord  Loreburn  in  the  Tamplin  Case.^  But  the 
application  of  the  principles  may  vary  with  the  terms  and  sub- 
ject-matter of  the  contract.  Is  there  a  conflict  at  the  present  time 
between  the  rules  which  are  relevant  to  the  present  case?  The 
original  rule  of  English  law  was  clear  in  its  insistence  that  where  a 
party  by  his  own  contract  creates  a  duty  or  charge  upon  himself 
he  is  bound  to  make  it  good  notwithstanding  any  accident  by  inevi- 
table necessity,  because  he  might  have  provided  against  it  by  his 
contract;  see  per  Curiam,  Paradine  v.  Jane.*  That  principle  was 
applied  with  full  severity  during  the  eighteenth  century.  I  need  not 
discuss  the  decisions  in  detail;  many  are  referred  to  in  Leake  on 

1  (1917)  33  Times  L.  R.  390. 
'  (1918)  34  Times  L.  R.  230. 
»  [1916]  2  A.  C.  397,  404. 
*  (1647)  Alevn.  26. 


774  BLACKBURN    CO.    V.    ALLEN    &    SONS  [CHAP,   V 

Contracts,  6th  ed.,  pp.  494-498.  In  some  of  those  cases  there 
was  clearly  a  grave  change  of  circumstances  not  within  the  con- 
templation of  the  parties  at  the  time  of  the  contract,  yet  it  was 
held  that  no  dissolution  of  contractual  obligation  took  place.  I 
mention  the  decisions  referred  to  in  Leake  because  it  is,  I  think 
essential  to  remember  them  if  the  pending  evolution  of  principle 
proceeds.  The  original  rule  has  again  and  again  been  restated.  I 
only  refer  to  Spence  v.  Chadwick,^  per  Wightman  J.,  and  to  Ford 
V.  Cotesworth,^  per  Blackburn  J.  To  what  extent  has  the  original 
rule  been  modified  by  later  decision?  I  do  not  think  that  the  de- 
cision in  Esposito  v.  Bowden  ^  is  revelant  to  the  question,  for  the 
contract  was  there  dissolved  by  reason  of  the  absolute  prohibition 
of  commercial  intercourse  mth  an  enemy.  I  doubt,  moreover,  if 
Baily  v.  De  Crespigny  *  is  a  true  modification  of  the  doctrine.  For 
there  an  Act  of  Parliament  took  away  from  both  parties  the  sub- 
ject-matter of  the  contract.  The  rights  of  each  were  destroyed 
and  nothing  was  left  upon  which  the  contract  could  operate.  There 
was  more  than  a  change  of  circumstance;  there  was  a  statutory 
seizure  of  the  contract  property.  But  the  judgment  of  the  Court 
undoubtedly  rested  to  some  extent  on  the  principle  of  dissolution  by 
a  complete  change  of  circumstance,  and  this  view  has  apparently 
been  approved  by  Lord  Parmoor  in  Metropolitan  Water  Board  v. 
Dick,  Kerr  &  Co.^  The  first  true  modification  of  the  original  rule 
was  created,  I  think,  by  the  doctrine  of  commercial  frustration. 
I  need  not  review  the  decisions  on  this  doctrine;  they  are  fully  and 
historically  considered  in  the  judgments,  both  in  the  Common  Pleas 
and  the  Exchequer  Chamber,  in  Jackson  v.  Union  Marine  Insurance 
Co."  The  effect  of  the  decision  is  best  stated  by  Brett,  J.'^  as  fol- 
lows :  "Where  a  contract  is  made  with  reference  to  certain  antici- 
pated circumstances,  and  whera,  without  any  default  of  either 
party,  it  becomes  wholly  inapplicable  to  or  impossible  of  application 
to  any  such  circumstances,  it  ceases  to  have  any  application;  it  can- 
not be  applied  to  other  circumstances  which  could  not  have  been 
in  the  contemplation  of  the  parties  when  the  contract  was  made." 
If  these  words  of  Brett  J.  arc  to  be  applied  to  their  widest  extent 
they  may  well  effect  a  revolution  of  contract  law.  It  has  been 
pointed  out  by  Lord  Loreburn  that  the  rule  stated  in  Jackson  v. 
Union  Marine  Insurance  Co.,"  is  a  mere  application  to  commer- 
cial adventures  of  a  broad  contractual  principle :  see  the  Tamplin 
Case."  The  next  true  modification  of  the  original  rule  Avas  finally 
effected   by  the  decision    in   Taylor   v.   Caldwell."     There  the   con- 

'  (•1847)  10  Q.  B.  517,  530. 

'    nsOS)    L.   R.  4  Q.  R.   127,  l^.*^. 

'   (18.'->7)   7  E.  &  B.  763. 

*  (\Hm)  L.  R.  4  Q.  R.  180. 
"  [1918]  A.  C.  119,  140. 

*  n873)  L.  R.  8  C.  P.  r)72;  (1874)  L.  R.  10  C.  P.  125. 
^  T,.  n.  H  C.  P.  r>H]. 

"  J  J.  R.  U)  f".  P.  ]2r>. 
»   [1010]  2  A.  C.  404. 


SECT.    Ill]  BLACKBURN    CO.    V.    ALLEN    &    SONS  775 

tract  was  held  dissolved  by  the  destruction  of  its  subject-matter. 
The  doctrine  of  Taylor  v.  Caldwell  ^  was  extended  by  Nickoll 
&  Knight  V.  Ashton,  Eldridge  &  Co.,-  and  still  more  strik- 
ingly enlarged  by  the  Coronation  cases,  of  which  Krell  v.  Henry  ^ 
is  the  most  vivid  example,  for  in  Krell  v.  Henry  ^  the  Court  held 
that  a  collateral,  though  important,  circumstance  was  the  basis 
of  the  contract  between  the  parties,  and  that  when  the  basis  ceased 
it  followed  that  the  contract  was  dissolved.  Krell  v.  Henry  has 
been  frequently  cited  and   adopted   in   the   highest   tribunal. 

So  stood  the  decisions  at  the  outbreak  of  the  present  war.  Since 
that  event  judgments  have  been  delivered  as  to  the  true  effect  of 
the  decisions  I  have  stated.  On  the  one  hand  the  original  rule  has 
been  stated  to  exist  in  its  integrity,  whilst  on  the  other  hand  the  modi- 
fication of  the  rule  is  deemed  to  be  clearly  settled :  see  per  Lord 
"Wrenbury  in  Horlock  v.  Beal.*  The  explanation  of  the  lines  of 
cases  represented  (a)  by  Jackson  v.  Marine  Union  Insurance  Co.,^ 
and  (&)  by  Krell  v.  Henry  ^  has  been  finally  and  authoritatively 
stated.  It  was  put  with  clearness  by  Lord  Shaw  in  Horlock  v.. 
Beal,^  where  he  said:  "The  underlying  ratio  is  the  failure  of  some- 
thing which  was  at  the  basis  of  the  contract  in  the  mind  and  in- 
tention of  the  contracting  parties."  It  was  stated  with  equal  clear- 
ness by  Lord  Haldane  in  the  Tamplin  Case  ^  where  he  said :  "The 
occurrence  itself  may  ....  he  of  a  character  and  extent  so  sweep- 
ing that  the  foundation  of  what  the  parties  are  deemed  to  have  in 
contemplation  has  disappeared,  and  the  contract  itself  has  vanished 
with  that  foundation."  In  every  case  it  is  now  necessary  "to  examine 
the  contract  and  the  circumstances  in  which  it  was  made,  not  of 
course  to  vary,  but  only  to  explain  it,  in  order  to  see  whether  or 
not  from  the  nature  of  it  the  parties  must  have  made  their  bar- 
gain on  the  footing  that  a  particular  thing  or  state  of  things  would 
continue  to  exist.  And  if  they  must  have  done  so,  then  a  term  to 
that  effect  will  be  implied,  though  it  be  not  expressed  in  the  con- 
tract:" per  Lord  Loreburn  m  the  Tamplin  Case.^  It  is  obvious 
that  what  I  will  call  the  Krell  v.  Henry  ^  rule  as  now  formulated  is 
theoretically  capable  of  application  to  all  contracts,  whether  as  be- 
tween shipowner  and  seamen,  as  in  Horlock  v.  Beal,''  or  to  building 
contracts,  as  in  Metropolitan  "Water  Board  v.  Dick,  Kerr  &  Co.^° 

But  by  what  tests  and  subject  to  what  limitations  is  the  Krell  v. 
Henry  ^  rule  to  be  applied  ?  No  indication  has  yet  been  given  as  to 
the  extent  of  its  operation.  At  the  outbreak  of  war  a  vast  body  of 
commercial  contracts  existed  which  contained  no  clauses  whatever 

1  3  B.  &  S.  826.  «  [1916]  1  A.  C.  at  p.  512. 

2  [1901]  2  K.  B.  126.  '  [1916]  2  A.  C.  406,  407. 

3  [1903]  2  K.  B.  740.  «  Ihid.,  at  p.  403. 

«  [1916]  1  A.  C.  486,  525.         «  [1916]  1  A.  C.  486. 
«  L.  R.  10  C.  P.  125.  1"  [1918]  A.  C.  119. 


776  BLACKBURN    CO.    V.    ALLEN    &    SONS  [CHAP.   V 

providing  for  that  event.  No  one  can  doubt  that  such  contracts 
had  been  made  upon  the  assumption  that  peace  would  continue. 
Neither  side  contemplated  the  occurrence  of  war.  But  it  cannot 
be  that  all  such  contracts  were  dissolved  by  the  events  of  August, 
1914.  The  mere  continuance  of  peace  was  not  a  condition  of  the  con- 
tract :  see  per  Loreburn  in  the  Tamplin  Case.^  The  descriptiapi 
of  a  state  of  peace  is  not  of  itself  a  destruction  of  any  specific  set 
of  facts  within  the  Krell  v.  Henry  -  rule.  Nor  can  it  be  that  grave 
difficulty  on  the  part  of  a  vendor  in  procuring  the  contract  articles 
will  excuse  him  from  the  performance  of  his  bargain.  If  such  were 
the  case,  then  the  decision  of  the  House  of  Lords  in  Tennants  (Lan- 
cashire) V.  Wilson  &  Co.,^  with  respect  to  the  force  majeure  clause 
there  in  question  would  have  been  unnecessary,  for  the  contract 
would  have  been  dissolved  by  a  basic  change  of  circumstances  and 
the  principle  of  Metropolitan  Water  Board  v.  Dick,  Kerr  &  Co.,* 
would  have  applied. 

What,  then,  are  the  limits  of  the  Krell  v.  Henry  -  rule  as  most 
recently  exemplified  by  the  last-named  case,  Metropolitan  Water 
Board  v.  Dick,  Kerr  &  Co.  ?  *  At  the  same  time  I  deem  it  well  to 
ask  this  further  question :  Have  the  recent  decisions  in  the  House 
of  Lords  impliedly  overruled  the  judgment  of  the  Court  of  Appeal 
in  Jacobs,  Marcus  &  Co.  v.  Credit  Lyonnais?^  There  the  de- 
fendants, a  London  firm,  sold  to  the  plaintiffs,  London  merchants, 
20,000  tons  of  Algerian  esparto  to  be  shipped  by  a  French  company 
at  an  Algerian  port  on  vessels  to  be  provided  by  the  plaintiffs.  The 
defendants  pleaded  that  performance  of  their  contract  had  become 
impossible  by  reason  of  an  insurrection  in  Algeria,  and  a  conse- 
quent prohibition  by  the  territorial  Government  of  the  collection 
and  transport  of  esparto.  It  was  held  by  the  Court  of  Appeal 
(Brett  M.  R.  and  Bowen  L.  J.),  affirming  Manisty  and  Denman  J  J., 
that  such  plea  afforded  no  answer  to  the  plaintiff's  claim  for  damages. 
The  pith  of  the  case  was  put  by  Brown  L.  J.''  "Now,  one  of  the 
incidents  which  the  English  law  attaches  to  a  contract  is  that  (except 
in  certain  excepted  cases  as  that  of  common  carriers  and  bailees, 
of  which  this  is  not  one,)  a  person  who  expressly  contracts  abso- 
lutely to  do  a  thing  not  naturally  impossible,  is  not  excused  for 
non-performance  because  of  being  prevented  by  vis  major.  'The 
rule  laid  down  in  the  case  of  Paradine  v.  Jane  '^  has,'  says  Lord 
Ellenborough,  'been  often  recognized  in  Courts  of  law  as  a  sound 
one;  i.  e.,  that  "when  the  party  by  his  own  contract  creates  a  duty 
or  charge  upon  himself,  he  is  bound  to  make  it  good,  if  he  may, 
notwithstanding  any  accident  by  inevitable  necessity,  because  he 
might  have  provided  against  it  by  his  contract.'"^    See  also  Spence 

>  [191G]  2  A.  C.  405.  »  12  Q.  B.  D.  589. 

»  [19031  2  K.  B.  740.  «  Ihid.,  at  p.  f)03. 

»  ri9171  A.  C.  495.  ''  Alnvn,  2f),  27. 

*  [1918]  A.  r.  1 10.  8  Atkinson  v.  Ritchie  (1809)  10  East,  530,  533. 


SECT.    Ill]  BLACKBURN    CO,    V.   ALLEN    &    SONS  777 

V.  Chadwick ;  ^  Lloyd  v.  Guibert.-  If  inevitable  necessity  occurring 
in  this  country  would  not  excuse  non-performance,  why  should 
non-performance  be  excused  on  account  of  the  inevitable  necessity 
arising  abroad?  So  to  hold  would  be  to  alter  the  liability  which 
English  law  attaches  to  contracts,  and  would,  in  the  absence  of  an 
expressed  or  implied  intention  to  that  effect,  be  contrary  to  authority 
as  well  as  principle,  see  Barker  v.  Hodgson;  ^  Sjoerds  v.  Luscombe."  * 
The  change  of  crcumstances  in  Jacobs'  Case  ^  was  serious  and 
clearly  was  not  foreseen  by  the  parties.  See  also  Ashmore  v.  Cox,  per 
Lord  Russell  of  Killowen  C.  J.^ 

To  supply  an  answer  to  the  above  questions  is  a  task  of  great 
difficulty  in  the  absence  of  any  authoritative  guidance,  for  it  calls 
not  only  for  a  reconciliation  of  apparently  conflicting  lines  of  cases, 
but  it  calls  also  for  the  ever-embarrassing  duty  of  deciding  whether 
an  implied  term  shall  be  read  into  a  given  contract  to  the  effect 
that  dissolution  shall  take  place  if  an  uncontemplated  and  serious 
change  of  circumstances  occurs.  The  decisions  with  respect  to 
personal  services  throw,  I  feel,  but  little  light  on  the  matter,  for  it 
seems  just  and  reasonable  to  imply  a  condition  in  such  agreements 
that  the  contract  shall  be  dissolved  upon  the  death  or  physical  in- 
capacity of  the  person  who  has  agreed  to  give  his  personal  ser- 
vices :  see  Robinson  v.  Davison.^  Death  and  illness  are  unceasing 
features  of  human  society.  I  think,  however,  that  assistance  is 
derived  from  considering  broadly  the  nature  of  the  cases  in  which 
the  Krell  v.  Henry  ^  rule  has  been  applied,  whether  before  or  after 
that  decision  in  1903.  It  will  be  observed  that  they  apparently  fall 
into  several  classes :  First,  where  British  legislation  or  Government 
intervention  has  removed  the  specific  subject-matter  of  the  construc- 
tion from  the  scope  of  private  obligation  (Bailey  &  DeCrespigny  ^ 
is  a  good  example  of  this  class:  see  also  In  re  Shipton,  Anderson  & 
Co.,  and  Harrison  Brothers  &  Co.,^°  the  case  of  specific  goods.  I 
myself  venture  to  think  that  this  is  an  independent  class  of  case, 
though,  for  the  purpose  of  clearness,  I  classify  it  as  falling  within 
Krell  V.  Henry  ^)  ;  secondly,  where  the  actual  and  specific  subject- 
matter  of  the  contract  has  ceased  to  exist,  apart  from  British  legis- 
lation or  administrative  intervention.  (Taylor  v.  Caldwell  ^^  is  the 
best  example  of  this  class ;  Horlock  v.  Beal  ^^  is  really,  I  think,  a 
further  example  of  this  class)  ;  thirdly,  where  a  specific  set  of  facts 
directly  affecting  a  specific  subject-matter  has  ceased  to  exist  (see 
Jackson  v.  Union  Marine  Insurance  Co.,^^  the  case  of  a  ship,  and 
Scottish  l^avigation  Co.  v.  Souter  &  Co.,^'*  also  the  case  of  a  ship) ; 

»  10  Q.  B.  517,  530.  »  TIOOS]  2  K.  B.  740. 

2  L.  R.  1  Q.  B.  115,  121.  s  L.  R.  4  Q.  B.  180. 

3  3  M.  &  S.  267.  1"  [19151  3  K.  B.  676. 
*  16  East,  201.  "  3  B.  &  S.  826. 

6  12  Q.  B.  D.  589.  12  [1916]  1  A.  C.  486. 

6  [1899]  1  Q.  B.  436.  i^  l  R.  IOC.  P.  125. 

'  L.  R.  6  Ex.  269.  "  [1917]  1  K.  B.  222. 


778  BLACKBURN    CO.    V.    ALLEN    &    SONS  [CHAP,    V 

fourthly,  where  a  specific  set  of  facts  collaterally  only  affecting  a 
specific  subject-matter,  but  yet  constituting  the  basis  of  contract,  has 
ceased  to  exist  (see  ISTickoll  &  Knight  v.  Ashton,  Eldridge  &  Co.,^  the 
case  of  a  ship,  and  Krell  v.  Henry,^  the  letting  of  specific 
premises)  ;  and,  fifthly,  where  British  administrative  intervention 
has  so  directly  operated  upon  the  fulfilment  of  a  contract  for  a 
specific  work  as  to  transform  the  contemplated  conditions  of  per- 
formance (Metropolitan  Water  Board  v.  Dick,  Kerr  &  Co.^).  I  need 
not,  of  course,  classify  or  illustrate  the  cases  in  which  British  legis- 
lation has  directly  prohibited  the  performance  of  a  contract.  In 
■such  cases  the  doctrine  of  illegality  dissolves  the  bargains :  see 
Brewster  v.  Kitchell.'*  In  none  of  the  cases  in  the  above  classes  has 
it  been  stated  or  substantially  suggested  that  the  principle  of  Krell  v. 
Henry  ^  applies  to  the  case  of  a  bare  sale  of  unascertained  goods. 
The  illuminating  judgment  of  Scrutton  L.  J.  in  Metropolitan  Water 
Board  v.  Dick,  Kerr  &  Co.,^  seems  throughout  to  be  dealing  with 
specific  subject-matter. 

But  the  above  classification,  imperfect  as  I  fear  it  is,  does  not 
exhaust  the  decisions  which  call  for  consideration,  and  here  I  must 
point  out  that  in  not  a  few  of  the  decisions  since  the  outbreak  of 
the  war  the  question  of  trading  with  the  enemy  has  crept  directly 
or  indirectly  into  the  determination  of  the  matters  in  dispute.  The 
doctrine  of  prohibition  against  any  intercourse  whether  commercial 
or  otherwise,  with  an  enemy  subject,  is  severe  and  far-reaching.  I 
need  only  refer  to  Esposito  v.  Bowden,*'  Zinc  Corporation  v.  Hirsch,^ 
Robson  V.  Premier  Oil  and  Pipe  Line  Co.,^  and  Ertel  Bieber  &  Co. 
V.  Rio  Tinto  Co.,^  in  the  House  of  Lords.  It  is  important  to  re- 
member this  point  in  approaching  the  cases  which  I  next  men- 
tion. Such  cases  apparently  deal  with  a  sale  of  unascertained  goods. 
They  are  as  follows: —  (a)  Jager  v.  Tolme  &  Runge^°  (Court  of 
Appeal).  The  facts  of  this  case  were  complicated,  but  the  substance 
of  the  matter  was  that  the  vendors  had  agreed  to  deliver  sugar 
f.  0.  b.  Hamburg  in  August,  1914.  The  parties  were  British.  The 
Courts  held  that  the  contract  was  dissolved  by  the  outbreak  of 
war.  In  my  opinion,  however,  It  Is  clear  that  the  ratio  of  the 
decision  was  that  performance  of  the  contract  would  be  illegal 
inasmuch  as  it  would  Involve  commercial  Intercourse  with  the  enemy. 
The  Court  of  Appeal  Ignored  the  expressly-raised  contention  that 
the  contracts  had  been  dissolved  on  the  principle  of  Krell  v.  Henry.^ 
The  case  of  Grey  &;  Co.  v.  Tolme  "  was  decided  by  Ballhache  J.  on 
the  same  ratio,     fb)  Smith,  Coney  k  Barrett  v.  Becker,  Gray  &  Co 

'  noOl]  2  K.  B.  126.  ■>  nOlfi]  1  K.  B.  541. 

'  nomi  2  K.  B.  740.    '  8  riftlSl  2  Ch.  124. 

»  n018]  A.  C.  119.  9  (10181  A.  C.  260. 

*  1  Salk.  108.  "  ri016]  1  K.  B.  039. 

«  ri017|  2  K.  B.  28,  29.  "  31  Timna  L.  R.  551 

«  7  K.  <fe  B.  763.  «  [1016]  2  Ch.  86. 


12 


SECT.   Ill]  BLACKBURN    CO.    V.   ALLEN    &    SONS  779 

Here,  again,  the  facts  were  complicated.  The  parties  were  British 
firms.  The  vendors  had  agreed  on  August  1,  1914,  to  sell  sugar 
f.  o.  b.  or  into  warehouse  Hamburg.  In  view  of  the  special  pro- 
visions in  the  contract  the  Court  held  that  the  contract  was  not 
dissolved.  Had  it  held  otherwise,  I  venture  to  think  that  the  true 
ratio  would  again  have  been  that  performance  would  have  involved 
trading  with  the  enemy.  But  it  is  right  to  say  that  although  the 
majority  of  the  Court  (Lord  Cozens-Hardy  M.  R.  and  Swinfen 
Eady  L.  J.)  did  not  apparently  favour  the  application  of  the  Krell 
V.  Henry  ^  rule,  yet  Phillimore  L.  J.  seems  to  have  thought  that 
it  might  apply  under  certain  circumstances — for  instance,  if  the 
sugar  had  been  wholly  destroyed  by  fire.  The  point  does  not  seem 
to  have  been  fully  argued,  and  such  cases  as  Jacobs,  Marcus  &  Co.  v. 
Credit  Lyonnais  ^  were  not  brought  to  the  attention  of  the  Court, 
(c)  Hulton  &  Co.  V.  Chadwick  &  Taylor.^  The  facts  in  this  deci- 
sion more  closely  approach  the  facts  of  the  present  case.  It  was 
recognized  by  Pickford  L.  J.  that  the  principle  of  dissolution  of 
contract  by  change  of  circumstances  had  been  largely  extended  in 
operation.  But  I  respectfully  suggest  that  the  true  ratio  of  the 
decision  of  the  Court  of  Appeal  is  to  be  found  not  so  much  in  the 
change  of  circumstance,  though  serious  in  extent,  as  in  the  fact  that 
an  administrative  intervention  of  the  British  Government  had  in 
substance  prevented  the  fulfilment  of  the  contract  by  the  vendor 
in  accordance  with  his  obligations.  Hulton  &  Co.  v.  Chadwick  & 
Taylor  ^  represents,  in  my  view,  an  extension  of  the  principle  of 
Brewster  v.  Kitchell  *  or  Baily  v.  DeCrespigny  ^  rather  than  a  true 
extension  of  the  broader  principle  of  Krell  v.  Henry .^  The  former 
principle  is  one  which  admits  of  many  applications  in  these  days 
of  administrative  intervention,  and  in  some  cases  the  facts  may  be 
covered  as  much  by  Krell  v.  Henry  ^  as  by  Baily  v.  DeCrespigny.^ 
The  principles  may  overlap.  The  rule  contended  for  by  Mr.  Mac- 
Kinnon must  have  applied,  if  at  all,  as  much  to  that  case  as  to  the 
present,  for  there  had  been  in  Hulton's  Case  ^  a  revolution  of  cir- 
cumstance, yet  it  is  clear  that  Pickford  L.  J.  rested  his  judgment  on 
administrative  intervention,  that  is  to  say,  on  Baily  v.  DeCrespigny,^ 
rather  than  on  the  application  of  the  Krell  v.  Henry  ^  rule. 

My  conclusion  upon  the  matter  is  that  in  the  absence  of  any 
question  as  to  trading  with  the  enemy,  and  in  the  absence  also  of 
any  administrative  intervention  by  the  British  Government  authori- 
ties, a  bare  and  unqualified  contract  for  the  sale  of  unascertained 
goods  will  not  (unless  most  special  facts  compel  an  opposite  impli- 
cation) be  dissolved  by  the  operation  of  the  principle  of  Krell  v. 
Henry,^  even  though  there  has  been  so  grave  and  unforseen  a 
change  of  circumstance  as  to  render  it  impossible  for  the  vendor  to 

1  ri903]  2  K.  B.  740.  ^  1  Salk.  198. 

2  12  Q.  B.  D.  589.  «  L.  R.  4  Q.  B.  180. 
8  34  Times  L.  R.  230. 


780  BLACKBURN    CO.    V.    ALLEN    &    SONS  [CHAP.    V 

fulfill  his  bargain.  If  I  were  to  hold  otherwise,  I  should  create  a 
rule  the  results  of  which  no  man  can  foresee,  and  to  the  operation 
of  which  no  judge  can  satisfactorily  fix  the  limits. 

By  stating  the  above  conclusion  I  maintain  the  original  rule  of 
English  law  whereby  a  man  is  bound  by  his  contract  whilst  I  leave 
a  field  as  yet  undefined  for  the  operation  and  extension  of  the  Krell 
V.  Henry  ^  principle.  I  am  fortified  in  the  view  I  express  by  the 
fact  that  Jacobs,  Marcus  &  Co.  v.  Credit  Lyonnais  ^  has  remained  un- 
challenged amidst  the  testing  breadth  of  recent  decisions.  I  can 
see  no  sound  distinction  between  impossibility  of  foreign  law  and 
impossibility  created  by  an  outbreak  of  war  involving  a  complete 
cessation  of  transport  facilities.  Just  as  it  seems  clear  that  a 
vendor  is  not  absolved  from  the  duty  to  deliver  unascertained  goods 
by  reason  of  the  destruction  of  his  factory  or  warehouse,  so  a 
vendor  is  not  relieved  from  his  obligation  in  such  a  case  as  the 
present.  An  ordinary  and  bare  contract  for  the  sale  of  unascer- 
tained goods  gives  no  scope  for  the  operation  of  the  Krell  v.  Henry  ^ 
rule,  unless  the  special  facts  show  that  the  parties  have  clearly 
(though  impliedly)  agreed  upon  a  set  of  circumstances  as  consti- 
tuting the  contractual  basis.  Here  no  such  agreement  exists.  In 
the  present  case,  I  ask  the  question  put  by  Denman  L.  in  Jacobs, 
Marcus  &  Co.  v.  Credit  Lyonnais :  ^  "Looking  at  the  nature  of  this 
contract,  what  is  there  to  show  that  the  intention  of  the  parties  was 
that  the  defendants  should  be  relieved  from  the  performance  of  their 
contract  by  reason  of  difficulties  arising  out  of  circumstances  which 
were  unforeseen?"  My  answer  in  the  present  case  is  that  there  is 
nothing  to  show  such  an  intention.  There  is  here  no  question  of 
illegality  or  public  policy,  of  actual  prohibition  or  of  intervention 
by  the  Government.  There  is  merely  an  unforeseen  event  which 
has  rendered  it  practically  impossible  for  the  vendor  to  deliver. 
That  event  the  defendants  could  easily  have  provided  for  in  their 
contracts.  If  I  approved  the  defendant's  contention,  I  should  be 
holding  in  substance  that  a  contract  which  did  not  contain  a  war 
clause  was  as  beneficial  to  the  vendor  as  a  contract  which  contained 
such  a  provision. 

In  my  view  the  rule  in  Jacobs,  Marcus  &  Co.  v.  Credit  Lyonnias  ^ 
holds  good  today,  and  I  think  that  it  covers  the  present  case.  I 
desire  respectfully  to  add  that  in  my  opinion  the  Krell  v.  Henry  ^ 
rule  should  not  be  unduly  extended.  It  is  only  in  exceptional  cases 
that  it  can  be  safely  applied.  The  difficulties  of  its  application  are 
amply  indicated  by  the  judgment  of  the  Court  of  Appeal  in  Heme 
Bay  Rtenm  Boat  Oo.  v.  Hntton  *  and  by  actual  decision  of  the 
majority  of  the  Law  Lords  in  the  Tamplin  Case."^     The  perils  of 

«• »  [\m^]2  K.  R.  740.  *  ri003T  2  K.  B.  683. 

»  12  0.  B.  D.  589.  "  [1916]  2  A.  C.  397. 


SECT.    Ill]  BLACKBURN    CO.    V.    ALLEN    &    SONS  781 

the  rule  may  appear  in  later  years.  If  it  be  extended  too  far,  it 
may  tend  to  sap  the  foundations  of  contract  law  as  they  now  exist. 
It  is,  I  venture  to  say,  of  the  utmost  importance  to  a  commercial 
nation  that  vendors  should  be  held  to  their  business  contracts.  When 
a  change  of  circumstance  is  to  absolve  from  liability,  provision  to 
that  effect  should  be  inserted  in  the  bargain.  If  I  pronounced  in 
favour  of  the  defendants  I  should  be  giving  a  decision  of  a  legisla- 
tive rather  than  judicial  character,  and  I  might  well  be  rendering 
superfluous  in  many  cases  the  provisions  contained  in  the  Courts 
(Emergency  Powers)  Act,  1917  (7  &  8  Geo.  V,  c.  25). 

I  may  mention  that  in  the  present  case  I  am  satisfied  that  the 
plaintiffs  were  unaware  at  the  time  of  the  contract  of  the  circum- 
stance that  the  timber  from  Finland  was  shipped  direct  from  a  Fin- 
nish port  to  Hull.  They  did  not  know  whether  the  transport  was  or 
was  not  partly  by  rail  across  Scandinavia,  nor  did  they  know  that  the 
timber  merchants  in  this  country  did  not  hold  stocks  of  Finnish 
larch. 

I  decide  against  the  first  contention  of  the  defendants. 

I  now  consider  the  second  point  raised  before  me.  The  defendants 
submitted  that  the  case  was  covered  by  the  Courts  (Emergency 
Powers)  Act,  1917,  and  that  I  should  annul  the  contract  upon  suit- 
able terms  by  virtue  of  s.  1,  sub-s  1,  of  that  Act.  The  sub-section 
enables  application  to  be  made  to  the  Court  by  any  party  to  "a 
contract  for  the  construction  of  any  building  or  work  or  for  the 
supply  of  any  materials  for  any  building  or  work  eptered  into  before 
August  4,  1914."  In  my  opinion  the  sub-section  has  no  application 
to  the  present  case.  The  keynote  of  the  words  I  have  read  is  "con- 
struction." The  sub-section  only  applies  to  the  cases  (a)  of  an 
ordinary  building  contract;  (b)  a  contract  for  the  construction  of 
some  work  which  in  substance  resembles  a  building  contract,  as, 
for  instance,  the  laying  of  a  water  system,  the  making  of  a  bridge 
or  the  like;  and  (c)  to  the  supply  of  materials  for  a  contract  which 
falls  within  either  (a)  or  (b).  The  wording  of  the  sub-section  is 
narrow.  Its  operation  is  restricted.  In  my  view  it  cannot  apply 
to  a  contract  for  the  supply  of  timber  to  be  used  for  the  making 
of  bobbins  for  spinning  mills.  Sub-s.  2  of  s.  1  of  the  Act  and  s.  3 
of  the  Act  apply  to  contracts  generally.  But  sub-s.  1  of  s.  1  deals 
with  a  particular  and  limited  body  of  contracts,  and  with  respect  to 
such  contracts  only  can  the  Court  give  relief  if  the  circumstances 
exist  which  are  indicated  in  the  sub-section.  The  second  point 
raised  by  the  defendants  therefore  fails  also. 

I  must  now  deal  with  the  question  of  damages,  and  here  I  must 
state  a  few  further  facts.  On  August  6,  1914,  the  plaintiffs  wrote 
to  the  defendants  the  following  letter :  "Sirs, — How  are  you  situated 
with  reference  to  the  birch  squares  on  order  for  us?  We  want  a 
truck  of  1%  inch  and  1  1-16  inch  mixed  very  badly."  Thereupon 
the  defendants  replied  as  follows  on  August  7:  'T)ear  Sirs, — We 


782  BLACKBURN    CO.    V.    ALLEN    &    SONS  [CHAP.    V 

have  your  favour  of  yesterday  and  regret  we  have  no  prospect  at 
present  of  being  able  to  supply  your  requirements  owing  to  the 
war.  If  our  fleet  is  able  to  clear  the  seas,  both  the  Baltic  and  the 
North  Sea,  of  the  German  warships  we  may  hope  to  see  steamers 
again  running  to  Finland,  and  in  that  case  we  may  be  able  to  supply 
you."  I  accept  the  evidence  of  Mr.  Dawson,  the  plaintiffs'  managing 
director,  that  upon  receipt  of  that  letter  he  assumed  that  the  de- 
fendants would  supply  when  they  could.  I  also  accept  his  evidence 
that  the  plaintiffs  were  willing  to  extend  the  defendants'  time  for 
the  delivery  of  the  timber.  Hence  he  did  not  reply  to  the  letter  of 
August  7,  1914.  In  November,  1914,  a  few  letters  passed  between 
the  parties  with  respect  to  a  possible  supply  to  the  plaintiffs  of 
some  Finland  birch  by  one  of  the  defendants'  customers.  But 
nothing  came  of  the  suggestion.  From  November,  1914,  to  1916,  the 
plaintiffs  were  waiting.  Then  they  heard  that  Finnish  timber  was 
being  imported  into  this  country.  Apparently  arrangements  had 
been  made  for  shipments  to  Sweden,  thence  by  rail  to  Norway  or 
across  Sweden,  and  thence  again  by  shipment  from  a  Scandinavian 
port  to  England.  Hence  they  wrote  to  the  defendants  on  July  31, 
1916,  and  explained  that  they  had  been  patiently  waiting  for  de- 
livery and  that  they  needed  a  supply.  Thereupon  the  defendants 
wrote  on  August  1,  1916,  that  all  pre-war  contracts  were  cancelled 
by  the  war.  The  defendants,  however,  offered  to  supply  a  certain 
shipment  at  261.  per  standard,  and  they  made  a  similar  offer  by 
letter  of  August  3,  1916.  The  plaintiffs  claim  as  damages  the  differ- 
ence between  101.  15s.,  the  contract  price,  and  the  sum  of  261,  per 
standard,  which  clearly  represents  the  price  in  August,  1916.  The 
defendant  sold  all  their  imports  of  the  Finnish  birch  in  1918  at 
that  figure.  The  defendants  argued,  however,  that  the  damages 
should  be  assessed  as  in  November,  1914.  But  the  plaintiffs  sub- 
mitted that  the  correspondence  between  the  parties,  and  particularly 
the  letter  of  August  7,  1914,  amounted  to  a  request  by  the  defendants 
for  an  extension  of  time  for  delivery,  and  that  this  request  was 
assented  to  by  the  plaintiffs.  If  this  be  so,  then  the  principle  of 
Ogle  V.  Earl  Vane  ^  applies.  Upon  consideration  I  am  of  opinion 
that  the  plaintiffs  are  right  in  their  submission.  Upon  the  facts 
and  documents  in  this  case.  I  think  the  proper  business  conclusion 
to  draw  is  that  the  defendants  requested  the  plaintiffs  to  extend 
the  time  for  delivery.  I  have  considered  the  judgments  in  Ogle  v. 
Earl  Vane,^  and  in  my  view  they  cover  the  present  case. 

T  therefore  hold  that  the  plaintiffs  are  entitled  to  recover  as 
damnges  the  difference  between  10/.  I.^s.  and  26/.  per  standard. 
Evfn  if  I  had  taken  November,  1914,  as  the  date  of  assessment,  as 
suggested  by  the  defendants,  I  should,  in  spite  of  the  ingenious 
arguments  of  Mr.  .Towitt,  have  arrived  at  the  same  sum  as  damages, 
for  in  the  absence  of  Finland  birch  the  plaintiffs  are  entitled  to  do 

»  L.  R.,  3  Q.  B.  272. 


SECT.   Ill]  BLACKBURN    CO.    V.    ALLEN    &    SONS  783 

the  best  they  could  under  the  priuciple  of  Hinde  v.  Liddell.^  They 
bought  English  timber,  which  is  far  less  pliable  than  Finnish 
birch,  and  which  involves  far  more  expense  and  also  far  more  waste 
in  cutting. 

After  a  careful  consideration  of  the  whole  of  the  complex  and 
detailed  evidence  upon  the  point  and  the  arguments  of  counsel 
thereon,  I  have  come  to  the  conclusion  that  the  plaintiffs'  damages 
would  not  be  less  if  assessed  in  November,  1914,  than  if  assessed 
in  August  or  September,  1916. 

I  therefore  give  judgment  for  the  plaintiffs  for  1067L  10s.  with 
costs. ^  Judgment  for  plaintiffs. 

1  L.  R.  10  Q.  B.  265. 

^  The  statement  of  facts  has  been  abbreviated.  The  decision  was  aflBrmed  by  the 
Court  of  Appeal  in  [1918]  2  K.B.  467. 


CHAPTER  VI 

ILLEGAL   CONTRACTS 


SECTION   I 
CONTRACTS    IN    RESTRAINT    OF    TRADE 


MITCHELL    V.    KEYNOLDS 

In  the  King's  Bench^  Hilary  Term^  1711 

{Reported  in  1  Peere  Williams,  181.] 

Debt  upon  a  bond.  The  defendant  prayed  oyer  of  the  condition, 
which  recited,  that  whereas  the  defendant  had  assigned  to  the 
plaintiff  a  lease  of  a  messuage  and  bakehouse  in  Liquorpond  Street, 
in  the  parish  of  St.  Andrew's  Halborn,  for  the  term  of  five  years : 
now  if  the  defendant  should  not  exercise  the  trade  of  a  baker  within 
that  parish,  during  the  said  term,  or,  in  case  he  did,  should  within 
three  days  after  proof  thereof  made,  pay  to  the  plaintiff  the  sum  of 
fifty  pounds,  then  the  said  obligation  to  be  void.  Quihus  lectis  and 
auditis,  he  pleaded,  that  he  was  a  baker  by  trade,  that  he  had  served 
an  apprenticeship  to  it,  rations  cujus  the  said  bond  was  void  in  law, 
per  quad  he  did  trade,  prout  ei  hene  licuit.  Whereupon  the  plain- 
tiff demurred  in  law. 

And  now,  after  this  matter  had  been  several  times  argued  at  the 
bar,  ParkeR;,  C.  J.,  delivered  the  resolution  of  the  court. 

The  general  question  upon  this  record  is,  whether  this  bond,  being 
made  in  restraint  of  trade,  be  good  ? 

And  we  are  all  of  opinion,  that  a  special  consideration  being 
set  forth  in  the  condition,  which  shows  it  was  reasonable  for  the 
parties  to  enter  into  it,  the  fame  is  good ;  and  that  the  true  distinction 
of  this  case  is,  not  between  promises  and  bonds,  but  between  contracts 
with  and  without  consideration;  and  that  wherever  a  sufficient 
consideration  appears  to  make  it  a  proper  and  useful  contract,  and 
such  as  cannot  be  set  aside  without  injury  to  a  fair  contractor,  it 
ought  to  be  maintained;  but  with  this  constant  diversity,  viz.  where 
the  restraint  is  general  not  to  exercise  a  trade  throughout  the  king- 
dom, and  where  it  is  limited  to  a  particular  place:  for  the  former  of 
these  must  be  void,  being  of  no  benefit  to  either  party,  and  only 
oppressive,  as  shall  be  shown  by  and  by. 

The  resolutions  of  the  books  upon  these  contracts  seeming  to 
disagree,  I  will  endeavor  to  state  the  law  upon  this  head,  and  to 

784 


SECT.    l]  MITCHELL    V.    REYNOLDS  785 

reconcile  the  jarring  opinions;  in  order  whereunto,  I  shall  proceed 
in  the  following  method. 

1st,  Give  a  general  view  of  the  cases  relating  to  the  restraint  of 
trade. 

2dly,  Make  some  observations  from  them. 

3dly,  Show  the  reasons  of  the  differences  which  are  to  be  found 
in  these  cases;  and 

4thly,  Apply  the  whole  to  the  case  at  bar. 

As  to  the  cases,  they  are  either  first,  of  involuntary  contracts, 
against,  or  without,  a  man's  own  consent;  or  secondly,  of  voluntary 
restraints  by  agreement  of  the  parties. 

Involuntary  restraints  may  be  reduced  under  these  heads.    - 

1st,  Grants  or  charters  from  the  crown. 

2dly,  Customs. 

3dly,  By-laws. 

Grants  or  charters  from  the  crown  may  be, 

1st,  A  new  charter  or  incorporation  to  trade  generally,  exclusive 
of  all  others,  and  this  is  void.     8  Co.  121. 

2dly,  A  grant  to  particular  persons  for  the  sole  exercise  of  any 
known  trade;  and  this  is  void,  because  it  is  a  monopoly,  and  against 
the  policy  of  the  common  law,  and  contrary  to  Magna  Chavta. 
11  Co.  84. 

3dly,  A  grant  of  the  sole  use  of  a  new  invented  art,  and  this  is 
good,  being  indulged  for  the  encouragement  of  ingenuity;  but  this 
is  tied  up  by  the  statute  of  21  Jac.  1,  cap.  3,  sect.  6,  to  the  term  of 
fourteen  years;  for  after  that  time  it  is  presumed  to  be  a  known 
trade,  and  to  have  spread  itself  among  the  people. 

Restraints  by  custom  are  of  three  sorts. 

1st,  Such  as  are  for  the  benefit  of  some  particular  persons,  who 
are  alleged  to  use  a  trade  for  the  advantage  of  a  community,  which 
are  good.  8  Co.  125 ;  Cro.  Eliz.  803 ;  1  Leon.  142 ;  Mich.  22  H.  6, 
14;  2  Bulst.  195;  1  Eoll.  Abr.  561. 

2dly,  For  the  benefit  of  a  community  of  persons  who  are  not 
alleged,  but  supposed  to  use  the  trade,  in  order  to  exclude  foreigners. 
Dyer,  279,  b;  W.  Jones,  162;  8  Co.  121;  11  Co.  52;  Carter,  68, 
114,  held  good. 

3dly,  A  custom  may  be  good  to  restrain  a  trade  in  a  particular 
place,  though  none  are  either  supposed  or  alleged  to  use  it;  as  in 
the  case  of  Rippon.    Register,  105,  106. 

Restraints  of  trade  by  by-laws  are  these  several  ways. 

1st,  To  exclude  foreigners;  and  this  is  good,  if  only  to  enforce 
a  precedent  custom  by  a  penalty.  Carter,  68,  114;  8  Co.  125.  But 
where  there  is  no  precedent  custom,  such  by-law  is  void.  I  Roll.  Abr. 
364;  Hob.  210;  1  Bulst.  11;  3  Keb.  808.  But  the  case  in  Keble  is 
misreported;  for  there  the  defendants  did  not  plead  a  custom  to 
exclude  foreigners,  but  only  generally  to  make  by-laws,  which  was  the 
ground  of  the  resolution  in  that  case. 


786  MITCHELL    V.    REYNOLDS  [CHAP.   VI 

2dly,  All  by-laws  made  to  cramp  trade  in  general,  are  void.  Moor, 
576;  2  lust.  47;  1  Bulst.  11. 

3dly,  By-laws  made  to  restrain  trade,  in  order  to  better  govern- 
ment and  regulation  of  it,  are  good,  in  some  cases  (viz.),  if  they  are 
for  the  benefit  of  the  place,  and  to  avoid  public  inconveniences, 
nuisances,  &c.  Or  for  the  advantage  of  the  trade,  and  improvement 
of  the  commodity.  Sid.  284;  Eaym.  288;  2  Keb.  27,  873,  and  5  Co. 
62,  b,  which  last  is  upon  the  by-law  for  bringing  all  broadcloth  to 
Blackwell-Hall,  there  to  be  viewed  and  marked,  and  to  pay  a  penny 
per  piece  for  marking:  this  was  held  a  reasonable  by-law;  and  in- 
deed it  seems  to  be  only  a  fixing  of  the  market;  for  one  end  of  all 
markets  is,  that  the  commodity  may  be  viewed;  but  then  they  must 
not  make  people  pay  unreasonably  for  the  liberty  of  trading  there. 

In  2  Keb.  308,  the  case  is  upon  a  by-law  for  restraining  silk- 
throwsters  from  using  more  than  such  a  certain  number  of  spindles, 
and  there  the  by-law  would  have  been  good,  if  the  reasons  given  for 
it  had  been  true. 

Voluntary  restraints  by  agreement  of  the  parties,  are  either, 

1st,  General,  or 

2dly,  Particular,  as  to  places  or  persons. 

General  restraints  are  all  void,  whether  by  bond,  covenant,  or 
promise,  &c.,  with  or  without  consideration,  and  whether  it  be  of  the 
party's  own  trade,  or  not.     Cro.  Jac.  596;  2  Bulst.  136;  Allen,  67. 

Particular  restraints  are  either,  1st,  without  consideration,  all 
which  are  void  by  what  sort  of  contract  soever  created.  2  H.  5,  5; 
Moor,  115,  242;  2  Leon.  210;  Cro.  Eliz.  872;  Noy,  98;  Owen,  143; 
2  Keb.  377;  March,  191;  Show.  2  (not  well  reported)  ;  2  Saund.  155. 

Or  2dly,  particular  restraints  are  with  consideration. 

Where  a  contract  for  restraint  of  trade  appears  to  be  made  upon 
a  good  and  adequate  consideration,  so  as  to  make  it  a  proper  and 
useful  contract,  it  is  good.  2  Bulst.  136;  Rogers  v.  Parry.  Though 
that  case  is  wrong  reported,  as  it  appears  by  the  roll  which  I  have 
caused  to  be  searched,  it  is  B.  R.  Trin.,  11  Jac.  1,  Rot,  223,  And 
there  solution  of  the  judges  was  not  grounded  upon  its  being  a  par- 
ticular restraint,  but  upon  its  being  a  particular  restraint  with  a 
consideration,  and  the  stress  lies  on  the  words,  as  the  case  is  here, 
though,  as  they  stand  in  the  book,  they  do  not  seem  material.  N^oy, 
98;  W.  Jones,  13  Cro.  Jac.  596.  In  that  case,  all  the  reasons  are 
clearly  stated,  and,  indeed,  all  the  books,  when  carefully  examined, 
seem  to  concur  in  the  distinction  of  restraints  general,  and  restraints 
particular,  with  or  without  consideration,  which  stands  upon  very 
good  foundation;  Volenti  non  fit  injuria;  a  man  may,  upon  a  valu- 
able consideration,  by  his  own  consent,  and  for  his  own  profit,  give 
over  bis  trade;  and  part  with  it  to  another  in  a  particular  place. 

Palm,  172;  Bragg  v.  Stanner.  The  entering  upon  the  trade,  and 
not  whether  the  riglit  of  action  accrued  by  bond,  promise,  or  cove- 
nant, was  the  consideration  in  that  case. 


SECT.    l]  MITCHELL    V.    REYNOLDS  787 

Vide  March's  Eep.  77,  but  more  particularly  Allen's,  67,  where 
there  is  a  very  remarkable  case,  which  lays  down  this  distinction, 
and  puts  it  upon  the  consideration  and  reason  of  the  thing. 

Secondly,  I  come  now  to  make  some  observations  that  may  be 
useful  in  the  understanding  of  these  cases.    And  they  are, 

1st,  That  to  obtain  the  sole  exercise  of  any  known  trade  through- 
out England,  is  a  complete  monopoly,  and  against  the  policy  of  the 
law. 

2dly,  That  when  restrained  to  particular  places  or  persons  (if 
lawfully  and  fairly  obtained)  the  same  is  not  a  monopoly. 

3dly,  That  since  these  restraints  may  be  by  custom,  and  custom 
must  have  a  good  foundation,  therefore  the  thing  is  not  absolutely, 
and  in  itself,  unlawful. 

4thly,  That  it  is  lawful  upon  good  consideration,  for  a  man  to  part 
with  his  trade. 

5thly,  That  since  actions  upon  the  case  are  actions  injuriarum, 
it  has  been  always  held,  that  such  actions  will  lie  for  a  man's  using 
a  trade  contrary  to  custom,  or  his  own  agreement;  for  there  he  uses 
it  injuriously. 

.  6thly,  That  where  the  law  allows  a  restraint  of  trade,  it  is  not 
unlawful  to  enforce  it  with  a  penalty. 

7thly,  That  no  man  can  contract  not  to  use  his  trade  at  all. 

8thly,  That  a  particular  restraint  is  not  good  without  just  reason 
and  consideration. 

Thirdly,  I  proposed  to  give  the  reasons  of  the  differences  which 
we  find  in  the  cases ;  and  this  I  will  do, 

1st,  With  respect  to  involuntary  restraints,  and 

2dly,  With  regard  to  such  restraints  as  are  voluntary. 

As  to  involuntary  restraints,  the  first  reason  why  such  of  these,  as 
are  created  by  grants  and  charters  from  the  Crown  and  by-laws, 
generally  are  void,  is  drawn  from  the  encouragement  which  the  law 
gives  to  trade  and  honest  industry,  and  that  they  are  contrary  to 
the  liberty  of  subject. 

2dly,  Another  reason  Is  drawn  from  Magna  Charta,  which  is 
infringed  by  these  acts  of  power;  the  statute  says,  nullus  Uher  homo, 
&c.,  dissetsetur  de  libero  tenemento  vel  libertatihus,  vel  liheris 
consuetudinihus  suis,  &c.,  and  these  words  have  been  always  taken 
to  extend  to  freedom  of  trade. 

But  none  of  the  cases  of  customs,  by-laws  to  enforce  these  customs, 
and  patents  for  the  sole  use  of  a  new  invented  art,  are  within  any 
of  these  reasons;  for  here  no  man  is  abridged  of  his  liberty,  or 
disseised  of  his  freehold;  a  custom  is  lex  loci,  and  foreigners  have 
no  pretence  of  right  in  a  particular  society,  exempt  from  the  laws 
of  that  society;  and  as  to  new  invented  arts,  no  body  can  be  said 
to  have  a  right  to  that  which  was  not  in  being  before,  and  therefore 
it  is  but  a  reasonable  reward  to  ingenuity  and  uncommon  industry. 

I  shall  show  the  reason  of  the  differences  in  the  cases  of  voluntary 
restraint. 


788  MITCHELL    V.   REYNOLDS  [CHAP.    VI 

1st,  jSTegatively. 

2dly,  Affirmatively. 

1st,  jSTegatively ;  the  true  reason  of  the  disallowance  of  these  in  any 
case,  is  never  drawn  from  Magna  Charta;  for  a  man  may,  volun- 
tarily, and  by  his  own  act,  put  himself  out  of  the  possession  of  his 
freehold ;  he  may  sell  it,  or  give  it  away  at  his  own  pleasure. 

2dly,  !N^either  is  it  a  reason  against  them,  that  they  are  contrary 
to  the  liberty  of  the  subject;  for  a  man  may,  by  his  own  consent, 
for  a  valuable  consideration,  part  with  his  liberty;  as  in  the  case  of 
a  covenant  not  to  erect  a  mill  upon  his  own  lands.  J.  Jones,  13 ; 
Mich.  4;  Ed.  3,  57.  And  when  any  of  these  are  at  any  time  men- 
tioned as  reasons  upon  the  head  of  voluntary  restraints,  they  are  to 
be  taken  only  as  general  instances  of  the  favor  and  indulgence  of 
the  law  to  trade  and  industry. 

3dly,  It  is  not  a  reason  against  them,  that  they  are  against  law, 
I  mean,  in  a  proper  sense,  for  in  an  improper  sense  they  are. 

All  the  instances  of  conditions  against  law  in  a  proper  sense  are 
reducible  under  one  of  these  heads. 

1st,  Either  to  do  something  that  is  malum  in  se,  or  malum,  prohibi- 
tum.; 1  Inst.  206. 

2dly,  To  omit  the  doing  of  something  that  is  a  duty.  Palm.  172; 
Hob.  12 ;  JSTorton  v.  Sims. 

3dly,  To  encourage  such  crimes  and  omissions.  Fitzherb,  tit. 
Obligation;  13  Bro.  tit.  Obligation;  34  Dyer,  118. 

Such  conditions  as  these,  the  law  will  always,  and  without  any 
regard  to  circumstances,  defeat,  being  concerned  to  remove  all  temp- 
tations and  inducements  to  those  crimes ;  and  therefore,  as  in  1  Inst. 
206,  a  feoffment  shall  be  absolute  for  an  unlawful  condition,  and  a 
bond  void.     But  from  hence  I  would  infer, 

1st,  That  where  there  may  be  a  way  found  out  to  perform  the 
condition,  without  a  breach  of  the  law,  it  shall  be  good.  Hob.  12; 
Cro.  Car.  22;  Perk.  228. 

2dly,  That  all  things,  prohibited  by  law,  may  be  restrained  by 
condition;  and  therefore  these  particular  restraints  of  trade,  not 
being  against  law,  in  a  proper  sense,  as  being  neither  m,ala  in  se,  nor 
mala  prohihita,  and  the  law  allowing  them  in  some  instances,  as  in 
those  of  customs  and  assumpsits,  they  may  be  restrained  by  condition. 

2dly,  vVffirmatively ;  the  true  reasons  of  the  distinction  upon  which 
the  judgments  in  these  cases  of  voluntary  restraints  arc  founded  are, 
Ist,  the  mischief  which  may  arise  from  them,  1st,  to  the  party,  by 
the  loss  of  his  livelihood,  and  the  subsistence  of  his  family;  2dly,  to 
the  t)n])licj  by  depriving  it  of  an  useful  member. 

Another  rf^ason  is,  the  great  abuses  these  voluntary  restraints 
are  liahlc;  to;  as  for  instance,  from  corporations,  who  are  perpetually 
laboring  for  exclusive  advantages  in  trade,  and  to  reduce  it  into  a 
few  hands  as  possible;  as  likewise  from  masters,  who  are  apt  to 
giv(!  their  apprentices  much  vexation   on  this  account,  and  to  use 


SECT.    l]  MITCHELL    V.    REYNOLDS  789 

many  indirect  practices  to  procure  such  bonds  from  them,  lest  they 
should  prejudice  them  in  their  custom,  when  they  come  to  set  up  for 
themselves. 

3dly,  Because  in  a  great  many  instances,  they  can  be  of  no  use 
to  the  obligee;  which  holds  in  all  cases  of  general  restraint  through- 
out England;  for  what  does  it  signify  to  a  tradesman  in  London, 
what  another  does  at  Newcastle  ?  and  surely  it  would  be  unreasonable 
to  fix  a  certain  loss  on  one  side,  without  any  benefit  to  the  other. 
The  Roman  law  would  not  enforce  such  contracts  by  an  action.  See 
Puff.^  lib.  5,  c.  2,  sect.  3,  21  H.  7,  20.  ' 

4thly,  The  fourth  reason  is  in  favor  of  these  contracts,  and  is, 
that  there  may  happen  instances  wherein  they  may  be  useful  and 
beneficial,  as  to  prevent  a  town  from  being  over-stocked  with  any 
particular  trade;  or  in  case  of  an  old  man,  who  finding  himself 
under  such  circumstances  either  of  body  or  mind,  as  that  he  is 
likely  to  be  a  loser  by  continuing  his  trade,  in  this  case  it  will  be 
better  for  him  to  part  with  it  for  a  consideration,  that  by  selling  his 
custom,  he  may  procure  to  himself  a  livelihood,  which  he  might 
probably  have  lost,  by  trading  longer. 

5thly,  The  law  is  not  so  unreasonable,  as  to  set  aside  a  man's 
own  agreement  for  fear  of  an  uncertain  injury  to  him,  and  fix  a 
certain  damage  upon  another;  as  it  must  do,  if  contracts  with  a 
consideration  were  made  void.  Barrow  v.  Wood,  March  Rep.  77; 
Mich.  7  Ed.  3,  65;  Allen,  67;  8  Co.  121. 

But  here  it  may  be  made  a  question,  that  suppose  it  does  not 
appear  whether  or  no  the  contract  be  made  upon  good  consideration, 
or  be  merely  injurious  and  oppressive,  what  shall  be  done  in  this 
case? 

Responsive.  I  do  not  see  why  that  should  not  be  shown  by  plead- 
ing; though  certainly  the  law  might  be  settled  either  way  without 
prejudice;  but  as  it  now  stands  the  rule  is,  that  wherever  such  con- 
tract stat  indiffer enter,  and  for  ought  appears,  may  be  either  good 
or  bad,  the  law  presumes  it  prima  facie  to  be  bad,  and  for  these 
reasons : 

1st,  In  favor  of  trade  and  honest  industry. 

2dly,  For  that  there  plainly  appears  a  mischief,  but  the  benefit 
(if  any)  can  be  only  presumed;  and  in  that  case,  the  presumptive 
benefit  shall  be  over-borne  by  the  apparent  mischief. 

3dly,  Eor  that  the  mischief  (as  I  have  shown  before)  is  not  only 
private,  but  public. 

4thly,  There  is  a  sort  of  presumption,  that  It  Is  not  of  any  benefit 
to  the  obligee  himself,  because,  It  being  a  general  mischief  to  the 
public,  everybody  Is  affected  thereby:  for  It  Is  to  be  observed,  that 

>  The  instances  there  mentioned  are,  that  if  any  should  agree  not  to  wash  their 
hands,  or  change  their  Hnen,  for  such  a  time,  there  could  be  no  need  to  trouble  a  magis- 
trate on  the  breach  of  such  agreements,  which  would  tend  to  no  consequence  when 
put  in  execution. 


790  MITCHELL    V.   REYNOLDS  [CHAP.   VI 

though  it  be  not  shown  to  be  the  party's  trade  or  livelihood,  or  that 
he  had  no  estate  to  subsist  on,  yet  all  the  books  condemn  those  bonds, 
on  that  reason  (xiz-.),  as  taking  away  the  obligor's  livelihood,  which 
proves  that  the  law  presumes  it;  and  this  presumption  answers  all 
the  difficulties  that  are  to  be  found  in  the  books. 

As  1st,  That  all  contracts,  where  there  is  a  bare  restraint  of  trade 
and  no  more,  must  be  void;  but  this  taking  place,  only  where  the 
consideration  is  not  shown,  can  be  no  reason  why,  in  cases  where  the 
special  matter  appears,  so  as  to  make  it  a  reasonable  and  useful 
contract,  it  should  not  be  good;  for  there  the  presumption  is  ex- 
cluded, and  therefore  the  courts  of  justice  will  enforce  these  latter 
contracts,  but  not  the  former. 

2dly,  It  answers  the  objection,  that  a  bond  does  not  want  a  con- 
sideration, but  is  a  perfect  contract  without  it;  for  the  law  allows 
no  action  on  a  nudum  pactum,  but  every  contract  must  have  a 
consideration,  either  expressed,  as  in  assumpsits,  or  implied,  as  in 
bonds  and  covenants,  but  these  latter,  though  they  are  perfect  as  to 
form,  yet  may  be  void  as  to  the  matter;  as  in  a  covenant  to  stand 
seised,  which  is  void  without  a  consideration,  though  it  be  a  complete 
and  perfect  deed. 

3dly,  It  shows  why  a  contract  not  to  trade  in  any  part  of  England, 
though  with  consideration,  is  void ;  for  there  is  something  more  than 
a  presumption  against  it,  because  it  can  never  be  useful  to  any  man 
to  restrain  another  from  trading  in  all  places,  though  it  may  be,  to 
restrain  him  from  trading  in  some,  unless  he  intends  a  monopoly, 
which  is  a  crime. 

4thly,  This  shows  why  promises  in  restraint  of  trade  have  been 
held  good;  for  in  those  contracts,  it  is  always  necessary  to  show  the 
consideration,  so  that  the  presumption  of  injury  could  not  take  place, 
but  it  must  be  governed  by  the  special  matter  shown.  And  it  also 
accounts  not  only  for  all  the  resolutions,  but  even  all  the  expressions 
that  are  used  in  our  books  in  these  cases;  it  at  least  excuses  the  ve- 
hemence of  Judge  Halt,  in  2  H.  5,  fol.  quinto;  for  suppose  (as  the 
case  seems  to  be)  a  poor  weaver,  having  just  met  with  a  great  loss, 
should,  in  a  fit  of  passion  and  concern,  be  exclaiming  against  his 
trade,  and  declare,  that  he  would  not  follow  it  any  more,  &c.,  at 
which  instant,  some  designing  fellow  should  work  him  up  to  such  a 
pitch,  as,  for  a  trifling  matter,  to  give  a  bond  not  to  work  at  it  again, 
and  aftrTwards,  Avhon  the  nooessitios  of  his  family,  and  the  cries  of 
his  cliildrcn,  send  him  to  the  loom,  should  take  advantage  of  the 
forfeiture,  and  put  the  bond  in  suit;  I  must  own,  I  think  this  such 
a  pief(!  of  villainy,  as  is  hard  to  find  a  name  for;  and  therefore 
cannot  but  approve  of  the  indignation  that  judge  expressed,  though 
Tif)t  liis  inniiiuT^  of  expressing  it.     Surely  it  is  not  fit  that  such  un- 

'  Hull  cxprcHHcd  }iiriiHf'lf  thu8;  A  ma  intent  vouh  purr<'8  aver  demurrer  sur  luy  que 
Ic  ohliKation  cHt  void,  cf)  (\uo,  lo  condition  est  ericountre  common  ley,  «fec.,  per  Dieu  si 
le  plaintiff  fuit  icy,  il  irra  al  prison  tanq;   il  ust  fait  fine  an  Roy. 


SECT.    l]  MITCHELL    V.    REYNOLDS  791 

reasonable  mischievous  contracts  should  be  countenanced,  much  less 
executed  by  a  court  of  justice. 

As  to  the  general  indefinite  distinction  made  between  bonds  and 
promises  in  this  case,  it  is  in  plain  words  this,  that  the  agreement 
itself  is  good,  but  when  it  is  reduced  into  the  form  of  a  bond,  it 
immediately  becomes  void;  but  for  what  reason,  see  3  Lev.  241,  Now 
a  bond  may  be  considered  two  ways,  either  as  a  security,  or  as  a 
compensation;  and 

1st,  "Why  should  it  be  void  as  a  security?  Can  a  man  be  bound 
too  fast  from  doing  an  injury?  which  I  have  proved  the  using  of  a 
trade  contrary  to  custom  or  promise,  to  be. 

2dly,  Why  should  it  be  void  as  a  compensation?  Is  there  any 
reason  why  parties  of  full  age,  and  capable  of  contracting,  may 
not  settle  the  quantum,  of  damages  for  such  an  injury?  Bract,  lib. 
3,  c.  2,  sect.  4. 

It  would  be  very  strange,  that  the  law  of  England  that  delights 
so  much  in  certainty,  should  make  a  contract  void,  when  reduced  to 
certainty,  which  was  good,  when  loose  and  uncertain;  the  cases  in 
March's  Rep,  77,  191,  and  also  Show.  2,  are  but  indifferently  re- 
ported, and  not  warranted  by  the  authorities  they  build  upon. 

1st  Objection.  In  a  bond  the  whole  penalty  is  to  be  recovered, 
but  in  assumpsit  only  the  damages. 

Response.    This  objection  holds  equally  against  all  bonds  whatever, 

2d  Objection.  Another  objection  was,  that  this  is  like  the  case  of 
an  infant,  who  may  make  a  promise  but  not  a  bond,  or  that  of  a 
sheriff  who  cannot  take  a  bond  for  fees. 

Response.  The  case  of  an  infant  stands  on  another  reason  (viz.), 
a  general  disability  to  make  a  deed;  but  here  both  parties  are 
capable;  neither  is  it  the  nature  of  the  bond,  but  merely  the  in- 
capacity of  the  infant,  which  makes  a  bond  by  him  void,  since  there 
a  surety  would  be  liable ;  but  it  is  otherwise  here. 

Also  the  case  of  a  sheriff  is  very  different;  for  at  common  law  he 
could  take  nothing  for  doing  his  duty,  but  the  statute  has  given  him 
certain  fees;  but  he  can  neither  take  more,  not  a  chance  for  more, 
than  that  allows  him. 

3d  Objection.  It  was  further  objected,  that  a  promise  is  good,  and 
a  bond  void,  because  the  former  leaves  the  matter  more  at  large  to 
be  tried  by  a  jury;  but  what  is  there  to  be  tried  by  a  jury  in  this 
case  ? 

Response,  1st.  It  is  to  be  tried  whether  upon  consideration  of  the 
circumstances  the  contract  be  good  or  not?  and  that  is  a  matter  of 
law,  not  fit  for  a  jury  to  determine. 

2dly,  It  is  to  ascertain  the  damages;  but  cui  bono  (say  they)  should 
that  be  done?  is  it  for  the  benefit  of  the  obligor? 

Response.  Certainly  it  may  be  necessary  on  that  account  for 
these  reasons : 

1st,   A  bond   is   more   favorable  for  him   than   a   promise;   for 


792  MITCHELL    V.    REYNOLDS  [CHAP.   VI 

the  penalty  is  a  re-purchase  of  his  trade  ascertained  before  hand, 
and  on  payment  thereof  he  shall  have  it  again ;  he  may  rather  choose 
to  be  bound'  not  to  do  it  under  a  penalty,  than  not  to  do  it  all. 

2dly,  However  it  be,  it  is  his  own  act. 

3dly,  He  can  suffer  only  by  his  knavery,  and  surely  courts  of  jus- 
tice are  not  concerned  lest  a  man  should  pay  too  dear  for  being  a 
knave. 

4thly,  Eestraints  by  custom  may  (as  I  have  proved)  be  enforced 
with  penalties  which  are  imposed  without  the  party's  consent,  nay 
by  the  injured  party  without  the  concurrence  of  the  other;  and  if 
so,  then  a  fortiori  he  may  bind  himself  by  a  penalty. 

Objection.  It  may  perhaps  be  objected,  that  a  false  recital  of  a 
consideration  in  the  condition  may  subject  a  man  to  an  inconven- 
ience, which  the  law  so  much  labors  to  prevent. 

Eesponse.  But  this  is  no  more  to  be  presumed  than  false  testi- 
mony, and  in  such  a  case,  I  should  think  the  defendant  might  aver 
against  it;  for  though  the  rule  be,  that  a  man  is  estopped  from 
averring  against  anything  in  his  own  deed,  yet  that  is,  supposing 
it  to  be  his  deed;  for  where  it  is  void,  it  is  otherwise,  as  in  the  case 
of  an  usurious  contract. 

The  application  of  this  to  the  case  at  bar  is  very  plain;  here  the 
particular  circumstances  and  consideration  are  set  forth,  upon  which 
the  court  is  to  judge,  whether  it  be  a  reasonable  and  useful  contract. 

The  plaintiff  took  a  baker's  house,  and  the  question  is,  whether  he 
or  the  defendant  shall  have  the  trade  of  this  neighborhood?  the  con- 
cern of  the  public  is  equal  on  both  sides. 

What  makes  this  the  more  reasonable  is,  that  the  restraint  is  ex- 
actly proportioned  to  the  consideration  (viz.),  the  term  of  five  years. 

To  conclude:  In  all  restraints  of  trade,  where  nothing  more 
appears,  the  law  presumes  them  bad ;  but  if  the  circumstances  are  set 
forth,  that  presumption  is  excluded,  and  the  Court  is  to  judge  of 
those  circumstances,  and  determine  accordingly;  and  if  upon  them  it 
appears  to  be  a  just  and  honest  contract,  it  ought  to  be  maintained. 

For  these  reasons  we  are  of  opinion,  that  the  plaintiff  ought  to 
have  judgment.^ 

»  In  United  States  v.  Addyston  Pipe  &  Steel  Co.,  85  Fed.  271  (C.  C.  A.)  at  page  281, 
Taft,  Circuit  Judge,  thus  enumerated  the  permissible  kinds  of  contracts  in  restraint 
of  trade:  "Covenants  in  partial  restraint  of  trade  are  generally  upheld  as  valid 
when  they  are  agreements  (1)  by  the  seller  of  property  or  business  not  to  com- 
pete with  the  l)uyer  in  such  a  way  as  to  derogate  from  the  value  of  the  prop- 
erty or  business  sold;  (2)  by  a  retiring  partner  not  to  compete  with  the  firm; 
(3)  by  ft  jjartner  pending  the  partnership  not  to  do  anything  to  interfere,  by 
eom petition  f)r  otherwise,  with  business  of  the  firm;  (4)  by  the  buyer  of  prop- 
rirty  not  to  msc.  the  same  in  competition  with  the  business  restrained  by  the 
seller;  and  Cr>)  by  an  assistant,  .servant,  or  ag(mt  not  to  compete  with  his  mas- 
t«;r  or  emi)loy('r  after  the  expiration  of  liis  time  of  service.  Before  such  agree- 
mfmtH  are  ujjheld,  however,  the  court  must  find  that  the  restraints  attempted 
thf'Pf'by  anr  rfiasonably  necessary  (1,  2  and  .3)  to  the  enjoyment  by  the  buyer 
f>{  the  proi)erty,  goorl  will,  or  Intercast  in  the  partnership  bought;  or  (4)  to  the 
legitimate  enrls  of  the  existing  p.-irtnership;  or  (.'>)  to  the  prevention  of  possible 
injury  to  the  buHincms  of  the  seller  from  use  by  the  buyer  of  the    thing   sold;  or 


SECT.    l]  GARST    V.    HARRIS  79c 


JULIUS  GARST  v.  FRANK  M.  HARRIS 

Supreme  Judicial  Court  of  Massachusetts,  October  2-18,  1900 

[Reported  in  177  Massachusetts,  72.] 

Contract,  for  breach  of  the  following  agreement  : 

"For  and  in  consideration  of  the  per  cent  deducted  from  the  full 
retail  price,  as  per  list  appended  hereto,  allowed  by  the  Phenyo 
Caffein  Company,  the  vendee  or  retailer  hereby  agrees  that  he  will 
not  sell,  nor  allow  any  one  in  his  employ  to  sell,  directly  or  in- 
directly, Phenyo  Caffein,  25  cent  size,  for  less  than  25  cents  a  single 
box,  five  boxes  for  one  dollar,  twelve  boxes  for  two  dollars  and  twenty- 
five  cents,  nor  the  10  cent  size  for  less  than  the  face  price. 

"The  vendee,  or  retailer,  further  agrees,  that  if  he  violates  the 
terms  of  this  contract,  he  will  pay  to  the  Phenyo  Caffein  Company 
the  sum  of  $21,  that  sum  being  the  agreed  amount  that  the  Phenyo 
Caffein  Company  would  be  damaged  by  a  breach  of  this  agreement. 
This  clause,  as  to  the  amount  of  damages,  is  inserted  because  it  is 
recognized  and  agreed  that  a  breach  of  this  agreement  would  cause 
the  Phenyo  Company  to  suffer  a  material  loss,  and  also  that  it  would 
be  very  difficult  and  usually  impossible  to  prove  the  exact  amount 
of  such  loss. 

"The  vendee,  or  retailer,  further  agrees  that  the  acceptance  of 
said  goods,  with  the  notice  of  the  conditions  of  sale,  shall  be  held 
to  be  an  assent  on  his  part  to  the  foregoing  terms,  and  an  agreement 
with  the  Phenyo  Caffein  Company,  to  sell  subject  to  the  price 
restrictions  fixed  by  it. 

"This  agreement  is  made  subject  to  the  stipulation  that  in  case 
the  vendee,  or  retailer,  should  desire  to  discontinue  the  sale  of 
Phenyo  Caffein,  and  notifies  the  Phenyo  Caffein  Company  of  that 
fact,  in  writing,  said  company  agrees  to  buy  from  the  vendee,  or 
retailer,  any  of  the  said  Phenyo  Caffein  at  the  net  cost  price  at 
which  it  was  sold  to  him." 

Then  followed  a  specification  of  the  price  and  discount  to  the  retail 
trade. 

The  case  was  submitted  to  the  Superior  Court,  and,  after  judgment 
for  the  plaintiff  for  $21,  by  Gaskill,  J.,  to  this  court,  on  appeal, 
upon  agreed  facts,  the  nature  of  which  appears  in  the  opinion. 

W.  C.  Mellish,  for  the  defendant. 

W.  Thayer  (H.  W.  Cobh,  with  him),  for  the  plaintiff. 

Holmes,  C.  J.  This  is  an  action  of  contract  to  recover  $21  as 
liquidated  damages  for  breach  of  an  agreement  not  to  sell  Phenyo 
Caffein  below  a  stipulated  price.     Phenyo  Caffein  was  a  proprietary 

(6)  to  protection  from  the  danger  of  loss  to  the  employer's  business  caused  by 
the  un'ust  use  on  the  part  of  the  employe  of  the  confidential  knowledge  ac- 
quired in  such  business." 


794  PULP   WOOD   CO.    V.    GREEN    BAY    FIBER   CO.      [CHAP.   VI 

medicine  purchased  by  the  defendant  of  the  plaintiff.  At  the  time 
of  the  sale  and  as  a  part  of  it  a  written  statement  of  terms  containing 
this  agreement  was  read  to  the  defendant  and  delivered  to  him. 
One  stipulation  expressed  in  the  document  was  that  the  acceptance 
of  the  goods  with  the  notice  of  the  conditions  of  the  sale  should  be  an 
assent  to  the  terms.  The  defendant  accepted  the  goods  and  ex- 
pressed no  dissent.  There  is  no  question,  therefore,  that  he  agreed 
to  those  terms  upon  the  consideration  of  the  sale,  which  was  made 
with  a  deduction  from  the  full  retail  price.  The  defendant  sold  the 
goods  so  purchased  below  the  stipulated  price  and  broke  his  contract. 
So  much  of  the  defendant's  argument  as  denies  the  agreement,  the 
consideration,  or  the  applicability  of  the  contract  to  the  goods  sold 
needs  no  further  discussion. 

The  rest  of  the  defence  needs  but  a  few  words.  It  is  said  that  the 
contract  was  unlawful  as  in  restraint  of  trade.  Some  limits  were 
set  to  the  inherited  doctrine  on  this  subject  by  the  recent  case  of 
Anchor  Electric  Co.  v.  Hawkes,  171  Mass.  101,  as  they  had  been  in 
England  before.  When,  as  here,  there  is  a  secret  composition,  which 
the  defendant  presumably  would  have  no  chance  to  sell  at  a  profit 
at  all  but  for  the  plaintiff's  permission,  a  limit  to  the  license,  in  the 
form  of  a  restriction  of  the  price  at  which  he  may  sell,  is  proper 
enough.  See  Morse  Twist  Drill  &  Machine  Co,  v.  Morse,  103  Mass. 
73 ;  Central  Shade  Roller  Co.  v.  Cushman,  143  Mass.  353 ;  Gloucester 
Isinglass  &  Glue  Co.  v.  Russia  Cement  Co.,  154  Mass.  92;  Fowle  v. 
Park,  131  U.  S.  88,  97;  Walsh  v.  Dwight,  40  App.  Div.  (K  Y.)  513. 

It  is  suggested  that  the  sum  agreed  upon  in  the  writing  as  liqui- 
dated damages  is  a  penalty.  But  it  is  admitted  in  the  agreed  facts 
that  the  damages  are  substantial  and  difficult  to  estimate,  and  it  was 
recognized  in  the  contract  that  they  would  be  so.  It  has  been  decided 
recently  that  parties  are  to  be  held  to  their  words  upon  this  question 
except  in  exceptional  cases  whore  there  are  special  reasons  for  a 
different  decision.  Guerin  v.  Stacy,  175  Mass.  595.  In  this  case 
there  is  every  reason  for  upholding  the  general  rule.  Chase  v.  Allen, 
13  Gray,  42;  Lynde  v.  Thompson,  2  Allen,  456. 

Judgment  for  the  plaintiff.^ 


PULP  WOOD  COMPANY  Appellant,  v.  GREEN  BAY 
&  FIBER  COMPANY,  Respondent 

Wisconsin  Supreme  Court,  May  23-June  17,  1914 

[Reported  in  157  Wisconsin,  604] 

This  action  arises  from  a  series  of  contracts  in  which  the  plaintiff 
agreed  to  supply  the  defendant  with  pulp-wood  for  its  paper  mill. 

'  Id  BoHton  Rtorf  v.  Amorican  rjriiphophonc  Co.,  240  U.  S.  8  contracts  between 
the  manufaotiircT  of  i)atentefl  uraphophones  and  all  dealers  throughout  the  country 
permitted  to  Hell  them  fixing  the  resale  price  were  held  invalid. 


SECT.    l]  PULP   WOOD   CO.    V.    GREEN    BAY    FIBER   CO.  795 

The  contracts  were  made  from  year  to  year,  during  the  years  1904 
to  1909.  They  were  alike  in  terms  except  as  to  the  amount  of  wood 
to  be  furnished,  and  the  so-called  base  price  for  it. 

The  contracts  in  effect  provided  that  the  plaintiff  should  sell 
a  named  quantity  of  pulp-wood  at  certain  fixed  prices,  but  also  pro- 
vided that  if  the  plaintiff  was  not  able  to  furnish  certain  specified 
amounts  needed  to  fulfill  its  contracts  with  certain  named  pur- 
chasers, the  defendant  would  accept  its  pro  rata  share  of  the  plain- 
tiff's production  as  full  satisfaction.  And  if,  on  the  other  hand,  the 
plaintiff  found  it  necessary  in  order  to  operate  economically,  to 
produce  more  than  the  amount  required  for  such  contracts,  the  de- 
fendant agreed  to  take  a  pro  rata  share  of  the  excess.  It  was  further 
provided  that  the  defendant  should  not  purchase  any  pulp-wood 
elsewhere,  and  that  at  the  end  of  the  season  the  so-called  base  price 
should  be  so  adjusted  as  to  make  the  defendant  pay  a  pro  rata  share 
of  the  costs  of  the  plaintiff's  product  and  seven  per  cent  on  the  capital 
employed,  an  additional  payment  being  made  by  the  defendant, 
or  a  rebate  paid  to  him,  as  circumstances  might  require. 

Three  causes  of  action  are  stated  by  the  plaintiff :  First,  to  recover 
from  the  defendant  a  pro  rata  share  of  a  loss  incurred  by  the  plain- 
tiff in  its  operations;  second,  to  recover  damages  for  the  defendant's 
failure  to  receive  wood  on  its  contracts  when  tendered;  and,  third, 
to  recover  an  alleged  balance  for  wood  delivered  to  the  defendant, 
and  not  paid  for. 

The  defendant  demurred  to  the  complaint.^ 

Barnes,  J.  The  defendant  contends  that  the  contracts  sued  on 
are  void  under  the  federal  Anti-Trust  Act,  26  U.  S.  Stats,  at  Large, 
209,  ch.  647  (3  U.  S.  Comp.  Stats.  1901,  p.  3200),  which  is  as 
follows : 

"Sec.  1.  Every  contract,  combination  in  the  form  of  a  trust 
or  otherwise,  or  conspiracy,  in  restraint  of  trade  or  commerce 
among  the  several  states,  or  with  foreign  nations,  is  hereby  de- 
clared to  be  illegal.  Every  person  who  shall  make  any  such  con- 
tract or  engage  in  any  such  combination  or  conspiracy,  shall  be 
deemed  guilty  of  a  misdemeanor,  and,  on  conviction  thereof,  shall 
be  punished  by  fine  not  exceeding  five  thousand  dollars,  or  by  im- 
prisonment not  exceeding  one  year,  or  by  both  said  punishments 
in  the  discretion  of  the  court. 

'Sec.  2.  Every  person  who  shall  monopolize,  or  attempt  to  monop- 
olize, or  combine  or  conspire  with  any  other  person  or  persons, 
to  monopolize  any  part  of  the  trade  or  commerce  among  the  several 
states,  or  with  foreign  nations,  shall  be  deemed  guilty  of  a  mis- 
demeanor, and,  on  conviction  thereof,  shall  be  punished  by  fine 
not  exceeding  five  thousand  dollars,  or  by  imprisonment  not  ex- 
ceeding one  year,  or  by  both  said  punishments,  in  the  discretion  of 
the  court." 

^  The  statement  of  facts  has  been  abbreviated. 


796  PULP   WOOD    CO.    V.    GREEN    BAY    FIBER   CO.      [CHAP.   VI 

Further,  tliat  sucli  contracts  were  made  in  violation  of  sees. 
1791;  and  I747e,  Stats,  of  Wis.,  which  read  as  follows : 

"Sec.  1791;.  Any  corporation  organized  under  the  laws  of  this 
state  which  shall  enter  into  any  combination,  conspiracy,  trust,  pool, 
agreement  or  contract  intended  to  restrain  or  prevent  competition 
in  the  supply  or  price  of  any  article  or  commodity  in  general  use 
in  this  state,  or  constituting  a  subject  of  trade  or  commerce  therein, 
or  which  shall  in  any  manner  control  the  price  of  any  such  article 
or  commodity,  fix  the  price  thereof,  limit  or  fix  the  amount  or 
quantity  thereof  to  be  manufactured,  mined,  produced  or  sold  in 
this  state,  or  fix  any  standard  or  figure  by  which  its  price  to  the 
public  shall  be  in  any  manner  controlled  or  established,  shall  upon 
proof  thereof,  in  any  court  or  competent  jurisdiction,  have  its 
charter  or  authority  to  do  business  in  this  state  canceled  and 
annulled.  Every  corporation  shall  upon  filing  its  annual  report 
with  the  secretary  of  state,  make  and  attach  thereto  the  affidavit 
of  its  president,  secretary  or  general  managing  officer,  fully  stating 
the  facts  in  regard  to  the  matters  specified  in  this  section." 

"Sec.  1747e.  Every  contract  or  combination  in  the  nature  of  a 
trust  or  conspiracy  in  restraint  of  trade  or  commerce  is  hereby 
declared  illegal.  Every  person  who  shall  combine  or  conspire  with 
any  other  person  to  monopolize  or  attempt  to  monopolize  any  part 
of  the  trade  or  commerce  in  this  state  shall  forfeit  for  each  such 
offense  not  less  than  fifty  dollars  nor  more  than  three  thousand 
dollars.  Any  such  person  shall  also  be  liable  to  any  person  transact- 
ing or  doing  business  in  this  state  for  all  damages  he  may  sustain 
by  reason  of  the  doing  of  anything  forbidden  by  this  section." 

The  circuit  court  held  that  sec.  7  of  the  contracts  by  which  the 
contracting  consumers  agreed  not  to  purchase  any  pulp  from  any 
person,  firm,  or  corporation  except  the  plaintiff,  unlawfully  re- 
strained trade,  in  that  it  took  twelve  consumers  of  wood  out  of 
the  market  and  operated  to  the  disadvantage  of  those  who  had  pulp 
wood  to  sell  by  reducing  the  number  of  competing  buyers. 

The  principal  contention  made  by  respondent's  counsel  in  their 
brief  and  on  the  oral  argument  is  that  the  contracts  evidence  a 
plan  or  scheme  on  the  part  of  the  contracting  parties  to  control 
and  restrict  the  output  of  pulp  and  paper,  to  the  end  that  the  mar- 
ket might  be  manipulated  and  prices  raised,  and  that  such  purpose 
is  made,  manifest  by  the  fact  that  twelve  or  thirteen  large  con- 
sumers of  pulp  wood  have  bartered  away  their  rights  from  year 
to  year  for  a  series  of  years  to  supply  their  legitimate  wants  in 
the  way  of  raw  material.  Tt  is  urged  that  the  plaintiff  is  a 
spurious  creature,  organized  for  ulterior  purposes  and  to  evade  the 
law,  and  that  tlu;  real  pow(^r  behind  it  is  a  group  of  manufacturers 
intent  on  undnly  stimulating  competition  or  suppressing  it  al- 
togetlier,  as  may  best  suit  their  lawless  wishes,  and  that  the  in- 
evitable tendency  of  the  contracts  is  towards  monopoly  and  unlawful 
restraint  of  trade. 


SECT.    l]  PULP   WOOD    CO.    V.    GREEN   BAY    FIBER   CO.  797 

The  complaint  shows  that  the  wood  supply  furnished  to  the 
plaintiff  came  from  the  states  of  Wisconsin,  Minnesota  and  Mich- 
igan, and  the  Dominion  of  Canada.  The  contract  we  think  in- 
volved interstate  commerce,  and  if  so  the  federal  statute  is  applicable 
and  the  case  will  be  treated  on  that  basis.  U.  S.  v.  Reading  Co, 
226  U.  S.  324,  33  Sup.  Ct.  90;  Swift  &  Co.  v.  U.  S.  196  U.  S. 
375,  25  Sup.  Ct.  276;  U.  S.  v.  Patten,  226  U.  S.  525,  33  Sup.  Ct. 
141 ;  Continental  W.  P.  Co.  v.  Louis  Voight  &  Sons  Co.  212  U.  S. 
227,  29  Sup.  Ct.  280.  So  far  as  this  particular  case  goes,  we  observe 
very  little  difference  whether  the  state  or  federal  statutes  or  both 
apply. 

The  case  will  first  be  considered  on  the  aspect  principally  re- 
lied on  by  respondent's  counsel  and  in  reference  to  the  so-called 
Sherman  Anti-Trust  Law. 

The  questionable  features  of  the  contracts  arise  out  of  the  fact 
that  they  take  in  twelve  or  thirteen  large  consumers  of  wood  and 
that  these  consumers  have  appointed  an  agent  who  has  the  exclusive 
authority  to  buy  all  their  pulp  wood. 

We  do  not  construe  the  contracts  as  fixing  a  price  which  the 
plaintiff  was  to  pay  for  wood.  The  prices  specified  in  the  sixth 
paragraph  are  merely  an  estimate,  made  in  advance,  of  what  the 
commodity  would  probably  cost,  and  payment  was  to  be  made  on 
the  basis  of  this  estimate  as  the  wood  was  delivered.  When 
the  total  expense  for  the  year  was  ascertained,  the  pur- 
chasers were  to  settle  on  the  basis  of  the  actual  cost,  which  included 
seven  per  cent  interest  on  the  capital  employed  by  the  plaintiff. 
If  the  estimated  price  was  greater  than  the  actual  cost  the  excess 
was  to  be  refunded  by  the  plaintiff.  If  the  actual  exceeded  the 
estimated  cost  the  purchasers  were  required  to  make  up  the  de- 
ficiency and  pay  in  proportion  to  the  amount  of  wood  purchased. 
This  we  deem  to  be  the  clear  intent  and  meaning  of  paragraph 
10  of  the  contract  and  of  the  provisions  of  the  same  taken  as  a  whole. 
ISTo  other  contract  could  be  made  if  the  actual  purpose  was  to  secure 
a  supply  of  wood.  The  contracts  covered  future  deliveries  for  a 
period  of  a  year.  Many  conditions  might  arise  which  would  materi- 
ally affect  the  supply  of  wood.  A  good  winter  for  hauling  would 
tend  toward  a  large  supply  and  a  lower  price,  while  an  open 
winter  would  greatly  curtail  output  and  tend  to  increase  the  price. 
The  varying  conditions  of  the  wood  market  are  reflected  in  the 
estimated  prices  found  in  the  contracts.  The  estimated  price  of 
spruce  was  $2  per  cord  higher  for  1907  than  for  1905,  and  of 
hemlock  $1.50  per  cord  higher.  The  plaintiff  would  have  to  pay 
the  going  prices  whatever  they  were  or  go  without  wood.  Its 
net  earnings  were  restricted  to  seven  per  cent,  on  the  capital  it 
had  invested.  We  do  not  understand  that  there  is  any  serious  dispute 
between  the  parties  as  to  the  intent  and  meaning  of  the  contract 
in  this  regard.     Neither  do  we  think  there  is  any  doubt  that  the 


798  PULP   WOOD    CO.    V.    GREEN   BAY   FIBER   CO,      [CHAP,   VI 

manufacturers  who  were  parties  to  contracts  like  that  set  forth  in 
the  statement  of  facts  attempted  to  make  the  plaintiff  their  sole 
agent  and  to  give  it  the  exclusive  right  to  purchase  their  supply 
of  wood.  If  it  appears  from  the  contracts,  read  in  connection 
with  the  allegations  of  the  complaint,  that  the  parties  had  no  lawful 
right  to  make  such  agreements,  or  that  the  agreements  contravene 
public  law,  then  the  contracts  are  void  and  the  action  will  not  lie, 
because  recovery  cannot  be  had  on  a  void  contract.  Menominee 
Eiver  B.  Co.  v.  Augustus  Spies  L.  &  Co.  147  Wis.  559,  132  N. 
W.  1118. 

The  complaint  being  challenged  by  demurrer,  every  reasonable 
intendment  must  be  made  in  favor  of  the  pleading.  Downer  v. 
Tubbs,  152  Wis.  177,  179,  139  N.  W.  820;  Jones  v.  Monson,  137 
Wis.  478,  119  N.  W.  179. 

"In  law  every  intendment  that  harmonizes  with  honesty  and 
fair  dealing  must  be  presumed  in  the  light  of  the  alleged  facts." 
Forest  Co.  v.  Shaw,  150  Wis.  294,  304,  136  K  W.  642. 

Where  a  contract  is  fairly  open  to  two  constructions,  by  one 
of  which  it  would  be  lawful  and  the  other  unlawful,  the  former 
must  be  adopted.  Hobbs  v.  McLean,  117  TJ.  S.  567,  576,  6  Sup. 
Ct.  870;  U.  S.  v.  Cent.  Pac.  R.  Co.  118  U.  S.  235,  6  Sup.  Ct.  1038, 
cited  in  Watters  v.  McGuigan,  72  Wis.  155,  157,  39  JST.  W.  382; 
Hicks  P.  Co.  V.  Wis.  Cent.  H.  Co.  138  Wis.  584,  591,  120  N.  W.  512. 
"When  the  terms  of  a  contract  are  indefinite,  uncertain,  and 
susceptible  of  two  constructions,  and  by  giving  them  one  construction 
one  of  the  parties  would  be  subjected  to  a  forfeiture,  and  by 
giving  them  the  other  no  such  forfeiture  would  be  incurred  and 
no  injustice  would  be  done  to  the  other  party,  the  contract  should 
be  so  construed  as  not  to  create  the  forfeiture."  Jacobs  v.  Spald- 
ing, 71  Wis.  177,  190,  36  N".  W.  608;  Weidner  v.  Standard  L.  &  A. 
Ins.  Co.  130  Wis.  10,  19,  110  K  W.  246;  Hicks  P.  Co.  v.  Wis. 
Cent.  R.  Co.  138  Wis.  584,  590,  591,  120  N.  W.  512;  Appleton 
Iron  Co.  V.  British  Am.  Assur.  Co.  46  Wis.  23,  1  N.  W.  9,  50  N.  W. 
1100;  Wier  v.  Simmons,  55  Wis.  637,  13  K  W.  873. 

A  violation  of  the  federal  Anti-Trust  Act  is  made  a  misdemeanor 
which  is  punishable  by  a  fine  not  exceeding  $5,000,  or  by  im- 
prisonment not  exceeding  one  year,  or  by  both,  in  the  discretion  of 
the  court. 

"It  is  a  most  fundamental  canon  of  criminal  legislation  that 
a  law  which  takes  away  a  man's  property  or  liberty  as  a  penalty 
for  an  ofi^ense  must  so  clearly  define  the  acts  upon  which  the 
penalty  is  denounced  that  no  ordinary  person  can  fail  to 
understand  his  duty  and  the  departure  therefrom  which  the  law 
attempts  to  make  criminal."  Brown  v.  State,  137  Wis.  543,  119 
:N'.   W.   338. 

It  is  Hnl)st;intiiilly  ruled  in  some  of  the  foflcn-.-il  courts  that  in 
close  and  doubtful  cases  arising  under  the  Anti-Trust  Law  and  in- 


SECT.    l]  PULP   WOOD   CO.    V.    GREEN   BAY    FIBER   CO,  .  799 

volving  intricate  questions,  the  merits  will  not  be  passed  upon  on 
demurrer  nor  until  all  the  essential  facts  are  before  the  court, 
where  such  facts  may  materially  aid  in  determining  whether  or  not 
the  law  has  been  violated.  U.  S.  v.  Winslow,  195  Fed.  578,  applying 
the  equity  rule  as  stated  in  Kansas  v.  Colorado,  185  U.  S.  125,  144, 
145,  22  Sup.  Ct.  552.  This  rule  is  not  binding  on  this  court,  but 
does  not  differ  essentially  from  our  uniform  holdings  in  later  years 
as  to  when  a  complaint  will  be  held  bad  on  general  demurrer. 

There  is  not  so  much  difficulty  at  the  present  time  in  determining 
what  the  law  is  as  there  is  in  making  the  proper  application  of 
established  rules  to  the  facts  in  each  particular  case.  There  has 
been  a  world  of  decisions  on  our  anti-trust  laws,  common  and 
statute,  in  the  state  and  federal  courts.  To  attempt  to  review 
them  all  would  be  a  work  of  supererogation.  To  harmonize  them 
would  be  an  impossibility.  On  the  federal  Anti-Trust  Statute,  how- 
ever, our  court  of  last  resort  has  recently  spoken  in  a  number  of  well 
considered  decisions  in  which  the  act  of  Congress  has  been  care- 
fully and  learnedly  analyzed  and  its  scope  defined.  Standard  Oil 
Co.  V.  U.  S.  221  U.  S.  1,  31  Sup.  Ct.  502 ;  U.  S.  v.  American  T.  Co. 
221  U.  S.  106,  31  Sup.  Ct.  632;  U.  S.  v.  Patten,  226  U.  S.  525,  33 
Sup.  Ct.  141;  Standard  S.  M.  Co.  v.  U.  S.  226  U.  S.  20,  33  Sup. 
Ct.  9;  U.  S.  V.  Reading  Co.  226  U.  S.  324,  33  Sup.  Ct.  90;  Swift 
&  Co.  V.  TJ.  S.  196  U.  S.  375,  25  Sup.  Ct.  276;  U.  S.  v.  Terminal 
R  K.  Asso.  224  TJ.  S.  383,  32  Sup.  Ct.  507;  Northern  S.  Co.  v. 
U.  S.  193  U.  S.  197,  24  Sup.  Ct.  436;  Montague  &  Co.  v.  Lowry, 
193  TJ.  S.  38,  24  Sup.  Ct.  307;  Continental  W.  P.  Co.  v.  Louis 
Voight  &  Sons  Co.  212  TJ.  S.  227,  29  Sup.  Ct.  280.  Many  other 
cases  might  be  cited,  but  a  reference  to  them  will  be  found  in  the 
foregoing  decisions. 

Whatever  understanding  or  misunderstanding  may  have  arisen 
out  of  the  decisions  in  TJ.  S.  v.  Trans-Missouri  F.  Asso.  166  TJ.  S. 
290,  17  Sup.  Ct.  540,  and  TJ.  S.  v.  Joint  Traffic  Asso.  171  TJ.  S. 
505,  19  Sup,  Ct,  25,  it  is  now  definitely  decided  that  the  words 
"restraint  of  trade"  at  common  law  and  in  the  law  of  this  country  at 
the  time  of  the  adoption  of  the  Anti-Trust  Act  embraced  only  acts, 
contracts,  agreements,  or  combinations  which  operated  to  the  preju- 
dice of  the  public  interests  by  unduly  restricting  competition  or 
by  unduly  obstructing  due  course  of  trade  and  that  Congress  intended 
that  those  words  used  in  the  act  should  have  a  like  significance. 
Standard  Oil  Co.  v.  TJ.  S.,  supra;  TJ.  S.  v.  American  T.  Co.,  supra. 
These  decisions  have  been  freely  criticised  and  often  denounced, 
but  they  are  the  law  of  the  land.  It  is  more  than  three  years 
since  they  were  announced,  during  which  time  Congress  has  been 
in  almost  continuous  session.  So  far  as  we  know  there  has  not 
even  been  any  attempt  to  pass  a  law  declaring  that  every  contract, 
combination,  or  conspiracy  in  restraint  is  unlawful  regardless  of 
the  extent  of  the  restraint.    We  are  inclined  to  agree  with  respon- 


800  PULP   WOOD   CO.    V.    GREEN   BAY    FIBER    CO.      [CHAP.    VI 

dent's  counsel  that  in  the  discussion  of   these  cases  "the  light  of 
reason"  has  ''often  been  absent." 

The  real  question  before  us  for  solution  is :  Do  the  contracts  re- 
ferred to,  read  in  connection  with  the  allegations  of  the  complaint, 
show  that  they  operated  to  the  prejudice  of  the  public  interest 
by  unduly  restricting  competition  or  by  unduly  obstructing  the 
due  course  of  trade? 

The  answer  depends  on  the  extent  to  which  competition  has  been 
restricted  or  trade  has  been  obstructed.  This  must  be  determined 
from  the  existing  facts.  When  the  facts  are  ascertained  the  ques- 
tion of  whether  the  restraint  is  reasonable  or  otherwise  is  one 
of  law.  Eichards  v.  American  D.  &  S.  Co.  87  Wis.  503,  513,  58  N. 
W.  787.  Sometimes  the  essential  facts  may  be  so  clearly  shown 
by  the  contract  involved,  if  one  is  involved,  that  further  evidence 
is  unnecessary  to  show  that  the  restraint  is  unlawful.  There  is 
another  class  of  cases  where  the  contract  in  itself  may  present 
an  innocent  appearance,  but  when  considered  in  the  light  of  other 
facts  and  circumstances,  including  the  purpose  for  which  it  was 
made,  the  objects  sought  to  be  accomplished  and  the  results  actually 
brought  about,  the  contract  may  be  positively  vicious.  In  such 
cases  the  contract  constitutes  a  link  in  the  chain  of  evidence. 
There  is  a  third  class  of  cases  where  the  contract  involved  shows 
some  restriction  of  competition  or  some  obstruction  of  trade,  but 
does  not  show  whether  such  restriction  or  obstruction  is  undue 
and  unreasonable  or  otherwise.  In  such  cases  it  is  necessary  to 
resort  to  evidence  dehors  the  contract  to  ascertain  whether  it  is 
void  or  valid. 

The  contracts  involved  in  this  case  would  seem  to  fall  within  the 
latter  class.  If  they  are  reasonably  susceptible  of  an  interpreta- 
tion which  would  render  them  lawful,  it  is  the  duty  of  the  court 
to  place  that  interpretation  upon  them.  It  is  argued  by  counsel  for 
respondent  that  these  contracts  place  a  limitation  on  the  produc- 
tion of  pulp  and  likewise  on  the  output  of  paper;  that  there  is  a 
federation  of  interests'  between  the  contracting  parties ;  that  estimates 
of  the  amount  of  wood  required  are  made  so  as  to  effectuate  the 
ulterior  purposes  of  the  parties,  or  it  may  be  the  group  itself 
makes  the  estimates;  that  the  power  is  centered  in  this  group 
to  dominate  the  pulp  and  paper  market;  that  plaintiff  is  merely  a 
clearing-house  for  carrying  out  the  unlawful  objects  of  the  combine; 
that  the  contracts  referred  to  give  the  plaintiff  power  to  crush 
competitors  and  force  combinations;  that  they  inevitably  tend  to- 
ward monopoly;  that  an  unlawful  restraint  is  placed  upon  the 
contracting  consumers,  in  that  tliey  arc  not  permitted  to  buy  any 
part  of  th(!ir  supply  of  wood  under  any  circumstances.  Some  other 
considerations  of  like  tenor  and  effect  are  suggested,  but  the  fore- 
going is  a  substantially  full  epitome  of  the  contentions  of  counsel 
on  the  point  prinfipnlly  argued.  Those  contracts  are  roundly  and 
at  times  extravagantly  denounced  by  counsel. 


SECT.    I]  PULP   WOOD    CO.    V.    GREEN   BAY    FIBER   CO.  801 

Defendant  asks  us  to  assume  altogether  too  much  in  passing 
upon  these  contracts  and  the  averments  of  the  complaint.  This  is 
not  an  action  brought  by  or  in  behalf  of  the  public  to  dissolve 
an  unlawful  combination.  It  is  a  case  where  one  particeps  criminis 
is  trying  to  avoid  responsibility  to  his  co-partners  in  crime,  if  any 
crime  was  in  fact  committed.  In  berating  the  plaintiff  the  de- 
fendant is  also  belaboring  itself.  It  is  true,  it  had  no  stock  in  the 
plaintiff  corporation,  but  if  the  corporation  was  organized  for  an  un- 
lawful purpose,  the  defendant  aided,  abetted,  and  assisted  it  in 
the  execution  of  such  unlawful  purpose.  The  contracts  before  us 
covered  a  period  of  six  or  seven  years.  If  the  production  of  pulp 
wood  and  of  paper  was  restricted  for  the  purpose  of  inflating  the 
price  of  paper  or  depressing  the  price  of  wood,  the  defendant  is  as 
well  aware  of  that  fact  as  is  any  one  else,  and  whether  it  is  or  not  the 
matter  is  easily  susceptible  of  proof.  The  defendant  certainly 
knows  how  long  its  mill  was  shut  down  for  want  of  pulp  wood  if 
it  was  shut  down  at  all.  It  can  be  readily  ascertained  how  long 
the  other  mills  whose  owners  made  like  contracts  were  shut  down 
for  this  or  any  other  cause  during  the  period.  If  no  attempt  was  in 
fact  made  during  this  time  to  restrict  output  so  as  to  squeeze 
up  prices  abnormally  or  to  do  other  unlawful  acts,  that  would  be 
pretty  convincing  evidence  that  the  plaintiff  corporation  was  not 
organized  to  juggle  the  paper  market.  If  the  plaintiff'  has  crushed 
or  attempted  to  crush  competitors,  or  has  forced  or  attempted  to 
force  unlawful  combinations  to  control  the  wood  or  paper  market, 
these  things  should  be  susceptible  of  proof,  but  it  is  not  apparent 
from  the  contracts  or  from  the  complaint  that  it  has  done  either. 

For  aught  we  know  it  may  be  shown  on  the  trial  that  the  con- 
tracting manufacturers  made  their  estimates  large  enough  to  cover 
their  needs  without  interference  from  any  one;  that  the  estimated 
amounts  were  substantially  furnished,  or  that  a  good-faith  attempt 
was  made  to  supply  them;  that  the  exercise  of  that  reasonable  dili- 
gence which  plaintiff  agreed  to  exercise  was  suflicient  to  insure  a  full 
supply  of  wood,  or  at  least  as  much  as  the  mill  owners  could  secure  if 
they  were  themselves  engaged  in  the  work  of  buying ;  that  the  mills  af- 
fected had  all  the  wood  they  needed  at  all  times,  and  that  there  was 
no  thought  of  restricting  the  output  of  paper  or  pulp  and  that  there 
was  no  restriction  in  fact  and  no  influence  exerted  on  the  paper 
market  whatever  by  this  alleged  unlawful  combine.  It  might  even  be 
made  to  appear  that  the  only  harm  which  the  parties  could  do,  if  they 
attempted  to  reduce  production,  would  be  to  themselves.  It  might 
also  be  made  to  appear  that  the  plaintiff  was  organized  to  further 
legitimate  economies  in  the  cost  of  the  article  which  the  mill  men  had 
to  offer  the  consuming  public.  Manifestly  the  question  under 
consideration  cannot  be  intelligently  decided  until  the  actual  facts 
are  before  the  court,  because  the  complaint  and  contracts  do  not 
affirmatively    establish    the    fact    that    there    has    been    any    undue 

26 


802  PULP   WOOD    CO.    V.   GREEN   BAY   FIBER   CO.      [CHAP.    VI 

restraint  of  competition  or  any  undue  obstruction  of  the  course 
of  trade.  It  is  possible  to  imagine  many  things  that  might  have 
happened,  but  the  vital  question  here,  after  all,  is,  "What  has  been 
done?  The  court  should  not  be  asked  to  draw  on  its  imagination 
for  its  facts.  The  plaintiff  has  been  operating  long  enough  so 
that  its  practices  should  be  well  known.  We  do  not  think  the 
contracts  on  their  face  inevitably  tend  to  unduly  restrain  trade  or 
competition. 

There  is  nothing  in  itself  unlawful  in  two  or  more  persons 
appointing  a  common  agent  to  purchase  a  commodity  which  they  re- 
quire and  in  giving  such  agent  the  exclusive  right  to  do  the  buying. 
Xat.  D.  Co.  V.  Cream  City  I.  Co.  80  Wis.  352,  56  I^^.  W.  864;  Kellogg 
V.  Larkin,  3  Pin.  123;  Wheeler-Stenzel  Co.  v.  American  W.  G.  Co. 
202  Mass.  471,  476,  89  N.  E.  28;  Burley  T.  Soc.  v.  Gillaspy  (Ind.) 
100  N.  E.  89;  Reeves  v.  Decorah  F.  C.  Soc.  (Iowa)  140  N.  W.  844; 
Eirst  Nat.  Bank  v.  Missouri  G.  Co.  169  Mo.  xlpp.  374,  152  S.  W. 
378;  Central  S.  R.  Co.  v.  Cushman,  143  Mass.  353,  9  N.  E.  629;  N"ew 
York  T.  R.  Co.  v.  Brown,  61  N.  J.  Law,  536,  43  Atl.  100;  Arkansas 
B.  Co.  V.  Dunn,  173  Fed.  899 ;  Anderson  v.  U.  S.  171  U.  S.  604,  613, 
614,  19  Sup.  Ct.  50;  Connolly  v.  Union  S.  P.  Co.  184  U.  S.  540,  22 
Sup.  Ct.  431,  read  in  connection  with  additional  facts  stated  in 
dissenting  opinion  of  Justice  Holmes  in  Continental  W.  P.  Co.  v. 
Louis  Voight  &  Sons  Co.  212  U.  S.  227,  29  Sup.  Ct.  280.  We  do 
not  wish  to  be  understood  as  approving  all  that  is  said  in  those 
cases. 

Such  an  arrangement  becomes  unlawful  when  it  injuriously  affects 
the  public,  or,  in  other  words,  when  it  unduly  restricts  competition 
or  restrains  trade.  Ordinarily  the  invalidity  of  such  an  agreement 
must  be  made  to  appear  from  facts  outside  of  the  contract,  because 
the  writing  seldom  shows  the  facts  necessary  to  determine  whether  the 
restraint  is  reasonable  and  permissible  or  undue  and  criminal.  The 
circuit  court  thought  the  contract  was  unlawful  because  it  took  a 
dozen  consumers  of  wood  out  of  the  market  and  thus  materi- 
ally affected  those  who  had  pulp  wood  for  sale,  by  reducing  the 
number  of  buyers.  The  idea  of  the  court  was  that  the  contracts  had 
a  tendency  to  reduce  the  price  of  wood.  This  is  a  contention  not 
very  often  made  in  this  class  of  cases,  because,  if  true,  it  would  also 
have  a  tendency  to  reduce  the  price  at  which  the  manufactured  article 
might  })e  sold  to  the  consuming  public.  However,  we  think  the 
pulp-wood  producer  is  entitled  to  protection  against  combinations 
which  unreasonably  depress  the  price  of  his  commodity,  even  though 
thc^  gcTifral  y)ublic  might  to  some  extent  benefit  by  the  depression. 

The  comydaint  shows  that  the  mills  for  which  plaintiff  acted  as 
agent  used  about  twelve  per  cent  of  the  entire  output  of  wood  in  the 
tfrritory  in  which  it  made  its  purchases.  It  cannot  be  held  as  a  con- 
clusion of  law  oti  thf'se  facts  that  there  was  an  undue  restraint  of 
competition.    'V\\v  producers  of  wood  have  made  no  complaint  on  this 


SECT.    l]  PULP   WOOD    CO.    V.    GREEN   BAY    FIBER   CO.  803 

score.  There  may  have  beeu  an  abundance  of  buyers  to  insure  fair 
and  free  competition  in  bidding  and  a  fair  and  adequate  price  for 
the  wood.  If  so,  it  could  not  be  said  that  competition  was  unduly 
restricted.  The  question  is  one  calling  for  evidence  to  show  how 
and  to  what  extent  it  was  reasonably  probable  that  those  w^ho  had 
wood  for  sale  were  affected. 

The  first  cause  of  action  is  brought  to  recover  a  loss  sustained 
on  the  Perry  contract.  The  effect  of  that  contract  on  this  cause  of 
action  has  not  been  much  discussed  by  counsel.  There  are  three 
causes  of  actions  stated  in  the  complaint,  and  the  demurrer  is  inter- 
posed to  the  whole  complaint,  so  that  if  any  good  cause  of  action 
is  stated  the  order  appealed  from  is  erroneous.  We  do  not  deem  it 
necessary  to  decide  on  the  validity  of  that  contract,  or  to  what  extent, 
if  any,  it  would  affect  the  plaintiff's  right  of  recovery  on  its  first 
cause  of  action  should  the  contract  be  held  void. 

The  mere  fact  that  the  plaintiff  corporation  was  an  unlawful 
combination  would  not  relieve  the  defendant  from  paying  for  the 
goods  purchased  from  it,  provided  the  contract  of  purchase  was  not 
in  itself  unlawful.  Nat.  D.  Co.  v.  Cream  City  I.  Co.  86  Wis.  352, 
56  N.  W.  864;  Connolly  v.  Union  S.  P.  Co.  184  U.  S.  540,  22  Sup. 
Ct,  431 ;  International  H.  Co.  v.  Eaton  Circuit  Judge,  163  Mich. 
55,  127  N.  W.  695 ;  Chicago  W.  P.  Mills  v.  General  P.  Co.  147  Fed. 
491.  This  being  the  law,  it  is  not  apparent  how  the  defendant  can 
derive  any  benefit  from  sec.  I79iy,  Stats,  of  Wis. 

Sec.  1747e,  Stats,  of  Wis.,  is  a  copy  of  the  federal  statute,  except 
that  it  applies  to  attempts  to  monopolize  trade  and  commerce  within 
the  state  and  prescribes  a  lesser  penalty  for  its  violation  than  is 
provided  for  in  the  act  of  Congress.  It  originally  appeared  as  ch. 
219,  Laws  of  1893.  Since  then  it  has  received  substantially  the 
same  construction,  suh  silentio  at  least,  that  was  placed  on  the  federal 
law  in  the  Standard  Oil  and  Tobacco  Cases,  as  will  be  seen  from  an 
examination  of  the  following  cases  decided  since  the  law  was  enacted  : 
Cottington  v.  Swan,  128  Wis.  321,  197  N".  W.  336 ;  My  Laundry  Co.  v. 
Schmeling,  129  Wis.  597,  109  N".  W.  540;  Kradwell  v.  Thiesen, 
131  Wis.  97,  111  :N'.  W.  233;  Burton  v.  Douglass,  141  Wis.  110,  123 
N.  W.  631;  Eureka  L.  Co  v.  Long,  146  Wis.  205,  131  :N'.  W.  412; 
Ruhland  v.  King,  154  Wis.  545,  143  N,  ^_  ggl;  jSTat.  D.  Co.  v. 
Cream  City  I.  Co.,  supra;  Richards  v.  American  D.  &  S.  Co.  87  Wis. 
503,  58  N.  W.  787;  Tecktonius  v.  Scott,  110  Wis.  441,  86  JST.  W. 
672.  If  the  above  statute  has  any  application  to  the  facts  in  this 
case,  it  should  receive  the  same  interpretation  that  was  placed  on 
the  federal  act,  from  which  it  was  taken,  by  the  supreme  court  of  the 
United  States. 

By  the  Court.  —  Order  reversed,  and  cause  remanded  for  further 
proceedings. 

Kerwin^  J.,  took  no  part. 


804  HAMPDEN    V.   WALSH  [CHAP.   VI 

SECTION  II 
WAGERS   AND    GAMING   CONTRACTS 


HAMPDEN  V.  WALSH 

In  the  Queen^s  Bench  Division^  January  17,  1876 

[Reported  in  1  Queens  Bench  Division,  189] 

The  judgment  of  the  court  (Cockburn,  C.  J.,  and  Mellor  and 
Quain,  J  J.),  was  delivered  by  — 

CocKBURN;,  C.  J.  This  is  an  action  brought  to  recover  the  sum  of 
500?.  deposited  by  the  plaintiff  with  the  defendant,  under  the  follow- 
ing circumstances :  — 

The  plaintiff,  it  appears,  entertains  a  strong  disbelief  in  the  re- 
ceived opinion  as  to  the  convexity  of  the  earth,  and  with  the  view, 
it  seems,  of  establishing  his  own  opinion  in  the  face  of  the  world,  he 
published  in  a  journal  called  "Scientific  Opinion,"  an  advertise- 
ment in  the  following  words :  "The  undersigned  is  willing  to  deposit 
501.  to  500L  on  reciprocal  terms,  and  defies  all  the  philosophers, 
divines,  and  scientific  professors  in  the  United  Kingdom  to  prove 
the  rotundity  and  revolution  of  the  world,  from  Scripture,  from 
reason,  or  from  fact.  He  will  acknowledge  that  he  has  forfeited  his 
deposit  if  his  opponent  can  exhibit  to  the  satisfaction  of  any  intelli- 
gent referee  a  convex  railway,  canal,  or  lake." 

The  challenge  thus  thrown  out  was  answered  and  accepted  by  a 
Mr.  Alfred  Wallace,  who  offered  to  stake  the  like  amount  "on  the 
undertaking  to  show  visibly,  and  to  measure  in  feet  and  inches,  the 
convexity  of  a  canal  or  lake." 

The  money  was  deposited  accordingly  in  a  bank,  to  the  credit  of 
Mr.  Walsh,  the  defendant.  An  agreement  was  drawn  up,  whereby 
it  was  agreed  that,  "if  Mr.  A.  R.  Wallace,  on  or  before  the  15th  of 
March,  1870,  proved  the  convexity  or  curvature  to  and  fro  of  the 
surface  of  any  canal,  river,  or  lake,  by  actual  measurement  and 
demonstration,  to  the  satisfaction  of  Mr.  John  Henry  Walsh,  of  346, 
Strand,  and  of  Mr.  W.  Carpenter,  of  7,  Carlton  Terrace,  Lewisham 
Park,  or,  if  they  differed,  to  the  satisfaction  of  the  umpire  they 
mipbt  appoint,"  Wallace  was  to  receive  the  two  sums  deposited; 
while  if  Wallace  failed  in  showing  such  actual  proof  of  convexity, 
the  two  sums  were  to  be  paid  to  the  plaintiff.  The  agreement  con- 
clndf'd  witb  the  following  proviso:  "Provided  always,  that,  if  no 
decision  can  be  arrived  at,  owing  to  the  death  of  either  of  the  parties, 
the  \vngr>r  is  to  be  annulled;  or  if,  owijig  to  the  weather  being  so  bad 
as  to  prevent  a  man  being  distinctly  seen  by  a  good  telescope,  at  a 
distance  of   four  miles,  then  a  further  period  of  one  month  is  to 


SECT.    II]  HAMPDEN    V.    WALSH  805 

be  allowed  for  the  experiment,  or  longer,  as  may  be  agreed  upon  by 
the  referees." 

Mr.  Walsh  being  unable  to  act  as  referee,  a  Mr.  Coulcher  was 
substituted  for  him.  Certain  tests  having  been  agreed  on,  the  ex- 
periment was  tried  on  the  Bedford  Level  Canal.  The  referees 
differed;  Mr.  Coulcher  being  of  the  opinion  that  Mr.  Wallace  had 
proved,  Mr.  Carpenter,  that  he  had  not  proved,  the  convexity  of  the 
canal.  Thereupon  it  was  proposed  that  the  referees  should  exercise 
their  power  of  appointing  an  umpire;  but  Mr.  Carpenter  declined  to 
act  further  in  the  matter.  A  correspondence  ensued,  when  it  was 
agreed  to  leave  the  matter  to  the  decision  of  Mr.  Walsh,  the  present 
defendant,  to  whom  the  two  referees  should  submit  their  reports,  and 
who  was  at  liberty  to  seek  any  further  information  he  might  deem 
necessary,  and  to  consult  Mr.  Solomons,  an  optician,  if  he  thought 
proper.  Having  done  so,  he  decided  in  favor  of  Mr.  Wallace,  as 
having  "proved  to  his  satisfaction  the  curvature  to  and  fro  of  the 
Bedford  Level  Canal  between  Witney  Bridge  and  Welsh's  dam  (six 
miles),  to  the  extent  of  five  feet  more  or  less." 

To  this  decision  the  plaintiff  objected,  and  before  the  defendant 
had  paid  over  the  money  to  Mr.  Wallace,  demanded  to  have  the  500Z. 
he  had  deposited  restored  to  him.  J^J'otwithstanding  which,  the  de- 
fendant paid  the  two  sums  of  5001,  to  Wallace. 

The  question  for  our  decision  is,  whether  upon  this  state  of  facts 
the  plaintiff  is  entitled  to  recover  the  sum  so  deposited  by  him. 

One  question  which  presents  itself  is,  whether  this  agreement 
amounts  in  effect  to  a  wager  and  if  so,  whether  the  plaintiff  by  the 
effect  of  8  &  9  Vict.  c.  109,  s.  18,  is  prevented  from  maintaining  this 
action. 

We  will,  in  the  first  instance,  proceed  with  case  on  the  assumption 
that  the  agreement  is  in  effect  a  wager. 

It  is  well  established  by  numerous  authorities,  which  it  would  be 
here  superfluous  to  cite,  that  at  common  law,  a  wager,  being  a  con- 
tract by  A.  to  pay  money  to  B.  on  the  happening  of  a  given  event,  in 
consideration  of  B.  paying  money  to  him  on  the  event  not  happening, 
was  legal,  provided  the  subject-matter  of  the  wager  was  one  upon 
which  a  contract  could  lawfully  be  entered  on.  But  by  effect  of  the 
statutes  of  16  Car.  2,  c.  7,  of  9  Anne,  c.  14,  and  of  other  statutes  for 
the  prevention  of  gaming,  various  forms  of  betting  became  stamped 
with  illegality,  and  no  action  could  be  maintained  by  the  winner 
against  the  loser  in  respect  of  them.  N"or  could  any  action  be 
brought  by  the  winner  against  the  stakeholder  with  whom  the  amount 
of  the  wager  had  been  deposited.  Wagers  not  included  in  these 
statutes  remained  as  before,  and  could  be  made  the  subject-matter 
of  an  action,  although  judges  sometimes  refused  to  try  such  actions, 
especially  where  the  subject-matter  of  the  wager  was  of  a  low  or 
frivolous  character,  as  unworthy  to  occupy  the  time  of  a  court  of 
justice. 


806  HAMPDEN    V.   WALSH  [CHAP.    VI 

As  the  law  now  stands,  since  the  passing  of  8  &  9  Yict.  c.  109, 
there  is  no  longer,  as  regards  actions,  any  distinction  between  one 
class  of  wagers  and  another,  all  wagers  being  null  and  void  at  law 
by  that  statute. 

But  though,  where  a  wager  was  illegal,  no  action  could  be  brought 
either  against  the  loser  or  stakeholder  by  the  winner,  a  party  who 
had  deposited  his  money  with  the  stakeholder  was  not  in  the  same 
predicament.  If,  indeed,  the  event  on  which  the  wager  depended 
had  come  off,  and  the  money  had  been  paid  over,  the  authority  to  pay 
it  not  having  been  revoked,  the  depositor  could  no  longer  claim  to 
have  it  back.  But  if,  before  the  money  was  so  paid  over,  the  party 
depositing  repudiated  the  wager  and  demanded  his  money  back,  he 
was  entitled  to  have  it  restored  to  him,  and  could  maintain  an  action 
to  recover  it ;  and  this,  not  only  where,  as  in  Hodson  v.  Terrill,  1  Cr. 
&  M.  797,  notice  had  been  given  to  the  stakeholder  prior  to  the  event 
being  determined,  but  also  where,  as  in  Hastelow  v.  Jackson,  8 
B.  &  C.  221,  notice  was  given  after  the  event  had  come  off. 

In  Hodson  ik  Terrill,  1  Cr.  &  M.  797,  the  deposit  had  been  made 
on  a  cricket  match  for  20/.  a  side,  and  was  therefore  unlawful  within 
the  statute  of  Anne.  A  dispute  having  arisen  in  the  course  of  the 
match,  and  one  side  having  refused  to  play  it  out,  the  plaintiff,  who 
had  paid  a  deposit,  claimed  to  have  it  returned,  and  it  was  held  that 
he  was  entitled  to  recover. 

So  in  Martin  v.  Hewson,  10  Ex.  737,  24  L.  J.  (Ex.)  174,  in  an 
action  for  money  had  and  received  to  plaintiff's  use,  the  defendant 
having  pleaded  that  the  money  had  been  deposited  with  him  to  abide 
the  event  of  a  cock-fight,  the  replication,  that  before  the  result  was 
ascertained  the  plaintiff  repudiated  the  wager,  and  required  repay- 
ment of  the  deposit,  was  held  good.  In  Hastelow  v.  Jackson,  8  B. 
&  C.  221,  the  Court  of  Queen's  Bench,  following  the  prior  cases  of 
Cotton  V.  Thurland,  5  T.  R.  405,  Smith  v.  Bickmore,  4  Taunt.  474, 
and  Bate  v.  Cartwright,  7  Price,  540,  held  that,  where,  money  having 
been  deposited  with  the  stakeholder  to  abide  the  event  of  a  boxing 
match.  A.,  the  depositor,  claimed  the  whole  sum  from  the  stake- 
holder, as  having  won  the  fight,  and  threatened  him  with  an  action 
if  he  paid  it  over  to  B.,  the  other  combatant,  which  he  nevertheless 
did  by  direction  of  the  umpire,  A.  was  entitled  to  recover  the  money 
he  had  deposited  as  his  own  stake  as  money  had  and  received  to  his 
use.  "If,"  says  Bayley,  J.,  "a  stakeholder  pays  over  the  money 
without  authority  from  the  party  and  in  opposition  to  his  desire, 
he  does  so  at  hia  own  peril."  Tliese  cases  have  never  been  overruled, 
and  must  be  considered  as  law:  although  in  Meaning  v.  Hellings,  14 
M.  &  W.  at  p.  712,  Alderson,  B.,  speaks  doubtingly  of  the  decision 
in  Hastelow  v.  Jackson,  8  B.  &  C.  221,  using  the  expression  "  that 
case  does  not  convince  me,  it  overcomes  me."  But  that  case  seems 
to  have  been  decided  more  on  the  form  of  the  particulars  than  any- 
tliin^  flsc,  jiiul   does   not  seriously  interfere  with   the  authority  of 


SECT.    Il]  HAMPDEN    V.    WALSH  807 

Hastelow  v.  Jackson,  8,  B.  &  C.  221,  which  seems  to  us  to  be 
good  law, 

A  distinction  has,  however,  been  taken  between  cases  in  which  the 
deposit  was  made  to  abide  the  event  of  an  illegal  wager,  and  others, 
in  which  the  wager,  not  being  prohibited  by  statute,  or  of  an  im- 
proper character,  was  legally  binding.  In  the  former  cases,  the  con- 
tract between  the  principals  being  null  and  void,  the  money  remains 
in  the  hands  of  the  stakeholder  devoid  of  any  trust  in  respect  of  the 
other  party,  and  in  trust  only  for  the  party  depositing,  who  can  at 
any  time  claim  it  back  before  it  has  been  paid  over.  In  the  latter, 
the  contract,  prior  to  8  &  9  Vict.  c.  109,  s.  18,  not  being  invalid,  it 
was  open  to  contention  that  money  deposited  on  the  wager  with  a 
stakeholder  must  remain  with  the  latter  to  abide  the  event. 

Greater  diiRculty,  therefore,  presented  itself  where,  prior  to  8  &  9 
Vict.  c.  109,  s.  18,  money  was  deposited  on  a  wager  not  illegal;  and 
the  Courts  of  King's  Bench  and  Exchequer  were  at  variance  on 
this  point.  In  Eltham  v.  Kingsman,  1  B.  &  Aid.  683,  the  Court  of 
King's  Bench,  consisting  of  Lord  Ellenborough,  C.  J.,  Bayley, 
Abbott,  and  Holroyd,  JJ.,  held  that  even  where  the  wager  was  legal, 
the  authority  of  a  stakeholder,  who  was  also  (as  is  the  case  with  the 
present  defendant)  to  decide  between  the  parties,  might  be  revoked 
and  the  deposit  demanded  back.  "Here,"  says  Lord  Ellenborough, 
"before  there  has  been  a  decision  the  party  has  countermanded  the 
authority  of  the  stakeholder."  "A  man,'-'  says  Abbott,  J,,  "who  has 
made  a  foolish  wager  may  rescind  it  before  any  decision  has  taken 
place."  In  the  later  case  of  Emery  v.  Kichards,  14  M.  &  W.  728, 
the  Court  of  Exchequer,  where  money  has  been  deposited  on  a  wager 
of  less  than  lOZ.  on  a  foot  race,  and  therefore,  prior  to  the  passing  of 
the  statute  8  &  9  Vict.,  not  illegal  under  the  then  existing  statute, 
held  that  the  plaintiff  could  not  demand  to  have  his  stake  returned, 
but  must  abide  the  event.  The  case  of  Eltham  v.  Kingsman,  1  B.  & 
Aid.  683,  does  not,  however,  appear  to  have  been  brought  to  the 
notice  of  the  court,  and  in  our  view  the  decision  of  this  court  was 
the  sounder  one.  We  cannot  concur  in  what  is  said  in  Chitty  on 
Contracts,  8th  ed.,  p.  574,  that  "a  stakeholder  is  the  agent  of  both 
parties,  or  rather  their  trustee."  It  may  be  true  that  he  is  the 
trustee  of  both  parties  in  a  certain  sense,  so  that,  if  the  event  comes 
off  and  the  authority  to  pay  over  the  money  by  the  depositor  be  not 
revoked,  he  may  be  bound  to  pay  it  over.  But  primarily  he  is  the 
agent  of  the  depositor,  and  can  deal  with  the  money  deposited  so 
long  as  his  authority  subsists.  Such  was  evidently  the  view  taken  of 
the  position  of  a  stakeholder  by  this  court  in  the  two  cases  of  Eltham 
V.  Kingsman,  1  B.  &  Aid.  683,  and  Hastelow  v.  Jackson,  8  B.  &  C. 
221 ;  and  In  that  view  we  concur. 

Practically,  however.  It  is  now  unnecessary  to  decide  this  question, 
if  the  transaction  under  consideration  is  to  be  looked  upon  as  a 
wager.    Eor  by  8  &  9  Vict.  c.  109,  s.  18,  it  is  enacted  "that  all  con- 


808  HAMPDEN    V.    WALSH  [CHAP.    VI 

tracts  or  agreements,  whether  by  parol  or  iu  writing,  by  way  of 
gaming  or  wagering,  shall  be  null  and  void;  and  that  no  suit  shall 
be  brought  or  maintained  in  any  court  of  law  or  equity  for  recover- 
ing any  sum  of  money  or  valuable  thing  alleged  to  be  won  upon  any 
wager,  or  which  shall  have  been  deposited  in  the  hands  of  any  per- 
son to  abide  the  event  on  which  any  wager  shall  have  been  made." 

The  present  wager,  though  previously  lawful,  being  thus  rendered 
null  and  void,  it  follows  that  the  plaintiff  must  be  entitled  to  re- 
cover his  deposit,  unless  that  part  of  the  enactment  which  provides 
that,  "no  suit  shall  be  brought  or  maintained  in  any  court  for  re- 
covering any  sum  of  money  which  shall  have  been  deposited  in  the 
hands  of  any  person  to  abide  the  event  on  which  any  wager  shall 
have  been  made,"  affords  an  answer  to  the  action,  —  a  question  on 
which  a  difference  of  opinion  exists.^ 

Thus  far  we  have  dealt  with  the  agreement  between  the  parties 
as  a  wager.  But  it  was  contended  before  us,  on  the  argument,  that 
this  was  not  a  wager,  but  an  agreement  entered  into  for  the  purpose 
of  trying  by  experiment  a  question  of  science.  We  think  this  posi- 
tion altogether  untenable.  The  agreement  has  all  the  essential 
characteristics  of  a  wager.  Each  party  stakes  his  money  on  an  event 
to  be  ascertained,  and  he  in  whose  favor  the  event  turns  out  is  to 
take  the  whole.  The  object  of  the  plaintiff  in  offering  the  challenge 
he  gave  was  not  to  ascertain  a  scientific  fact,  but  to  establish  his  own 
view  in  a  marked  and  triumphant  manner.  To  use  a  common  phrase, 
his  object  was  to  back  his  own  opinion.  No  part  of  the  money 
staked  was  to  go  to  the  party  by  whom  the  experiment  was  to  be 
made.  Lastly,  the  parties  themselves  in  the  written  agreement  have 
spoken  of  it,  in  terms,  as  a  "wager."  We  can  have  no  hesitation  in 
holding  it  to  be  such. 

But  even  if  our  view  of  the  agreement  were  such  as  was  suggested 
by  the  defendant's  counsel,  our  decision  would  be  the  same,  as  the 
principle  of  the  decision  of  the  court  in  the  cases  of  Eltham  v. 
Kingsman,  1  B.  &  Aid.  683,  and  Hastelow  v.  Jackson,  8  B.  &  C.  221, 
before  cited,  would  appear  to  us  to  apply,  according  to  which  we 
should  look  upon  the  defendant  merely  as  the  agent  of  the  plaintiff, 
and  as  no  longer  justified  in  paying  over  the  money  when  once  his 
authority  had  been  countermanded. 

But  as  we  hold  the  agreement  to  have  been  a  wager,  and  conse- 
quently that  the  case  is  concluded  by  the  authorities  Ave  have  referred 
to,  it  is  unnecessary  to  decide  this  point. 

Our  judgment  will  therefore  bo  for  the  plaintiff. 

Judgment  for  ihe  plaintiff.^ 

'  Tlio  cf)iirt  on  examination  of  rlpoisions  hold  that  this  provision  applied  only  to 
BuitH  hv  thr;  winner  of  a  waf'cr  to  rcoov(>r  the  stakes. 

'  O'Snllivaii  ?'.  Thomas,  [l^^^l  1  O.  B.  OOS;  TTnivorsal  Stock  Exchanw  v.  Strachan 
[IHOfl")  A.  C.  100;  Rurrro  7).  Ashley,  [1^)0]  1  Q.  H.  744;  Lewis  ?).  ■Rniton,  74  Ala.  .317; 
TTiornhill  v.  O'Rfar,  108  Ala.  290;  Hale  v.  Sherwood,  40  Conn.  3.S2;  Colson  r.  Meyers, 
80  On.  4!M);    Petiihm  v.  Hippie,  90  111.  420;    Burroughs  ?-.  Hunt,  13  Ind.  178;    Adkina 


SECT.    II ]  HOPKINS    V.   o'kANE  809 

JOHN  S.  HOPKINS,  Receiver  of  LAUGHLIN  and  McMANUS, 
V.  ARTHUE  O'KANE,  Appellant 

Pennsylvania  Supreme  Court,  April  1-July  18,  1895 

[Reported  in  169  Pennsylvania  State,  478] 

Rule  to  open  judgment. 

Prom  the  depositions  taken  in  support  of  the  rule,  it  appeared 
that  in  November,  1892,  defendant  directed  Laughlin  and  McManus, 
brokers,  to  purchase  two  hundred  shares  of  Reading  Railroad  stock, 
for  which  he  paid  in  full.  The  brokers  received  and  retained  the 
certificate  for  the  stock,  and  in  December,  1892,  at  defendant's  re- 
quest resold  the  stock  and  retained  the  proceeds.  Subsequently  de- 
fendant directed  the  brokers  to  purchase  shares  of  a  traction  com- 
pany, and  these  in  turn  were  sold  by  the  brokers,  and  the  proceeds 
retained  by  them.  Similar  transactions  took  place  until  on  February 
28,  1893,  when  defendant  was  indebted  to  Laughlin  and  McManus 
in  the  sum  of  $2,000,  for  which  the  judgment  note  in  suit  was  given. 
Judgment  was  entered  upon  the  note  by  the  receiver  of  the  firm  of 
Laughlin  and  McManus,  and  subsequently  defendant  obtained  a  rule 
to  open  the  judgment  on  the  ground  that  the  debt  grew  out  of 
gambling  transactions. 

The  Court  discharged  the  rule,  and  defendant  appealed. 

V.  Flemming,  29  Iowa,  122;  Pollock  v.  Agner,  54  Kan.  618;  Martin  v.  Francis  173 
Ky.  529;  McDonough  v.  Webster,  68  Me.  530;  Fisher  v.  Hildreth,  117  Mass.  558; 
Morgan  v.  Beaumont,  121  Mass.  7;  Whitwell  v.  Carter,  4  Mich.  329;  Wilkinson  v. 
Tousley,  16  Minn.  263;  Pabst  Brewing  Co.  v.  Listen,  80  Minn.  473;  Weaver  v.  Harlan, 
48  Mo.  App.  319;  White  v.  Gilleland,  93  Mo.  App.  310;  Deaver  v.  Bennett,  29  Neb. 
812;  Hoit  v.  Hodge,  6  N.  H.  104;  Hensler  v.  Jennings,  62  N.  J.  L.  209;  Stoddard  v. 
McAuliffe,  81  Hvin,  524,  affirmed  without  opinion,  151  N.  Y.  671;  Wood  v.  Wood,  3 
Murph.  172;  Forrest  v.  Hart,  3  Murph.  458;  Dunn  v.  Drummond,  4  Okla.  461;  Willis 
V.  Hoover,  9  Oreg.  418;  Conklin  v.  Conway,  18  Pa.  329;  Davis  v.  Fleishman,  245  Pa. 
224;  McGrath  v.  Kennedy,  15  R.  I.  209;  Bledsoe  v.  Thompson,  6  Rich.  L.  44;  Guth- 
man  v.  Parker,  3  Head,  2.34;  Lillard  v.  Mitchell,  37  S.  W.  Rep.  (Tenn.)  702;  Lewy 
V.  Crawford,  5  Tex.  Civ.  App.  293;  We,st  v.  Holmes,  26  Vt.  530,  ace.  See  also  Shool- 
bred  v.  Roberts,  [1899]  2  Q.  B.  560,  [1900]  2  Q.  B.  497;  Trenery  v.  Goudie,  106  Iowa, 
693;  Jones  v.  Cavanaugh,  149  Mass.  124.  But  see  contra,  Matthews  v.  Lopus,  24 
Col.  App.  63;    Kelley  v.  Dirks,  40  S.  Dak.  453,  455. 

In  a  few  States  demand  must  be  made  upon  the  stakeholder  before  the  wager  has 
been  decided.  Johnston  v.  Russell,  37  Cal.  670;  Davis  v.  Holbrook,  1  La.  Ann.  176; 
Hickerson  v.  Benson,  8  Mo.  8;  Connor  v.  Black,  132  Mo.  150,  154;  Sutphin  v.  Crozer, 
32  N.  J.  L.  257.  But  in  Missouri  and  New  Jersey  this  doctrine  has  been  affected  by 
statute.  See  Weaver  v.  Harlan,  48  Mo.  App.  319;  Wliite  v.  Gilleland,  93  Mo.  App. 
310;    Hensler  v.  Jennings,  62  N.  J.  L.  209. 

If  a  stakeholder  pays  the  winner,  before  receiving  notice  of  repudiation  of  the 
wager,  he  is  not  lialDle.  Colson  v.  Meyers,  80  Ga.  490;  Frybarger  )'.  Simpson,  11 
Ind.  59;  Adldns  v.  Flemming,  29  Iowa,  122;  Himmelman  v.  Pecaut,  133  Iowa.  503; 
Goldberg  v.  Feiga,  170  Mass.  146;  Riddle  v.  Perr>\  19  Neb.  505;  Bates  v.  Lancaster, 
10  Humph.  134;  unless  made  so  by  statute,  see  Hensler  v.  Jennings,  62  N.  J.  L.  209; 
Ruckman  v.  Pitcher,  1  N.  Y.  392,  20  N.  Y.  9;  Columbia  Bank  v.  Holdeman,  7  W.  & 
S.  233;    Harnden  v.  Melby,  90  Wis.  5. 

Nor  can  the  loser  recover  from  the  winner,  Davies  v.  Porter,  248  Fed.  397  (C.  C.  A.) 
Johnson  v.  Colliex,  161  Ala.  204,  209;  Northrup  v.  Buffington,  171  Mass.  468;  unless 
the  payment  is  made  by  the  stakeholder  after  notice  of  repudiation  by  the  loser, 
Love  V.  Harvey,  114  Mass.  80. 


810  HOPKINS  V.  o'kane  [chap.  VI 

Error  assigned  was  above  order. 

Opinion  by  Mr.  Justice  Mitchell,  July  IS,  1895: 

There  is  nothing  in  this  case  which  would  justify  disturbing  the 
judgment.  It  ought  not  to  be  necessary  to  say  again  after  Peters  v. 
Grim,  149  Pa.  163,  and  other  cases,  that  a  purchase  of  stocks  on 
margin  is  not  necessarily  a  gambling  transaction.  Stocks  may  be 
bought  on  credit,  just  as  flour  or  sugar  or  anything  else,  and  the 
credit  may  be  for  the  whole  price  or  for  a  part  of  it,  and  with 
security  or  without  it.  "Margin"  is  security,  nothing  more,  and  the 
only  difference  between  stocks  and  other  commodities  is  that  as 
stocks  are  more  commonly  made  the  vehicle  of  gambling  speculation 
than  some  other  things,  courts  are  disposed  to  look  more  closely 
into  stock  transactions  to  ascertain  their  true  character.  If  they 
are  real  purchases  and  sales,  they  are  not  gambling  though  they  are 
done  partly  or  wholly  on  credit. 

The  appellant  himself  testified  that  the  first  transaction  involved 
in  this  case  was  his  purchase  of  two  hundred  shares  of  Reading. 
"I  bought  them  outright,"  and  paid  for  them.  Shortly  afterwards 
he  sold  them,  and  on  his  order,  the  brokers  bought  Traction  stock, 
and  retained  the  proceeds  of  the  Reading  as  part  payment  for  it. 
The  subsequent  transactions  were  of  the  same  character,  actual 
purchases  and  sales  in  which  the  stocks  bought  were  received  by  the 
brokers  for  defendant,  and  those  sold  delivered  by  them  for  him 
to  the  purchasers.  There  was  all  the  time  on  the  broker's  book  a 
standing  credit  to  appellant  of  the  money  received  on  his  account 
from  the  sale  of  the  Reading  stock,  and  the  subsequent  debits  and 
credits  for  the  later  purchases  and  sales.  The  account  closed  un- 
fortunately for  the  appellant  with  a  balance  against  him,  but  there 
is  no  allegation,  certainly  no  evidence,  that  it  was  not  correct. 

Judgment  affirmed} 

•  Universal  Stock  Exchange  v.  Stevens,  66  L.  T.  n.  s.  612;  Forget  v.  Ostigny 
[1895]  A.  C.  318;  Union  Nat.  Bank  v.  Carr,  15  Fed.  Rep.  438;  Clews  v.  Jamieson 
182  U.  S.  461;  Hatch  v.  Douglas,  48  Conn.  116;  Titcomb  v.  Richter,  89  Conn.  226 
Corbett  v.  Underwood,  83  111.  324;  Oldershaw  v.  Knowles,  101  111.  117;  Perin  v 
Parker,  126  111.  201;  Fisher  v.  Fisher.  113  Ind.  474;  Sondheim  v.  Gilbert,  117  Ind.  71 
Ball  V.  Campbell,  .30  Kan.  177;  Sawyer  v.  Taggart,  14  Bush,  727;  Durant  v.  Burt 
98  Mass.  161;  Bullard  v.  Smith,  139  Mass.  492;  Bingham  v.  Scott,  177  Mass.  208 
Clay  V.  Allen,  63  Mi.ss.  426;  Stenton  v.  Jerome,  54  N.  Y.  480;  Gruman  v.  Smith 
81  N.  Y.  25;  Minor  ?>.  Beveridge,  141  N.  Y.  .399;  Taylor's  Estate,  192  Pa.  304,  309 
313;    Fear.son  v.  Little,  227  Pa.  348;    Winward  v.  Lincoln,  23  R.  I.  476.  ace. 

The  Constitution  of  California,  provided  until  1908  that  all  purchases  and 
sales  of  .stock  on  margin  should  be  void  and  money  paid  under  them  recover- 
able, but  this  provision  was  repealed  in  1908.  See  Willcox  v.  Edwards,  162  Cai. 
455. 


SECT.   II]  "fiARVEY    V.    MERRILL  811 


WILLIAM  p.  HARVEY  and  others  v.  Z.  TAYLOR 

MERRILL   AND   ANOTHEE 

Supreme  Judicial  Court  of  Massachusetts^  March  5,  1889- 

September  5,  1889 

[Reported  in  150  Massachusetts,  1] 

Contract  to  recover  for  losses  incurred  by  tbe  plaintiffs,  in  the 
purchase  and  sale  of  pork  on  the  Chicago  board  of  trade  for  the 
defendants,  and  for  their  commissions  as  brokers.  The  case  was 
referred  to  an  auditor,  who  made  a  report,  which,  so  far  as  material,, 
is  as  follows : — 

The  plaintiffs  were  commission  merchants  and  brokers,  dealing  in 
provisions  and  grain  as  members  of  the  board  of  trade  in  the  city 
of  Chicago.  The  defendants  were  brokers  in  the  city  of  Boston, 
who  forwarded  orders  for  the  purchase  and  sale  of  pork,  upon  con- 
tracts for  future  delivery,  to  the  plaintiffs,  who  entered  into  contracts 
of  purchase  and  sale  for  future  delivery  in  their  own  name,  but  for 
account  of  the  defendants,  the  defendants  promising  to  pay  them  a 
commission  for  the  execution  of  such  orders,  and  to  reimburse  them 
for  any  expenses  or  losses  which  should  be  incurred  in  the  final 
settlement.  This  action  is  brought  to  recover  for  commissions  in  the 
execution  of  such  orders,  and  for  the  loss,  being  the  difference  be- 
tween the  contracts  of  purchase  which  the  plaintiffs  made  on  behalf 
of  the  defendants  and  the  sales  of  the  same  quantity  of  pork  for  the 
same  account. 

The  defendants  gave  the  orders,  and  the  plaintiffs  made  the  con- 
tracts. There  was  a  rapid  decline  in  the  market  shortly  after  the 
contracts  and  purchases  were  made,  in  consequence  of  which,  when 
the  contracts  for  sales  were  made,  there  was  a  loss  of  about  twenty 
thousand  dollars,  which  the  plaintiffs  have  paid  and  have  suffered. 

It  was  the  custom  in  such  dealings  for  persons  in  the  situation  of 
the  plaintiffs  to  require  a  deposit  of  a  margin,  unless  the  person  ex. 
ecuting  the  orders  was  content  to  rely  upon  the  pecuniary  responsi- 
bility of  the  person  giving  such  orders,  and  there  was  a  customary 
margin  of  a  dollar  a  barrel  on  pork  at  that  time  in  these  transactions 
made  on  the  Chicago  board  of  trade.  A  draft  of  one  thousand 
dollars  was  sent  on  May  28,  1883,  and  credited  as  a  margin,  and 
another  sum  of  three  thousand  dollars  as  a  margin  was  sent  by  the 
defendants  about  July  2,  in  response  to  a  request  from  the  plain- 
tiffs for  the  same. 

The  principal  ground  of  defence  was  that  these  contracts  were 
made  upon  the  mutual  understanding  that  no  delivery  of  the  mer- 
chandise was  intended  or  expected,  but  that,  by  a  series  of  offsetting 
contracts  of  sales  for  future  delivery  of  the  same  kind  of  mer- 
chandise, settlements  were  to  be  made  by  the  payment  of  the  differ- 


812  HARVEY    V.    MERRILL  [CHAP.   VI 

ence  in  price,  according  to  the  state  of  the  market  as  it  should  rise 
or  fall,  and  that  the  contracts  were  merely  a  device  to  enable  the 
parties  to  make,  in  effect,  wagers  upon  the  probable  rise  or  fall  in 
the  market,  and  thus  to  gamble  upon  the  chance  of  such  advance  or 
decline  in  prices. 

It  was  well  understood  by  the  parties,  both  plaintiffs  and  de- 
fendants, that,  though  the  contracts  in  form  called  for  and  required 
an  express  delivery  of  the  pork  purchased  and  sold,  yet  the  parties 
intended  and  contemplated  only  transactions  by  formal  contracts, 
which  should  be  set  off  one  against  the  other,  to  avoid  the  necessity 
of  ever  receiving  or  delivering  a  single  barrel  of  pork,  and  that  the 
transactions  were  to  be  adjusted  and  settled  solely  upon  those  differ- 
ences which  the  chances  of  the  rise  and  fall  of  the  market  should 
create.  These  contracts  were  to  be  executed  in  Chicago,  and  were 
clearly  governed  by  the  law  of  Illinois  and,  at  the  time  they  were 
made,  a  statute  was  there  in  force  which  declared  that  "whoever 
contracts  to  have  or  give  to  himself  or  another  the  option  to  sell 
or  buy  at  a  future  time  any  grain  or  other  commodity,  stock  of  any 
railroad  or  other  company,  .  .  .  shall  be  fined  not  less  than  $10 
nor  more  than  $1,000,  or  confined  in  the  county  jail  not  exceeding 
one  year,  or  both ;  and  all  contracts  made  in  violation  of  this  sec- 
tion shall  be  considered  gambling  contracts,  and  shall  be  void." 
Eev.  Sts.  of  111.  of  1874,  c.  38,  §  130.^ 

The  terms  of  these  contracts  did  not  give  the  parties  an  option  to 
sell  or  buy  at  a  future  time  this  pork;  they  were  contracts  to  be  ful- 
filled by  the  delivery  of  the  pork  in  a  future  month;  and  were  not 
such  options  as  are  forbidden  by  the  statute.  The  auditor  based  his 
findings  as  to  the  invalidity  of  the  contracts  upon  the  fact  that, 
though  the  parties  made  express  contracts  for  the  purchase  of  several 
thousand  barrels  of  pork  in  June  and  July,  to  be  delivered  in  August 
and  September,  yet  it  was  well  understood  between  the  parties  that 
actual  deliveries  were  not  to  be  made,  but  such  deliveries  were  to 
be  avoided  by  the  device  of  making  equivalent  contracts  for  the 
sale  of  an  equal  number  of  barrels  of  pork  deliverable  in  the  same 
months,  and  then  by  making  a  direct  settlement  by  a  set-off  of  these 
opposite  contracts,  and  by  paying  or  receiving  the  difference  created 
by  the  rise  or  fall  in  the  market  prices.  According  to  the  rules 
of  the  board  of  trade,  and  according  to  the  terms  of  the  contracts 
madf,  the  purchaser  could  exact  the  delivery  of  the  article,  and  he 

'  800  as  to  the  construction  of  this  statute,  Wolcott  v.  Hoatb,  7S  111.  433;  Lofian 
V.  Mu.sick.  81  111.  4ir,;  Schtioidcr  v.  Turner,  1.30  111.  28;  Ames  v.  Moir,  1.30  111.  582; 
Corcoran  v.  Lehigh  f^oal  Co.,  l.'iS  III.  .300;  IVraton  v.  Smith,  1.'56  111.  S.TO;  Wolf  v. 
National  Hank  of  Illinois.  178  111.  8.5;  Sclilco  v.  Cuckcnlidm(-r,  179  111.  50.3;  Ubben 
V.  Hinriian,  1 S2  III.  r,(\H;    hoch  v.  Stern,  lOS  III.  .371;    Stewart  v.  Dodson,  2S2   111.  192. 

(Jnle.sH  forLidden  hy  Htat!it(\  a  contr.'iot  f)f  option  i.s  valid.  Union  Nat.  Hank  v.  Carr, 
15  r»;d.  Rer,.  438;  Ilanna  ?).  Iimrarn,  9.3  Ala.  4S2;  Codnian  v.  Heix.sel,  05  Ind.  32; 
Maaon  v.  I'jiyne,  47  Mo.  517  Pir^ronnet  v.  Lull.  10  Neh.  457;  Bi-relow  v.  lk>nediet, 
70  N.  Y.  202;  Harris  v.  Turnhridufr,  83  N.  Y.  93;  Lester  v.  Bucl,  49  Ohio  St.  240, 
252;     Kirkpatriok  v.   IJon.sall,  72   Pa.   155. 


SECT.    II ]  HARVEY    V.    MERRILL  813 

could  not  be  required  to  settle  by  an  offsetting  contract;  and  a  seller 
could  likewise  insist  upon  a  delivery  and  payment  of  the  money, 
and  not  be  required  to  settle  by  an  offsetting  contract.  In  a  vast 
majority  of  the  transactions  of  the  board  of  trade,  settlement  was 
made  by  the  set-off  of  opposite  contracts;  and  in  every  instance  such 
was  the  mode  of  dealing  between  the  plaintiffs  and  the  defendants. 

The  defendants  did  not  deal  in  these  articles  of  merchandise  by 
the  actual  receipt  and  delivery  of  the  same,  and  never  have  done 
so.  They  had  no  facilities  to  handle  them  by  actual  receipt  and 
delivery;  they  had  no  warehouses;  the  customers  for  whom  they 
acted  appeared  to  be  residents  of  Lawrence,  in  this  Commonwealth, 
and  there  was  no  disclosure  of  any  circumstance  indicating  any 
facilities  on  the  part  of  these  customers  for  the  receipt,  storage, 
or  delivery  of  such  a  quantity  of  these  commodities  as  the  defendants 
ordered  to  be  bought  and  sold.  In  a  period  of  two  months  the  de- 
fendants ordered  purchases  of  above  fifteen  thousand  barrels  of  pork, 
at  an  aggregate  cost  of  about  two  hundred  and  fifty  thousand  dollars ; 
they  also  bought  large  quantities  of  lard,  wheat,  corn,  and  ribs; 
and  the  aggregate  of  the  purchases  was  between  four  and  five  hun- 
dred thousand  dollars,  and  they  were  nearly  all  made  within  the 
thirty  days  following  June  11,  1883.  In  the  same  period  they. sold 
the  same  quantity  of  pork,  lard,  wheat,  corn,  and  ribs  as  was  pur- 
chased, with  a  net  loss  of  between  twenty  and  twenty-five  thousand 
dollars.  No  warehouse  receipt,  no  bill  of  lading,  and  no  item  of 
storage  appears  to  have  been  created  in  any  of  these  transactions. 

The  plaintiffs  rendered  to  the  defendants  an  account  covering 
all  their  transactions,  which  exhibited  a  balance  due  from  the  de- 
fendants to  the  plaintiffs. 

The  auditor  found  for  the  defendants,  solely  on  the  ground  that, 
under  the  guise  of  the  contracts  above  described,  the  real  intent  was 
to  speculate  on  the  rise  and  fall  of  prices,  and  not  to  receive  or 
deliver  the  actual  commodities,  and  therefore  that  the  contracts 
were  wagers;  but  if  his  finding  in  this  respect  should  be  incorrect, 
he  found  that  the  plaintiffs  were  entitled  to  recover  such  balance 
with  interest. 

The  auditor  filed  a  supplemental  report,  which  contained  the  fol- 
lowing statement : — 

"The  contracts  made  between  members  of  the  board  of  trade 
appear,  upon  the  evidence  before  me,  to  be  valid  obligations,  some 
of  which,  it  appears,  are  executed  by  actual  deliveries;  and  there 
was  no  evidence  before  me  that  any  ear-mark  or  distinctive  feature 
of  any  of  the  contracts  so  made  existed,  by  which  the  majority  that 
were  to  be  set  off  and  cancelled  without  delivery  of  merchandise 
could  be  distinguished  from  the  minority,  in  which  actual  delivery 

was  made My  finding  relates  to  the  understanding  between  the 

plaintiffs  and  the  defendants,  and  my  conclusion  is  unchanged 
that  the  parties  to  this  suit  entered  into  the  dealings  with  each 


814  HARVEY    V.    MERRILL  [CHAP.    VI 

other,  which  are  the  subject  thereof,  with  a  clear  understanding  that 
actual  deliveries  were  not  contemplated,  and  were  not  to  be  enforced ; 
and  it  appears  to  me  that  the  question  whether  the  members  of 
this  board  with  whom  the  defendants  dealt  had  such  an  under- 
standing with  each  other  is  not  material  to  the  issue  of  this  case. 
If  it  is  material,  I  do  not  find  such  an  understanding  to  have  been 
proved." 

At  the  trial  in  this  court,  the  reports  of  the  auditor  were  the  only- 
evidence  introduced  by  either  party,  and  Holmes,  J.,  declined  to 
submit  the  case  to  the  jury,  or  to  direct  a  verdict  for  the  defendants, 
as  requested  by  them ;  but  instructed  the  jury  that  the  plaintiffs  were 
entitled  to  a  verdict  upon  the  auditor's  report. 

The  jury  returned  a  verdict  for  the  plaintiffs;  and  the  defendants 
alleged  exceptions. 

R.  M.  Morse,  Jr.,  and  W.  S.  Knox,  for  the  defendants. 

E.  W.  Hutchins  and  H.  Wheeler,  for  the  plaintiffs. 

Field,  J.  The  rights  of  the  parties  are  to  be  determined  by  the 
law  of  Illinois,  but  there  is  no  evidence  that  the  common  law  of 
Illinois  differs  from  that  of  Massachusetts.  We  cannot  take  notice 
of  the  statutes  of  Illinois,  except  so  far  as  they  are  set  out  in  the 
auditor's  report ;  and  the  auditor  has  set  out  but  one  statutory  pro- 
vision of  that  State,  and  has  found  that  the  parties  have  not  acted  in 
violation  of  that.  We  are  therefore  to  determine  whether  the  con- 
tract between  the  parties,  as  the  auditor  has  found  it  to  be,  is  illegal 
and  void  by  the  common  law  of  Massachusetts. 

It  is  not  denied  that,  if,  in  a  formal  contract  for  the  purchase 
and  sale  of  merchandise  to  be  delivered  in  the  future  at  a  fixed 
price,  it  is  actually  the  agreement  of  the  parties  that  the  merchan- 
dise shall  not  be  delivered  and  the  price  paid,  but  that,  when  the 
stipulated  time  for  performance  arrives,  a  settlement  shall  be  made 
by  a  payment  in  money  of  the  difference  between  the  contract  price 
and  the  market  price  of  the  merchandise  at  that  time,  this  agree- 
ment makes  the  contract  a  wagering  contract.^  If,  however,  it  is 
agreed  by  the  parties  that  the  contract  shall  be  performed  accord- 
ing to  its  terms  if  either  party  requires  it,  and  that  either  party 
shall  have  a  right  to  require  it,  the  contract  does  not  become  a 
wagering  contract,  because  one  or  both  the  parties  intend,  when  the 
time  for  performance  arrives,  not  to  require  performance,  but  to 
substitute  therefor  a  settlement  by  the  payment  of  the  difference 

'  Numfrous  docisions  to  this  effect  aro  colloctod  in  14  Am.  &  Eng.  Encyc.  of  Law 
(2d  >'<l.),  000-011.  In  sonic  jurisdictionH  contracts  to  sell  in  the  future  stock  or  mer- 
chandise which  the  selhir  did  not  own  at  tlie  time  of  the  contract  arc  made  illegal 
without  reference  to  any  intention  that  there  shall  be  no  delivery.  See  Fortcnbury 
T.  State,  47  Ark.  188;  .Tolinston  v.  Miller,  07  Ark.  172;  Branch  v.  Palmer,  65  Ga.  210; 
MoHS  V.  ExchanKe  Bank,  102  Oa.  808;  Sincleton  v.  Bank  of  Monticello,  113  Ga.  527; 
AdamH  v.  Dick,  220  Mass.  40;  Dillard  v.  Brenner,  7.3  Miss.  130;  Violett  v.  Mansold, 
27  So.  Rep.  CMi.ss.)  875;  Connor  v.  Black.  119  Mo.  126,  132  Mo.  1.50;  Edwards 
Brokerage  Co.  v.  Stevenson,  160  Mo.  510;  Star)les  v.  Gould,  9  N.  Y.  520;  Springs  v. 
.lames.  137  N.  Y.  Ai)p.  D.  110;  C;ist  v.  Western  Union  Tel.  Co.,  45  S.  C.  344;  Riordan 
V.  Doty.  50  S.  C.  637;   Saundere  v.  Phelps  Co.,  63  S.  C.  173, 


SECT.    Il]  HARVEY    V.    MERRILL  815 

between  the  contract  price  and  the  market  price  at  that  time.  Such 
an  intention  is  immaterial,  except  so  far  as  it  is  made  a  part  of  the 
contract,  although  it  need  not  be  made  expressly  a  part  of  the 
contract.  To  constitute  a  wagering  contract,  it  is  sufficient,  what- 
ever may  be  the  form  of  the  contract,  that  both  parties  understand 
and  intend  that  one  party  shall  not  be  bound  to  deliver  the  mer- 
chandise and  the  other  to  receive  it  and  to  pay  the  price,  but  that 
a  settlement  shall  be  made  by  the  payment  of  the  difference  in  prices. 

The  construction  which  we  think  should  be  given  to  the  auditor's 
report  is,  that  he  finds  that  the  contracts  which  the  plaintiffs  made 
on  the  board  of  trade  with  other  members  of  that  board  were  not 
shown  to  be  wagering  contracts,  and  that  the  contract  which  the 
defendants  made  with  the  plaintiffs  was,  that  the  defendants  should 
give  orders  from  time  to  time  to  the  plaintiffs  for  the  purchase  and 
the  sale  on  account  of  the  defendants  of  equal  amounts  of  pork  to 
be  delivered  in  the  future;  that  the  plaintiffs  should,  in  their  own 
names,  make  these  purchases  and  these  sales  on  the  board  of  trade; 
that  the  plaintiffs  should,  at  or  before  the  time  of  delivery,  procure 
these  contracts  to  be  set  off  against  each  other,  according  to  the 
usages  of  that  board;  that  the  defendants  should  not  be  required  to 
receive  any  pork  and  pay  for  it,  or  to  deliver  any  pork  and  receive 
the  pay  for  it,  but  should  only  be  required  to  pay  to  the  plaintiffs, 
and  should  only  be  entitled  to  receive  from  them,  the  differences 
between  the  amounts  of  money  which  the  pork  was  bought  for  and 
was  sold  for;  and  that  the  defendants  should  :furnish  a  certain 
margin,  and  should  pay  the  plaintiffs  their  commissions. 

The  defendants  gave  orders  in  pursuance  of  this  contract;  the 
plaintiffs  made  the  purchases  and  sales  on  the  board  of  trade,  set 
them  off  against  each  other,  and  now  sue  the  defendants  for  the 
differences  which  they  have  paid  and  for  their  commissions. 

The  auditor  has  found  that,  "in  a  vast  majority  of  the  transactions 
of  the  board  of  trade,  settlement  was  made  by  the  set-off  of  opposite 
contracts."  In  his  supplemental  report  he  says,  "My  conclusion  is 
unchanged,  that  the  parties  to  this  suit  entered  into  the  dealings 
with  each  other  which  are  the  subject  thereof  with  a  clear  under- 
standing that  actual  deliveries  were  not  contemplated  and  were  not 
to  be  enforced;  and  it  appears  to  me  that  the  question  whether  the 
members  of  this  board  with  whom  the  defendants  dealt  had  such  an 
understanding  with  each  other  is  not  material  to  the  issue  of  this 
case." 

The  peculiarity  of  this  case,  according  to  the  findings  of  the 
auditor,  is,  that  while  the  contracts  which  the  plaintiffs  made  on  the 
board  of  trade  must  be  taken  to  be  legal,  the  plaintiffs  have  under- 
taken to  agree  with  the  defendants  that  these  contracts  should  not  be 
enforced  by  or  against  them,  except  by  settlements  according  to  dif- 
ferences in  prices.  If  such  an  agreement  seems  improbable,  it  is 
enough  to  say  that  the  auditor  has  found  that  it  was  made.     The 


816  HARVEY    V.    MERRILL  [CHAP.   VI 

usages  of  the  board  of  trade  were  such  that  the  plaintiffs  might  well 
think  that  they  risked  little  or  nothing  in  making  such  an  agree- 
ment. Indeed,  the  distinction  in  practice  between  the  majority  of 
contracts  which  by  the  auditor's  report  appear  to  be  made  and  settled 
on  the  board  of  trade,  and  wagering  contracts,  is  not  very  plain, 
and  brokers,  for  the  purpose  of  encouraging  speculation  and  of 
earning  commissions,  might  be  w^illing  to  guarantee  to  their  cus- 
tomers that  the  contracts  made  for  them  on  the  board  of  trade  should 
not  be  enforced,  except  by  a  settlement,  according  to  differences  in 
prices. 

We  do  not  see  why  the  agreement  between  the  plaintiffs  and  the 
defendants,  that  the  defendants  should  not  be  required  to  receive 
or  deliver  merchandise,  or  to  pay  for  or  receive  pay  for  merchandise, 
but  should  be  required  to  pay  to  and  to  receive  from  the  plaintiffs 
only  the  differences  in  prices,  is  not,  as  between  the  parties,  open 
to  all  the  objections  which  lie  against  wagering  contracts.  On  the 
construction  we  have  given  to  the  auditor's  report,  the  plaintiffs, 
in  their  dealings  with  the  defendants,  in  some  respects  acted  as  prin- 
cipals. In  making  the  contracts  on  the  board  of  trade  with  other 
brokers,  they  may  have  been  agents  of  the  defendants.  In  agree- 
ing with  the  defendants  that  they  should  not  be  compelled  to  per- 
form or  accept  performance  of  the  contracts  so  made,  the  plaintiffs 
acted  for  themselves  as  principals.  If  the  defendants  had  made  a 
contract  with  the  plaintiffs  to  pay  and  receive  the  differences  in  the 
price  of  pork  ordered  to  be  bought  and  sold  for  future  delivery 
with  the  understanding  that  no  pork  was  to  be  bought  or  sold,  this 
would  be  a  wagering  contract.  On  such  a  contract  the  defendants 
would  win  what  the  plaintiffs  lose,  and  the  plaintiffs  would  win  what 
the  defendants  lose.  But  so  far  as  the  defendants  are  concerned, 
the  contracts  on  which  the  auditor  has  found  they  made  with  the 
plaintiffs  are  contracts  on  which  they  win  or  lose  according  to  the 
rise  or  fall  in  prices,  in  the  same  manner  as  on  wagering  contracts. 
If  the  plaintiffs,  by  virtue  of  the  contracts  they  made  with  other 
members  of  the  board  of  trade,  were  bound  to  receive  or  deliver 
merclianrlise,  and  to  pay  or  receive  the  price  therefor,  on  the  auditor's 
finding  they  must  be  held  as  against  the  defendants  to  have  agreed 
to  do  these  things  on  their  own  account,  and  that  the  defendants 
should  only  be  bound  to  pay  to  them  and  to  receive  from  them  the 
difforf'ncos  in  j^rices.  If  the  defendnnts,  as  undisclosed  principals, 
should  bo  hold  bound  to  other  memlxn's  of  \}w  board  of  trade  on  the 
contracts  made  by  the  plaintiffs,  the  plaintiffs  by  the  terms  of  their 
employment  would  be  bound  to  indemnify  the  defendants,  except 
so  far  as  the  contracts  wore  settled,  by  a  payment  of  differences  in 
prices.  Th(!  agroc^ment  of  the  parties,  as  the  auditor  has  found  it, 
exfludoH  finy  ini])liod  liability  on  tho  pnrt  of  the  defendants  to  in- 
domnify  the  pliiiiitiffs,  except  for  iiioncy  p.'iid  in  the  settlement 
of  difrorences  in  prices.     The  position  of  the  plaintiffs  towards  the 


SECT.    II  ]  HARVEY    V.    MERRILL  817 

defendants  is  no  better  than  it  would  have  been  if  the  plaintiffs 
had  been  employed  to  make  wagering  contracts  for  pork  on  account  of 
the  defendants,  and  had  made  such  contracts,  because  the  plaintiffs, 
relying  upon  the  usages  of  the  board  of  trade,  have  undertaken  to 
agree  with  the  defendants  that  whatever  contracts  they  make  shall 
bind  the  defendants  only  as  wagering  contracts,  and  shall  be  settled 
as  such. 

The  plaintiffs  contend  that,  even  if  the  contracts  which  the  de- 
fendants authorized  them  to  make  and  which  they  made  on  the  board 
of  trade  had  been  wagering  contracts,  yet  they  could  recover  what- 
ever money  they  had  paid  in  settlement  of  these  contracts  in  the 
manner  authorized  by  the  defendants. 

In  Thacker  v.  Hardy,  4  Q.  B.  D.  685,  the  court  found  that  the 
plaintiff  was  employed  to  make  lawful  contracts,  and  ruled  that  the 
understanding  between  the  plaintiff  and  his  customer,  that  the  con- 
tract should  be  so  managed  that  only  differences  in  prices  should  be 
paid,  did  not  violate  the  provisions  of  8  &  9  Vict.  c.  109,  §  18. 
Lindley,  J.,  in  giving  the  opinion  at  the  trial,  said,  at  p.  687 :  "What 
the  plaintiff  was  employed  to  do  was  to  buy  and  sell  on  the  Stock 
Exchange,  and  this  he  did;  and  everything  he  did  was  perfectly 
legal,  unless  it  was  rendered  illegal  as  between  the  defendant  and 
himself  by  reason  of  the  illegality  of  the  object  they  had  in  view,  or 
of  the  transactions  in  which  they  were  engaged.  Now,  if  gaming 
and  wagering  were  illegal,  I  should  be  of  opinion  that  the  illegality 
of  the  transactions  in  which  the  plaintiff  and  the  defendant  were  en- 
gaged would  have  tainted,  as  between  themselves,  whatever  the 
plaintiff  had  done  in  furtherance  of  their  illegal  designs,  and  would 
have  precluded  him  from  claiming,  in  a  court  of  law,  any  indemnity 
from  the  defendant  in  respect  of  the  liabilities  he  had  incurred. 
Cannan  v.  Bryce,  3  B.  &  Aid.  179;  M'Kinnell  v.  Eobinson,  3  M.  & 
W.  434;  Lyne  v.  Siesfield,  1  H.  &  W.  278.  But  it  has  been  held  that 
although  gaming  and  wagering  contracts  cannot  be  enforced,  they  are 
not  illegal.  Fitch  v.  Jones,  5  E.  &  B.  338,  is  plain  to  that  effect." 
On  appeal,  Brett,  L.  J.,  said,  at  p.  694:  "It  was  further  suggested 
in  Cooper  v.  Neil,  W.  N.,  1  June,  1878,  that  the  agreement  was,  that 
although  the  plaintiff,  being  a  broker  to  the  defendant,  but  contract- 
ing in  his  own  person  as  principal,  should  enter  into  real  bargains, 
yet  the  defendant  should  be  called  upon  only  to  pay  the  loss  if  the 
market  should  be  unfavorable,  and  should  receive  only  the  profit 
if  it  proved  favorable;  and  that  no  further  liability  should  accrue 
to  the  principal,  whatever  might  become  of  the  broker  upon  the 
Stock  Exchange;  so  that,  as  regarded  the  real  principal,  the  de- 
fendant in  the  action,  it  should  be  a  mere  gambling  transaction. 
I  then  considered  that  a  transaction  of  that  kind  might  fall  within 
the  provisions  of  8  &  9  Vict.  c.  109,  §  18,  but  I  thought  that  there 
was  no  evidence  of  it.  And  with  respect  to  the  present  action,  I  say 
that   there   is   no   evidence   that   the   bargain   between    the   parties 


818  HARVEY    V.    MERRILL  [CHAP.    VI 

amounted  to  a  transaction  of  that  nature.     I  retract  nothing  from 
what  I  said  in  that  case." 

In  England,  wagering  contracts  concerning  stocks  or  merchandise 
are  not  illegal  at  common  law,  and  all  the  judges  in  Thacker  v. 
Hardy  were  of  opinion  that  the  facts  in  that  case  did  not  shov/  that 
the  transactions  between  the  parties  were  in  violation  of  the  statute. 

In  Irwin  v.  Williar,  110  TJ.  S.  499,  510,  the  Supreme  Court  of  the 
United  States  says  of  wagering  contracts:  "In  England,  it  is  held 
that  the  contracts,  although  wagers,  were  not  void  at  common  law, 
and  that  the  statute  has  not  made  them  illegal,  but  only  non-enforce- 
able (Thacker  v.  Hardy,  uhi  supra),  while  generally,  in  this  country, 
all  wagering  contracts  are  held  to  be  illegal  and  void  as  against 
public  policy.  Dickson's  Executor  v.  Thomas,  97  Penn.  St.  278; 
Gregory  v.  Wendell,  40  Mich.  432;  Lyon  v.  Culbertson,  83  111.  33; 
Melchert  v.  American  Union  Telegraph  Co.,  3  McCrary,  521 ;  s.  c. 
11  Fed.  Rep.,  193  and  note;  Barnard  v.  Backhaus,  52  Wis.  593; 
Kingsbury  v.  Kirwan,  77  N".  Y.  612;  Story  v.  Saloman,  71  N.  Y. 
420;  Love  v.  Harvey,  114  Mass.  80."  In  considering  how  far  brokers 
would  be  affected  by  the  illegality  of  contracts  made  by  them,  that 
court  says :  "It  is  certainly  true  that  a  broker  might  negotiate  such 
a  contract  without  being  privy  to  the  illegal  intent  of  the  principal 
parties  to  it  which  renders  it  void,  and  in  such  a  case,  being  inno- 
cent of  any  violation  of  law,  and  not  suing  to  enforce  an  unlawful 
contract,  has  a  meritorious  ground  for  the  recovery  of  com- 
pensation for  services  and  advances.  But  we  are  also  of  the  opinion 
that  when  the  broker  is  privy  to  the  unlawful  design  of  the  parties, 
and  brings  them  together  for  the  very  purpose  of  entering  into  an 
illegal  agreement,  he  is  particeps  criminis,  and  cannot  recover  for 
services  rendered  or  losses  incurred  by  himself  on  behalf  of  either 
in  forwarding  the  transaction."  This  was  decided  in  Embrey  v. 
Jemison,  131  U.  S.  336.  See  also  Kahn  v.  Walton  (Ohio,  1888), 
20  K  E.  Rep.  203;  Cothran  v.  Ellis,  125  111.  496;  Fareira  v.  Gabell, 
89  Penn.  St.  89;  Crawford  v.  Spencer;  92  Misso.  498;  Lowry  v. 
Dillman,  59  Wis.  197;  Whitesides  v.  Hunt,  97  Ind.  191;  First  Na- 
tional Bank  v.  Oskaloosa  Packing  Co.,  66  Iowa,  41 ;  Rumsey  v. 
Berry,  65  Maine,  570. 

It  is  not  denied  that  wagering  contracts  are  void  by  the  common 
law  of  Massachusetts;  but  it  is  argued  that  they  are  not  illegal,  and 
that,  if  one  pays  money  in  settlement  of  them  at  request  of  another, 
he  can  recover  it  of  the  person  at  whose  request  he  pays  it.  It  is 
now  settled  here  that  contracts  which  are  void  at  common  law,  be- 
cause they  are  against  public  policy,  like  contracts  which  are  prohib- 
ited by  statute,  are  illegal  as  well  as  void.  They  are  prohibited  by 
law  because  they  are  considered  vicious,  and  it  is  not  necessary  to 
impose  a  penalty  in  order  to  render  them  illegal.  Bishop  v.  Palmer, 
146  Mass.  469;"Gibbs  v.  Consolidated  Gas  Co.,  130  U.  S.  396.  The 
weiglit  of  authority  in  this  country  is,  we  think,  that  brokers  who 


SECT.    II ]  PIXLEY    V.    BOYNTON  819 

knowingly  make  contracts  that  are  void  and  illegal  as  against  public 
policy,  and  advance  money  on  account  of  them  at  the  request  of  their 
principals,  cannot  recover  either  the  money  advanced  or  their  com- 
missions, and  we  are  inclined  to  adopt  this  view  of  the  law.  Embrey 
V.  Jemison,  131  U.  S.  336,  uhi  supra,  and  the  other  cases  there 
cited.^ 

We  are  of  the  opinion  that  the  instruction  of  the  presiding  justice, 
that  on  the  auditor's  report  the  plaintiffs  were  entitled  to  a  verdict, 
cannot  be  sustained.  Whether  on  the  auditor's  report  the  de- 
fendants were  entitled  to  a  ruling  directing  the  jury  to  render  a 
verdict  in  their  favor,  or  whether  the  case  should  have  been  sub- 
mitted to  the  jury  for  the  reasons  stated  in  Peaslee  v.  Koss,  143  Mass. 
275,  is  a  question  which  has  not  been  carefully  argued,  and  upon 
which  we  express  no  opinion.  Exceptions  sustained. 


BENJAMIN  F.  PIXLEY  et  al  v.  CHARLES  W. 

BOYNTON    ET    AL 

Illinois   Supreme   Coubt,   September   Term,    1875 
[Reported  in  79  Illinois,  351] 

Appeal  from  the  Circuit  Court  of  Cook  County;  the  Hon.  John 
G.  Rogers,  Judge,  presiding. 

This  was  an  action  of  assumpsit,  brought  by  Charles  W.  Boynton, 
George  S.  Foster,  and  John  S.  Miller,  partners,  against  Benjamin  F. 
Pixley,  Thomas  W.  Hall,  and  Joseph  G.  Hall,  partners,  upon  a 
promissory  note.  The  opinion  of  the  court  contains  a  statement  of 
the  material  facts. 

Mr.  Farlin  Q.  Ball,  for  the  appellants. 

Messrs.  Prentiss  &  HooTce,  for  the  appellees. 

Mr.  Chief  Justice  Scott  delivered  the  opinion  of  the  court : — 

The  judgment  in  favor  of  plaintiffs  in  the  court  below  was  for 
$31.33  in  excess  of  the  ad  damnum  in  the  declaration.  That  sum 
had  been  remitted  in  this  court  by  plaintiffs  before  the  cause  was 
submitted  for  decision.  Under  our  present  statute  this  is  per- 
missible, and  is  in  accordance  with  the  practice  that  prevails. 

The  action  is  upon  a  promissory  note,   and  defendants   seek  to 

avoid  the  payment  on  the  ground  the  consideration  is  illegal.     The 

special  defence  set  up  in  the  notice  filed  with  the  general  issue  is, 

that  it  was  given  in  settlement  of  "differences"  arising  out  of  an 

optional  contract  in  wheat,  made  on  the  board  of  trade,  and  that  it 

was  not  the  intention  of  any  of  the  parties  to  the  transaction  to  buy 

or  sell,  or  deliver  or  receive  grain,  but  their  only  purpose  was  to 

trade  in  "differences"  in  the  price  of  grain  on  the  Chicago  market. 

*  Phelps  V.  Holderness,  56  Ark.  300;  Nat.  Bank  of  Augusta  v.  Cunningham,  75 
Ga.  366;  Pope  v.  Hanke,  155  111.  617;  People's  Saving  Bank  v.  Gifford,  108  Iowa, 
277;    Rogers  v.  Marriott,  59  Neb.  759,  ace. 


820  PIXLEY    V.    BOYNTON  [CHAP,   VI 

It  will  not  be  necessary  to  discuss  the  legal  proposition,  that  such 
contracts  are  void,  as  being  against  a  sound  public  morality,  for 
the  reason  we  do  not  think  any  such  contracts  as  defendants  insist 
upon  has  been  proven  to  have  existed  between  the  parties.  The 
burden  of  proof  is  upon  the  defendants  to  show  the  consideration  of 
the  note  is  illegal,  and  they  ought,  in  a  case  like  this,  to  be  required 
to  make  this  proof  by  a  clear  preponderance  of  the  evidence.  This 
they  have  not  done. 

The  contract  was  made  by  Hall,  one  of  the  defendants,  on  behalf 
of  Wallace,  who  was  not  himself  a  member  of  the  board  of  trade,  and 
could  not  by  its  usages  make  contracts  in  his  own  name  in  relation 
to  transactions  on  'change.  In  June,  1879,  Wallace,  through  Hall, 
sold  to  Boynton,  for  his  firm,  5,000  bushels  No.  2  spring  wheat, 
at  $1.12  per  bushel,  "seller  July."  Suddenly  the  price  of  wheat 
went  up,  and  it  was  thought  best  to  close  up  the  matter.  Accordingly, 
Hall,  at  the  instance  perhaps  of  Wallace,  certainly  in  his  interest, 
bought  the  wheat  back  from  Boynton  at  an  advance  of  fourteen 
cents  per  bushel.  N^either  Hall  nor  his  firm  had  any  real  interest  in 
the  wheat,  but  as  Hall  and  Boynton  were  both  members  of  the  board 
of  trade,  and  as  the  contract  was  made  in  Hall's  name,  by  his  con- 
sent, and  he  was  legally  obligated  to  perform  it,  he  would  have 
been  expelled  had  he  not,  in  some  satisfactory  manner,  closed  up 
the  matter  with  Boynton  at  the  maturity  of  the  contract.  It  was 
no  doubt  for  this  reason,  as  well  as  his  legal  liability,  his  firm  gave 
the  note  upon  which  this  action  was  brought. 

A  number  of  witnesses  familiar  with  the  rules  of  the  board  of  trade 
were  examined,  and  they  all  say  this  contract  was  in  conformity 
with  the  custom  of  trade,  and  was  a  regular  and  legitimate  contract. 
"Seller"  the  month,  as  that  term  is  understood  and  used  on  the 
board  of  trade,  is  explained  to  mean  the  seller  has  until  the  last  day 
of  the  month  in  which  to  make  a  delivery  of  any  grain  contracted 
to  be  sold.  Under  such  a  contract  as  we  understand  the  evidence, 
all  the  option  the  seller  has  is  the  privilege  to  deliver  the  grain  at 
any  time  before  the  maturity  of  the  contract.  This  is  nothing  more 
than  a  time  contract,  which  is  regarded  on  the  board  of  trade  and 
elsewhere  as  a  legitimate  and  regular  contract.  Time  contracts  in 
relation  to  grain,  as  well  as  other  commodities,  are  of  daily  occur- 
rence, and  must  necessarily  be  in  commercial  transactions. 

One  witness  says,  the  true  idea  of  an  "option"  is  "puts"  and 
"calls."  A  "put"  is  defined  in  the  evidence  to  be  "a  privilege  of 
delivering  or  not  delivering  the  grain,"  and  a  "call"  is  "a  privilege 
of  calling  or  not  calling  for  the  grain."  The  contract  between  the 
parties  to  this  transaction  was  not  an  optional  one,  in  the  sense  of 
"puts  nrid  calls."  The  only  optioTi  the  s(>ll('r  had  was  as  to  the  time 
of  thf!  delivery.  The  legal  effect  f>f  bis  agreement  was  that  he  should 
deliver  the  grain  contracted  to  be  sold  within  a  limited  period. 

Wliatever  may  have  been   the   intention  of  Hall   or  Wallace,  it 


SECT.    Il]  WINCHESTER    V.    NUTTER  821 

seems  clear  that  Boynton  understood  he  was  to  have  the  grain  at 
the  maturity  of  the  contract.  His  good  faith  was  manifested,  in 
that,  immediately  upon  selling  the  grain  back  to  Hall,  for  Wallace, 
he  purchased  a  like  amount  at  the  price  he  had  sold,  and  upon  the 
maturity  of  the  contract,  took  the  wheat  and  paid  for  it.  Plaintiffs 
were  extensively  engaged  in  shipping  grain,  as  shown  by  the  testi- 
mony. Boynton  emphatically  declares  this  was  not  a  gambling 
transaction,  so  far  as  he  was  concerned,  but  that  the  grain  was 
purchased  in  good  faith  for  the  legitimate  purposes  of  commerce. 
There  is  nothing  in  the  record  to  overcome  his  testimony  in  this 
regard. 

The  intention  of  the  parties  gives  character  to  the  transaction, 
and  if  either  party  contracted  in  good  faith,  he  is  entitled  to  the 
benefit  of  his  contract,  no  matter  what  may  have  been  the  secret 
purpose  or  intention  of  the  other  party. 

A  remittitur  having  been  entered,  there  is  now  no  error  in  the 
record,  and  the  judgment  will  be  affirmed  to  the  extent  of  $1000. 
But  because  there  was  error  in  the  record  before  the  remittitur  was 
entered,  all  costs  accruing  in  this  court  up  to  the  date  of  entering 
the  remittitur  and  the  costs  of  entering  the  same,  will  be  taxed 
against  appellees.  Judgment  affirmed.^ 


WINCHESTER  V.  NUTTER  &  another 

New  Hampshire  Supreme  Court,  December  1872 

[Reported  in  52  Neiv  Hampshire,  507] 

Assumpsit,  by  Cummings  M.  Winchester  against  Oscar  Nutter 
and  Elden  Earnham,  upon  an  account  annexed,  "for  furnishing  twenty 
four  suppers,  at  your  request,  at  seventy-five  cents  each,  price  agreed, 
$18."  It  appeared,  in  evidence,  that  the  plaintiff  and  two  defendants 
and  several  others  met  one  evening  at  a  schoolhouse  in  Lancaster, 
for  the  purpose  of  considering  the  subject  of  having  a  squirrel  hunt 
in  that  neighborhood.  The  plaintiff  was  chosen  chairman  of  the 
meeting.  The  two  defendants  were  chosen  as  the  leaders  of  the 
two  opposite  sides,  called  "captains,"  and  accepted  that  place.     They 

1  Grizewood  v.  Blane,  11  C.  B.  526;  Clews  v.  Jamieson,  182  U.  S.  461,  489;  Hentz 
V.  Jewell,  20  Fed.  Rep.  592;  Bennett  v.  Covinsrton,  22  Fed.  Rep.  816;  Bangs  v.  Hor- 
nick,  30  Fed.  Rep.  97;  Hill  v.  Levy,  98  Fed.  Rep.  94;  Flowers  v.  Bush  &c.  Co.,  254 
Fed.  Rep.  519;  Robson  v.  WeU,  142  Ga.  429;  Scanlon  v.  Warren,  169  111.  142;  Vigel 
V.  Gatton,  61  111.  App.  98;  Whitesides  v.  Hunt,  97  Ind.  191;  Sondheim  v.  Gilbert, 
117  Ind.  71;  Murray  v.  Ocheltree,  59  Iowa,  4.35;  Sawj^er  v.  Ta^gart.,  14  Bush,  727; 
Rumsey  v.  Berry,  65  Me.  570,  573;  Dillaway  v.  Alden,  88  Me.  230;  Barnes  v.  Smith, 
159  Mass.  344;  Davy  v.  Banscs,  174  Mass.  238;  Gregory  v.  Wendell,  40  Mich.  432; 
Donovan  v.  Daiber,  124  Mich.  49;  McCarthy  v.  Weare  Commission  Co.,  87  Minn. 
11;  Clay  v.  Allen,  63  Miss.  426;  Rogers  n.  Marriott,  59  Neb.  759;  Botts  ?).  Mercan- 
tile Bank,  170  N.  Y.  App.  D.  879;  Dows  v.  Glaspel,  4  N.  Dak.  251,  ace.  Medlin 
Millin<:  Co.  v.  Moffatt  Commission  Co.,  218  Fed.  Rep.  686  (Mo.);  Taylor  v.  Sebas- 
tian, 158  Mo.  App.  147;    McGrew  v.  City  Produce  Exchange,  85  Tenn.  572,  contra. 


822  WINCHESTER    V.    NUTTER  [CHAP.    VI 

then  chose  sides,  each  captain  selecting  his  men  alternately,  until 
there  were  twelve  on  each  side,  including  the  captains.  They  agreed 
to  have  a  squirrel  hunt,  the  hunting  to  begin  and  close  at  a  fixed 
time,  —  after  the  close  of  which  the  game  was  to  be  counted  accord- 
ing to  certain  prescribed  rules,  and  the  side  tHat  got  beat  was  to  pay 
for  the  suppers  for  both  sides,  it  being  arranged  that,  in  the  end, 
the  captains  should  pay  no  more  than  each  other  man  on  his  side; 
that  each  man  on  the  side  that  got  beat  should  pay  for  his  own 
supper  and  for  that  of  one  man  on  the  side  that  beat.  The  question 
submitted  to  the  jury  was  as  to  what  was  the  contract  made  with  the 
plaintiff,  who  agreed  to  furnish  the  suppers  for  the  whole.  The  jury 
found  that  the  contract  was  that  the  two  captains  (the  defendants) 
engaged  the  suppers,  and  were  to  be  responsible  to  the  plaintiff  for 
the  whole  of  them,  and  the  matter  was  to  be  afterwards  adjusted 
between  the  captains  and  their  men.  It  appeared  that  the  plaintiff 
knew  and  understood  fully  all  these  arrangements  as  to  how  the 
supper  was  to  be  paid  for  in  the  end. 

The  defendants  moved  the  court  to  nonsuit  the  plaintiff,  upon  the 
ground  that  this  whole  transaction  was  simply  a  bet  or  wager  for 
the  suppers,  and  that  the  plaintiff's  claim  in  this  case  "grows  out 
of  such  bet  or  wager,"  under  the  provisions  of  ch.  254,  sec.  12,  Gen. 
Stats.  The  court,  pro  forma,  overruled  this  motion,  and  the  de- 
fendants excepted. 

The  question  of  law  thus  raised  was  reserved. 

Fletcher  &  Reyivood  and  E.  Fletcher  for  the  defendants. 

Ray  &  Drew  and  G.  A.  Bingham,  for  the  plaintiff. 

Foster,  J.  The  plaintiff  furnished,  sold,  and  delivered  to  the  de- 
fendants, at  their  special  request,  twenty-four  suppers;  why  should 
not  the  defendants  pay  for  them,  there  being  no  controversy  about 
the  price  or  the  quality  of  the  article  furnished? 

The  plaintiff  has  fully  performed  his  part  of  the  contract;  why 
should  not  the  defendants  perform   their  part? 

Because,  they  say,  that  although  they  have  received  and  eaten  the 
plaintiff's  suppers,  still  those  suppers  were  provided  in  order  to  enable 
certain  parties  to  pay  a  bet  or  wager;  therefore,  the  contract  for  the 
purchase  and  sale  of  these  suppers  grew  out  of  a  bet  or  wager;  and 
such  a  contract,  they  contend,  is  illegal  and  void,  and  in  any  effort 
to  enforce  it,  potior  est  conditio  defendentis. 

Tf  this  contract  is  held  void,  it  can  only  be  on  the  ground  that  the 
wager  was  illegal,  —  a  violation  of  law ;  and  that  the  plaintiff,  by 
contracting  to  furnish  the  suppers  absolutely,  whatever  might  be  the 
result  of  the  squirrel  hunt,  for  a  certain  price  and  payment,  absolute 
and  unconditional,  to  these  two  defendants,  whether  they  or  the 
party  that  either  one  of  them  represented  should  be  defeated  or  not 
in  the  event  of  the  hunt,  aided,  abetted,  counselled,  hired,  or  pro- 
cured the  commission  of  a  crime  or  a  misdemeanor. 

At  common  law  some  contracts  of  wager  are  valid  and  some  are 


SECT.    Il]  WINCHESTER    V.    NUTTER  823 

void.  2  Pars,  on  Con.  627,  755.  But  the  common  law,  allowing 
actions  to  be  maintained  upon  a  wager  in  cases  not  contrary  to 
public  policy  nor  prohibited  by  statute,  has  never  been  adopted  in 
jSTew  Hampshire. 

Here  all  wagers  are  void  contracts.  Perkins  v.  Eaton,  3  N.  H. 
152;  Hoit  v.  Hodge,  6  JST.  H.  104.  This  is  not  because  the  contract 
is  to  commit  or  be  accessory  to  a  crime  or  a  misdeamor,  for  a  wager 
contract  is  neither  a  crime  nor  a  misdeamor.  Mere  betting,  un- 
connected with  a  criminal  offence,  is  no  offence  against  the  criminal 
law.  Neither  the  common  law  nor  any  statute  of  this  State  affixes 
any  penalty  to  betting,  as  a  criminal  offence,  or  in  any  respect  a 
misdemeanor. 

The  plaintiff  presided  at  the  meeting  at  which  the  arrangements 
for  the  hunt  and  for  the  subsequent  suppers  were  made.  He  knew 
and  understood  fully  all  these  arrangements.  And  so  he  may  be 
said  to  have  aided  and  abetted  all  these  transactions.  But  as  the 
wager  was  not  a  misdemeanor,  the  plaintiff,  in  aiding  the  wager, 
did  not  aid  a  misdemeanor. 

Here  was  no  offence  against  the  common  law.  How  is  the  trans- 
action to  be  viewed  in  the  light  of  our  statutes,  and  how  is  it  affected 
by  them?     The  wager  contract  is  simply  a  void  contract. 

Section  12  of  ch.  254,  Gen.  Stats.,  provides  that  "all  bets  and 
wagers  upon  any  question  where  the  parties  have  no  interest  in  the 
subject  except  that  created  by  the  wager,  are  void;  and  either  party 
may  recover  any  property  by  him  deposited,  paid  or  delivered  upon 
such  wager  or  its  loss,  and  repel  any  action  brought  for  anything  the 
right  or  claim  tp  which  grows  out  of  such  bet  or  wager." 

The  contract  of  wager,  then,  as  between  the  parties  to  that  con- 
tract, the  winning  and  losing  parties  in  the  result  of  the  hunt,  was  a 
void  contract.  But  it  was  not  void  as  being  an  undertaking  to  violate 
the  law,  nor  as  an  undertaking  involving  any  violation  of  law  punish- 
able by  a  penalty  as  an  offence  against  the  criminal  law. 

The  criminal  law  does  not  prohibit  the  contract.  The  criminal 
law  is  not  violated  by  it.  The  criminal  law  affixes  no  penalty  to  the 
making  or  execution  of  the  contract.  The  contract  is  in  no  way 
connected  with  a  violation  of  the  criminal  law,  for  betting  is  not  a 
violation  of  the  criminal  law. 

Therefore,  the  doctrine  of  pariiceps  criminis  does  not  arise,  and 
cannot  be  applied,  because  there  is  no  crimen;  no  statutory  nor  com- 
mon law  offence,  no  municipal  regulation  nor  ordinance,  —  nothing 
but  a  special  statute  imposing  no  penalty  by  virtue  of  any  criminal 
process  or  proceeding,  and  not  declaring  a  wager  to .  be  a  mis- 
demeanor, but  merely  denying  a  civil  remedy  and  annulling  a  con- 
tract upon  grounds  of  supposed  public  policy. 

What  is  the  public  policy?  Probably  to  restrain  the  tendency 
to  idleness  and  improvidence,  which  is  likely  to  be  promoted  by  in- 
dulgence in  the  habit  of  betting.    But  public  policy  has  not  seemed 


824  WINCHESTER    V.    NUTTER  [CHAP.   VI 

to  require  tliat  such  amusements  should  be  punished  as  a  crime  or 
misdemeanor,  nor  even  that  they  should  be  so  much  as  forbidden  by 
the  language  of  the  law.  The  act  of  betting  and  the  contract  of  wager 
is,  therefore,  neither  malum  in  se,  nor  malum  prohibitum,,  in  the  eye 
or  the  letter  of  the  law. 

Furthermore,  as  to  the  public  policy,  then,  of  the  special  statute 
referred  to,  which  only  renders  the  contract  of  wager  void,  its  pur- 
pose and  intent  may  be  gathered  from  an  additional  part  of  the 
statute ;  for  a  subsequent  section  of  the  same  chapter  —  section  14  — 
furnishes  a  definition  of  the  terms  "bet"  or  "wager,"  as  employed 
in  the  previous  section.  "Any  contract  or  agreement  for  the  pur- 
chase, sale,  loan,  payment,  or  use  of  money  or  property,  real  or  per- 
sonal, the  terms  of  which  are  made  to  depend  upon,  or  are  to  be 
varied  or  affected  by,  any  uncertain  event  in  which  the  parties  have 
no  interest  except  that  created  by  such  contract  or  agreement,  shall 
be  deemed  a  bet  or  wager." 

ISTow,  it  seems  very  clear  that  the  idea  of  the  special  statute, 
section  12,  is  to  declare  void  and  to  annul  all  contracts,  the  considera- 
tion or  performance  of  which  depends  upon  such  an  uncertain  event 
as  is  mentioned  in  section  14,  —  that  is,  where  one  party's  considera- 
tion, to  be  furnished,  and  the  other  party's  performance  or  payment 
is  to  be  furnished  or  made,  according  as  such  uncertain  event  may 
happen;  in  other  words,  where  the  contract  is  to  be  performed  if 
the  uncertain  event  happen,  and  not  to  be  performed  if  it  does  not 
happen,  or  vice  versa. 

The  statute,  then,  evidently  applies  to  a  party  to  the  transaction, 
and  under  its  provisions  the  losing  party  may  successfully  resist  an 
action  to  recover  the  money  or  value  of  the  thing  forfeited  by  the 
terms  of  the  wager,  or  any  action  to  recover  damages  for  the  non- 
performance of  any  act  stipulated  to  be  done,  or  for  the  omission 
of  performance  of  any  act  stipulated  not  to  be  done,  or  indeed  any 
action  founded  upon  anything  growing  out  of  the  wager. 

And  this  immunity  from  liability  would  probably  attach  to  any 
person,  not  directly  a  party  to  the  wager,  who  might  be  so  identified 
with  the  transaction  as  that  his  cause,  claim,  or  rights  should  grow 
out  of  and  depend  upon  the  uncertain  event  which  was  the  subject 
of  the  wager. 

But,  as  between  the  parties  to  this  suit,  there  was  no  element  of 
uncertainty  involved  in  their  contract.  The  defendants  contracted 
with  the  plaintiff  that  he  should  furnish  for  them  twenty-four 
suppers,  at  seventy-five  cents  each,  upon  their  credit.  They  agreed 
to  pay  for  them.  This  was  the  whole  of  the  contract.  Their  own 
reimbnrsement  was  to  be  regulated  independently  of  their  contract 
with  tlin  plfiititiff.  He  was  not  to  gain  or  lose  by  the  success  or  the 
defeat  of  either  party.  The  consideration  for  the  defendant's 
promise  was  the  suppers,  which  the  two  defendants  were  to  have 
and  dispoKf!  of  as  they  might  sec  fit.    They  might  cat  the  twenty-four 


SECT.    Il]  FERGUSON    V.    COLEMAN  825 

suppers  themselves,  or  give  them  to  their  dogs.  They  were  to  re- 
ceive so  much  food,  absolutely  and  at  all  events.  They,  and  only 
they,  were  to  pay  the  plaintiff  for  it,  absolutely  and  at  all  events. 
There  was  no  element  of  uncertainty  on  either  side  of  this  contract. 

It  is  said  that  money  lent  for  the  purpose  of  betting  cannot 
be  recovered  by  the  lender  of  the  borrower :  Peck  v.  Briggs,  3  Denio. 
107;  Kuckman  v.  Bryan,  id.  340:  2  Par.  on  Cont.  756,  note  h;  but 
that  depends  entirely  upon  the  question  whether  the  wager  was  a 
crime  or  a  misdemeanor,  or  a  contract  connected  with  a  violation 
of  law. 

So,  a  note  given  for  money  knowingly  lent  to  be  applied  for  the 
suppression  of  a  prosecution  for  crime  is  void :  Plummer  v.  Smith, 
5  ]Sr.  H.  553;  but,  by  Kichardson,  C.  J.,  "it  is  most  unquestionably 
illegal,  in  a  private  individual,  to  suppress  a  criminal  prosecution." 

A  bet  upon  the  result  of  a  squirrel  hunt  is,  most  unquestionably, 
not  a  violation  of  any  law  of  this  State. 

The  defendants'  exception  is  therefore  overruled,  and  their  motion 
for  a  Nonsuit  denied. 


WILLIAM  S.  FEKGUSOW  v.  KLLEN  COLEMAN" 
South  Carolina  Court  of  Appeals,  Spring  Term,  1846 
{Reported  in  3  Richardson  {Law),  99] 

This  was  an  action  on  an  instrument,  dated  31st  January,  1843, 
whereby  the  defendant  promised  "to  pay  on  the  first  of  January, 
1844,  to  W.  S.  Ferguson  or  bearer,  nine  hundred  and  two  dollars, 
fifty-eight  cents,  if  cotton  should  rise  to  eight  cents  by  the  first. 
November  next,  and  if  not,  to  pay  five  hundred  dollars,  for  value 
received."  It  was  admitted  at  the  trial  that  this  instrument  was 
given  in  part  payment  of  a  tract  of  land  which  the  defendant  had 
purchased  of  the  plaintiff;  and  it  was  proved  on  the  part  of  the 
plaintiff,  that  between  the  date  of  the  agreement  and  the  first  of 
ISTovember,  1843,  the  highest  prices  of  cotton  were,  in  Columbia, 
81^  and  8%  cents,  and  in  Charleston,  9  and  9I/4  cents. 

The  defendant  contended,  1st,  that  the  agreement  was  a  wager 
on  the  price  of  cotton;  2d,  that  according  to  the  true  construction 
of  the  instrument,  the  defendant  was  only  bound  to  pay  the  larger 
sum,  if  cotton  was  selling  for  eight  cents  on  or  near  the  first  of 
N'ovember,  and  that  this  had  not  been  shown. 

Under  the  instructions  of  his  Honor  the  presiding  judge,  the  jury 
found  for  the  plaintiff  the  larger  sum. 

The  defendant  appealed,  and  now  moved  this  court  for  a  new  trial. 

Boyce  and  Gregg,  for  the  motion. 

Curia,  per  Frost,  J.  The  objection  chiefly  urged  against  the 
instructions  of  the  circuit  judge,  affects  the  construction  of  the  agree- 


826  FERGUSON    V.    COLEMAN  [CHAP.   VI 

ment  to  pay  the  larger  sum  expressed  in  the  note,  "if  cotton  should 
rise  to  eight  cents  by  the  first  of  November  next."  It  appeared  by 
admissions  at  the  trial  that  the  defendant  was  treating  with  the 
plaintiff  for  the  purchase  of  a  tract  of  land;  and  declining  to  give 
the  price  which  the  plaintiff  asked,  it  was  agreed  that  the  defendant 
should  pay  a  certain  sum  if  cotton  advanced,  or  less  if  it  did  not. 
The  defendant  insists  that  the  import  of  the  agreement  is,  that  cotton 
should  rise  to  eight  cents  ''at  or  near"  the  first  of  November.  The 
various  significations  to  which  the  necessities  of  language  have 
applied  this  and  other  propositions,  would  render  any  construction 
of  the  agreement,  based  on  a  critical  analysis  of  its  meaning,  very 
unsatisfactory.  But  it  may  be  observed  that  hy,  in  its  primitive 
sense,  expresses  relation  to  place;  though  by  various  remote  and 
obscure  analogies  and  casual  associations,  that  meaning  is  variously 
modified.  In  relation  to  place,  it  clearly  does  signify  "at  or  near," 
but  its  import  is  more  indefinite  when  used  to  express  the  relation 
of  time.  In  this  application  it  signifies  "on  or  before."  Many  ex- 
amples of  this  sense  readily  occur.  If  a  contract  were  made  for  the 
delivery  of  an  article,  or  the  completion  of  work,  by  a  particular 
time,  to  be  paid  for  on  completion,  or  delivery,  a  claim  for  the  price 
would  accrue  on  performance,  whenever  that  might  be ;  for  the  agree- 
ment provides  for  a  performance  and  payment  before  the  appointed 
time,  but  leaves  the  time  of  performance  wholly  indefinite.  It  would 
be  more  difficult  to  derive  an  example  of  the  defendant's  construc- 
tion from  the  transactions  of  life.  The  popular  signification  of 
words,  that  which  use  has  made  familiar  in  the  affairs  of  men,  must 
be  adopted  in  giving  construction  and  effect  to  their  contracts. 

The  objection  to  the  agreement  that  it  is  a  wager  is  plainly  inap- 
plicable; for  the  parties  had  an  interest  in  the  contingency.  The 
defendant  purchased  the  land  at  the  lowest  price,  unconditionally, 
but  contracted  to  pay  a  larger  sum  if  the  value  should  be  enhanced 
by  the  increased  value  of  its  product. 

The  motion  is  dismissed.^ 

1  Plumb  V.  Campbell,  129  111.  101;  Wolf  v.  National  Bank,  178  lU.  85;  Phillips  v- 
Gifford,  104  Iowa,  458:  Kirkpatrick  v.  Bonsall,  72  Pa.  155,  ace.  See  ako  United  States 
V.  Olnoy,  1  Abb.  U.  S.  275;  Lynch  v.  Rosenthal,  144  Ind.  86;  Dion  v.  St.  John  Baptiste 
Soc.  82  Me.  319;  Miller  v.  Ea^le,  &c.  Ins.  Co.,  2  E.  D.  Smith,  268;  Dunham  v.  St. 
Croix  MfR.  Co.,  M  N.  Bruns.  243. 

The  winner  of  a  race  is  Kenerally  allowed  to  recover  the  prize  offered.  Alvord 
V.  Smith,  63  Ind.  58;  Moulton  v.  Daviess  County  Assoc,  12  Ind.  App.  542;  Dclier 
V.  Plymouth  County  Soc,  57  Iowa,  481;  Misner  v.  Knapp,  13  Greg.  135;  Porter  v. 
Day,  71  Wis.  296;  Gates  ?>.  Tinning,  5  U.  C.  O.  B.  540.  See  also  Harris  v.  White,  81 
N.  Y.  532;  People  v.  Fallon,  152  N.  Y.  12;  Ballard  v.  Brown,  67  Vt.  586. 


SECT.    Ill]  HUTLEY    V.    HUTLEY  827 

SECTION  III 

CONTRACTS   OBSTRUCTING   THE   ADMINISTRATION 
OF   JUSTICE 


(a)     Champerty  and  Maintenance 


HUTLEY  V.  HUTLEY 

In  the  Queen's  Bench,  January  24,  1873 
[Reported  in  Law  Reports,  8  Queens  Bench,  112] 

Declaration  that  one  John  Hutley,  a  brother  of  defendant  and  a 
cousin  of  plaintiff,  had  died,  leaving  extensive  landed  estates  and 
large  personal  property;  and  defendant  was  the  heir-at-law  of  the 
deceased  and  one  of  his  next  of  kin;  and  the  deceased  died,  leaving 
a  will  whereby  his  property  real  and  personal  was  left  to  persons 
other  than  plaintiff  and  defendant;  and  plaintiff  believed  that  such 
will  revoked  a  former  will  by  which  the  testator  had  bequeathed  cer- 
tain property  to  plaintiff;  and  in  consideration  that  plaintiff  would 
take  the  necessary  steps  to  contest  the  validity  of  the  said  will,  and 
would  advance  certain  moneys  and  obtain  evidence  for  such  purposes 
and  instruct  an  attorney  in  that  behalf,  defendant  promised  that  he 
would  pay  to  plaintiff  one  half  of  any  personal  property  and  convey 
to  him  a  moiety  of  any  landed  estates  he  might  recover  or  which 
might  come  to  him,  defendant,  by  reason  of  the  taking  of  such  pro- 
ceedings for  the  setting  aside  such  will;  and  plaintiff  took  such  steps 
as  aforesaid,  and  advanced  certain  moneys  and  instructed  an 
attorney,  and  a  large  sum  of  money  was  thereby  recovered  by  de- 
fendant, and  the  said  will  was  declared  invalid  and  defendant  be- 
came entitled  to  and  obtained  possession  of  large  landed  estates  of 
the  deceased.  Allegation  of  all  conditions  precedent.  Breach  that 
defendant  had  not  paid  to  the  plaintiff  half  the  said  personal 
property  or  conveyed  to  him  one  half  of  the  said  real  estates. 

Demurrer.     Joinder  in  demurrer. 

Philbrich  (Pearce  vsdth  him),  in  support  of  the  demurrer. 

Day,  Q.  C.  (Anderson  with  him),  for  the  plaintiff. 

Blackburn,  J.  The  question  is  whether  the  contract  disclosed  on 
this  declaration  is  such  as  can  be  enforced  in  a  court  of  law.  Putting 
out  of  the  question,  for  the  moment,  the  position  of  the  plaintiff, 
it  alleges  that  the  defendant  is  heir-at-law  and  one  of  the  next  of 
kin  of  a  deceased  person  who  made  a  will. by  which  the  personal  and 
real  estate  were  left  away  from  the  defendant,  and  in  consideration 
that  the  plaintiff  would  take  the  necessary  steps  to  contest  the 
validity  of  the  will,  and  would  advance  certain  moneys,  and  obtain 
evidence,  and  instruct  an  attorney,  the  defendant  promised  to  pay 


828  HUTLEY    V.    HUTLEY  [CHAP.   VI 

to  the  plaintiff  one  half  of  the  personal  estate,  and  convey  to  him  a 
moiety  of  the  real  estate  which  the  defendant  should  recover.  If  that 
stood  without  more,  it  is  clear  that  it  is  champerty  by  the  English 
law,  which  says  that  a  bargain,  whereby  the  one  party  is  to  assist 
the  other  in  recovering  property,  and  is  to  share  in  the  proceeds  of 
the  action,  is  illegal.  Sprye  v.  Porter,  7  E.  &  B.  58,  81;  26  L.  J. 
(Q.  B.)  64,  71,  was  one  of  the  cases  cited,  and  I  entirely  agree  with 
what  is  there  said.  Lord  Campbell,  delivering  the  judgment  of  the 
court,  says :  "Here  we  have  maintenance  in  its  worst  aspect.  The 
plaintiff  and  Rosaz,  entire  strangers  to  the  property  which  they  say 
the  defendant  has  a  title  to,  but  which  is  in  the  possession  of  another 
claiming  title  to  it,  agree  with  him  that  legal  proceedings  shall  be 
instituted  in  his  name  for  the  recovery  of  it,  and  that  they  will 
supply  him,  not  with  any  specified  or  definite  documents  or  in- 
formation, but  with  evidence  that  should  be  sufficient  to  enable  him 
successfully  to  recover  the  property.  Each  of  them  is  to  have  one 
fifth  of  the  property  when  so  recovered ;  and  unless  the  evidence  with 
which  they  supply  him  is  sufficient  for  this  purpose,  they  are  to  re- 
ceive nothing.  They  are  not  to  employ  the  attorney,  or  to  advance 
money  to  carry  on  the  litigation;  but  they  are  to  supply  that  upon 
which  the  event  of  the  suit  must  depend,  evidence;  and  they  are  to 
supply  it  of  such  a  nature  and  in  such  quantity  as  to  secure  success. 
The  plaintiff  purchases  an  interest  in  the  property  in  dispute, 
bargains  for  litigation  to  recover  it,  and  undertakes  to  maintain 
the  defendant  in  the  suit  in  a  manner  of  all  others  the  most  likely 
to  lead  to  perjury  and  to  a  perversion  of  justice.  Upon  principle 
such  an  agreement  is  clearly  illegal;  and  Stanley  v.  Jones,  7  Bing. 
369,  is  an  express  authority  to  that  effect."  Putting  aside  that  the 
plaintiff  there  was  an  absolute  stranger,  the  present  agreement  goes 
further  than  that,  for  the  present  plaintiff  agrees  to  instruct  an 
attorney  and  advance  money,  and  falls  short  of  it  so  far  that  the 
present  plaintiff  only  agrees  to  obtain  evidence,  whereas  in  Sprye  v. 
Porter,  7  E.  &  B.  58;  26  L.  J.  (Q.  B.)  64,  the  plaintiff  undertakes 
to  supply  evidence  sufficient  to  ensure  success.  But  the  mischief 
is  as  great  in  the  one  case  as  in  the  other,  and  both  agreements  are 
void  as  amounting  to  maintenance  and  champerty. 

But  then  it  is  argued  that  the  position  of  the  plaintiff  with  re- 
lation to  the  defendant  and  the  property  in  question  takes  it  out  of 
the  rule  against  champerty  and  maintenance.  The  declaration 
alleges  that  the  plaintiff  was  a  cousin  of  the  deceased,  and  so  a  re- 
lation of  the  defendant,  who  was  the  deceased's  brother;  and  the 
plaintiff's  counsel  cited  cases  which  he  said  showed  that  such  re- 
lationship prevented  an  agreement  like  the  present  from  being  illegal. 
But  he  produced  no  authority  thjit  blood  relationship  between  the 
parties  made  any  difference  as  to  champerty.  Then  the  further 
allr'g.'ition  Avas  relied  on,  that  the  y)lniiitiff  believed  that  the  will 
which  was  to  b(!  contested  revokc^d  a  former  will  by  which  the  testator 


SECT.    Ill]  HUTLEY    V.    HUTLEY  829 

had  bequeathed  certain  property  to  the  plaintiff;  and  it  was  argued 
that  because  the  plaintiff  thought  he  had  an  interest  in  the  litigation 
by  which  the  one  will  was  to  be  upset  and  the  other  revived,  the 
agreement  was  not  illegal.  But  the  litigation  was  to  be  maintained 
by  the  plaintiff,  not  solely,  as  far  as  he  was  concerned,  for  any  benefit 
he  might  directly  or  indirectly  derive  himself  from  upsetting  the 
will,  but  the  bargain  was  that  he  would  maintain  the  action  in  con- 
sideration of  the  defendant  transferring  to  him  half  the  property 
which  the  defendant  might  become  possessed  of  as  the  fruits  of  the 
litigation.  While,  therefore,  I  incline  to  agree  with  every  word  that 
is  said  by  Lord  Abinger  and  Lord  Cranworth  in  Findon  v.  Parker, 
11  M.  &  W.  675,  679,  that  an  agreement  to  assist  in  bringing  an 
action  is  not  made  maintenance  by  the  fact  that  the  party  turns  out 
to  be  mistaken  in  supposing  that  he  had  a  common  interest  with  the 
litigant  parties  in  the  result  of  the  suit,  I  cannot  see  that  that  case 
is  any  authority  for  the  present  plaintiff.  If  every  word  that  is  said 
in  the  declaration  about  the  plaintiff's  belief  in  his  interest  in  the 
subject-matter  of  the  suit  were  true,  that  would  not  justify  or  make 
legal  the  agreement  to  share  in  the  property  to  be  recovered  by 
the  defendant.  There  must,  therefore,  be  judgment  for  the 
defendant. 

LusH^  J.  I  am  of  the  same  opinion.  It  is  conceded  by  the  plain- 
tiff's counsel  that  if  it  were  not  for  the  plaintiff's  interest  the  con- 
tract in  the  declaration  would  amount  to  champerty.  First,  the 
plaintiff  is  a  cousin  of  the  deceased ;  that  would  give  him  no  interest. 
iSTor  would  the  relationship  to  the  defendant  justify  an  agreement  of 
champerty.  Then  there  is  the  allegation  that  the  plaintiff  believed 
that  the  will  revoked  a  former  will  by  which  the  testator  had  be- 
queathed certain  property  to  the  plaintiff,  and  assuming  that  this 
shows  that  the  plaintiff  had,  or  thought  he  had,  a  collateral  interest 
in  contesting  the  will,  that  collateral  interest  would  not  justify  an 
agreement  to  share  the  property  which  the  defendant  should  acquire 
by  successfully  contesting  the  will.  There  are  cases  which  show 
that  there  are  circumstances  which  may  justify  a  person  in  main- 
taining, that  is,  in  assisting,  one  of  the  litigant  parties  in  a  suit; 
certain  relationship  would  justify  maintenance;  but  I  know  of  no 
case,  and  Mr.  Day  has  not  produced  the  semblance  of  an  authority 
for  saying  that  relationship  or  collateral  interest  justifies  champerty. 
Therefore  the  additional  allegations  in  the  declaration  do  not  make 
the  agreement  good. 

Archibald,  J.  I  am  also  of  opinion  that  the  declaration  is  bad. 
It  does  not  show  any  circumstances,  either  on  the  ground  of  re- 
lationship or  interest,  to  make  the  agreement  good.  There  are  cases 
to  show  that  a  common  interest,  or  even  a  bona  fide  belief  in  the 
existence  of  a  common  interest,^  would  justify  the  mere  maintenance 

*  Or  motives  of  charity:  Harris  v.  Brisco,  17  Q.  B.  D.  604.  See  further,  Alabaster 
V.  Harness,  [1895]  1  Q.  B.  339;   Breay  v.  Royal  Assoc,  [1897]  2  Ch.  272. 


830  ACKERT    V.    BARKER  [CHAP.   VI 

of  the  suit;  but  they  go  no  further.     The  present  case  falls  within 
the  principle  of  Sprye  v.  Porter,  7  E.  &  B.  58;  26  L.  J.  (Q.  B.)  64: 

Judgment  for  the  defendant. 


MONTEAVILLE  ACKEKT  v.   ALFRED  R.  BARKER 

Supreme  Judicial  Court  of  Massachusetts,  September   27- 
October  10,  1881 

[Reported  in  131  Massachusetts,  436] 

Contract  for  money  had  and  received.  The  answer  set  up  that 
the  defendant  was  an  attorney  at  law,  and  as  such  was  employed  by 
the  plaintiff  to  collect  certain  sums  of  money  from  certain  insurance 
companies;  "that  the  plaintiff  agreed,  in  consideration  of  the  de- 
fendant acting  for  him  in  the  premises,  that  said  defendant  should, 
out  of  any  and  all  moneys  received  by  him  from  said  insurance 
companies,  retain  one  half  of  the  amount  received  after  payment 
of  proper  costs  and  charges ;"  admitted'  the  receipt  of  a  certain  sum 
from  the  insurance  companies;  and  averred  that  the  defendant  had 
the  right  to  retain  out  of  it  the  costs  and  expenses  and  one  half  of 
the  sum  remaining  after  deducting  such  costs  and  expenses.  Trial 
in  the  Supreme  Court,  before  Allen,  J.,  who  allowed  a  bill  of  ex- 
ceptions, which,  after  stating  that  the  pleadings  were  a  part  thereof, 
was  in  substance  as  follows : — 

The  defendant  admitted  the  receipt  of  $836  from  two  insurance 
companies,  but  contended  in  his  answer  that  the  plaintiff  could  right- 
fully demand  of  him  only  half  the  whole  sum  collected,  less  costs  of 
the  suits  brought  to  enforce  the  demands  on  which  the  said  collec- 
tions were  made,  because  the  plaintiff  promised  to  allow  him  one 
half  the  amount  recovered,  in  consideration  for  professional  ser- 
vices rendered  in  this  behalf;  that  he  had  a  right,  under  such  agree- 
ment, to  stop  out  or  retain  such  sum;  and  his  testimony  was  to  that 
effect.  He  also  testified  that  said  agreement  did  not  require  him  to 
bear  or  be  responsible  for  the  expenses  of  said  suits. 

The  defendant  asked  the  judge  to  rule  as  follows :  "1.  If  it  appears 
that  the  percentage  mentioned  in  the  alleged  agreement  amounted 
only  to  a  measure  of  compensation  in  the  event  of  a  successful  ter- 
mination of  the  suits,  in  distinction  from  an  indefinite  fee  to  be 
charged  in  the  event  of  the  unsuccessful  termination  of  the  suits, 
thfii  flie  contract  is  not  champertous,  and  it  can  be  enforced.     2.  If, 

'  Miinday  v.  Whissflnhnnt,  00,  N.  C  458,  ace.  Tho  English  laws  of  maintenance 
and  charriiKTty  an;  not  in  force  in  India,  and  a  fair  aRreomont  to  supply  funds  to 
carry  on  a  suit  in  nonaidcration  of  having  a  share  f)f  tho  property,  if  recovered,  is  not 
neceasariiy  to  he  ro/jirfied  as  opposed  to  pul)lic  i)olicy.  Rut  such  agreements  should 
be  carefully  watoluid,  and  when  extortionate,  unconscionable,  or  made  for  improper 
objects,  ouidit  to  he.  held  invalid.  Ram  Coomar  Coondoo  v.  Chunder  Canto  Mookerjee, 
2  App.  Cam.  IHO. 


SECT.    Ill]  ACKERT    V.    BARKER  831 

uuder  the  terms  of  the  agreement,  the  defendant  had  a  right  to 
stop  out  of,  or  retain  from,  the  funds  collected  one  half  the  total 
sum  for  professional  services,  and  actually  had  stopped  out  such  sum 
prior  to  any  notice  to  him  that  the  contract  was  abrogated  by  the 
plaintiif,  then  the  transaction  was  so  far  closed  in  that  behalf  that 
the  plaintiff  cannot  avoid  or  undo  the  same." 

The  judge  refused  to  give  either  of  the  rulings  asked  for,  but 
instructed  the  jury  that,  if  they  found  there  was  an  agreement  by 
which  the  defendant  was  entitled  to  retain  one  half  the  sum  collected 
as  compensation  for  services,  such  agreement  was  unlawful,  and 
would  not  avail  the  defendant  in  this  action. 

The  jury  returned  a  verdict  for  the  plaintiff  in  the  sum  of  $808.04; 
and  the  defendant  alleged  exceptions. 
H.  C.  Bliss,  for  the  defendant. 

H.  C.  Strong  (E.  H.  Lathrop  with  him),  for  the  plaintiff. 
Gray,  C.  J.  The  defendant's  answer  and  bill  of  exceptions,  fairly 
construed,  show  that  the  agreement  set  up  by  the  defendant  was  an 
agreement  by  which,  in  consideration  that  an  attorney  should  prose- 
cute suits  in  behalf  of  his  client  for  certain  sums  of  money,  in  which 
he  had  himself  no  previous  interest,  it  Avas  agreed  that  he  should  keep 
one  half  of  the  amount  recovered  in  case  of  success,  and  should 
receive  nothing  for  his  services  in  case  of  failure. 

By  the  law  of  England,  from  ancient  times  to  the  present  day, 
such  an  agreement  is  unlawful  and  void  for  champerty  and  main- 
tenance, as  contrary  to  public  justice  and  professional  duty,  and 
tending  to  speculation  and  fraud,  and  cannot  be  upheld,  either  at 
common  law  or  in  equity.  2  Eol.  Ab.  114;  Lord  Coke,  2  Inst.  208, 
564;  Hobart,  C.  J.,  Box  v.  Barnaby,  Hob.  llY  a;  Lord  Nottingham, 
Skapholme  v.  Hart,  Finch,  477;  s!  c.  1  Eq.  Cas.  Ab.  86,  pi.  1;  Sir 
William  Grant,  M.  K.,  Stevens  v.  Bagwell,  15  Ves.  139;  Tindal, 
C.  J.  Stanley  v.  Jones,  7  Bing.  369,  377;  c.  5  Moore  &  Payne, 
193,  206;  Coleridge,  J.,  In  re  Masters,  1  Har.  &  Wol.  348;  Shadwell, 
V.  C,  Strange  v.  Brennan,  15  Sim.  346;  Lord  Cottenham,  s.  c.  on 
appeal,  2  Coop,  temp.  Cottenham,  1;  Erie,  C.  J.,  Grell  v.  Levy,  16 
C.  B.  (n.  s.)  73;  Sir  George  Jessel,  M.  E.,  In  re  Attorneys  &  Solic- 
itors Act,  1  Ch.  D.  573. 

It  is  equally  illegal  by  the  settled  law  of  this  commonwealth. 
Thurston  v.  Percival,  1  Pick.  415;  Lathrop  v.  Amherst  Bank,  9  Met. 
489;  Swett  v.  Poor,  11  Mass.  549;  Allen  v.  Hawks,  13  Pick.  79,  83; 
Call  V.  Calef,  13  Met.  362;  Eindge  v.  Coleraine,  11  Gray,  157,  162; 
1  Dane  Ab.  296;  6  Dane  Ab.  740,  741.  In  Lathrop  v.  Amherst  Bank, 
the  fact  that  the  agreement  did  not  require  the  attorney  to  carry  on 
the  suit  at  his  own  expense  was  adjudged  to  be  immaterial.  9  Met. 
492.  In  Scott  V.  Harmon,  109  Mass.  237,  and  in  Tapley  v.  Coffin,  12 
Gray,  420,  cited  for  the  defendant,  the  attorney  had  not  agreed  to 
look  for  his  compensation  to  that  alone  which  might  be  recovered, 
and  thus  to  make  his  pay  depend  upon  his  success. 


S32  BLAISDELL    V.    AHERN  [CHAP,    VI 

The  law  of  Massachusetts  being  clear,  there  would  be  no  propriety 
in  referring  to  the  conflicting  decisions  in  other  parts  of  the  country. 
If  it  is  thought  desirable  to  subordinate  the  rules  of  professional  con- 
duct to  mercantile  usages,  a  change  of  our  law  in  this  regard  must 
be  sought  from  the  legislature,  and  not  from  the  courts. 

The  defendant,  by  virtue  of  his  employment  by  the  plaintiff,  and 
of  his  professional  duty,  was  bound  to  prosecute  the  claims  en- 
trusted to  him  for  collection,  and  holds  the  amount  recovered  as 
money  had  and  received  to  the  plaintiff's  use.  The  agreement  set 
up  by  the  defendant,  that  he  should  keep  one  half  of  that  amount, 
being  illegal  and  void,  he  is  accountable  to  the  plaintiff  for  the  whole 
amount,  deducting  what  the  jury  have  allowed  him  for  his  costs. 
In  re  Masters,  and  Grell  v.  Levy,  above  cited;  Pince  v.  Beattie,  32 
L.  J.  (n.  s.)  Ch.  734. 

Of  Best  V.  Strong,  2  Wend.  319,  on  which  the  defendant  relies  as 
showing  that,  assuming  this  agreement  to  be  illegal,  the  plaintiff 
cannot  maintain  this  action,  it  is  enough  to  say  that  there  the  money 
was  voluntarily  paid  to  the  defendant,  with  the  plaintiff's  assent, 
after  the  settlement  of  the  suit  by  which  it  was  recovered;  and  it  is 
unnecessary  to  consider  whether,  upon  the  facts  before  the  court, 
the  case  was  well  decided.  Exceptions  overruled. 


MARK  A.  BLAISDELL  v.  HONORA  AHERN" 

Supreme  Judicial  Court  of  Massachusetts, 
January  20-May  7,  1887 

[Reported  in  144  Massachusetts,  393] 

W.  Allen,  J.  This  is  an  action  by  an  attorney  at  law  to  recover 
for  professional  services.  The  only  question  argued  is,  whether  the 
services  were  rendered  under  a  contract  illegal  for  champerty  or 
maintenance,  so  that  no  compensation  can  be  recovered  for  them. 

The  parties  were  residents  of  this  Commonwealth.  The  defendants 
were  children  of  a  father  who  had  been  a  stranger  to  his  family  for 
years.  They  earned  their  living  as  .domestic  servants,  and  one  or 
both  of  them  had  lived  in  the  family  of  which  the  plaintiff  was  a 
member,  and  had  known  him  from  boyhood.  They  heard  that  their 
father  had  died  in  N'ow  Hampshire,  leaving  property  there,  and 
consulted  the  plaintiff  in  regard  to  recovering  it,  and  gave  him  a 
power  of  attorney  to  collect  their  shares  of  it.  They  had  no  means 
except  their  earnings,  and  were  unable  to  defray  the  expense  of 
legal  proceedings.  The  plaintiff  orally  agreed  with  them  to  take 
charge  of  their  case  upon  the  terms  that  they  should  furnish  money 
for  all  actual  expenses,  and  that,  in  the  event  of  success,  he  should 
charge  more  for  his  Morvices  thnn  if  he  was  sure  of  his  pay  at  the 
outset.     The  plaintiff  rendered  services  under  this  agreement. 


SECT.    Ill]  BLAISDELL    V.    AHERN  833 

The  defendants'  case  was  tried  In  the  Probate  Court  in  New- 
Hampshire,  and  a  decision  rendered  adverse  to  them,  and  an  appeal 
was  taken  to  the  Supreme  Court.  Pending  this  appeal,  there  was 
some  difference  between  the  defendants  and  the  counsel  employed 
in  New  Hampshire,  and  he  withdrew  from  the  case,  but  was  per- 
suaded by  the  plaintiif  to  return;  and,  in  consequence,  a  written 
agreement  was  signed  by  the  defendants,  which  recited  that  they  had 
retained  the  plaintiif  and  authorized  him  to  retain  counsel  in  New 
Hampshire,  and  that  "said  counsel  and  attorney  are  to  depend  upon 
the  contingency  of  success  for  the  fees  for  all  services  rendered  in 
and  about  said  prosecution."  The  contract  also  contained  the  agree- 
ment that  the  plaintiff  and  the  counsel  employed  "shall  in  view  of  the 
uncertainty  of  the  result  in  their  payment  be  entitled  to  very  large 
and  liberal  fees,  in  no  event  to  exceed  fifty  per  cent  of  the  amount 
collected  by  them,  and  that  we  [the  defendants]  will  furnish  all  the 
evidence  and  pay  all  the  actual  costs  in  the  prosecution  of  saidl 
claims."  The  defendants  afterward,  without  notice  to  the  plaintiff, 
employed  other  counsel,  and,  on  trial  recovered  $9300. 

According  to  the  terms  of  this  agreement,  the  plaintiff  could  un- 
questionably have  maintained  an  action  against  the  defendants  for 
his  fees,  if  successful  in  the  suit.  In  that  event,  he  "is  to  be  en- 
titled to  very  large  and  liberal  fees,"  for  which  he  would  have  a  right 
of  action  against  the  defendants.  This  is  inconsistent  with  a 
champertous  agreement,  an  essential  element  of  which  is  a  sharing 
in  the  fruits  of  the  litigation.  There  was  no  agreement  that  the 
plaintiff  should  receive  a  share  of  the  amount  recovered  as  compen- 
sation for  his  services.  It  is  immaterial  that  the  avails  of  the  suit 
were  the  means  or  the  security  on  which  he  relied  for  payment,  if  it 
was  to  be  payment  of  a  debt  due  from  the  defendants.  Thurston  v. 
Percival,  1  Pick.  415.    Lathrop  v.  Amherst  Bank,  9  Met.  489. 

Ackert  v.  Barker,  131  Mass.  436,  and  Belding  v.  Smythe,  138  Mass. 
530,  are  cases  of  champerty,  where  a  part  of  the  amount  recovered 
was  to  be  received  in  compensation  for  services,  and  there  was  to 
be  no  personal  liability.  Where  the  right  to  compensation  is  not 
confined  to  an  interest  in  the  thing  recovered,  but  gives  a  right  of 
action  against  the  party,  though  pleading  the  avails  of  the  suit,  or 
a  part  of  them,  as  security  for  payment,  the  agreement  is  not 
champertous.  Tapley  v.  Coffin,  12  Gray,  420;  Scott  v.  Harmon,  109 
Mass.  237;  McPherson  v.  Cox,  96  U.  S.  404;  Christie  v.  Sawyer,  44 
N.  H.  298;  Anderson  v.  Eadcliffe,  E.,  B.  &  E.  806,  817. 

We  do  not  see  anything  in  the  agreement  which  renders  it  void 
for  maintenance.  In  a  sense,  a  lavtyer  may  be  said  to  maintain 
another  in  a  suit  when  he  gives  his  advice  or  services,  as  formerly 
it  would  have  been  maintenance  for  a  layman  to  do  so ;  but  such  acts 
have  long  since  ceased  to  be  unlawful,  and  it  would  now  nowhere 
be  held  to  be  in  itself  unlawful  for  a  lawyer  to  give  his  services  to 
prosecute  a  suit,  with  the  understanding  that  his  services  are  to  be 

27 


834  THOMPSON    V.    REYNOLDS  [CHAP.   VI 

free  unless  success  shall  give  to  his  client  the  ability  to  pay  him,  and 
that  in  that  case  he  will  expect  liberal  feces.  There  may  be  cir- 
cumstances in  which  such  a  contract  would  be  meritorious;  and  there 
may  be  circumstances  in  which  it  would  partake  of  the  worst  evils 
of  maintenance.  Under  what  circumstances  a  contract  of  that  nature 
might  be  held  void  as  against  public  policy,  we  need  not  consider. 
The  contract  under  consideration  was  nothing  more  than  an  agree- 
ment by  the  plaintiff  to  give  his  services  without  charge  if  the  suit 
should  not  be  successful,  and  and  agreement  by  the  defendants  to 
pay  large  and  liberal  fees  if  successful;  and  we  know  no  authority 
and  no  reason  in  public  policy  why,  under  the  relations  and  circum- 
stances of  the  parties,  it  is  not  a  lawful  contract,  which  they  had  a 
right  to  enter  into.  We  think  that  the  ruling,  as  matter  of  law^ 
that  the  action  could  not  be  maintained,  was  wrong. 

New  trial  granted.^ 


CHARLES  THOMPSON  v.  JOSEPH  S.  REYNOLDS 

Illinois  Supreme  Court,  September  Term,  1874 
[Reported  in  73  Illinois,  11] 

Appeal  from  the  Circuit  Court  of  Cook  County;  the  Hon.  John 
G.  Rogers,  judge,  presiding. 

Messrs.  Merriam  and  Alexander,  for  the  appellants. 

Mr.  John  C.  Richherg,  for  the  appellee. 

Mr.  Chief  Justice  Walker  delivered  the  opinion  of  the  court : — 

Some  time  in  the  latter  part  of  the  year  1868,  appellee  and  his 
partner  were  consulted  by  appellants  as  to  whether  they  should 
execute  a  release,  without  consideration,  of  ^certain  property  men- 
tioned in  the  deed.  The  partner  advised  that  they  had  no  interest, 
and  could  do  so  without  prejucidice  to  their  rights ;  but,  subsequently, 
another  quitclaim  deed  was,  in  like  manner,  presented  for  a  large 
amount  of  property.  Appellee  was  then  applied  to  for  further  ad- 
vice, when  he,  with  appellant  Charles  Thompson,  consulted  with 
one  James  Dunne,  also  an  attorney,  who  occupied  the  same  office  with 
appellee.  They  investigated  the  matter  and  arrived  at  the  conclusion 
that  appellants  had  an  interest  in  the  property. 

An  agreement  was  soon  after  entered  into  between  appellants  and 
appellee,  by  which  appellee  was  to  institute  all  necessary  proceedings 
to  ascertain  and  fix  the  rights  of  appellants;  that  he  should  pay  all 
unnecessary  expenses,  and  receive  one  half  of  whatever  should  be 
rerilizfr].  Appellants  agreed  that  they  would  do  no  act  to  interfere 
witli  the  proceedings.  It  is  claimed  that,  Avith  the  consent  of  the 
parties,  appellee  agreed  with  Dunne  he  should  assist  in  prosecuting 
the  claims,  for  which  he  was  to  receive  one  half  of  appellee's  moiety, 
being  one  fourth  of  what  should  be  recovered. 

'  Boo  furfhor,  DaviH  v.  Commonwoalth,  164  Mass.  241;  Hadlock  v.  Brooks,  178 
Maaa.  425;   Taylor  v.  Rosenberg,  219  Muss.  113;    Butler  v.  LcRro,  62  N.  H.  350. 


SECT.    Ill]  THOMPSON    V.   REYNOLDS  835 

Soon  after,  proceedings  were  commenced  in  the  Circuit,  the 
Superior,  and  the  County  courts  by  these  attorneys.  During  the 
continuance  of  these  proceedings,  it  is  claimed  that  about  $10,000 
was  realized  by  appellants  executing  releases,  by  way  of  compromise, 
with  several  defendants  to  the  various  suits,  and  it  is  claimed  that 
these  proceeds  were  divided  according  to  the  terms  of  the  agreement. 

About  the  month  of  May,  1871,  appellants,  it  is  claimed,  without 
the  consent  of  appellee  or  of  Dunne,  terminated  the  several  proceed- 
ings and  conveyed  the  lands  in  litigation,  in  consideration  of  $7,500 
actually  paid  to  them;  and  to  recover  one  half  of  that  sum  this 
action  was  brought.  A  trial  by  the  court  and  a  jury  was  had,  result- 
ing in  a  verdict  of  $1,500  in  favor  of  plaintiff,  on  which  a  judg- 
ment was  rendered  and  this  appeal  prosecuted. 

A  number  of  errors  are  assigned  on  the  record,  but  in  the  view 
we  take  of  the  case,  we  shall  only  consider  whether  the  judgment 
is  against  the  law.  The  court  was  asked  to  instruct  the  jury  that 
the  agreement  entered  into  was  champertous  and  void,  but  the  court 
below  refused  to  give  the  instruction.  Blackstone  defines  champerty 
(vol.  iv.  p.  135)  as  "a  species  of  maintenance,  and  punished  in  the 
same  manner,  being  a  bargain  with  a  plaintiff  or  defendant  campum 
partiere,  to  divide  the  land  or  other  matter  sued  for  between  them, 
if  they  prevail  at  law,  whereupon  the  champerter  is  to  carry  on  the 
party's  suit  at  his  own  expense."  The  same  author  informs  us  that 
the  punishment,  if  a  common  person,  for  champerty,  was  by  fine 
and  imprisonment;  and  this  was  a  misdemeanor,  punishable  at  the 
common  law.  See  Hawk.  Pleas  of  the  Crown,  vol.  i.  p.  463.  It  was 
also  prohibited  by  various  ancient  statutes,  commencing  as  early  as 
the  Statute  of  Westminster  1,  ch.  25,  all  of  which  enact  heavy 
penalties  for  their  violation. 

It  thus  appears  that  champerty  was  an  offence  at  the  common  law, 
and  our  General  Assembly  having  adopted  the  common  law  of  Eng- 
land as  the  rule  of  decision,  so  far  as  applicable  to  our  condition, 
until  modified  or  repealed,  this  must  be  regarded  as  in  force  in  this 
State,  as  affecting  all  such  contracts,  and  as  being  opposed  to  sound 
public  policy.  It  is  certainly  applicable  to  our  condition  so  far  as  it 
relates  to  attorney  and  client,  and  contracts  with  intermeddlers  and 
speculators  in  apparently  defective  titles  to  property.  If  allowed 
to  be  practised  by  attorneys,  it  would  give  them  an  immense  ad- 
vantage over  a  client.  The  superior  knowledge  of  the  attorney  of 
the  rights  of  the  client  would  give  him  the  means  of  oppression,  and 
acquiring  great  and  dishonest  advantages  over  the  ignorant  and 
unsuspecting  owner  of  property.  By  giving  false  advice,  the  attor- 
ney, owing  to  the  confidence  his  client  reposes  in  him,  and  to  his 
superior  knowledge,  would  have  the  client  completely  at  his  mercy, 
and  would  thus  be  enabled  to  acquire  the  client's  property  in  the 
most  dishonorable  manner.  To  allow  champerty  would  be  to  per- 
mit temptation  to  the  avaricious  and  unscrupulous  in  the  profession, 


836  THOMPSON    V.    REYNOLDS  [CHAP.    VI 

that  would,  from  the  very  nature  of  things,  lead  to  great  abuses  and 
oppression. 

Whilst  the  great  body  of  the  profession  are  honest,  and  understand 
and  act  on  the  duties  devolving  upon  them,  there  necessarily  must 
be,  in  this  as  in  all  ages  of  the  past,  some  who  gain  admission  that 
have  neither  the  integrity  nor  sense  of  duty  necessary  to  restrain 
them  from  dishonorable  means  in  practice.  Usually  a  person  will 
not  employ  an  attorney  unless  he  feels  assured  of  his  honesty  as  a 
man  as  well  as  his  ability  as  an  attorney.  Having  this  confidence,  all 
must  see  at  a  glance  that  it  would  give  the  attorney  immense  power 
over  the  client,  and  with  this  pow^  all  must  see  that  to  permit  him 
to  make  champertous  contracts  would  be  to  place  the  client  in  the 
power  of  the  attorney.  Professional  duty  requires  that  advice  given 
should  be  honest,  fair,  and  unreserved ;  but  where  the  weak  in  morals 
or  the  vicious  are  consulted,  and  they  see  and  determine  to  embrace 
the  opportunity  to  make  a  champertous  contract,  how  can  we  ex- 
pect them  to  give  fair,  honest,  and  unreserved  advice  at  the  com- 
mencement, or  in  conducting  the  litigation?  The  just,  the  good  and 
upright  require  no  restraints,  but  the  vicious  or  immoral  should  be 
freed  from  temptation. 

At  all  times  in  the  past  champerty  has  been  found  a  source  of 
oppression  and  wrong  to  the  property  owner,  and  a  great  annoyance 
to  the  community.  To  allow  it  to  attorneys,  with  a  portion,  but 
it  is  believed  the  number  would  be  small,  there  would  be  strong 
temptation  to  annoy  others  by  the  commencement  of  suits  without 
just  claim  or  right,  merely  to  extort  money  from  the  defendant  in 
buying  his  peace.  Such  practices  have  been  denominated  as  a 
crime  malum  in  se.  And  such  extortion  from  others,  or  by  the 
oppression  of  a  client,  is  unquestionably  a  great  moral  delinquency, 
that  no  government  regardful  of  the  rights  of  its  citizens  should  ever 
tolerate.  We  see  that  it  is  as  liable  now  to  abuse  as  it  ever  was, 
and  would  be  as  injurious  to  our  community  as  to  other  communities 
in  the  past.  And  this  court  has  repeatedly  held  that  common  law 
misdemeanors  may  be  punished  in  this  State,  unless  abrogated  by 
statutory  enactment. 

Then,  has  this  common  law  oifence  been  repealed?  We  think  not. 
The  General  Assembly  has  defined  the  offences  of  barratry  and 
maintenance,  but  the  offence  of  champerty  is  not  named ;  and  as, 
at  common  law,  all  three  of  these  offences  were  regarded  as  separate 
and  distinct,  and  as  the  British  Parliament  enacted  separate  laws  in 
reference  to  each,  and  as  they  were  enforced  by  distinct  proceedings, 
we  may  regard  them  as  different  offonces,  although  champerty  is  said 
to  be  a  species  of  maintenance.  Tlicn,  if  the  lOSth  section  of  the 
Criminal  Code  would  not  embrace  this  offence,  it  is  in  force  as  a 
common  law  misdemeanor,  and  we  do  not  see  that  it  does. 

But  it  is  said  that  the  case  of  Newkirk  v.  Cone,  18  111.  49,  has 
determiiK'd  tli.-if  ihcrc  is  no  law  in  this  State  against  champerty;  but 


SECT.    Ill]  THOMPSON    V.    REYNOLDS  837 

this  is  manifestly  a  mistake.  In  that  case  there  seems,  at  first,  to 
have  been  a  champertous  agreement,  but  it  was  abandoned  by  the 
parties  by  mutual  consent.  Cone  then  went  on  and  rendered  services, 
and  sued  for  professional  services  in  prosecuting  and  defending 
causes,  also  for  examining  records  in  public  offices,  abstracting  title 
to  lauds,  drawing,  copying,  and  engrossing  conveyances,  deeds,  and 
writings,  for  journeys  and  purchasing  lands,  and  for  work  and  labor. 
Thus,  it  will  be  seen  that,  although  it  may  have  been  argued,  the 
question  of  maintenance  or  champerty  was  not  before  the  court, 
but  simply  whether  an  attorney  may  recover  a  fair  compensation  for 
professional  services  and  labor  performed  as  an  agent;  and  it  is  held 
that  a  contract  of  hiring,  for  the  purpose  of  investigating  title,  and 
making  purchases,  and  rendering  legal  services  in  settling  titles  to 
land  thus  purchased,  was  legal,  and  the  person  employed  could  re- 
cover for  such  services.  It  is  true  that  the  court  refer  to  the  ancient 
common  law  and  British  statutes  to  show  that  the  contract  of  the 
parties  then  before  the  court  was  not  affected  by  them.  It  was  also 
shown  that  our  statute  against  maintenance  did  not  embrace  that 
contract.  There,  a  person  desiring  to  purchase  lands  employed  an 
attorney  to  examine  title,  to  give  him  an  opinion  as  to  its  validity, 
and  when  purchased  to  litigate  against  conflicting  titles,  which  was 
held  not  to  be  maintenance.  That  case  is  essentially  different  from 
this,  both  in  its  facts  and  on  principle,  and  for  these  reasons  it  cannot 
be  regarded  as  an  authority  in  favor  of  appellee  in  this  case. 

This  court  has  held  in  Gilbert  v.  Holmes,  64  111.  548,  and  Walsh  v. 
Shumway,  65  111.  471,  that  similar  contracts  were  tainted  with 
champerty,  and  could  not  be  enforced. 

According  to  the  doctrine  of  the  case  of  Scoley  v.  Ross,  13  Ind.  117, 
there  can  be  no  question  that  this  contract  is  champertous,  according 
to  the  doctrine  of  the  courts  of  this  country.  That  case  refers  to 
and  reviews  a  large  number  of  American  decisions  on  this  question, 
and  carries  the  doctrine  to  the  full  extent  of  the  English  rule. 

It  was  the  policy  of  the  common  law  to  protect  presons  from 
harassing  and  vexatious  litigation.  Hence,  it  would  not  permit  a 
person  having  no  interest  in  the  subject-matter  of  the  litigation  to 
intermeddle  or  to  become  interested  in  the  suit  of  another,  unless  it 
was  an  attorney,  who  could  only  have  and  demand  a  fee  for  his 
services,  and  that  not  in  a  portion  of  the  things  in  dispute.  In  the 
absence  of  such  a  rule,  great  wrong  would  necessarily  be  inflicted  on 
the  community. 

On  a  consideration  of  all  the  authorities,  we  are  clearly  of  opinion 
that  this  contract,  however  honestly  entered  into  and  carried  out, 
was  void,  and  that  the  judgment  of  the  court  below  should  be 
reversed  and  the  cause  remanded.  Judgment  reversed.^ 

^  "It  is  next  urged  that  the  contract  is  champertous  and  void,  as  against  public 
policy.  It  is  true  that  the  land  in  question  was  in  the  possession  of  Kerr  at  the  time 
the  contract  involv"^  was  entered  into,  and  the  cohtract  provided  that  the  litigation 
should  be  carried  on,  and  Beckwith,  Ayer,  and  Kales  were  to  render  the  professional 


838  FOWLER    V.    CALLAN  [CHAP.    VI 


K    HILL    FOWLER,    Appellant,    v.    CHARLES    T.    CALLAN 
ET  AL.,   Respondents 

New  York  Court  of  Appeals,  April  19-June  1,  1886 

[Reported  in  102  New  York,  395] 

Appeal  from  judgment  of  the  General  Term  of  the  Court  of 
Common  Pleas  in  and  for  the  city  and  county  of  New  York,  entered 
upon  an  order  made  at  the  January  term,  1884,  which  affirmed 
judgments  in  favor  of  defendants,  entered  upon  an  order  dismissing 
the  complaint  on  trial.     (Reported  below,  12  Daly,  263.) 

This  was  an  action  of  ejectment  to  recover  an  undivided  half  of 
certain  premises  to  which  plaintiff  claimed  title  under  a  deed  from 
defendant  Callan.  The  plaintiff  is  an  attorney  at  law,  and  the  deed 
was  delivered  to  him  in  pursuance  of  a  contract,  the  substance  of 
which  is  stated  in  the  opinion. 

Scott  Lord,  for  appellant. 

services,  and  were  to  receive  one  fourth  of  what  should  be  realized  for  such  services. 
If  an  agreement  of  this  character,  entered  into  between  attorney  and  chent,  is  cham- 
pertous,  then  the  point  is  well  taken;  but  as  we  understand  the  law,  the  contract 
lacked  one  essential  element  to  render  it  champertous,  and  that  is,  that  the  attorneys 
should  prosecute  the  litigation  at  their  own  costs  and  expense.  Had  the  contract  pro- 
vided that  the  attorneys  should  carry  on  the  litigation  for  a  share  of  what  they  might 
recover,  at  their  own  cost  and  expense,  then  the  contract  might  have  been  champer- 
tous and  void.  Thompson  v.  Reynolds,  73  111.  11;  Park  Commissioners  v.  Coleman, 
108  id.  601.  Such,  however,  is  not  the  case.  The  written  contract,  which  alone  fixea 
and  determines  the  rights  and  duties  of  the  oarties,  contains  no  provision  whatever 
requiring  the  attorneys  or  the  park  commissioners  to  pay  the  costs  or  expenses  of  the 
litigation.  The  fact  that  the  park  commissioners  may  have  advanced  Phillips  money 
which  was  used  in  the  prosecution  of  the  litigation,  has  no  bearing  on  the  question." 
Phillips  V.  South  Park  Commissioners,  119  111.  626,  635. 

This  test  is  that  usually  adopted.  Peck  v.  Heurich,  167  U.  S.  624;  McPherson 
V.  Cox,  96  U.  S.  404;  Jeffries  v.  Mutual  Ins.  Co.,  110  U.  S.  305;  MuUer  v.  Kelly,  116 
Fed.  Rep.  545;  Keiper  v.  MUler,  68  Fed.  Rep.  627;  Swanston  v.  Morning  Star  Mining 
Co.,  13  Fed.  Rep.  215;  Wheeler  v.  Pounds,  24  Ala.  472;  Stanton  v.  Haskin,  1  Mc- 
Arthur  (D.  C),  558;  Johnson  v.  Van  Wyck,  4  D.  C.  App.  294;  Moses  v.  Bagley, 
55  Ga.  283;  Meeks  v.  Dewberry,  57  Ga.  263;  Taylor  v.  Hinton,  66  Ga.  743;  Johnson 
V.  Hilton.  96  Ga.  577;  Coleman  v.  Billings,  89  111.  183;  Geer  v.  Frank,  179  111.  570; 
Hart  V.  State,  120  Ind.  83;  Clancy  v.  Kelly,  182  Iowa,  1207;  Atchison,  &c.  Railroad 
Co.  r.  Johnson,  29  Kan.  218,  227;  Aultman  v.  Waddle,  40  Kan.  195;  Newport  Rolling 
Mill  Co.  V.  Hall,  147  Ky.  598;  HoUoway  v.  Dickinson,  137  Minn.  410;  Shelton  v. 
Franklin,  224  Mo.  342;  Coughlin  v.  Railroad  Co.,  71  N.  Y.  443;  McCoy  v.  Gas  Engine 
Co.  152  N.  Y.  App.  D.  042,  208  N.  Y.  631 ;  Hayney  v.  Coyne,  10  Hcisk,  339;  Weakly 
V.  Hall.  13  Oliio.  167:  Brown  v.  Ginn.  66  Ohio  St.  316;  Chester  Co.  v.  Barber,  97  Pa. 
455.  Perry  v.  Dicken.  105  Pa.  83;  Martin  v.  Clarke,  8  R.  I.  389;  Nelson  v.  Evans, 
21  Utah,  202;  Jn  re  Aidrich,  86  Vt.  .531;  Nickels  v.  Kane's  Adm.,  82  Va.  309;  Dockery 
V.  McL<;llan.  93  Wis  381,  ficc.  Sec  also  Casserlcigh  v.  Wood,  119  Fed.  Rep.  (C.  C.  A.) 
30S. 

1(  the  agreement  provides  that  the  owner  of  the  right  of  action  shall  not  com- 
promiHf  or  Hettio  the  claim,  the  provision  h;is  l)nen  held  to  make  the  contract  illegal. 
FoHter  i;.  Jacks.  4  Wall.  .334;  North  Chicago  R.  R.  Co.  v.  Ackley,  171  111.  100;  Elwood 
B.  Wilnon,  21  Iowa,  r>2'.i:  Boardman  v.  Tlionipson.  25  Iowa,  487;  Htiber  v.  Johnson. 
68  Minn.  74.  But  wjc  Hoffman  r.  Valicjo.  45  (\al.  564:  P.  C.  C.  &  St.  L.  Ry.  Co.  ». 
Volkcrt  .58  Ohio  St.  363.  Ryan  v.  Martin,  16  Wis.  57;  Kusterer  v.  Beaver  Dam,  56 
Wis   471. 


SECT.    Ill]  FOWLER    V.    CALLAN  839 

J.  Adolphus  Kamping,  for  respondent  Callan. 

Quentin  McAclam,  for  respondents  Kelly  and  Griffin. 

Finch,  J.  It  does  not  a£fect  the  validity  of  the  contract  between 
the  attorney  and  his  client  that,  measured  by  the  old  rules  relating  to 
champerty  and  maintenance,  it  would  have  fallen  under  their  con- 
demnation; for  neither  doctrine  now  prevails  except  so  far  as  pre- 
served by  our  statutes.  Sedgwick  v.  Stanton,  14  N.  Y.  289.  The 
attorney  may  agree  upon  his  compensation,  and  it  may  be  contingent 
upon  his  success,  and  payable  out  of  the  proceeds  of  the  litigation. 
Such  contracts  are  of  common  occurrence,  and  while  their  propriety 
has  been  vehemently  debated,  they  are  not  illegal,  and  when  fairly 
made  are  steadily  enforced.  In  substance  that  was  the  contract  here 
made,  and  there  would  be  no  question  about  it  had  it  not  contained 
a  provision  by  the  terms  of  which  the  attorney  not  only  agreed  to  rely 
upon  success  for  his  compensation,  but  also  to  assume  all  costs  and 
expenses  of  the  litigation  and  indemnify  his  client  against  them.  It 
is  this  feature  of  the  contract  which  raises  the  question  necessary  to 
be  determined. 

The  facts  of  the  case  are  not  very  fully  developed,  but  appear  to  be 
that  the  defendant  as  devisee  under  a  will  was  entitled  to  certain  real 
estate, — his  right  dependent  upon  the  validity  of  the  will,  and  in 
some  manner  threatened  by  proceedings  before  the  surrogate  which 
put  his  interest  in  peril,  and  made  a  defence  essential  to  its  pro- 
tection. In  this  emergency  he  sought  the  aid  and  professional  ser- 
vice of  the  plaintiff  and  retained  him  as  attorney.  The  latter  neither 
sought  the  retainer,  nor  did  anything  to  induce  it.  So  far  as  appears, 
it  was  not  occasioned  by  any  offer  or  solicitation  of  his,  but  originated 
in  the  free  and  unbribed  choice  of  the  client.  The  evidence  does  not 
show  whether  the  latter  had  gained  possession  of  the  land  devised 
or  was  out  of  possession,  but  he  gave  to  the  attorney  a  deed  of  the 
one  undivided  half  part  of  the  property,  taking  back  his  covenant 
to  conduct  the  defence  to  its  close,  paying  all  costs  and  expenses  of 
the  litigation,  and  indemnifying  the  devisee  against  all  such  lia- 
bility. The  agreement  appears  to  have  been  purely  one  for  compen- 
sation. If  the  client  had  given  to  the  attorney  money  instead  of 
land,  the  contract  would  have  differed  in  no  respect  except  the 
contingent  character  of  the  compensation.  The  arrangement  con- 
templated success  in  the  litigation,  in  which  event  the  land  would 
pay  the  costs  and  expenses  and  the  attorney's  reward,  and  both  would 
be  discharged  out  of  the  property  of  the  client  placed  in  the  hands 
of  the  attorney  for  that  precise  purpose.  The  contract  in  no  respect 
induced  the  litigation.  That  was  already  begun  and  existed  in- 
dependently of  the  agreement,  and  originated  in  other  causes.  It 
did  not  tend  to  prolong  the  litigation.  It  made  it  to  the  interest  of 
the  attorney  to  close  it  as  briefly  and  promptly  as  possible,  and  at 
as  little  cost  and  expense  as  prudence  would  permit.  The  plaintiff, 
therefore,   stirred  up   no   strife,   induced   no  litigation,   but   merely 


840  FOWLER    V.    CALLAN  [CHAP.    VI 

agreed  to  take  for  his  compensation  so  much  of  the  value  of  the 
land  conveyed  to  him  as  might  remain  out  of  that  value  after  the 
costs  and  expenses  had  been  paid.  We  do  not  think  the  statute 
condemns  such  an  agreement.  3  K.  S.  [6th  ed.]  449,  §§  59,  60; 
Code,  §§  73,  74.  The  Code  revision  changed  somewhat  the  language 
of  the  prohibition,  but,  nevertheless,  must  be  deemed  a  substantial 
re-enactment  of  the  earlier  sections.  Browning  v.  Marvin,  100  IN".  Y. 
144,  148.  They  forbid,  first,  the  purchase  of  obligations  named  by 
an  attorney  for  the  purpose  and  with  the  intent  of  bringing  a  suit 
thereon;  and,  second,  any  loan  or  advance,  or  agreement  to  loan  or 
advance,  "as  an  inducement  to  the  placing,  or  in  consideration  of 
having  placed  in  the  hands  of  such  attorney,"  any  demand  for  collec- 
tion. The  statute  presupposes  the  existence  of  some  right  of  action, 
valueless  unless  prosecuted  to  judgment,  which  the  owner  might  or 
might  not  prosecute  on  his  own  behalf,  but  which  he  is  induced  to 
place  in  the  hands  of  a  particular  attorney  by  reason  of  his  agree- 
ment to  loan  or  advance  money  to  the  client.  It  contemplates  a  case 
in  which  the  action  might  never  have  been  brought  but  for  the  in- 
ducement of  a  loan  or  advance  offered  by  the  attorney,  and  in  which 
the  latter  by  officious  interference  procures  the  suit  to  be  brought 
and  obtains  a  retainer  in  it.  The  statute  speaks  of  a  "demand"  which 
by  enforcement  will  end  in  a  "collection";  phrases  which  have  no 
aptness  to  the  situation  of  one  simply  defending  a  good  title  to  land 
against  the  efforts  of  others  seeking  to  destroy  the  devise  under  which 
he  claims.  The  plaintiff  made  no  "loan  or  advance"  in  any  proper 
sense  of  those  words.  They  imply  a  liability  on  the  part  of  the 
client  to  repay  what  was  thus  lent  or  advanced.  The  attorney  loaned 
nothing,  and  he  advanced  nothing  to  the  client  which  the  latter  was 
bound  to  reimburse.  Simply  he  was  paid  in  advance  an  agreed 
price,  taken  in  land  instead  of  money,  and  out  of  which  he  was 
first  to  pay  costs  and  expenses.  The  facts  before  us  are  not  within 
the  terms  of  the  statutes  as  it  respects  a  "demand"  which  is  the 
subject  of  "collection";  but  our  conclusion  rests  more  strongly  upon 
the  conviction  that  the  agreement  made  was  one  for  compensation 
merely,  and  had  in  it  no  vicious  element  of  inducing  litigation  or 
holding  out  bribes  for  a  retainer. 

The  judgment  should  be  reversed  and  a  new  trial  granted,  costs 
to  iil)id('  thti  event. 

All  concur.  Judgment  reversed^ 

'  S<-o  further  Wenks  v.  Gattell,  125  N.  Y.  App.  D.  402,  193  N.  Y.  681;  Dennin  o 
PowfiFH,  90  N.  Y.  Misc.  252. 

In  Taylor  v.  Remiss.  110  U.  S.  42,  45,  the  Court  said:  — 

"It  rcrnjiin."  to  b(!  consid(!rcd  whothor  thorn  i.s  in  this  contract  of  employment  any- 
thiPK  wliifli,  ufttr  it  has  Jk-oh  fully  oxocutod  on  both  sides,  should  require  it  to  be 
derlarc'd  voir!  in  :i  court,  nf  equity,  and  the  money  received  imder  it  returned.  It  was 
dfciflcd  in  the  riLse  Ktsmton  v.  Embrny,  9.3  U.  R.  548,  that  contracts  by  attorneys  for 
ronipj-nMiition  in  prosceiitiri'.'  rliiims  acainst  tlie  United  States  were  not  void  because 
th'-  amoimt  of  it  wms  rnndc-  eonf  inL'cnt  !ii)on  siicoi'ss,  or  upon  the  sum  recovered.  And 
th<-  wfjlknowii  flifTiciiltieH  and  ddavH  in  '^)l)t!iinint'  ptiyTiicnt  of  just  claims  which  are 
not  wifliin  the  ordin.-irv  coiirsi-  of  procedure  of  the  auditinu;  officers  of  the  government 


SECT.    Ill]  GAMMONS    V.   JOHNSON  841 


LEONAED  W.  GAMMONS  v.  GUSTAE  JOHNSOK^ 

Minnesota  Supreme  Court,  April  26,  1899 
[Reported  in  76  Minnesota,  76] 

Mitchell,  J.^  .  .  .  The  complaint  in  this  case  is  silent  as  to  any 
special  contract  between  the  defendant  and  either  the  plaintiff  or 
Huber.  For  his  first  and  second  causes  of  action,  the  plaintiff  alleges 
generally  the  performance  of  professional  services,  and  the  expendi- 
ture of  money  by  the  plaintiff  for  the  defendant  at  his  instance  and 
request.  For  his  third  and  fourth  causes  of  action,  he  alleges  gen- 
erally the  performance  of  certain  labor  and  services,  and  the  ex- 
penditure of  certain  moneys  by  Huber  for  the  defendant  at  his 
special  instance  and  request,  which  claims  had  been  assigned  by 
Huber  to  the  plaintiff. 

In  his  answer,  the  defendant,  among  other  things,  denied  that 
he  ever  employed  or  requested  the  plaintiff  to  perform  any  services 
for  him,  or  that  plaintiff  ever  did  perform  any.  The  answer  further 
alleged,  and  upon  the  trial  the  defendant  offered  to  prove,  that, 
in  the  spring  of  1896,  plaintiff  and  Huber  (who  was  a  layman) 
entered  into  an  agreement  or  arrangement  whereby  Huber  and  one 
Mossberg,  as  the  agent  of  plaintiff  and  Huber,  were  to  go  through 
certain  counties  in  the  northern  and  western  part  of  the  State  to 
seek  out  claims,  and  instigate  suits  against  the  Great  Northern 
Railway  Company  for  damages  resulting  to  different  parties  from 
the  failure  of  the  railroad  company  to  fence  its  track  across  the  land 
of  such  parties,  and  when  they  discovered  any  such  claim,  to  procure 
the    party    having    the    claim    to    bring    suit    against    the    railroad 


justifies  a  liberal  compensation  in  successful  cases,  where  none  is  to  be  received  in 
case  of  failure. 

"Any  other  rule  would  work  much  hardship  in  cases  of  creditors  of  small  means 
residing  far  from  the  seat  of  government,  who  can  give  neither  money  nor  personal 
attention  to  securing  their  rights. 

"This,  however,  does  not  remove  the  suspicion  which  naturally  attaches  to  such 
contracts,  and  where  it  can  be  shown  that  they  are  obtained  from  the  suitor  by  any 
undue  influence  of  the  attorney  over  the  client,  or  by  any  fraud  or  imposition,  or  that 
the  compensation  is  clearly  excessive,  so  as  to  amount  to  extortion,  the  court  will  in 
a  proper  case  protect  the  party  aggrieved. 

"While  fifty  per  cent  seems  to  be  more  than  a  fair  proportion  in  the  division  be- 
tween client  and  attorney  in  an  ordinary  case,  we  are  not  prepared  to  assume  that  it 
is  extortionate  for  that  reason  alone,  and  the  testimony  of  the  lawyers  on  that  subject, 
taken  as  experts,  does  not  justify  such  a  conclusion.  In  the  case  before  us,  it  is  beyond 
dispute  that  the  attorneys  of  Mrs.  Bemiss  exercised  no  influence  over  her  whatever 
in  adjusting  the  amount  of  the  fee  stipulated  in  the  agreement.  They  had  never 
known  her  until  this  employment,  and  it  was  through  no  suggestion  of  theirs  or  any 
agent  of  theirs  that  she  applied  to  them.  Her  first  letter  to  them  on  the  subject  made 
the  offer  of  fifty  per  cent,  and  no  more  was  asked  for  by  them. 

"The  evidence  of  two  of  the  judges  who  composed  the  court  shows  that  the  case> 
was  a  difficult  and  comphcated  one,  and  that  both  Taylor  and  Wood  attended  to  it 
vigorously,  and  gave  it  much  time  and  attention,  and  that  it  was  in  court  a  consider- 
able time." 

^  A  portion  of  the  opinion  and  the  concurring  opinion  of  Canty,  J.,  are  omitted. 


842  GAMMONS    V.    JOHNSON  [CHAP.   VI 

company;  that,  for  the  purpose  of  working  up  and  procuring  the 
institution  of  such  suits,  plaintiffs  furnished  Huber  with  blank 
contracts  for  the  parties  to  execute,  which  were  identical  in  terms 
with  the  contract  already  referred  to  between  defendant  and  Huber, 
of  which  it  was  one;  that,  in  pursuance  of  this  agreement,  Hubert 
and  Mossberg  canvassed  some  nine  counties  to  seek  out  and  bring  to 
light  such  claims,  and  induced  seventy-one  separate  and  distinct 
persons  (among  others  this  defendant)  to  execute  such  contracts, 
under  which  seventy-one  suits  were  instituted  against  the  railroad 
company  by  Huber  and  plaintiff,  but  in  the  names  of  the  parties 
who  had  executed  the  contracts,  in  all  of  which  the  plaintiff  appeared 
as  attorney;  that  in  these  suits  the  amounts  of  damages  claimed 
ranged  from  $400  to  $1,500  in  each  suit,  but  all  of  them,  except  one 
or  two,  were  settled  before  the  trial  by  the  railroad  company  with 
the  landowners  for  from  one  dollar  to  five  dollars  each;  that  none 
of  these  parties  would  have  brought  these  suits  but  for  the  systematic 
work  of  the  plaintiff  and  Huber  to  induce  them  to  do  so;  and  that 
defendant  was  one  of  the  parties  who  was  thus  induced  by  Huber 
to  sign  a  contract  authorizing  the  commencement  of  a  suit  against 
the  railroad  company.  The  defendant  also  offered  evidence  that  at 
least  some  of  these  parties  did  not  know  that  they  had  any  claim 
against  the  railroad  company,  until  so  informed  by  Huber. 

All  of  this  evidence  was  excluded  on  the  objection  of  the  plaintiff ; 
and  this  ruling  is  the  subject  of  one  of  the  main  assignments  of  error. 

It  conclusively  appears  from  the  evidence  that  the  suit  against 
the  railroad  company  was  instituted  in  the  name  of  the  defendant  by 
Huber  or  plaintiff,  or  both,  under  and  in  pursuance  of  the  written 
contract,  already  referred  to,  between  defendant  and  Huber;  that 
whatever  services  or  expenditures  were  performed  or  made  by  either  of 
them  were  in  the  institution  and  prosecution  of  that  suit  in  accordance 
with  the  terms  of  that  contract;  also  that  plaintiff  was  never  em- 
ployed by  defendant  personally,  but,  if  employed  by  any  one,  it  was 
by  Huber;  and  that  when  plaintiff  instituted  the  suit  against  the 
railroad  company  he  knew  all  about  the  contract  between  defendant 
and  Huber,  and  accepted  employment,  and  did  whatever  he  did,  upon 
the  strength  of  it.  It  also  appears  that  defendant  settled  with  the 
railroad  company  for  $100  before  the  suit  was  tried. 

According  to  the  evidence  offered  and  excluded,  plaintiff  and 
Huber,  who  were  strangers  to  the  parties  and  to  the  claims  which 
were  the  subjects  of  these  contracts,  and  who  had  no  object  in  inter- 
meddling with  the  matters,  except  a  speculative  one,  entered  into  a 
systematic  scheme  to  hunt  up  claims,  or  supposed  claims,  against  the 
Great  "N'orthfTn  T^iilway  Company,  upon  which  the  original  holders 
would  probably  never  have  asserted  any  right  or  brought  any  action, 
and  to  stir  up  wholesah;  litigation,  and  induce  the  landowners  to 
allow  them  to  bring  actions,  by  agreeing  to  prosecute  the  suits  at 
their   own    expense,    idemnify    these   clients    against   the   costs    and 


SECT.    Ill]  GAMMONS    V.    JOHNSON  843 

expenses  of  litigation,  accept  for  their  compensation  a  share  of  what 
might  be  recovered,  and  not  to  charge  anything  for  their  services 
unless  they  succeeded  in  collecting  the  claims,  and  further  attempted 
to  make  the  contract  ironclad  by  incorporating  into  it  a  provision 
that  the  clients  should  not  settle  with  the  railroad  company  without 
their  consent,  under  the  penalty  of  having  to  pay  them  a  specified 
sum,  apparently  fijced  arbitrarily  without  reference  to  the  value  of 
their  services.  A  course  of  conduct  on  the  part  of  either  an  attorney 
or  layman  more  obnoxious  than  this  to  public  policy,  as  involving 
champerty,  maintenance,  and  barratry,  cannot  be  well  imagined. 

The  old  common-law  rules  on  the  subject  of  champerty  have  doubt- 
less been  much  modified,  but  the  essential  principle  upon  which  those 
rules  rested,  and  the  evils  and  abuses  at  which  they  were  aimed, 
still  exist.  The  general  purpose  of  the  law  against  champerty  and 
maintenance  and  barratry  was  to  prevent  officious  intermeddlers  from 
stirring  up  strife  and  contention  by  vexatious  or  speculative  liti- 
gation, which  would  disturb  the  peace  of  society,  lead  to  corrupt 
practices,  and  prevent  the  remedial  process  of  the  law.  All  contracts 
or  practices  which  necessarily  and  manifestly  tend  to  produce  these 
results  ought  still  to  be  held  void  on  grounds  of  public  policy.  It  is 
doubtless  the  more  modern  doctrine  that  the  mere  taking  a  case 
on  a  contingent  fee  does  not  constitute  champerty,  and  that  it  is 
not  unlawful  for  an  attorney  to  carry  on  a  suit  for  another  for  a 
share  of  what  may  be  recovered,  at  least  unless  he  assumes  the  risks 
of  litigation  by  indemnifying  his  client  against  all  costs  and  ex- 
penses of  the  same.  But  the  vice  in  the  conduct  of  these  parties 
lies  deeper  and  much  further  back  than  merely  entering  into  a 
champertous  contract  for  their  compensation  for  lawful  services  per- 
formed in  the  prosecution  of  suits  legitimately  instituted. 

According  to  the  facts  alleged  and  offered  to  be  proved,  it  con- 
sisted of  an  unlawful  and  barratrous  systematic  scheme  to  work  up 
and  institgate  wholesale  vexatious  litigation  in  the  names  of  parties 
and  concerning  subjects  to  whom  and  which  they  were  entire 
strangers,  and  in  which  they  had  no  interest,  except  a  speculative 
one  in  the  pecuniary  profit  which  they  might  derive  form  the  liti- 
gation which  they  had  instigated,  and  which,  in  all  probability  never 
would  have  been  instituted  except  for  their  officious  intermeddling. 
The  illegality  of  the  conduct  of  the  parties  enters  into  the  very  incep- 
tion of  the  scheme  by  which  the  litigation  itself  was  instigated,  and 
but  for  which  it  never  would  have  existed.  Even  if  the  special  written 
contracts  regarding  compensation  be  set  aside  or  ignored,  this  original 
vice,  in  the  very  inception  of  the  scheme,  would  still  exist  in  full  force. 

To  hold  that  a  party  can  thus  illegally  stir  up  and  instigate 
litigation,  and  yet  obtain  the  benefits  of  it  by  ignoring  the  special 
contracts,  and  bringing  suit  upon  a  quantum  meruit  for  services  per- 
formed in  prosecuting  the  litigation  which  he  has  unlawfully  insti- 
gated, would  be  a  travesty  on  justice,  and  to  permit  a  party  to  do 


844  SMALL    V.   THE    C,   R.    I.,    &    P.    R.    CO.      [CHAP.    VI 

indirectly  what  he  cannot  do  directly/  It  is  unnecessary  to  consider 
whether  the  course  of  conduct  alleged  and  offered  to  be  proved  would 
be  a  ground  for  the  disbarment  of  an  attorney.  It  is,  however,  so 
clearly  against  public  policy  that  the  courts  ought  not  to  enforce 
such  a  contract,  or  aid  a  party  in  recovering  the  fruits  of  such  a 
speculative  and  vicious  scheme.  If  defendant  can  prove  what  he 
alleges  in  his  answer,  and  what  he  offered  to  prove,  it  would  consti- 
tute a  complete  defence  to  each  and  all  of  the  causes  of  action  set  up 
in  the  complaint.  It  was  therefore  error  for  the  Court  to  exclude 
the  evidence.^ 


SMALL  V.  THE  C,  E.  L,  &  P.  K.  CO. 

lowA  Supreme  Couet^  April  6,  1881 

{Reported  in  55  Iowa,  583] 

^  This  is  an  action  to  recover  the  value  of  a  grain  elevator,  and  cer- 
tain grain  and  other  property  which  it  is  alleged  were  destroyed  by 
fire,  set  by  defendant  in  operating  its  railroad.  Two  causes  of  ac- 
tion are  set  out  in  the  petition,  one  of  the  said  causes  being  for  the 
destruction  of  the  elevator  and  one  Fairbanks  scale,  which  it  is  alleged 
Avere  the  property  of  the  Farmers'  Union  Elevator  Company,  and  that 
said  company,  after  the  said  property  was  destroyed  by  fire  assigned 
its  claim  for  damages  to  the  plaintiff.  The  other  cause  of  action  is  for 
the  loss  by  fire  of  other  property  which  it  is  alleged  was  owned  by 
the  plaintiff. 

There  was  a  trial  by  jury,  and  a  verdict  and  judgment  for  the 
plaintiff.    Defendant  appeals. 

E.  S.  Winslow,  Smith  &  Wilson,  and  Matt.  Phelps,  for  appellant, 

S.  H.  Fairall,  Bonorden  &  Ranch,  and  John  N.  Rogers,  for 
appellee. 

RoTHROCK,   J.     In   the   seventh   division   of   the   answer   the   de- 

*  Compensation  on  the  basis  of  quantum  meruit  has  sometimes  been  allowed  an 
attorney  who  has  rendered  services  under  a  champcrtous  aoireement.  Goodman  v. 
Walker.  30  Ala.  482,  500;  Brush  v.  Carbondalc,  229  111.  144;  Rochester  v.  Campbell, 
184  Ind.  421;  Caldwell  v.  Shepherd,  6  T.  B.  Mon.  3S9;  Gammons  v.  .Johnson,  69 
Minn.  488-  In  re  Snvder,  190  N.  Y.  GO;  Stearns  ?>.  Felker,  28  Wis.  594.  See  also 
Merritt  v.  Lambert,  10  Paine,  352,  aff'd  2  Denio,  007.  But  see  Ackert  v.  Barker,  131 
Mass.  430;  Butler  v.  Leiq-o,  02  N.  H.  3.50;  Munday  v.  Whisscnhunt,  90  N.  C.  458; 
Arlintrtf)n  Hotel  Co.  v.  Ewino;,  124  Tenn.  530;  Roller  i\  Murray,  112  Va.  780.  See 
al8f>  Pince  V.  Beattie,  32  L.  J.  Ch.  734;  Grell  v.  Levy,  16  C.  B.  n.  s.  73;  Willemin  v. 
Bate.Hon,  63  Mich.  309. 

'  fJammons  v.  Gulbran.son,  78  Minn.  21,  (w.c.  See  also  Alpers  v.  Himt,  86  Cal.  78; 
Hirsehhneh  v.  Ketchum,  5  N.  Y.  App.  Div.  324.  Compare  Metropolitan  Ins.  Co.  v. 
Fuller.  01  C<,nn.  2.52;  Vocke  v.  Peters,  58  111.  App.  338;  Wheeler  v.  Harrison,  94  Md. 
147.  A  eon^r.'iet  to  .secuni  (ividenoe  necessary  for  winnin'j;  a  suit  for  a  fee  contingent 
on  BticcesH  in  illct^al.  Stanley  v.  .Jones,  7  Bin!^  369;  TIenderson  v.  Hall,  87  Ark.  1; 
Luce  V.  Endslev.  (Ark.)  224  S.  W.  019;  Gillett  v.  lioard,  67  111.  256;  Quirk  v.  Muller, 
14  Mf>nt.  467;  rjotchell  v.  Wclday,  2  Ohio  N.  P.  390.  But  see  Casserleigh  v.  Wood, 
14  Col.  Ai)p.  205. 

'  Only  BO  much  of  the  ca«e  is  print<!d  aa  relates  to  the  defence  of  champerty. 


SECT.    Ill]        SMALL    V.    THE    C,    R.    I.,    &    P.    R.    CO.  845 

fendant  pleaded  as  a  defence  that  before  the  commenceinent  of  the 
suit  it  was  agreed,  between  the  plaintiff  and  his  attorneys,  that  said 
attorneys  should  carry  on  the  suit  at  their  own  costs  and  expense, 
and  that  they  should  receive  for  their  services  and  said  costs  and 
expenses  about  one  sixth  of  the  amount  of  the  recovery,  if  the  liti- 
gation should  prove  successful,  and  if  they  should  fail  in  the  action 
they  should  receive  nothing.  It  was  averred  that  said  agreement  and 
contract  was  against  the  public  policy,  champertous,  and  void.  There 
was  a  demurrer  to  this  division  of  the  answer,  which  was  sustained. 
To  this  ruling  exceptions  were  taken,  and  error  is  assigned  thereon. 

That  the  averments  of  the  answer  would  be  a  good  defence  to  an 
action  by  the  attorneys  to  recover  of  the  plaintiff  upon  the  alleged 
contract  may,  for  the  purposes  of  this  case,  be  admitted.  But  that 
it  can  be  interposed  by  the  defendant  to  defeat  a  recovery  by  the 
plaintiff,  in  his  own  name,  for  the  damages  sustained  by  him,  is 
quite  another  question.  That  there  are  authorities,  the  most  respec- 
table, which  hold  that  when  it  appears  that  a  plaintiff  is  prosecuting 
an  action  under  a  champertous  arrangement  between  himself  and 
his  attorney,  the  action  should  be  abated,  must  be  conceded.  But  on 
the  other  hand  there  are  cases  which  hold  the  contrary  doctrine.  In 
Hilton  V.  Woods,  L.  E.  4  Eq.  Cas.  432,  Malvin,  V.  C,  said :  "I  have 
carefully  examined  all  the  authorities  which  were  referred  to  in 
support  of  this  argument,  and  they  clearly  establish  that  when  the 
right  of  the  plaintiff,  in  respect  of  which  he  sues,  is  derived  under 
a  title  founded  in  champerty  or  maintenance,  his  suit  will  on  that 
account  necessarily  fail.  But  no  authority  was  cited,  nor  have  I  met 
with  any,  which  goes  the  length  of  deciding  that,  when  a  plaintiff 
has  an  original  and  good  title  to  property,  he  becomes  disqualified 
to  sue  for  it  by  having  entered  into  an  improper  bargain  w^ith  his 
solicitor  as  to  the  mode  of  remunerating"  him  for  his  professional 
services  in  the  suit  or  otherwise." 

See  also  Elborough  v.  Ayres,  L.  R.  10  Eq.  Cas.,  367;  Whitney  v. 
Kirtland,  27  N.  J.  Eq.  333 ;  Robinson  v.  Beale,  26  Ga.  17. 

It  seems  to  us  that  there  is  no  sound  reason  nor  just  principle  in 
a  rule  which  would  allow  a  party  to  defeat  a  just  cause  of  action 
because  the  opposite  party  has  made  a  contract  with  his  attorney 
which  is  utterly  void,  and  which,  therefore,  cannot  be  enforced  by 
either  of  the  contracting  parties.  As  to  the  defendant  in  this  action, 
who  seeks  to  avail  itself  of  the  illegal  contracts,  the  rights  of  the 
parties  are  the  same  as  if  it  had  never  been  made.  The  plaintiff  is 
still  the  real  party  in  interest.  The  illegal  and  champertous  con- 
tract, being  void,  divests  him  of  no  right.  That  by  reason  thereof 
he  should  be  disabled  from  asserting  his  rights,  we  do  not  believe. 
It  is  enough  that  the  parties  to  such  contracts  be  authorized  to  re- 
pudiate them,  without  allowing  others  to  exonerate  themselves  from 
just  obligations  by  reason  thereof.  As  is  said  by  Day,  J.,  in  Allison 
V.  C.  &  N".  W.  R.  Co.,  42  Iowa,  274,  "If  he  (the  defendant  in  the 


846  FLOWER    V.    SADLER  [CHAP.   VI 

action)  could  do  so,  an  unheard-of  effect  would  be  given  to  a  void 
agreement.  Suppose  a  suit  upon  a  promissory  note  is  prosecuted 
under  a  champertous  arrangement  between  the  plaintiff  and  his 
attorney;  does  this  avail  the  defendant  to  defeat  an  otherwise  just 
liability?  Will  not  the  law  rather  compel  the  defendant  to  perform 
his  undertakings  and  leave  the  question  of  champerty  to  be  de- 
termined between  the  plaintiff  and  his  attorney  ?"  ^ 


(&)    Agreements  to  Stifle  Pbosecution 

FLO  WEE  AND  OTHERS  V.  SADLER 

In  the  Queen's  Bench  Division^  Court  of  Appeal^ 
June   29,   1882 

[Reported  in  10  Queen  s  Bench  Division,  572] 

Appeal  by  the  defendant  from  the  judgment  of  Denman,  J.,  in 
favor  of  the  plaintiffs. 

The  facts  are  fully  stated  in  the  judgment  of  Denman,  J.,  9  Q.  B. 
D.  83 ;  and  it  is  here  necessary  only  to  give  the  following  short  state- 
ment of  them : — 

Maynard  had  been  employed  to  collect  rents  on  behalf  of  the 
plaintiffs;  he  failed  to  account  for  a  large  sum,  and  the  plaintiffs 
threatened  to  prosecute  him  for  embezzlement.  Maynard  after- 
wards indorsed  to  the  plaintiffs  certain  bills  of  exchange  drawn  by 
him  upon,  and  accepted  by,  the  defendant;  the  consideration  for  the 
defendant's  acceptance  was  the  sale  to  him  by  Maynard  of  a  share 
in  a  patent.  The  indorsement  of  the  bills  of  exchange  by  Maynard 
to  the  plaintiffs  was  not  done  under  the  influence  of  the  plaintiffs' 
threat,  and  was  a  free  and  bona  -fide  transaction. 

Fullarton,  for  the  defendant.  The  plaintiffs  had  threatened  to 
prosecute  Maynard  for  embezzlement.  This  threat  was  sufficient  to 
vitiate  any  security  subsequently  given  by  Maynard  for  the  debt 
due  from  him ;  in  fact  the  indorsement  of  the  bills  to  the  plaintiffs 

1  Hilton  V.  Woods,  4  Eq.  432;  Bumes  v.  Scott,  117  U.  S.  582;  Courtright  v.  Burnes, 
3  McCrary,  60;  Sibley  v.  Alba,  95  A'a.  191;  Missouri  Pac.  Ry.  Co.  v.  Smith,  60  Ark. 
221;  GaKc  v.  Downey,  79  Cal.  140;  Robinson  v.  Beall,  26  Ga.  17;  Ellis  v.  Smith,  112 
Ga.  480;  Toironce  v.  Rhedd,  112  111.  466;  Stearns  v.  Reidy,  135  III.  119;  Gage  v.  Du 
Puy,  1.37  111.  6.52;  Burton  v.  Perry,  146  III.  71;  Allen  v.  Frazee,  85  Ind.  283;  Zeigler 
V.  Mize.  132  Ind.  403;  Bowser  v.  Pafriek,  65  S.  W.  Rep.  (Ky.),824;  Gilkcson  Co.  v. 
Bond,  44  La.  Ann.  4sl;  Hrinley  v.  Whitimx,  5  Pick,  348;  Robertson  v.  Blewett,  71 
MiH.s.  409;  Bent  v.  Priest,  86  Mo.  475;  Biek  v.  Ovcrfelt,  88  Mo.  App.  139;  Chamber- 
lain V.  Grimes,  42  Nt^p.  701;  Taylor  v.  Gilman,  .58  N.  H.  417;  Connecticut  Ins.  Co.  v. 
Way,  02  N.  H.  622;  Whitney  v'.  Kirtland,  27  N.  .1.  Eq.  333;  Schwabe  «.  Herzog,  161 
N.  Y.  App.  D.  712;  Pennsylvania  Co.  ?).  Lombardo,  49  Ohio  St.  1;  Potter  v.  Ajax 
MiniriK  Co.,  22  Utah,  273;  Irons  v.  Croft  &c.  Co.  (W.  Va.),  104  S.  E.  Ill,  ace.  Sec 
also  Eimr'au  v.  Hu-ncr,  105  Mo.  682;    Cookv.  v.  Pool,  25  S.  C.  .593. 

KeipcT  j;.  Miller.  68  Fed.  Rcj).  627,  70  Fed.  Rep.  128;  Grecnman  v.  Cohee,  61  Ind. 
201;  St«-wart  v.  Welch,  41  Ohio  St.  483;  Davy  v.  Aetna  L.  Ins.  Co.,  78  Ohio  St.  256, 
441;  Webb  v.  Armstrong,  5  Humph.  379;  Hudson  v.  Shoafc,  41  S.  Dak.  475;  Kelly 
V.  Kelly,  8G  Wia.   170,  contra. 


SECT.    Ill]  FLOWER    V.    SADLER  847 

was  an  act  done  to  stifle  a  prosecution  for  felony,  and  therefore 
the  plaintiffs  cannot  sue  upon  them ;  Keir  v.  Leeman,  9  Q.  B.  371 ; 
Williams  v.  Bayley,  L.  R.  1  H.  L,  200.  In  giving  judgment,  Den- 
man,  J.,  relied  upon  Ward  v.  Lloyd,  7  Scott,  N.  R.  499;  but  that 
case  is  distinguishable  in  its  facts,  and  moreover  is  not  binding 
since  Williams  v.  Bayley,  L.  R.  1  H.  L.  200,  Further,  the  learned 
judge  drew  a  wrong  inference  as  to  the  facts;  the  bills  of  exchange 
were  delivered  by  the  defendant  to  Maynard  to  be  discounted;  they 
were  not  accepted  by  the  defendant  in  payment  of  a  share  in  a 
patent  sold  to  him  by  Maynard. 

Finlay,  Q.  C,  was  not  called  upon  to  argue  for  the  plaintiffs. 

LoED  CoLEEiDGE^  C.  J.^  I  think  that  the  judgment  of  Denman, 
J.,  is  right,  and  ought  to  be  affirmed.  The  action  is  brought  upon 
three  bills  of  exchange.  The  defendant  has  alleged  that  he  handed 
them  to  Maynard  in  order  to  be  discounted,  but  Denman,  J.,  has 
found  that  the  bills  of  exchange  were  accepted  upon  a  good  considera- 
tion, that  is,  for  the  purchase  of  a  share  in  a  patent.  Maynard  had 
been  employed  in  a  situation  of  trust,  and  had  been  guilty  of  a 
breach  of  duty;  the  plaintiffs  had  threatened  him  with  a  prosecu- 
tion, and  had  used  strong  expressions  with  reference  to  his  conduct. 
The  bills  were  then  delivered  over  to  the  plaintiffs.  The  question  is, 
whether  a  defence  arises  upon  these  facts.  It  is  said  that  the  con- 
sideration for  the  transfer  of  the  bills  of  exchange  to  the  plaintiffs 
was  the  compromise  of  criminal  proceedings,  and  that  they  were  not 
the  lawful  indorsees  of  them.  Upon  the  facts  of  the  case  there  is  no 
foundation  for  this  argument;  there  was  no  agreement  to  stifle  a 
prosecution  for  felony.  The  evidence  fails  to  disclose  even  a  vestige 
of  an  agreement  of  that  kind;  the  form  and  the  subject  of  the 
transaction  was  different.  The  plaintiffs  used  threats  to  Maynard, 
but  they  did  not  come  to  an  agreement  with  him  not  to  prosecute 
him.  A  creditor  may  use  strong  expressions  and  even  threats;  and 
it  was  held  in  Ward  v.  Lloyd,  7  Scott,  'N.  R.  499,  that  strong  lan- 
guage is  not  conclusive  evidence  of  an  agreement  to  compound  a 
felony  or  to  stifle  a  prosecution.  Both  the  facts  and  the  law  fail 
to  support  the  case  for  the  defendant.  In  Keir  v.  Leeman,  9  Q.  B. 
371,  it  was  held  by  the  Court  of  Exchequer  Chamber,  upon  error 
from  the  Court  of  Queen's  Bench,  that  the  compromise  of  a  prose- 
cution for  an  assault,  coupled  with  riot  and  the  obstruction  of  a 
public  officer,  was  illegal;  but  Tindal,  C.  J.,  in  delivering  the  judg- 
ment of  the  Court  of  Exchequer  Chamber,  said  (9  Q.  B.  395)  :  "We 
have  no  doubt  that  in  all  offences  which  involve  damages  to  an  in- 
jured party  for  which  he  may  maintain  an  action,  it  is  competent 
for  him,  notwithstanding  they  are  also  of  a  public  nature,  to  compro- 
mise or  settle  his  private  damage  in  any  way  he  may  think  fit."  I 
think  that  upon  the  authorities  there  can  be  no  question  that  the 
plaintiffs  had  a  right  to  take  security  for  the  debt  due  from  May- 
^  Brett,  L.  J.,  and  Cotton,  L.  J.,  delivered  concurring  opinions. 


848  NICKELSON    V.    WILSON  [CHAP.    VI 

nai'd;  it  is  open  to  any  creditor  to  obtain  payment  of  a  debt  justly 
due  to  him.  We  have  referred  to  Williams  v.  Bailey,  L.  R.  1  H.  L. 
200 ;  as  that  was  a  decision  of  the  House  of  Lords,  we  should  of  course 
submit  to  it;  but  the  principle  of  law  there  laid  down  is  not  appli- 
cable to  the  present  case ;  for  the  plaintiff  in  the  suit  in  the  Court  of 
Chancery  sought  to  enforce  the  delivery  of  certain  securities  obtained 
from  him  without  consideration.  It  is  plain  that  there  was  no  con- 
sideration for  the  plaintiff  in  that  suit  rendering  himself 
liable    for    the    debts    of    his    son.  The    state    of     facts    was 

different.  I  do  not  understand  that  any  alteration  of  the  law  was 
caused  by  the  decision  in  that  case.  I  do  not  understand  that  the 
opinions  of  the  Law  Lords  interfered  with  the  general  principles  as 
to  the  right  of  a  creditor  to  secure  payment  of  his  debt.  A  creditor 
has  a  perfect  right  to  recover  his  debt  by  action;  and  upon  this 
ground  I  think  that  the  judgment  of  Denman,  J.,  must  be  affirmed. 
The  view  taken  by  the  learned  judge,  both  as  to  the  law  and  as  to 
the  facts,  was  correct.^ 


WILLIAM  B.  NICKELSON  v.  GEORGE  A.  WILSON 

New  Yokk   Court  of  Appeals,  February  24— April   13,   1875 

[Reported  in  60  New  Yorh,  362] 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme 
Court  in  the  fourth  judicial  department,  affirming  a  judgment  in 
favor  of  defendants,  entered  upon  a  decision  of  the  court  at  Special 
Term.     (Reported  below,  1  Hun,  615;  4  N.  Y.  S.  C.  [T.  &  C]  104.) 

This  action  was  brought  for  the  specific  performance  of  a  contract, 
and  to  restrain  defendants  from  enforcing  a  judgment  against  plain- 
tiff in  alleged  violation  of  said  contract. 

The  court  found  substantially  the  following  facts : — 

On  the  25th  day  of  May,  1869,  plaintiff  sold  a  certain  patent- 
right  to  the  defendant  Wilson  and  one  J.  Goodrich  Scott,  for  $12,000, 
each  agreeing  to  pay  one  half.  Wilson  gave  his  promissory  notes, 
to  the  amount  of  $6,000,  of  which  sum  the  plaintiff  had  $3,000, 
and  Scott  $3,000.  After  such  sale,  Wilson,  claiming  a  fraud  had 
been  practised  on  him  by  the  plaintiff  and  Scott,  and  that  said  notes 
had  been  obtained  of  him  by  means  of  false  pretenses,  commenced 
an  action  in  the  Supreme  Court  against  them,  to  recover  the  amount 
of  the  notes,  alleging  they  had  been  transferred  to  bona  fide  pur- 
chasfirs.  Wilson  also  made  a  complaint  before  a  grand  jury,  against 
th(!  [)hiintifT  and  Scott  for  snch  alleged  false  pretences,  and  they 
wfTf    itidictcd    tlifTcfor.      Scott    subsequently   caused    a    petition    in 

»  McClatcliic  V.  Hiwlam,  CiF)  L.  T.  (VM;  Vam'  v.  Hioronymua,  102  111.  .546;  Powell 
V.  Fliin.-iry,  KK>  Kv.  342;  Thorn  v.  Pinkh.im,  K4  Mc  101;  Boath  v.  Chapoton,  115 
Mich.  .000;  C-uw  f  Vumty  Bank  v.  Brickn'-r,  M  Ni-h.  510;  Barrott  v.  Weber,  125  N.  Y. 
18;   Portner  v.  KirHchnnr,  169  Pa.  472;   Board  v.  Angel,  75  W.  Va.  747.  ace. 


SECT.    Ill]  NICKELSON    V.    WILSON  849 

bankruptcy  to  be  filed  to  have  Wilson  adjudged  a  bankrupt;  and 
evidence  was  taken  before  one  of  the  registers  in  bankruptcy  to 
sustain  the  petition.  Plaintiff  and  "Wilson  authorized  their  counsel 
to  do  any  act;  or  peform  any  act,  make  any  agreement  to  further 
the  interests  of  their  clients  in  said  litigations,  and  defence  of  the 
suit  and  proceedings.  Wilson's  counsel  was  the  district  attorney. 
Said  counsel  entered  into  an  agreement  substantially  set  forth  in  a 
memorandum  made  at  the  time  as  follows: — 

"February  14,  1870. 

"1.  Nickelson  will  testify  to  all  he  knows  in  bankrupt  case,  in 
civil  case,  and  in  the  criminal  case. 

"2.  If  there  be  no  recovery  against  Scott  in  the  civil  action,  there 
shall  be  none  against  IST. 

"S.  The  civil  case  going  to  judgment  against  S.  and  N.,  the  judg- 
ment shall  not  be  enforced  against  N.  for  more  than  $1,000,  and 
this  $1,000  may  be  paid  in  one  of  Wilson's  notes  for  that  sum. 

"4.  ]Srickelson  shall  be  given  the  control  for  his  benefit  of  judg- 
ment against  Scott  for  whatever  sum  he  has  to  account  for  to  Wilson. 

"5.  Nickelson  testifying  fully  as  above,  the  counsel  will  recommend 
nol.  pros,  against  Nickelson." 

The  clients  were  not  informed  of  the  full  details  of  said  agree- 
ment, but  plaintiff  followed  the  direction  of  his  counsel,  and  in 
pursuance  of  such  agreement  waived  his  personal  privilege,  and 
testified  as  a  witness  on  behalf  of  Wilson  in  the  civil  case,  and  in 
the  bankruptcy  proceedings,  and  also  on  the  trial  of  said  indictment, 
having  been  called  by  the  district  attorney.  In  the  action  for 
damages,  Wilson  recovered  a  judgment  against  Scott  and  Nickelson 
for  the  amount  of  the  notes  upon  which  plaintiff  paid  $1,000,  but 
Wilson  and  the  defendant  Baker,  his  assignee  in  bankruptcy,  re- 
fused to  release  planitiff  from  the  judgment,  or  to  transfer  an 
interest  therein. 

The  court  further  found  "that  the  object  and  intent  of  the  agree- 
ment was  to  stifle,  embarrass,  and  to  procure  a  discontinuance  of  the 
criminal  proceedings  pending  against  Nickelson  at  the  time  the 
agreement  was  entered  into  by  the  counsel  as  aforesaid."  And,  as 
conclusion  of  law,  "that  the  agreement  was  against  public  policy, 
and  void." 

C.  D.  Adams,  for  the  appellant. 

Watson  M.  Rogers,  for  the  respondents. 

Rapallo,  J.  The  court,  at  Special  Term,  found  that  the  object 
and  intent  of  the  agreement  which  the  plaintiff  seeks  to  enforce  in 
this  action  was  "  to  stifle,  embarrass,  and  procure  the  discontinuance 
of  the  criminal  proceedings  pending  against  the  plaintiff."  On 
this  ground  it  decided  that  the  agreement  was  against  public  policy 
and  void,  and  this  decision  was  afiirmed  by  the  Supreme  Court  at 
General  Term. 


850  NICKELSON    V.    WILSON  [CHAP.   VI 

The  only  evidence  upon  which  the  evidence  was  based  consists  of 
the  written  agreement  and  the  testimony  of  the  plaintiff's  counsel  as 
to  the  negotiation  of  which  that  agreement  was  the  result.  The 
plaintiff  claims  that  this  evidence  is  wholly  insufficient  to  sustain 
the  finding,  or,  in  other  words,  that  the  finding  is  unsupported  by 
any  evidence. 

The  feature  of  the  written  agreement  relied  upon  on  the  part  of 
the  defendants,  as  establishing  the  illegal  intent,  is  the  fifth  clause, 
which  provides  that,  "INTickelson  testifying  fully  as  above,  the  coun- 
sel will  recommend  7ioL  pros,  against  IN^ickelson." 

The  preceding  part  of  the  agreement  referred  to  provided  that 
Nickelson  should  testify  to  all  he  knew  in  the  bankrupt  case,  the 
civil  case,  and  the  criminal  case.  The  performance  of  this  agree- 
ment involved  a  waiver  by  J^ickelson  of  his  personal  privilege  of 
declining  to  answer  questions,  his  answers  to  which  might  tend  to 
criminate  him;  and  this  waiver  constituted  the  consideration  for 
the  whole  agreement.  There  was  nothing  in  the  written  agree- 
ment engaging  the  prosecutor  to  forbear  bringing  the  indictment 
to  trial  against  both  of  the  accused,  to  withhold  or  suppress  any 
evidence  against  the  plaintiff,  nor  to  interfere  with  the  course  of 
justice  in  any  way.  So  far  as  can  be  gathered  from  the  written 
agreement  the  object  of  the  prosecutor  was  to  obtain  evidence  upon 
which  one,  at  least,  of  the  accused  might  be  convicted.  The  dis- 
position of  the  other  was  to  be  left  to  the  discretion  of  the  court, 
and  to  depend  upon  the  frankness  with  which  he  should  testify.  The 
prosecutor,  who  knew  the  facts  as  well  as  the  accused,  was  competent 
to  determine  whether  or  not  the  testimony  of  the  plaintiff  was  full 
and  true;  and  if  so,  he  agreed  to  intercede  with  the  court  for  his 
discharge.  On  this  assurance  the  plaintiff  consented  to  incur  the 
hazard  of  a  full  disclosure.  Nothing  more  can  be  spelled  out  of  the 
written  agreement.  The  inference  that  indirect  means  or  any  others 
than  those  expressed  in  the  agreement  were  to  be  employed  to  pro- 
cure the  discharge  of  the  plaintiff,  or  to  stifle  or  embarrass  the  prose- 
cution against  him,  seems  to  us  unwarranted  and  illegitimate. 

The  testimony  of  Mr.  Starbuck,  who  was  counsel  for  the  plaintiff 
and  made  the  agreement  in  his  behalf,  adds  no  force  to  the  de- 
fendant's position.  His  object,  undoubtedly,  was  —  and  in  this  he 
only  performed  his  duty  to  his  client  —  to  secure  to  him  by  fair  and 
legal  means  and  with  the  approval  of  the  court,  immunity  from  his 
offence,  if  he  had  committed  one,  in  consideration  of  his  making  full 
disclosure.  The  testimony  of  Mr.  Starbuck,  giving  to  it  all  the 
effect  claimed  by  the  defendants,  amounts  to  nothing  more  than  that, 
as  a  condition  for  agreeing  to  advise  his  client  to  expose  himself  to 
tlif  peril  of  waiving  his  privilege  and  testifying  to  matters  by  which 
he.  iriigbt  friminnte  himself,  he  (exacted  tlie  promise  of  his  adversary 
that  if,  uiKlf-r  tlie  advice  of  him,  Starbuck,  ISTickelson  should  thus 
waive  his  privilege  and   state  the  whole  truth,  the  counsel  of  the 


SECT.    Ill]  NICKELSON    V.    WILSON  851 

prosecutor  would  unite  with  him,  Starbuck,  in  a  recommendation  to 
the  court  that  a  nolle  prosequi  be  entered  against  Nickelson.  It 
also  appears  from  the  testimony  of  Mr.  Starbuck  that  the  plaintiff 
was  not  even  informed  of  the  arrangement,  but  placed  his  case  in 
the  hands  of  Mr.  Starbuck,  agreeing  to  do  whatever  he  should  advise, 
without  asking  any  questions;  and  that  when  he  gave  his  evidence 
he  did  not  even  know  of  the  agreement  to  recommend  a  nolle  prosequi. 
The  counsel  for  the  prosecutor  was  also  district  attorney  of  the 
county. 

It  cannot  justly  be  deduced  from  this  statement  tha  any  means 
were  agreed  to  be  employed  to  obtain  the  discharge  of  Nickelson 
other  than  by  openly,  and  in  accordance  with  the  well  known  and 
established  practice  prevailing  in  courts  of  criminal  jurisdiction, 
invoking  the  action  of  the  court  in  favor  of  an  accomplice  or  co-de- 
fendant in  a  criminal  indictment,  of  whose  testimony  the  govern- 
ment avails  itself  for  the  purpose  of  securing  the  conviction  of  his 
confederate  in  the  same  crime. 

The  promised  interposition  in  behalf  of  the  plaintiff  was  upon 
the  conditions  that  he  should  testify  to  all  he  knew.  The  arrangement 
had  not  in  view  the  suppression  of  any  evidence,  but  rather  the 
eliciting  of  the  truth;  and  the  recommendation  which  the  prosecutor 
agreed  to  give  if  the  plaintiff  should  testify  fully  was  simply  that 
the  course  which  was  usual  in  such  cases  should  be  pursued.  The 
plaintiff  could  not  be  called  as  a  witness  on  the  trial  of  the  indict- 
ment except  with  the  assent  of  the  district  attorney,  and  it  was 
even  then  discretionary  with  the  court  whether  or  not  to  admit  him 
to  testify.  If  he  appeared  to  be  the  principal  offender  he  would  be  re- 
jected. If  the  court  admitted  him,  and  he  testified  fully  and  can- 
didly, there  was  an  implied  promise  of  immunity  on  the  part  of  the 
government.  People  v.  Whipple,  9  Cow.  713,  716.  Where  the  State 
desires  to  call  as  a  witness  one  of  the  several  defendants,  jointly 
indicted  and  tried,  this  can  be  done  only  by  discharging  the  witness 
from  the  record,  as  by  the  entry  of  a  nolle  prosequi,  etc.  1  Greenl. 
Ev.  §  363.  If  an  accomplice  be  admitted  to  testify,  and  appears  to 
have  acted  in  good  faith  in  giving  testimony,  the  government  is 
bound  in  honor  to  discharge  him.  TJ.  S.  v.  Lee,  4  McLean,  103.  The 
English  practice  under  such  circumstances  is,  when  the  witness  makes 
a  clean  breast,  to  grant  a  pardon.  The  admission  of  accomplices 
as  witnesses  for  the  government  is  justified  by  the  necessity  of  the 
case,  it  being  often  impossible  to  bring  the  principal  to  justice  with- 
out them.  1  Greenl.  Ev.  §  411.  It  is  difficult  to  see  how  an  arrange- 
ment for  obtaining  evidence  of  this  description,  on  the  usual  terms, 
and  subject  to  the  control  of  the  public  prosecutor  and  of  the  court, 
can  be  violative  of  any  rule  of  public  policy.  In  my  judgment, 
public  policy  requires  that  good  faith  be  observed  with  persons 
charged  with  crime,  who  are  induced  to  testify  under  such 
circumstances. 


852  NICKELSON    V.    WILSON  [CHAP.   VI 

The  cases  relied  upon  on  the  part  of  the  defence  are  of  a  totally 
different  character;  they  are  cases  of  agreements  between  the  crimi- 
nal and  the  prosecutor,  whereby,  in  consideration  of  some  compensa- 
tion or  reward  given  by  the  criminal,  the  prosecutor  agrees  to  for- 
bear the  prosecution,  or  to  suppress  or  destroy  evidence  which  might 
lead  to  a  conviction.  The  statutes  against  compounding  felonies 
and  misdemeanors  point  out  very  distinctly  the  character  of  that 
offence.  2  R.  S.  689,  §§  17,  18;  692,  §  12.  They  prohibit  the 
taking  of  any  money,  property,  gratuity,  or  reward,  or  any  engage- 
ment or  promise  therefor,  upon  any  agreement  or  understanding  to 
compound  or  conceal  a  crime,  abstain  from  prosecuting,  or  withhold 
evidence.  These  are  the  acts  by  which  the  course  of  justice  may  be 
interfered  with  and  prosecutions  may  be  stifled  or  embarrassed.  And 
in  all  the  cases  which  have  been  cited  some  of  these  vicious  elements 
existed  and  appeared.  In  the  often  cited  case  of  Collins  v.  Blantern, 
2  Wilson,  343,  349,  a  promissory  note  was  given  by  a  friend  of  the 
accused  in  consideration  of  the  agreement  of  the  prosecutor  not  to 
appear  and  give  evidence  on  a  charge  of  perjury,  and  a  bond  of 
indemnity  against  the  note  was  held  void.  In  the  Steuben  County 
Bank  v.  Mathewson,  5  Hill,  249,  251,  the  bond  sued  upon  had  been 
given  upon  an  agreement  that  the  bank  should  surrender  up  a  note 
alleged  to  be  forged,  and  should  not  make  a  criminal  charge  for  forg- 
ing the  note  or  obtaining  the  money  thereon.  In  Porter  v.  Havens, 
37  Barb.  343,  the  notes  in  suit  were  executed  by  one  Havens,  against 
wham  criminal  proceedings  were  pending,  and  were  placed  in  the 
hands  of  a  third  party  to  be  delivered  to  Barron,  the  payee,  when 
the  criminal  proceedings  against  Havens  should  be  "discontinued  and 
ended";  and  upon  the  further  condition  that  Barron,  the  payee, 
should  not  arrest  Havens  or  cause  him  to  be  arrested  on  any  process 
whatever,  but  should  cease  all  proceedings  against  him.  The  plain 
intent  of  this  agreement  was  to  supress  the  criminal  prosecutions. 
In  Conderman  v.  Hicks,  3  Lans.  108,  the  note  was  given  to  obtain 
the  release  of  the  maker,  and  the  termination  of  criminal  pro- 
ceedings for  false  pretences,  pending  against  him,  but  without  the 
approval  of  the  court  or  magistrate,  as  provided  in  2  Revised 
Statutes,  page  730,  section  66,  etc. 

But  the  present  case  exhibits  no  such  elements;  the  agreement 
looked  not  to  an  abandonment  of  the  prosecution,  but  to  bringing  the 
indictment  to  trial;  not  to  withholding  of  evidence,  but  to  the  pro- 
curing it;  not  to  any  secret  effort  to  shield  the  plaintiff,  but  to  an 
open  application  to  receive  him  as  State's  evidence,  with  the  conse- 
quences which  usually  follow. 

A  further  ground  for  sustaining  the  validity  of  the  agreement  is 
to  be  found  in  the  provisions  of  the  Revised  Statutes  which  permit 
the  compounding,  by  leave  of  the  court,  of  misdemeanors  for  which 
the  injured  party  has  a  remedy  by  civil  action.  2  R.  S.  730,  §§ 
66,   67,   68.     These   provisions  permit   the  court   before  whom   the 


SECT.    Ill]  NICKELSON    V.    WILSON  853 

indictment  is  pending  to  exercise,  in  its  discretion,  the  power  of 
ordering  a  perpetual  stay  of  the  prosecution,  on  the  injured  party 
appearing  and  acknowledging  satisfaction,  and  on  the  payment  of 
costs.  In  the  present  case  the  charge  was  false  pretences,  by  which 
the  prosecutor  had  sustained  pecuniary  damages.  This  offence  has 
been  held  to  amount,  not  to  a  felony,  but  merely  to  a  misdemeanor 
(Fassett  v.  Smith,  23  I^.  Y.,  252),  and  therefore  falls  within  the 
provisions  of  the  statute.  The  prosecutor  might,  therefore,  law- 
fully have  agreed  to  appear  before  the  court  and  invoke  its  action 
under  the  statute  referred  to.  That  course  was  not  pursued,  and 
therefore  the  statute  cited  has  not,  perhaps,  a  direct  bearing  upon 
this  case,  but  it  affords  some  indication  of  the  policy  of  the  law  upon 
the  subject  under  consideration. 

The  whole  point  of  the  case  lies  in  this :  An  agreement  to  cripple, 
stifle,  or  embarrass  a  prosecution  for  a  criminal  offence,  by  destroying 
or  withholding  evidence,  suppressing  facts,  or  other  acts  of  that 
character,  is  against  public  policy,  and  void.  In  such  cases  the 
parties  take  the  responsibility  of  interfering  with,  and  by  secret  or 
indirect  means,  frustrating  the  administration  of  justice.  But  an 
agreement  to  lay  the  whole  facts  before  the  court,  and  to  leave  it  to 
the  free  exercise  of  the  discretionary  powers  vested  in  it  by  law,  is 
not  in  itself  wrong,  and  it  is  not  rendered  illegal  even  by  a  stipulation 
on  the  part  of  the  prosecutor  to  exert  such  legitimate  influence  as  his 
position  gives  him  in  favor  of  the  extension  of  mercy  to  a  guilty 
party. 

Some  other  points  have  been  suggested  on  the  part  of  the  defence 
which  merit  observation.  The  argument  that  the  plaintiff's  agree- 
ment to  testify  was  not  a  sufficient  consideration  for  the  defendant's 
engagement  has  been  already  met.  The  plaintiff  was  privileged 
against  criminating  himself,  and  the  waiver  of  this  privilege  consti- 
tuted a  consideration. 

But  it  is  further  urged  that  any  agreement  to  give  testimony  in 
consideration  of  a  reward  is  against  public  policy,  having  a  tendency 
to  induce  the  commission  of  the  crime  of  perjury;  and  in  a  well 
considered  case  (Pollak  v.  Gregory,  9  Bosw.  116)  it  was  held  that  an 
agreement  to  pay  a  witness  for  testifying,  on  condition  that  his  evi- 
dence should  lead  to  a  result  favorable  to  the  party  calling  him,  was 
illegal  and  void.  But  the  evil  of  such  an  agreement  consists  in  the 
condition,  which  holds  out  to  the  witness  the  temptation  of  falsifying 
his  testimony,  so  as  to  produce  the  result  upon  which  his  compensa- 
tion is  to  depend.  Where  the  witness  simply  consents  to  make  a 
disclosure  of  the  truth,  and,  as  in  the  present  case,  he  has  no  in- 
ducement to  produce  any  special  result,  the  mischief  is  not  apparent. 
In  Yeatman  v.  Dempsey,  7  C.  B.  [n.  s.]  628,  an  agreement  to  testify, 
divested  of  such  a  condition,  was  sustained;  and  also  in  Webb  v. 
Page,  1  C.  &  K.  23,  in  the  case  of  an  expert. 

The   defendant   deemed   the   testimony   of   the   plaintiff   essential 


854  SCOTT    V.    AVERY  [CHAP.    VI 

to  enable  him  to  recover  the  judgment  in  question.  It  is  conceded 
and  found  that  the  plaintiff  performed  his  part  of  the  agreement; 
and  it  is  fairly  presumable  that  the  judgment  was  obtained  by  means 
of  his  testimony.  It  would  be  exceedingly  unjust  to  enforce  that 
judgment  against  him  under  the  circumstances. 

The  judgment  should  be  reversed  and  a  new  trial  ordered,  with 
costs  to  abide  the  event. 

ChurcH;,  Ch.  J.,  Allen,  and  Folger,  JJ.,  concur. 

Grovek,  Andrews,  and  Miller,  JJ.,  dissent. 

Judgment  reversed} 


(c)  Agreements  to  Submit  to  a  Specified  Tribunal 

ALEXANDEK   SCOTT    v.   GEOKGE   AVERY 

In  the  House  op  Lords,  June  25,  July  9,  1855,  May  19, 
July  10,  1856 

{Reported  in  5  House  of  Lords  Cases,  811] 

Action  on  three  policies  of  insurance  effected  on  the  ship  "Alex- 
ander," valued  at  £2400,  in  three  assurance  companies,  of  which 
both  the  plaintiff  and  the  defendant  were  members.  It  will  be  suffi- 
cient to  refer  to  the  first  only.  The  declaration,  after  stating  in  the 
usual  form  the  making  of  the  policy,  alleged  that  it  was  mutually 
agreed  that  all  rules  and  regulations  of  the  association  should  be 
binding  on  the  assurers  and  assured,  as  if  they  were  inserted  in  the 
policy  and  formed  part  thereof,  and  that  the  said  rules  and  regula- 
tions, so  far  as  they  relate  to  the  plaintiff's  claim,  are  as  follows  : 
"That  any  member  who  shall  prove  to  the  committee  of  the  said 
association  that  his  ship  is  lost,  will  be  entitled  (at  the  expiration  of 
two  months  from  the  date  of  the  first  quarterly  settlement)  to  part 
payment  for  the  same,  but  in  no  case  to  exceed  80  per  cent  on  the 
sum  insured,  until  a  final  account  of  the  proceeds  of  the  sale  of  the  ma- 
terials is  furnished  to  the  underwriters.  That  the  sum  to  be  paid  by 
this  association  to  any  suffering  member  for  any  loss  or  damage 
shall,  in  the  first  instance,  be  ascertained  and  settled  by  the  committee; 
and  the  suffering  member,  if  he  agrees  to  accept  such  sum  in  full  sat- 
isfaction of  his  claim,  shall  bo  entitled  to  demand  and  sue  for  the  same 
as  soon  as  the  amount  to  be  paid  has  been  so  ascertained  and  settled, 
but  not  before,  which  can  only  be  claimed  according  to  the  customary 
modf  of  payment  in  use  by  the  society."  The  declaration  then  alleged 
tli;it  flic  plaintiff  "has  performed  all  the  conditions  and  things  on 
liis  ])i\v\.  by  the  said  contract,  policy,  rules,  and  regulations  to  be 
pxjrformfid ;  but  that  althougli  he  has  always  been  ready  and  willing 
that  such  loss  should  be  ascertained  and  settled  by  the  said  committee 

>  Rogers  ».  Hill,  22  R.  T.  406,  ncc. 


SECT.    Ill]  SCOTT    V.   AVERY  855 

according  to  the  rules  of  the  said  association  of  which  the  defendant 
had  notice;  and  although  the  plaintiff  has  requested  the  defendant 
and  the  said  committee  so  to  ascertain  the  said  loss,  and  although 
a  reasonable  time  for  them  so  to  do  elapsed  before  the  commencement 
of  this  suit,  yet  the  said  committee  has  refused  and  neglected  so  to 
do ;  and  although  two  months  have  expired  since  the  date  of  the  first 
quarterly  settlement  of  the  said  association  which  occurred  next  after 
the  said  committee  had  notice  of  the  said  loss;  and  although  a  final 
account  of  the  proceeds  of  the  sale  of  the  materials  of  the  said 
ship  was  furnished  to  the  underwriters  of  the  said  policy,  in  accord- 
ance with  the  said  rules,  long  before  the  commencement  of  this  suit; 
and  although  a  reasonable  time  for  the  defendant  and  the  said  com- 
mittee to  pay  the  said  loss  elapsed  before  the  commencement  of  this 
suit,  yet  neither  the  defendant  nor  the  said  committee  had  paid  such 
loss,  or  any  part  thereof." 

The  defendant  pleaded  several  pleas,  but  the  only  pleas  material  to 
the  case  of  this  policy  are  the  fifth  and  sixth. 

The  fifth  plea  stated  that  one  of  the  rules  and  regulations  of  the 
Newcastle  A  1  Insurance  Association  is  as  follows :  "25.  That  the 
sum  to  be  paid  by  this  association  to  any  suffering  member,  for  any 
loss  or  damage,  shall  in  the  first  instance  be  ascertained  and  settled 
by  the  committee,  and  the  suffering  member,  if  he  agrees  to  accept 
such  sum  in  full  satisfaction  of  his  claim,  shall  be  entitled  to  demand 
and  sue  for  the  same  as  soon  as  the  amount  to  be  paid  has  been  so 
ascertained  and  settled,  but  not  before,  which  can  only  be  claimed 
according  to  the  customary  mode  of  payment  in  use  by  the  society. 
And  if  a  difference  shall  arise  between  the  committee  and  any  suffer- 
ing member,  relative  to  the  settling  any  loss  or  damage,  or  to  a  claim 
for  average,  or  any  other  matter  relating  to  the  insurance,  in  such 
case  the  member  dissatisfied  shall  select  one  arbitrator  on  his  or  her 
behalf,  and  the  committee  shall  select  another.  And  if  the  com- 
mittee refuse  for  fourteen  days  to  make  such  selection,  the  suffering 
member  shall  select  two,  and  in  either  case  the  two  selected  shall 
forthwith  select  a  third,  which  three  arbitrators,  or  any  two  of  them, 
shall  decide  upon  the  claims  and  matters  in  dispute,  according  to 
the  rules  and  customs  of  the  club,  to  be  proved  on  oath  by  the 
secretary."  "And  in  all  cases  where  arbitration  is  resorted  to,  the 
settlement  of  the  committee  to  be  wholly  rescinded,  and  the  state- 
ment begun  de  novo.  Provided  always  (and  it  is  hereby  expressly 
declared  to  be  a  part  of  the  contract  of  insurance  between  the  mem- 
bers of  this  association),  that  no  member  who  refuses  to  accept  the 
amount  of  any  loss  as  settled  by  the  committee  hereinbefore  speci- 
fied, in  full  satisfaction  of  such  loss,  shall  be  entitled  to  maintain 
any  action  at  law,  or  suit  in  equity,  on  his  policy,  until  the  matters 
in  dispute  shall  have  been  referred  to,  and  decided  by,  arbitrators, 
appointed  as  hereinbefore  specified;  and  then  only  for  such  sum  as 
the  said  arbitrators  shall  award.    And  the  obtaining  the  decision  of 


856  SCOTT    V.    AVERY  [CHAP.    VI 

such  arbitrators  on  the  matters  and  claims  in  dispute  is  hereby  de- 
clared to  be  a  condition  precedent  to  the  right  of  any  member  to 
maintain  any  such  action  or  suit." 

The  plea  then  stated  that  "the  said  committee,  in  pursuance  of  the 
said  rule,  proceeded  to  ascertain  and  settle  the  said  loss,  but  before 
they  had  ascertained  or  settled  it  a  difference  and  dispute  arose, 
which  has  ever  since  existed  between  the  said  committee  and  the  said 
plaintiff,  relating  to  the  said  insurance,  to  wit,  as  to  the  extent  of  the 
said  loss,  and  as  to  the  repairs  done  to  the  said  ship,  and  as  to  the 
sum  to  be  paid  by  the  said  association  to  the  plaintiff  in  respect 
of  such  loss;  by  reason  and  means  and  in  consequence  of  which 
difference  and  dispute  the  said  loss  never  has  been  ascertained  or 
settled  by  the  said  committee."  Averment  of  readiness  and  willing- 
ness by  the  committee  to  refer,  and  the  refusal  of  the  plaintiff  so 
to  do;  "and  the  matters  of  the  said  difference  and  dispute  have  not 
nor  has  any  of  them  been  referred  to  arbitrators  or  decided,  nor  has 
the  said  loss  be  ascertained  or  settled  by  arbitrators,  as  by  the  said 
rule  is  in  such  case  required." 

The  sixth  plea  stated  "that  the  said  committee  did  not  refuse  or 
neglect  to  ascertain  the  said  loss  as  alleged,  but,  on  the  contrary, 
the  defendant  says  that  the  committee  did  within  a  reasonable  time 
in  that  behalf,  and  before  the  commencement  of  this  action,  ascer- 
tain and  settle  the  sum  to  be  paid  by  the  said  association  to  the  plain- 
tiff for  the  said  loss,  as  the  plaintiff  well  knew;  but  the  plaintiff  was 
dissatisfied  with  the  settlement  so  made  by  the  said  committee,  and 
declined  to  accept  the  sum  at  which  they  so  ascertained  and  settled 
the  said  loss;  and  thereupon  a  difference  and  dispute  arose,  which 
has  ever  since  existed  between  the  said  committee  and  the  said 
plaintiff,  relating  to  the  said  insurance,  to  wit,  as  to  the  extent  of 
the  said  loss,  and  as  to  the  sum  to  be  paid  by  the  said  association 
to  the  plaintiff  in  respect  of  such  loss."  The  plea  then  alleged  that 
the  rule  set  out  in  the  fifth  plea  was  binding  on  the  plaintiff  and 
defendant,  and  stated,  as  before,  that  the  defendant  and  the  com- 
mittee Avere  willing  to  refer,  but  this  the  plaintiff  refused,  etc. 

Demurrer  and  joinder.  Upon  the  argument  of  the  demurrers  at  the 
sittings  after  Hilary  Term,  1853,  the  Court  of  Exchequer  gave  judg- 
ment for  the  plaintiff  in  error. 

On  error  brought  the  Court  of  Exchequer  Chamber  reversed  that 
judgment,  and  gave  judgment  for  the  defendant  in  error.  This  writ 
of  error  was  thereupon  brought. 

The  judges  were  summoned,  and  Mr.  Baron  Parke,  Mr.  Baron 
Alderson,  Mr.  Justice  Coleridge,  Mr.  Justice  Maule,  Mr.  Justice 
Cresswell,  Mr.  Justice  Wightman,  Mr.  Justice  Earle,  Mr.  Justice  Wil- 
liams, Mr.  Baron  Martin,  Mr.  Justice  Crompton,  and  Mr.  Justice 
Crowder  attended, 

Mr.  Atherton  and  Mr.  C.  E.  PoUorJc  for  the  plaintiff  in  error. 

Mr.    Braminrl]   aiid    Mr.    Manisty,    for    the    defendant    in    error. 


SECT.    Ill]  SCOTT    V.    AVERY  857 

The  following  question  was  put  to  the  judges :  "Whether,  looking  at 
the  record  in  this  case  the  judgment  ought  to  be  given  for  the  plaintiff 
in  error  or  for  the  defendant  in  error." 

The  Lord  Chancellor,  after  stating  the  nature  of  the  action  and 
the  pleadings,  said :  This  question  appears  to  me  to  be  one  merely  of 
construction  of  the  policy.  For  there  is  no  doubt  of  the  general  prin- 
ciple which  was  argued  at  your  Lordship's  bar,  that  parties  cannot  by 
contract  oust  the  ordinary  courts  of  their  jurisdiction.  That  has  been 
decided  in  many  cases.  Perhaps  the  first  case  I  need  to  refer  to  was 
a  case  decided  about  a  century  ago, —  Kill  v.  Hollister,  1  Wils.  p. 
129.  That  was  an  action  on  a  policy  of  insurance,  in  which  there  was 
a  clause  that  in  case  of  any  loss  or  dispute  it  should  be  referred  to 
arbitration.  It  was  decided  that  there  an  action  would  lie,  although 
there  had  been  no  reference  to  arbitration. 

Then  after  a  lapse  of  about  half  a  century,  occurred  a  case  before 
Lord  Kenyon,  and  from  the  language  that  fell  from  that  learned  judge, 
many  other  cases  had  probably  been  decided  which  are  not  reported ; 
but  in  the  time  of  Lord  Kenyon  occurred  the  case  which  is  considered 
the  leading  case  upon  this  subject,  the  case  of  Thompson  v.  Charnock, 
8  T.  R.  139.  This  was  an  action  upon  a  charter-party,  in  which  there 
was  a  stipulation  that  if  any  difference  should  arise  it  should  be 
referred  to  arbitration.  That  clause  was  pleaded  in  bar  to  the  action 
which  has  been  brought  upon  a  breach  of  the  covenant,  with  an  aver- 
ment that  the  defendant  has  been  and  always  was  ready  to  refer  the 
matter  to  arbitration.  That  was  held  to  be  a  bad  plea,  upon  the 
ground  that  a  right  of  action  had  accrued,  and  that  the  fact  that  the 
parties  had  agreed  that  the  matter  should  be  settled  by  arbitration  did 
not  oust  the  jurisdiction  of  the  courts. 

Just  about  the  same  time  occurred  a  case  in  the  Court  of  Common 
Pleas,  when  that  court  was  presided  over  by  Lord  Eldon,  the  case  of 
Tatterstall  v.  Groote,  2  B.  and  P.  131.  That  was  an  action  by  the  ad- 
ministratrix of  a  deceased  partner  against  a  surviving  partner- 
ship. To  that  action  there  was  a  demurrer,  and  the  demurrer  was 
allowed.  But  that  case,  I  think,  can  afford  very  little  authority  in  the 
present  action,  or  in  actions  similar  to  the  present,  because  there  the 
covenant  was  only  that  if  any  dispute  arose  between  the  partners, 
they  would  name  an  arbitrator.  One  of  the  partners  died  and  his  ad- 
ministratrix brought  an  action,  and  Lord  Eldon  pointed  out  that  the 
covenant  did  not  apply  to  a  case  where  one  of  the  partners  was  dead, 
and  an  action  was  brought  by  one  of  his  representatives.  Therefore, 
in  truth,  that  amounts  to  no  decision  whatever  upon  the  general  ques- 
tion. 

There  was  then  a  case  before  Sir  Lloyd  Kenyon  at  the  Rolls,  of 
Halfhide  v.  Penning,  2  Brown,  C.  C.  336,  in  which  he  held  a  different 
doctrine.  That  was  a  bill  for  an  account  of  partnership  transactions. 
The  plea  to  that  bill  was,  that  the  articles  contained  an  agreement  that 
any  difference  that  should  arise  should  be  settled  by  arbitration;  and 


858  SCOTT    V.    AVERY  [CHAP.    VI 

the  Master  of  the  EoUs  allowed  that  plea.  But  I  think  that  case  can- 
not be  relied  upon,  because  it  has  been  universally  treated  as  having 
proceeded  upon  an  erroneous  principle.  There  is  no  doubt  that  where 
a  right  of  action  has  accrued,  parties  cannot  by  contract  say  that  there 
shall  not  be  jurisdiction  to  enforce  damages  in  respect  of  that  right  of 
action.  Now  this  doctrine  depends  upon  the  general  policy  of  the  law, 
that  parties  cannot  enter  into  a  contract  which  gives  rise  to  a  right  of 
action  for  breach  of  it,  and  then  withdraw  such  a  case  from  the 
jurisdiction  of  the  ordinary  tribunals.  But  surely  there  can  be  no 
principle  or  policies  of  the  law  which  prevents  parties  from  entering 
into  such  a  contract  as  that  no  breach  shall  occur  until  after  a  refer- 
ence has  been  made  to  arbitration.  It  appears  to  me  that  in  such 
cases  as  that,  the  policy  of  the  law  is  left  untouched. 

And  that,  I  take  it,  is  what  was  alluded  to  by  Lord  Hardwicke, 
in  the  case  of  Wellington  v.  Mackintosh,  2  Atk.  569,  which  was  this : 
The  articles  of  partnership  in  that  case  contained  a  covenant  that 
any  dispute  should  be  referred.  A  bill  was  filed  by  one  of  the  part- 
ners, and  a  plea  set  up  that  covenant  to  refer  as  a  bar  to  the  bill. 
Lord  Hardwicke  overruled  the  plea,  but  said  that  the  parties  might 
have  so  framed  the  deed  as  to  oust  the  jurisdiction  of  the  court.  I 
take  it  that  what  Lord  Hardwicke  meant  was,  that  the  parties  might 
have  so  framed  the  stipulations  amongst  themselves  that  no  right  of 
action  or  right  of  suit  should  arise  until  a  reference  had  been  pre- 
viously made  to  arbitration.  I  think  it  may  be  illustrated  thus: 
If  I  covenant  with  A.  to  do  particular  acts,  and  it  is  also  covenanted 
between  us  that  any  question  that  may  arise  as  to  the  breach  of  the 
covenants  shall  be  referred  to  arbitration,  that  latter  covenant  does 
not  prevent  the  covenantee  from  bringing  an  action.  A  right  of 
action  has  accrued,  and  it  would  be  against  the  policy  of  the  law  to 
give  effect  to  an  agreement  that  such  a  right  should  not  be  enforced 
through  the  mediums  of  the  ordinary  tribunals.  But  if  I  covenant 
with  A.  B.  that  if  I  do  or  omit  to  do  a  certain  act  then  I  will  pay  him 
such  a  sum  as  J.  S.  shall  award  as  the  amount  of  damages  sus- 
tained by  him,  then,  until  J.  S.  has  made  his  award,  and  I  have 
omitted  to  pay  the  sum  awarded  my  covenant  has  not  been  broken, 
and  no  right  of  action  has  arisen.  The  policy  of  the  law  does  not 
prevent  parties  from  so  contracting.  And  the  question  is  here, 
what  is  the  contract?  Does  any  right  of  action  exist  until  the  amount 
of  damage  has  been  ascertained  in  the  specified  mode?  I  think  clearly 
not.  The  stipulation  here  is,  that  the  sum  to  be  paid  to  the  suffering 
member  shall  be  settled  by  the  committee.  Certain  proceedings  are 
provided  to  obtain  the  decision  of  the  arbitrators,  and  there  is  this 
express  stipulation,  that  "the  obtaining  the  decision  of  such  arbi- 
trators on  the  matters  and  claims  in  dispute  is  hereby  declared  to 
be  a  condition  precedent  to  the  right  of  any  member  to  maintain  any 
such  action  or  suit." 

That  the.  nuiariirig  of  the  iKirfies  therefore  was,  that  the  sum  to  be 


SECT,    III]  SCOTT    V.    AVERY  859 

recovered  should  be  only  such  a  sum  as,  if  not  agreed  upon  in  the 
first  instance  between  the  committee  and  the  suffering  member,  should 
be  decided  by  arbitration,  and  that  the  sum  so  ascertained  by  arbitra- 
tion, and  no  other,  should  be  the  sum  to  be  recovered,  appears  to  me  to 
be  clear  beyond  all  possibility  of  controversy.  And  if  that  was  their 
meaning,  the  circumstance  that  they  have  not  stated  that  meaning  in 
the  clearest  terms  or  in  the  most  artistic  form,  is  a  matter  utterly 
unimportant.  What  the  court  below  had  to  do  was  to  ascertain  what 
the  meaning  of  the  parties  was  as  deduced  from  the  language  they 
have  used.  It  appears  to  me  perfectly  clear  that  the  language  used 
indicates  this  to  have  been  their  intention :  that,  supposing  there  was  a 
difference  between  the  person  who  had  suffered  loss  or  damage  and 
the  committee  as  to  what  amount  he  should  recover,  that  was  to  be 
ascertained  in  a  particular  mode,  and  that  until  that  mode  had  been 
adopted,  and  the  amount  ascertained  according  to  that  mode,  no 
right  of  action  should  exist.  In  other  words,  that  the  right  of  action 
should  be,  not  for  what  a  jury  should  say  was  the  amount  of  the  loss, 
but  for  what  the  persons  designated  in  that  particular  form  of  agree- 
ment should  so  say. 

It  was  argued  that  here  the  arbitrators  were  to  decide,  not  the 
mere  amount,  but  other  matters,  as,  for  instance,  what  average  was 
to  be  allowed,  whether  there  had  been  a  loss,  and  a  variety  of  other 
matters  which  were  to  be  ingeniously  suggested  at  your  Lordships'  bar. 
In  the  first  place,  if  that  had  been  so,  it  would  not  necessarily  change 
my  view  of  the  case.  I  am  not  at  all  clear  that  it  is  not  so.  I  observe 
the  learned  judges  differed  about  that.  I  do  not  think  it  necessary  to 
go  into  that,  because  I  am  quite  prepared  to  say  that,  in  my  view  of 
the  case,  that  makes  no  difference  at  all.  If,  in  consideration  of  a 
sum  of  money  paid  to  me  by  A.  B.,  I  agree  with  him  that  in  case  J.  S. 
should  decide  that  A.  B.  had  fulfilled  certain  conditions,  and  had  sus- 
tained certain  damage,  and  J.  S.  should  make  his  award  accordingly, 
I  would  pay  to  A.  B.  the  sum  so  ascertained  ajid  awarded,  no  right  of 
action  would  exist  until  J.  S.  had  made  his  award. 

I  do  not  go  into  the  question,  therefore,  whether  in  this  case,  accord- 
ing to  the  true  construction  of  the  contract,  the  amount  of  damage 
alone  is  to  be  ascertained,  because  in  my  view  of  the  case,  the  prin- 
ciple goes  much  further.  It  appears  to  me  perfectly  clear  that  until 
the  award  was  made,  no  right  of  action  accrued,  and  consequently 
the  judgment  of  the  court  below,  reversing  the  judgment  of  the  Court 
of  Exchequer,  and  allowing  the  plea,  was  a  perfectly  correct  judg- 
ment. 

Your  Lordships  have  had  the  benefit  of  the  attendance  of  the 
learned  judges  on  the  argument  in  this  case.  They  have  differed  in 
their  opinion  on  it;  there  was  a  majority,  but  a  bare  majority,  in 
favor  of  the  view  which  I  have  taken  of  this  case.  Whichever  way 
the  preponderance  of  opinion  among  the  learned  judges  may  be,  and 
however  great  it  may  be  either  way,  of  course  the  ultimate  decision 


860  SCOTT    V.    AVERY  [CHAP.    VI 

rests  with  your  Lordships;  but  it  is  always  satisfactory  to  know  that 
the  view  taken  by  your  Lordships  is  in  concurrence  with  the  opinion 
of  the  learned  judges.  Here  it  is  in  concurrence  with  the  opinion  of 
the  majority,  though  but  a  slender  majority.  However,  I  entirely 
agree  with  the  majority,  and  I  therefore  humbly  move  your  Lordships 
that  the  judgment  below  be  affirmed,  and  that  judgment  be  given  for 
the  defendant  in  error,  with  costs. ^ 

^  Justices  Coleridge,  Cresswell,  Wightman,  and  Crowder,  in  answer  to  the 
inquiry  of  the  Lords,  deUvered  opinions  in  favor  of  the  defendant  in  error.  Justice 
Crompton  and  Barons  A-Lderson  and  Martin  delivered  contrary  opinions.  Lord 
Campbell  deUvered  an  opinion  concurring  with  the  Lord  Chaj^cellor. 

In  Viney  v.  Bignold,  20  Q.  B.  D.  172,  Wills,  J.,  said:  "The  principle  on  which 
cases  such  as  the  present  ought  to  be  decided  is  very  clear,  and  it  is  this.  The  court 
must  look  and  see  what  the  covenant  is.  If  there  is  a  covenant  to  pay  the  amount  of 
the  loss,  accompanied  by  a  collateral  provision  that  the  amount  shall  be  ascertained 
by  arbitration,  such  arbitration  is  not  a  condition  precedent  to  the  maintenance  of  an 
action  on  the  covenant ;  but  if  the  parties  have  covenanted  that  the  liability  is  only  to 
arise  after  the  amount  has  been  adjusted  by  arbitration,  then  such  adjustment  is  a 
condition  precedent  to  the  right  to  recover."  Elliott  v.  Royal  Ex.  Ass.,  L.  R.  2  Ex. 
237;  Dawson  v.  Fitzgerald,  1  Ex.  D.  257;  Collins  v.  Locke,  4  A.  C.  674;  Babbage 
V.  Coulburn,  9  Q.  B.  D.  235;  Caledonian  Ins.  Co.  v.  Gilmour,  [1893]  A.  C.  85;  Trainor 
V.  Phoenix  Fire  Ass.  Co.,  65  L.  T.  825;  Manchester  Ship  Canal  Co.  v.  Pearson,  [1900] 
2  Q.  B.  606;  Spurrier  v.  La  Cloche,  [1902]  A.  C.  446,  ace.  Compare  Edwards  v. 
AberajTon  Ins.  Soc.  1  Q.  B.  D.  563. 

A  test  apparently  intended  to  be  similar  to  that  adopted  by  the  English  Courts 
was  adopted  in  the  following  cases:  Hamilton  i'.  Home  Ins.  Co.,  137  U.  S.  370;  Cross- 
ley  V.  Conn.  Ins.  Co.,  27  Fed.  Rep.  30;  KahnweUer  v.  Phcenix  Ins.  Co.,  57  Fed.  Rep. 
562;  67  Fed.  Rep.  486;  Connecticut  Ins.  Co.  v.  Hamilton,  59  Fed.  Rep.  258;  Mutual 
Ins.  Co.  V.  Alvord,  61  Fed.  Rep.  755;  Old  Saucelito  Co.  v.  Commercial  Ass.  Co.,  66 
Cal.  253;  Adams  v.  South  British  Ins.  Co.  70  Cal.  198;  Da\'isson  v.  Land  Co.,  153 
Cal.  81;  Ins.  Co.,  72  Cal.  297;  Denver,  &c.  R.  R.  Co.  v.  Riley,  7  Col.  494;  Denver, 
&c.  Co.  V.  Stout,  8  Col.  61;  Union  Pacific  Co.  v.  Anderson,  11  Col.  293;  Hanover 
Fire  Ins.  Co.  v.  Lewis,  28  Fla.  209;  Liverpool  Ins.  Co.  v.  Creighton,  51  Ga.  95;  South- 
ern Ins.  Co.  V.  Turnley,  100  Ga.  296;  Birmingham  Ins.  Co.  v.  Pulver,  126  111.  329,  338; 
Lesure  Lumber  Co.  v.  Mutual  Fire  Ins.  Co.,  101  Iowa,  514;  Zelesky  v.  Home  Ins.  Co., 
102  Iowa,  613;  Read  v.  State  Ins.  Co.,  103  Iowa,  307;  Dee  v.  Key  City  Ins.  Co.,  104 
Iowa,  167;  Fisher  v.  Merchants'  Ins.  Co.,  95  Me.  486;  Chippewa  Lumber  Co.  v. 
Phenix  Ins.  Co.,  80  Mich.  116;  Guthat  v.  Gow,  95  Mich.  527;  Boots  v.  Steinberg, 
100  Mich.  134;  Weggner  v.  Grecnstino,  114  Mich,  310;  Gasser  v.  Sun  Fu-e  Office,  42 
Minn.  315;  Levine  v.  Lancashire  Ins.  Co,  66  Minn.  138;  Mecartney  v.  Guardian 
Trust  Co.,  274  Mo.  224;  Delaware  &  H.  C.  Co.  v.  Penn.  Coal  Co.,  50  N.  Y.  250; 
Anderson  v.  Hall,  86  N.  J.  L.  271;  National  Co.  v.  Hudson  River  Co.,  170  N.  Y. 
439;  Keefe  v.  National  Soc,  4  N.  Y.  App.  Div.  392;  Spink  v.  Co-operative  Ins.  Co.. 
25  N.  Y.  App.  Div.  484;  Van  Note  v.  Cook,  55  N.  Y.  App.  Div.  55;  Pioneer  Mfg.  Co., 
V.  Phoenix  Ass.  Co.,  106  N.  C.  28  (see,  however.  Pioneer  Mfg.  v.  Phcenix  Ass.  Co., 
110  N.  C.  176;  Uhrig  v.  Williamsburg  Ins.  Co.,  116  N.  C.  491);  Monongahela  Nav, 
Co.  V.  Felon,  4  W.  &  S.  205;  Reynolds  v.  CaldweU,  51  Pa.  298;  Gowen  v.  Pierson. 
166  Pa.  258;  Chandley  v.  Cambridge  Springs,  200  Pa.  230,  232;  Scottish  Ins.  Co.  v, 
Clancy,  71  Tex.  5;  American  Ins.  Co.  v.  Bass  Bros.,  90  Tex.  380,  382;  Van  Homo 
V.  Watrous,  10  Wasli.  525;  Zindorf  Co.  i'.  \Ve.storn  Co.,  27  Wash.  31  {conf.  Winsor  v. 
Gorman  S<jc.,  72  Pao.  Rep.  66);  Chapman  v.  Rockford  Ins.  Co.,  89  Wis.  572.  See  also 
Randall  v.  Phcenix  Ins.  Co.,  10  Mont.  302;  Kahn  v.  Traders'  Ins.  Co.,  4  Wyo.  419. 
In  many  of  these  cases,  however,  the  court  considered  not  only  the  question  whether 
the  provisif>n  for  arbitration  was  expressed  as  a  condition  precedent  or  as  a  collateral 
promi.sf;,  Ijut  also  the  (|uestion  whether  the  agreement  for  arbitration  related  to  the 
liability  under  the  contract  or  to  the  amount  of  damages. 


SECT.    Ill]  LIVINGSTONE    V.    RALLI  861 


WILLIAM  LIVINGSTONE  v.  ANTONIO  RALLI 

In  the  Queen's  Bench,  Trinity  Term,  1885 
[Reported  in  5  Ellis  &  Blackburn,  132] 

Count  that,  by  a  contract,  plaintiff  agreed  to  buy  of  defendant, 
and  defendant  to  sell  to  plaintiff,  a  cargo  of  wheat,  on  certain  terms 
mentioned  in  the  contract,  "and  that,  should  any  difference  arise  as 
to  that  contract,  the  same  should  be  left  to  arbitration  in  London, 
in  the  usual  manner ;  that  is  to  say,  the  arbitration  of  two  London  corn 
factors,  one  to  be  chosen  by  plaintiff  and  the  other  by  defendant, 
or  an  umpire  to  be  chosen  by  such  arbitrators  in  case  of  difference." 
Averment  that  the  cargo  of  wheat  arrived,  and  was  accepted,  and  the 
price  paid,  by  plaintiff  to  defendant,  according  to  the  agreement,  and 
that  a  difference  thereupon  and  before  this  suit  arose  between  plaintiff 
and  defendant  as  to  the  said  contract,  which  difference  ought  to 
have  been  left  to  arbitration  in  manner  so  agreed  as  aforesaid.  Gen- 
eral averment  of  performance  by  plaintiff  and  of  lapse  of  reasonable 
time  for  appointing  an  arbitrator.  Breach :  that  defendant  refused 
to  concur  with  plaintiff  in  referring  the  said  difference,  or  procuring 
it  to  be  disposed  of  by  arbitration  in  the  said  usual  manner,  and 
wrongfully  hindered  and  prevented  it  being  so  left  or  disposed  of. 

Plea,  setting  out  the  contract  in  hcBC  verha  as  follows :  "London 
21st  January,  18,54.  Sold  by  order  and  on  account  of  Messrs.  A. 
Ralli  &  Co.,  to  our  principals  the  cargo  of  Taganrog  Ghirka  Wheat 
shipped  at  Taganrog  on  board  the  Mary  and  Ellen,  and  consisting 
of  2630  chetwerts  of  10  poods,  as  per  bill  of  lading  dated  the  12 
November,  at  the  price  of  755.  say  75  shillings  per  quarter,  free  on 
board  there,  including  freight  and  insurance  (the  latter  free  from 
war  risk),  to  a  safe  port  in  the  United  Kingdom,  calling  for  orders. 
Reckoning  72  quarters  for  every  108  chetwerts  of  10  poods  shipped. 
No  charge  to  be  made  for  demurrage.  The  sale  subject  to  the  arrival 
of  the  wheat  in  good  order  and  condition  at  port  of  call ;  a  slight  dry 
warmth,  so  long  as  the  wheat  is  not  injured  for  the  miller's  use,  is  not 
to  be  objected  to.  Should  the  cargo  not  arrive  in  good  order  and  con- 
dition, with  the  above  exception,  it  is  either  to  be  accepted  or  rejected 
within  24  hours  of  the  receipt  of  the  report  and  samples  by  us  for 
the  buyer.  The  cargo  to  be  examined  at  Queenstown  by  Messrs. 
James  Scott  &  Company,  and  at  Falmouth  by  Messrs.  Lashbrook  & 
Hunt.  Should  the  cargo  be  accepted,  the  buyer  is  to  take  all  the  risk 
from  port  of  shipment.  Payment  to  be  made  in  cash,  less  discount  for 
the  unexpired  term  of  three  months  from  date  of  bill  of  lading,  on 
landing  same,  together  with  approved  policies  of  insurance.  Should 
the  cargo  be  rejected,  the  money  to  be  returned  with  the  interest. 
Should  any  difference  arise  as  to  this  contract,  the  same  is  to  be  left 
to  arbitration  in  London  in  the  usual  manner."     Averment:  "That 


862  LIVINGSTONE    V.   RALLI  [CHAP.   VI 

tlie  said  supposed  difference  in  the  declaration  mentioned  was  a  dif- 
ference concerning  a  claim  and  demand  made  by  plaintiff  upon  de- 
fendant for  compensation  of  damages  alleged  to  be  payable  by  defend- 
ant to  the  plaintiff  for  reason  of  the  said  cargo  of  the  said  wheat  be- 
ino-  deficient,  as  amounting  to  a  less  quantity  than  the  quantities  of 
2630  chetwerts  of  10  poods,  as  per  bill  of  lading  in  the  said  agree- 
ment mentioned,  and  with  no  other  difference  whatsoever,"  Where- 
upon the  defendant  refused  and  declined  to  concur  in  referring  the 
supposed  difference  to  arbitration,  as  in  the  declaration  is  alleged. 

Demurrer.    Joinder. 

^Yilles,  in  support  of  the  demurrer. 

Lord  Campbell,  C.  J.^  I  have  a  very  great  respect  for  the  doubts 
of  LoED  Eldon,  and  he  seems  in  Tatterstall  v.  Groot,^  to  doubt  much 
whether  such  a  contract  as  the  present  was  not  altogether  nugatory; 
but  I  cannot  bring  myseK  to  doubt  that,  on  principle,  an  action  lies  on 
it.  There  is  a  sufficient  consideration  to  support  any  promise;  and 
there  is  an  express  promise  to  refer  to  any  disputes  that  may  arise. 
Why  should  not  such  a  promise  be  binding,  and  one  for  the  breach  of 
which  an  action  would  lie?  Can  it  be  said  that  such  an  agreement 
is  void  as  being  immoral,  or  as  contrary  to  public  policy  ?  It  seems  to 
me,  on  the  contrary,  that  it  is  a  very  judicious  and  proper  arrange- 
ment, and  that  it  would  be  a  strange  restriction  on  the  liberty  of  the 
subject  if  parties  could  not  make  such  an  agreement  if  they  please. 

Then,  as  to  the  authorities.  It  certainly  seems  that,  in  Tatterstall 
V.  Groote,^  Lord  Eldon  expressed  much  doubt :  but  neither  in  that  case 
nor  in  any  other  was  there  a  decision  that  an  action  could  not  be  main- 
tained on  such  an  agreement :  and,  ever  since  I  have  known  West- 
minster Hall  at  least,  the  opinion  of  the  profession  has  been  that, 
though  such  a  prospective  agreement  of  reference  could  not  bar  an 
action  in  the  courts  of  law,  yet  an  action  was  maintainable  for  the 
breach  of  it.  There  seems  at  one  time  to  have  prevailed  in  our  courts 
a  horror  of  a  domestic  forum  which  I  can  neither  sympathize  with  nor 
account  for;  but  the  Legislature  has  recently,  in  the  Common  Law 
Procedure  Act,  1854  (17  &  18  Vict.  c.  125),  sect,  11,  made  a  provision 
in  such  cases,  not  that  the  agreement  to  refer  shall  be  pleadable  in 
bar,  but  that  the  Court  may  stop  the  action.  This  shows  the  opinion 
of  the  Legislature  that  such  agreements  are  not  contrary  to  public 
policy.  For  these  reasons  I  have  to  entertain  no  doubt  that  the  action 
lies. 

Then  it  is  shown  that  there  is  no  real  difference  to  refer?  The 
count  avers  that  there  was.  The  plea  admits  that  there  was  a  dif- 
ference, which  it  states,  and  which,  it  is  contended,  has  been  already 
decided.  But  T  cannot  say  that  this  is  not  a  fair  subject  of  differ- 
ence.   I  do  not  know  what  evidence  may  be  brought  before  the  arbi- 

'  CoLRniiKH':  imil  lOiiiiE,  JJ.,  delivered  concu^^in^;  opinions.  Crompton,  J.,  also 
conciirrfrd. 

«  2  Ti.  «t  P.  i:n. 


SECT.    Ill]  WHITE    V.    MIDDLESEX   RAILROAD    CO.  863 

trator,  or  how  he  may  decide.  I  think  if  there  was  no  real  dispute 
that  would  be  a  bar :  but  that  should  be  so  pleaded  that  the  plaintiff 
might  take  issue  upon  it;  and  then  a  jury  would  decide  if  there  was 
a  real  difference  or  not.^ 


AUGUSTINE  K.  WHITE  v.  MIDDLESEX  RAILEOAD 

COMPANY 

Supreme   Judicial   Court   of   Massachusetts,   March   7- 
June  21,   1883 

[Rejjorted  in  135  Massachusetts,  216] 

Contract  for  money  had  and  received,  to  recover  $65,  deposited  by 
the  plaintiff  with  the  defendant  corporation  under  a  written  agree- 
ment, providing,  among  other  things,  that  the  plaintiff,  who  was 
about  to  enter  the  defendant's  employ  as  a  conductor,  should,  upon 
entering  such  employ,  deposit  the  sum  of  $65,  to  be  retained  by  the 
defendant,  together  with  interest  accrued  thereon  and  all  wages  that 
might  be  due  him,  as  security  for  the  proper  discharge  of  his  duties, 
for  the  due  accounting  for  and  paying  over  to  the  defendant  of  all 
fares  received,  and  for  the  due  observance  by  him  of  all  the  rules 
and  regulations  of  the  defendant;  that,  in  case  of  a  breach  by  the 
plaintiff  of  any  of  said  rules  and  regulations,  the  defendant  might 
retain  the  whole  of  said  deposit  and  any  interest  thereon,  and  the 
amount  of  wages  that  might  be  due  him,  as  liquidated  damages,  for 
such  breach;  and  that  the  defendant's  president  "shall  be  the  sole 
judge  between  the  company  and  the  conductor  whether  the  company 
is  entitled  to  retain  the  whole  or  any  part  of  said  $65  and  interest, 
and  all  wages  that  may  at  any  time  be  due  him,  as  liquidated  damages. 
And  his  certificate  in  writing  that  the  same  or  any  given  part  there- 
of, stated  in  such  certificate,  are  to  be  so,  retained  and  forfeited  to 
the  company,  and  of  the  cause  of  such  retention,  shall  be  a  final  ad- 
judication thereof,  binding  and  conclusive  evidence  between  the  par- 
ties in  all  the  courts  of  justice,  civil  and  criminal,  both  that  the 
amount  thereby  certified  as  the  true  amount  to  be  forfeited  and  re- 
tained by  the  company,  and  that  that  has  happened  which  in  such  cer- 
tificate is  certified  to  be  the  cause,  and  that  it  is  a  lawful  and  suffi- 
cient cause  for  such  retention ;  and  such  certificate  shall  bar  the  con- 
ductor of  all  right,  under  any  circumstances,  to  recover  the  moneys 
so  certified  to  be  forfeited  and  retained,  or  any  part  thereof." 

The  case  was  submitted  to  the  Superior  Court,  and,  after  judgment 
1  Donegal  v.  Verner,  6  Ir.  Rep.  C.  L.  504;  Hamilton  v.  Home  Ins.  Co.,  137  U.  S. 
370,  385;  Hill  v.  More,  40  Me.  515,  523,  ace.  See  also  Nute  v.  Hamilton  Mut.  Ins.  Co. 
6  Gray,  174,  181;  Union  Ins.  Co.  v.  Central  Trust  Co.,  157  N.  Y.  633;  Gray  v.  Wilson 
4  Watts,  39,  41.  But  only  nominal  damages  are  recoverable.  Munson  v.  Straits  of 
Dover  S.  S.  Co..  99  Fed.  Rep.  787,  102  Fed.  Rep.  (C.  C.  A.)  926;  and  specific  per- 
formance will  not  be  granted.     3  Williston,  Contracts,   §  1421. 


864  WHITE    V.    MIDDLESEX   RAILROAD    CO.  [CHAP.    VI 

for  the  plaintiff,  to  this  court  on  appeal,  upon  agreed  facts,  in  sub- 
stance as  follows :- — 

The  defendant  received  said  $65  under  said  agreement,  and  the 
only  claim  the  defendant  has  to  such  money  is  by  virtue  of  the  agree- 
ment and  president's  certificate  indorsed  thereon,  as  follows :  "By 
virtue  of  the  written  agreement,  and  under  the  power  therein  con- 
ferred upon  me,  I,  Charles  E.  Powers,  president  of  the  said  Middlesex 
Railroad  Company,  do  hereby  adjudge  and  decide  that  said  railroad 
company  is  entitled  to  retain  the  whole  of  the  $65  deposited  with  it 
under  said  agreement,  together  with  all  the  interest  thereon,  and  the 
same  is  hereby  declared  to  be  forfeited  to  the  said  railroad  company 
on  account  of  the  breach  by  the  within-named  Augustine  K.  White, 
conductor,  of  the  fourth  clause  of  said  agreement  [which  related  to 
the  faithful  discharge  of  his  duty  as  a  conductor]  and  of  the  sixty- 
fifth  and  sixty-sixth  rules  and  regulations  of  the  Middlesex  Railroad 
Company." 

The  rules  and  regulations  above  referred  to  were  as  follows :  "65. 
The  punch  must  be  used  to  cancel  and  record  a  fare  for  each  and  every 
person  over  three  years  of  age  who  rides  upon  the  car.  66.  As  soon 
as  fare  has  been  received  from  one  person  the  punch  must  be  used  in 
the  presence  of  such  person,  to  record  such  fare  or  fares,  before  an- 
other one  is  taken  up.  Failure  to  comply  with  this  rule,  in  every  in- 
stance will  be  positive  cause  of  dismissal." 

The  plaintiff  contends  that  this  money  should  be  paid  to  him  for 
the  reason  that  the  agreement  was,  on  its  face,  unconscionable  and 
void,  and  against  public  policy. 

The  defendant  contends  that  the  agreement  was  valid,  legal,  and 
final  between  the  parties. 

If  the  court  should  be  of  the  opinion  that  the  agreement  was  void, 
judgment  was  entered  for  the  plaintiff;  if  it  was  valid,  judgment 
for  the  defendant, 

L.  M.  Child,  for  the  defendant. 

/.  F.  Pickering  and  /.  W.  Pickering  for  the  plaintiff. 
Field,  J.  If  the  parties  had  an  opportunity  to  appear  and  be 
heard  before  the  president  of  the  company,  and  the  plaintiff  had 
appeared  and  been  heard,  and  an  award  had  actually  been  made  that 
nothing  was  due  the  plaintiff,  this  award  would  be  a  bar  to  the 
action,  unless  for  some  cause  it  was  impeached.  The  fact  that  an 
arbitrator  was  an  officer  of  the  defendant  corporation,  as  it  was 
known  to  the  plaintiff  when  he  signed  the  agreement,  would  not 
invalidate  the  award.  But  it  does  not  appear  by  the  agreed  statement 
of  facts  that  any  hearing  was  ever  had  before  the  president 
or  that  the  company  ever  made  any  claim  before  him  that  the  plaintiff 
had  not  fully  performed  his  duties,  or  that  the  i)laintiff  ever  had  any 
notice  that  the  company  made  any  such  claim,  and  that  the  president 
would  proceed  to  hear  the  parties,  and  adjudicate  upon  the  question 
whether  the  conipjiny  had  the  right  under  the  agreement  to  retain 
the    whole    or  any  part  of  the  $65. 


SECT.    Ill]  WHITE    V.    MIDDLESEX   RAILROAD    CO.  865 

By  the  agreed  facts  it  appears  that  the  agreed  contention  between 
the  parties  is  not  upon  an  award,  but  upon  the  agreement,  whether  it 
is  valid  or  void ;  and  that,  if  the  court  is  of  the  opinion  that  the  agree- 
ment is  void,  judgment  is  to  be  entered  for  the  plaintiff ;  if  it  is  valid, 
judgment  to  be  for  the  defendant.  The  principal  contention  in  argu- 
ment on  the  part  of  the  company  is,  that  this  is  not  an  agreement  to 
arbitrate,  but  an  agreement  that  the  company  may  retain  the  whole 
of  the  $65,  or  such  part  as  the  president  may  adjudge,  and  that,  until 
the  president  has  adjudged  that  the  whole  or  some  part  is  due  to  the 
plaintiff,  no  action  at  law  can  be  maintained  by  him. 

London  Tramways  Co.  v.  Bailey,  3  Q.  B,  D.  217,  is  almost  identi- 
cal with  the  case  at  bar,  and  the  judgment  was  for  the  company.  See 
also  Wilson  v.  Glasgow  Tramway  &  Omnibus  Co.,  5  Sc.  Ses.  Cas.  (4th 
ser.)  981,  and  Glasgow  Tramway  &  Omnibus  Co.,  v.  Dempsay,  3  Coup. 
Just.  440.  The  decision  in  London  Tramways  Co.  v.  Bailey,  uhi 
supra,  was  by  Mellor  and  Lush,  J.  J.,  and  is  put  upon  the  ground  that 
the  "agreement  is  very  like  the  stipulation  that  the  certificate  of  an 
architect  or  engineer  shall  be  conclusive."  It  seems  to  be  the  doc- 
trine of  the  English  Courts  that  agreements  prohibiting  a  party 
from  bringing  an  action  or  purporting  to  oust  the  courts  entirely  of 
their  jurisdiction,  are  void;  that,  in  contracts  in  which  it  is  a  condi- 
tion precedent  to  the  right  to  maintain  an  action  that  there  shall  first 
be  a  reference  and  an  award,  no  action  can  be  maintained  until  this 
condition  has  been  complied  with,  unless,  indeed,  it  becomes  impos- 
sible to  comply  with  it;  but  if  the  stipulation  to  refer  to  arbitration 
is  collateral  to  the  other  stipulations  of  the  contract,  an  action  can 
be  maintained  upon  the  contract  without  a  reference.  Babbage  v. 
Coulburn,  9  Q.  B.  D.  235;  Edwards  v.  Aberayon  Ship  Ins.  Society, 
1  Q.  B.  D.  563;  Dawson  v.  Fitzgerald,  1  Ex.  D.  257;  Hope  v.  Inter- 
national Financial  Society,  4  Ch.  D.  327 ;  Scott  v.  Liverpool,  3  De  G. 
&  J.  334;  Horton  v.  Sayer,  4  H.  &  N.  643. 

Scott  V.  Avery,  5  H.  L.  Cas.  811,  left  it  uncertain  whether,  if  in  a 
contract  the  agreement  to  submit  to  arbitration  is  a  condition  pre- 
cedent to  maintain  the  action,  and  includes  all  disputes  that  may 
arise  under  the  contract,  and  is  not  confined  to  questions  which  affect 
the  amount  of  damages,  it  is,  or  is  not,  void.  The  cases  we  have 
cited  show  that  English  judges  do  not  yet  agree  in  opinion  on  this 
question.  The  inclination  of  this  court  has  been  to  regard  such  an 
agreement  as  void.  Cobb  v.  New  England  Ins.  Co.,  6  Grey,  192 ;  Eowe 
V.  Williams,  97  Mass.  163;  Wood  v.  Humphrey,  114  Mass.  185; 
Pearl  v.  Harris,  121  Mass.  390;  Vass  v.  Wales.  38.  See  also  Trott 
V.  City  Ins.  Co.,  1  Cliff.  439;  Mansfield  v.  Doolin,  I.  E.  4  C.  L.  17.^ 

1  Dickson  Mfg.  Co.  v.  American  Locomotive  Co.,  119  Fed.  Rep.  488;  Meaher  v, 
Cox,  37  .\la.  201;  Western  Ass.  Co.  v.  Hall,  112  Ala.  318;  Bauer  v.  Samson  Lodge. 
102  Ind.  262;  Supreme  Council  v.  Garrigus,  104  Ind.  133;  Louisville,  &c.  Ry.  Co.  v. 
Donnegan,  111  Ind.  179;  Supreme  Council  v.  Forsinger,  125  Ind.  52;  McCoy  v.  Able, 
131  Ind.  417;  Ison  v.  Wright,  55  S.  W.  Rep.  (Ky.)  202;  Robinson  v.  Georges  Ins. 
Co.,  17  Me.   131;    Stephenson  v.  Piscataqua  Ins.  Co.,  66  Me.  419;   (but  see  Fisher  v. 

28 


866  WHITE    V.    MIDDLESEX   RAILROAD   CO.         [CHAP.   VI 

If  such  an  agreement  in  a  contract  is  not  void  as  contrary  to  the 
policy  of  the  law,  the  whole  doctrine  amounts  to  this,  that  courts  will 
not  specifically  enforce  the  agreement,  but  will  treat  it  as  valid,  and 
as  a  condition  precedent,  or  as  an  independent  stipulation,  according 
to  the  construction  given  to  the  contract. 

The  agreement  in  this  case  seems  to  us  an  attempt  to  oust  courts 
entirely  of  jurisdiction  over  the  question  whether  the  defendant  is 
entitled  to  retain  the  whole,  or  some  part,  of  the  $65,  as  liquidated 
damages  for  breach  of  the  contract.  It  regards  this  sum,  or  such 
part  of  it  as  the  president  may  determine,  as  forfeited  by  the  plain- 
tiff, if  the  president  shall  so  certify. 

In  Hope  V.  International  Financial  Society,  ubi  supra,  the  defend- 
ant contended  that  the  plaintiff  had  no  standing  in  court,  because  he 
had  forfeited  his  shares  under  the  articles  of  association  by  taking 
legal  proceedings  against  the  company;  but  Lord  Justice  James 
said :  "We  cannot  listen  to  that  argument.  Any  stipulation  that  a 
shareholder  shall  not  appeal  to  a  court  of  justice  must  be  bad." 
4  Ch.  D.  334. 

In  London  Tramways  Co.  v.  Bailey,  uhi  supra,  no  cases  were  cited 
by  the  court,  and  only  Brown  v.  Overbury,  11  Exch.  715,  and  Scott  v. 
Avery,  uhi  supra,  were  cited  by  the  counsel.  Brown  v.  Overbury  was 
an  action  to  recover  the  stakes  at  a  steeple  chase,  when  the  stewards, 
who,  by  the  articles,  were  to  decide  the  race,  had  met,  and  were  unable 
to  decide  whose  horse  had  won;  and  it  was  held  that  it  was  a  con- 
dition precedent  to  the  plaintiff's  right  to  recover  that  he  obtain  the 
judgment  of  the  stewards,  if  practicable.  Baron  Alderson  said: 
"Every  contract  must  be  determined  acording  to  the  circumstances 
belonging  to  it.  This  is  one  of  racing,  and  the  universal  practice 
has  been  that,  in  order  to  ascertain  who  is  to  have  the  stakes,  it  must 
first  be  determined  who  is  the  winner,  not  in  the  opinion  of  the  jury 
but  of  the  persons  appointed  to  decide  it,  viz.,  the  judges  or  the 
stewards.  The  courts  do  not  decide  what  the  effect  would  be  if  it 
became  possible  to  obtain  a  decision  from  the  stewards.  There  is, 
we  think,  notwithstanding  what  was  said  by  Lord  Campbell  in  Scott 
V.  Avery,  ubi  supra,  little  analogy  between  that  case  and  the  case  at 
bar.  Neither  do  we  think  that  this  agreement  is  like  a  building  con- 
tract, in  which  the  decision  and  certificate  of  an  architect  or  engineer, 

Merchants'  Ins.  Co.,  95  Mc.  486);  Phoenix  Ins.  Co.  v.  Zlotky,  92  N.  W.  Rep.  (Neb.) 
7.3G;  Hartford  Ins.  Co.  v.  Hon.  92  N.  W.  Rep.  (Neb.)  742;  Leach  v.  Republic  Ins. 
Co..  r,H  N.  H.  245;  Baltimore,  &c.  R.  R.  Co.  v.  Stankard,  56  Ohio  St.  224;  Myers  v. 
Jenkii.H,  6.3  Ohio  St.  101;  Ball  v.  Doud,  26  Oreg.  14;  Gray  v.  AVilson,  4  Watts,  39; 
Commercial  Union  Ass.  Co.  v.  HockinK,  115  Pa.  407;  Yost  v.  Dwelling  House  Ins. 
Co.  179  Pa.  :i81;  Penn  Plate  Glass  Co.  v.  Spring  Garden  Ins.  Co.,  189  Pa.  255;  Needy 
V.  German  American  Ins.  Co.,  197  Pa.  460;  Pepin  v.  Socifit6  St.  Jean  Baptiste,  23  R.  I. 
81;  Danih(!r  v.  Grand  Lodge,  10  Utah,  110;  Kenney  v.  Baltimore,  &c.  Association,  35 
W.  Va.  HHF,  (conf.  Buer's  Sons  Co.  v.  Cuttini;  I'^ruit  Packing  Co.,  43  W.  Va.  359),  ace. 
Ree  aW)  Edwards  v\  Al)erayr()n  Ins.  Co.,  1  Q.  B.  D.,  563,  and  the  Michigan,  Minnesota, 
and  N'-w  ^Ork  decisions  cited  in  the  note  to  Scott  v.  Avery,  ante;  also  Greenhood  on 
Public  Policy,  407  i'.l  net/,  and  cases  cited. 


SECT.    Ill]  MILES    V.    SCHMIDT  867 

upon  the  quantity  or  quality  of  the  work  done,  is  a  condition  precedent 
to  the  plainiflp's  maintaining  his  action  for  the  price.  Such  a  stipula- 
tion in  a  building  contract  is  not  regarded  as  strictly  an  agreement  to 
submit  to  arbitration.  Wardsworth  v.  Smith,  L  R.  6  Q.  B.  332; 
Palmer  v.  Clark,  106  Mass.  373.  'No  hearing  of  the  parties  is  usually 
contemplated.  The  matters  to  be  examined  relate  to  things  that  are 
visible  and  can  be  determined  by  appraisal,  inspection,  measurement, 
or  other  similar  methods,  and  pertain  solely  to  the  performance  of  the 
work  to  recover  the  price  of  which  the  plaintiff  brings  his  action, 
and  it  is  an  irrevocable  part  of  such  contracts  that  the  plaintiff  shall 
recover  only  upon  the  condition  that  the  architect  or  engineer  certifies 
that  the  work  has  been  done  according  to  the  contract,  or  shall  only 
recover  for  extra  work  whatever  the  architect  or  engineer  estimates  the 
value  of  it  to  be,  or  shall  recover  only  if  the  work  is  done  to  the  satis- 
faction of  the  architect  or  engineer. 

This  is  not  a  suit  for  wages;  and  if  it  were,  the  plaintiff  is  not, 
by  his  agreement,  required  to  perform  his  duties  to  the  satisfaction 
of  the  president  of  the  company,  and  there  is  no  stipulation  that  the 
plaintiff  shall  recover  as  wages  only  such  sum  as  the  president  may 
determine.  This  is  a  suit  to  recover  a  deposit.  If  the  defendant 
claims  the  right  to  retain  it,  as  liquidated  damages,  for  a  breach  of 
the  agreement  by  the  plaintiff,  the  burden  is  on  the  defendant  to 
prove  the  breach.  If  a  controversy  arises  upon  the  questions  whether 
there  has  been  such  a  breach,  and  whether  the  company  has  the  right 
to  retain  the  deposit,  as  liquidated  damages  for  such  breach,  there 
is  a  stipulation  that  the  president  shall  be  the  sole  judge  of  it,  and 
that  his  certificate  shall  be  the  final  adjudication  of  it.  Such  a 
stipulation  is,  we  think,  an  agreement  to  submit  to  arbitration,  and 
an  attempt  to  oust  courts  of  justice  of  all  jurisdiction  over  the  whole 
controversy,  and  is  void. 

In  the  opinion  of  a  majority  of  the  court,  the 

Judgment  must   be  affirmed.^ 


JONAS  M.  MILES  AND  ANOTHER  v.  ARTHUR  P. 
SCHMIDT 

Supreme  Judicial  Court  oe  Massachusetts,  December  3,  1896 

May  20,  1897 

[Reported  in  168  Massachusetts,  339] 

Bill  in  equity,  to  enforce  the  specific  performance  of  a  written 
contract. 

The  defendant  demurred  to  the  bill,  assigning  as  ground  therefor 

the  following  arbitration  clause  contained  in  the  contract : 

1  Rozen  v.  Dry  Dock.  &c.  R.  R.  Co.,  27  N.  Y.  Supp.  337,  cmtra.  See,  however, 
Pope  Mfg.  Co.  V.  Gornmlly.  144  IT.  S.  224;  Fidelity  Co.  v.  Eickhoff,  63  Minn.  170; 
Fidelity  Co.  v.  Crays,  76  Minn.  450;  Baltimore,  &c.  R.  R.  Co.  v.  Stankard,  56  Ohio 
St.  224.    Cf.  New  England  Trust  Co.  v.  Abbott,  162  Mass.  148. 


868  MILES    V.    SCHMIDT  [CHAP.    VI 

''It  is  further  mutually  agreed  that  in  case  of  any  alleged  violation 
of  the  promises  and  agreements  herein  made  by  said  Schmidt  or  by 
said  firm,  if  such  alleged  violation  is  continued  after  thirty  days' 
notice  in  writing  from  the  other  to  the  party  charged  as  guilty  of 
such  violation,  requiring  such  party  to  cease  such  violation,  then  the 
party  so  guilty  shall  be  liable  to  the  other  for  all  damages  caused  by 
such  violation,  to  be  determined  by  a  board  of  referees  in  manner  as 
follows : 

"After  the  expiration  of  the  thirty  days'  notice  provided  for  in  the 
above  clause,  said  Schmidt  and  said  firm  shall  each  forthwith  appoint 
a  referee,  and  the  two  so  appointed  shall  appoint  the  third.  If  either 
party  fails  to  appoint  a  referee  for  ten  days,  after  written  notice  of 
such  appointment  by  the  other  party,  then  the  referee  so  appointed 
shall  appoint  a  second,  and  the  two  so  appointed  shall  appoint  a  third. 

"The  referee  shall  proceed  forthwith  to  hear  the  parties  and  to 
determine  whether  or  not  there  has  been  any  violation  of  the  agree- 
ments herein  contained,  and  whether  the  same  has  continued  for  more 
than  thirty  days  after  notice  to  discontinue  such  violation  above  pro- 
vided for,  and  what  damage  either  party  has  sustained  by  reason  of 
such  violation. 

"The  decision  of  a  majority  of  said  referees  shall  be  final  and  bind- 
ing on  said  parties,  and  they  hereby  agree  to  abide  by,  submit  to,  and 
forthwith  to  comply  with  any  decision,  or  award,  of  a  majority  of 
said  referees.  The  expense  of  any  such  reference  shall  be  borne  by 
any  or  all  the  parties  in  such  proportion  as  said  referees  may  deter- 
mine." 

The  Superior  Court  sustained  the  demurrer,  and  dismissed  the 
bill;  and  the  plaintiff  appealed  to  this  court. 

C.  B.  iSouthard  (T.  Parher  ivith  him),  for  the  plaintiff. 

//.  M.  Rogers,  for  the  defendant. 

Morton,  J.  Perhaps,  if  the  question  were  a  new  one,  no  objection 
would  be  found  to  permitting  parties  to  select  their  own  tribunals  for 
the  settlement  of  civil  controversies,  even  though  the  result  might  be 
to  oust  the  courts  of  the  jurisdiction  in  such  cases.  But  the  law  is 
settled  otherwise  in  this  State.  Eowe  -v.  Williams,  97  Mass.  163; 
Wood  V.  Humphrey,  114  Mass.  185;  Pearl  v.  Harris,  121  Mass.  390; 
Vass  V.  Wales,  129  Mass.  38;  White  v.  Middlesex  Railroad,  135  Mass. 
216.  When  the  question  is  a  preliminary  one,  or  in  the  aid  of  an 
action  at  law  or  suit  in  equity,  such,  for  instance,  as  the  ascer- 
tainment of  damages,  an  agreement  for  arbitration  will  be  upheld. 
Wood  V.  Humphrey,  114  Mass.  185;  Reed  v.  Washington  Ins.  Co., 
138  Mass.  572,  575;  Hutcliinson  v.  Liverpool  k  London  &  Globe 
Ins.  Co.,  153  Mass.  143.  The  defendant  contends  that  the  agreement 
for  iirhitration  in  this  case  goes  no  further  than  the  assessment  of 
(hunagcH.  Rut  it  is  expressly  provided,  among  other  things,  that  the 
rr-fcrccs  shall  "bear  the  parties  and  dr'termine  whether  or  not  there 
has  l)ffii   any  violation   of   \\\v,  agreements  herein  contained.   .    .    . 


SECT.    Ill]  ASPHALT   CO.    V.    TRINIDAD    CO.  869 

and  what  damage  either  party  has  sustained"  thereby,  and  that,  "the 
decision  of  a  majority  of  said  referees  shall  be  final  and  binding  on 
said  parties."  The  evident  intent  is  to  submit  all  disputes  relating  to 
the  performance  of  the  agreement  to  the  final  decision  of  a  tribunal 
constituted  by  the  parties  themselves.  The  referees  are  not  only  to 
assess  the  damages,  but  also  to  determine  whether  there  have  been  any 
violations  of  the  agreement,  and  their  decision  in  all  matters  is  to  be 
final.  The  agreement  to  submit  to  arbitration  was  therefore  in  viola- 
tion of  the  law,  and  the  demurrer  should  have  been  overruled. 
Demurrer  overruled,  and  decree  dismissing  hill  set  aside. 


UNITED  STATES  ASPHALT  REFHSTING  COMPANY  v. 
TEINIDAD    LAKE    PETROLEUM    COMPANY,    LTD. 

District  Court  foe  the  South  District  of  New  York. 
January  23,  1915 

[Reported  in  222  Federal  Reporter,  1006] 

Hough,  District  Judge.  One  of  these  actions  is  brought  for  the 
alleged  breach  of  the  charter  party  of  the  steamship  Russian  Prince, 
and  the  other  for  a  similar  breach  of  a  like  charter  party  relating  to 
the  steamship  Roumanian  Prince.  Libelant  is  a  corporation  of  South 
Dakota.  Respondent  was  the  chartered  owner  of  the  steamships  above 
named.  It  is  a  British  corporation  and  the  vessels  are  of  British 
registry. 

The  charter  parties  by  which  libelant  took  the  steamers  from 
respondent  were  made  in  London,  and  granted  libelant  the  right  to 
use  the  vessels  in  any  lawful  traffic  in  most  parts  of  the  world,  As 
matter  of  fact  the  steamers  were  employed  between  Trinidad  and  the 
United  States  ports  until  the  outbreak  of  war  in  August,  1914,  when 
it  is  alleged  that  the  vessels  were  wrongfully  withdrawn  from  char- 

1  In  Reed  v.  Washington  Ins.  Co.,  138  Mass.  572,  the  action  was  brought  upon  an 
insurance  policy  in  the  form  prescribed  by  the  Massachusetts  statute.  The  pohcy 
contained  the  following  provision:  "In  case  any  difference  of  opinion  shall  arise  as  to 
the  amount  of  loss  under  this  policy,  it  is  mutually  agreed  that  the  said  loss  shall  be 
referred  to  three  disinterested  men,  the  company  and  the  insured  each  choosing  one 
out  of  three  persons  to  be  named  by  the  other,  and  the  third  being  selected  by  the  two 
so  chosen,  provided  that  neither  party  shall  be  required  to  choose  or  accept  any  person 
who  has  served  as  a  referee  in  any  like  case  within  four  months;  and  the  decision  of  a 
majority  of  said  referees  in  writing  shall  be  final  and  binding  on  the  parties." 

At  the  conclusion  of  the  plaintiff's  evidence,  the  judge  declined  to  rule,  as  requested 
by  the  defendant,  that  the  plaintiff  could  not  recover  without  evidence  of  a  reference 
to  arbitration.  This  ruling  was  sustained  by  the  full  court  on  the  ground  that  the 
clause  was  not  expressed  as  a  condition  precedent.  See  also  Clement  v.  British  Ameri- 
can Ass.  Co.,  141  Mass.  298. 

In  Lamson  Store  Service  Co.  v.  Prudential  Ins.  Co.,  171  Mass.  433,  the  action  was 
brought  upon  a  policy  in  the  form  prescribed  by  a  later  Massachusetts  statute  (St. 
1887,  c.  214,  §  60).  The  policy  contained  a  clause  similar  to  that  quoted  above,  except 
for  the  following  added  words,  "and  such  reference,  unless  waived  by  the  parties, 
shall  be  a  condition  precedent  to  any  right  of  action  in  law  or  equity  to  recover  for  such 
loss."  The  court  held  that  the  words  constituted  a  condition  precedent  to  the  plain- 
tiff's right  of  action. 


870  ASPHALT   CO.    V.   TRINIDAD    CO.  [CHAP.   VI 

terer's  service.  These  actions  in  personam  were  begun  with  clause  of 
foreign  attachment,  and  appearance  enforced  by  seizure  of  funds 
within  this  jurisdiction.  Before  any  steps  in  the  actions  other  than 
appearing  and  giving  security  for  the  seized  property  had  been  taken, 
these  motions  were  made. 

The  charter  party  of  each  steamer  contained  the  following  very 
ordinary  clause: 

"19.  Any  dispute  arising  under  this  charter  shall  be  settled  in  London  by  arbi- 
tration, the  owners  and  charterers  each  appointing  an  arbitrator,  and  the  two  so  chosen, 
if  they  do  not  agree,  shall  appoint  an  umpire,  the  decision  of  whom  shall  be  final. 
Should  either  party  refuse  or  neglect  to  appoint  an  arbitrator  within  21  days  of  being 
required  to  do  so  by  the  other  party,  the  arbitrator  appointed  may  make  a  final  de- 
cision alone,  and  this  decision  shall  be  binding  upon  both  parties.  For  the  purpose 
of  enforcing  any  award,  this  agreement  shall  be  made  a  rule  of  court." 

There  can  be  no  doubt  that  this  was  submission  to  arbitration,  and 
for  that  reason  was  a  contract  between  the  parties  to  this  action; 
District  of  Columbia  v.  Bailey,  171  TJ.  S.  at  page  171,  18  Sup  Ct. 
868,  43  L.  Ed.  118;  citing  Wliitcher  v.  Whitcher,  49  N.  H.  176,  6 
,  Am.  Rep.  486.  It  is  equally  plain  that  under  the  law  of  the  place  of 
the  contract — i.e.  England — this  arbitration  agreement  was  at  the 
time  of  making  the  charter  parties  entirely  valid,  and  any  endeavor  to 
do  exactly  what  libelant  has  done  by  bringing  these  suits  would  have 
been  restrained  by  the  English  courts,  acting  under  the  authority  of 
the  English  Arbitration  x\ct  of  1889  (chapter  49,  52-53  Victoria). 
See,  also  Manchester  Ship  Canal  Co.  v.  Pierson  &  Son  [1900]  2  Q. 
B.  606;  Australian  Lloyd  Co.  v.  Gresham,  etc..  Society  [1903J  1  K. 
B.  249. 

The  contentions  of  the  parties  litigant  may  therefore  be  summed  up 
as  follows :  Respondent  urges  that  the  contract  for  arbitration 
contained  in  the  charter  parties  was  valid  and  enforceable  when  and 
where  it  was  made,  and  must  consequently  be  enforced  everywhere, 
unless  some  positive  rule  of  the  law  of  the  forum  prevents  such  recog- 
nition and  enforcement.  Libelant  asserts  that,  whether  the  contract 
was  or  was  not  good  at  the  time  and  place  of  making  it  has  always 
been  invalid  under  the  law  of  the  United  States  and  most  of  the  states 
thereof,  with  the  admitted  and  asserted  result  that  an  American  may 
make  a  solemn  contract  of  this  nature  in  England  and  repudiate  it 
at  will  in  America  with  the  approbation  of  the  courts  of  his  own 
country. 

There  has  long  been  a  great  varioty  of  available  reasons  for 
refusing  to  give  effect  to  the  agreements  of  men  of  mature  age,  and 
presumably  sound  judgment,  when  the  intended  effect  of  the  agree- 
ments was  to  prevent  proceedings  in  any  or  all  courts  and  substitute 
therofor  the  decision  of  arbitrators.  The  remarkably  simple  nature 
of  tills  libelnnt's  contract  has  led  me  to  consider  at  some  length  the 
nature  and  history  of  the  reasons  adduced  to  justify  the  sort  of 
condnct,  by  no  means  new,  but  remarkably  well  illustrated  by  these 
libels. 


SECT.    Ill]  ASPHALT   CO.    V,    TRINIDAD    CO.  871 

It  has  never  been  denied  that  the  hostility  of  the  English-speak- 
ing courts  to  arbitration  contracts  probably  originated  (as  Lord 
Campbell  said  in  Scott  v.  Avery,  4  H.  L.  Cas.  811) — 

"in  the  contests  of  the  courts  of  ancient  times  for  extension  of  jurisdiction  —  all 
of  them  being  opposed  to  anything  that  would  altogether  deprive  every  one  of  them 
of  jurisdiction." 

A  more  unworthy  genesis  cannot  be  imagined.  Since  (at  the 
latest)  the  time  of  Lord  Kenyon,  it  has  been  customary  to  stand 
rather  upon  the  antiquity  of  the  rule  than  upon  its  excellence  or 
reason : 

"It  is  not  necessary  now  to  say  how  this  point  ought  to  have  been  determined  if  it 
were  res  Integra  —  it  having  been  decided  again  and  again,"  etc.  Per  Kenyon,  J., 
in  Thompson  v.  Charnock,  8  T.  R.  139. 

There  is  little  difference  between  Lord  Kenyon's  remark  and  the 
words  of  Cardozo,  J.,  uttered  within  a  few  months  in  Meacham  v.. 
Jamestown,  etc.,  R.  E.  Co.,  211  N.  Y.  at  page  354,  105  N".  E.  at  page 
656: 

"It  is  true  that  some  judges  have  expressed  the  belief  that  parties  ought  to  be 
free  to  contract  about  such  matters  as  they  please.  In  this  state  the  law  has  long 
been  settled  to  the  contrary." 

Nevertheless,  the  legal  mind  must  assign  some  reason  in  order  to 
decide  anything  with  spiritual  quiet,  and  the  causes  advanced  for 
refusing  to  compel  men  to  abide  by  their  arbitration  contracts  may 
apparently  be  subdivided  as  follows : 

(a)  The  contract  is  in  its  nature  revocable. 

(b)  Such  contracts  are  against  public  policy. 

(c)  The  covenant  to  refer  is  but  collateral  to  the  main  contract, 
and  may  be  disregarded,  leaving  the  contract  keeper  to  his  action  for 
damages  for  breach  of  such  collateral  covenant. 

(d)  Any  contract  tending  to  wholly  oust  the  courts  of  jurisdic- 
tion violates  the  spirit  of  the  laws  creating  the  courts,  in  that  it  is 
not  competent  for  private  persons  either  to  increase  or  diminish  the 
statutory  juridical  power. 

(e)  Arbitration  may  be  a  condition  precedent  to  suit,  and  as 
such  valid,  if  it  does  not  prevent  legal  action,  or  seek  to  determine 
out  of  court  the  general  question  of  liability. 

The  Doctrine  of  Revocdbility 

This  seems  to  rest  on  Vinior's  case,  8  Coke,  81b,  and  is  now  some- 
what old-fashioned,  although  it  appears  in  Oregon,  etc..  Bank  v. 
American,  etc.,  Co.  (C.  C.)  35  Fed.  23,  with  due  citations  of  author- 
ity :  and  in  Tobey  v.  County  of  Bristol,  3  Story,  800,  Fed.  Cas.  No. 
14,065,  it  is  treated  at  great  length. 


872  ASPHALT    CO.    V.    TRINIDAD   CO.  [CHAP.    VI 

The  Public  Policy  Doctrine 

No  reason  for  the  simple  statement  that  arbitration  agreements  are 
against  public  policy  has  ever  been  advanced,  except  that  it  must  be 
against  such  policy  to  oust  the  courts  of  jurisdiction.  This  is  hardly 
a  variant  of  the  reasoning  ascribed  by  Lord  Campbell  to  the 
"courts  of  ancient  times" : 

"vSuch  stipiilations  [for  arbitration]  are  regarded  as  against  the  policy  of  the 
common  law,  as  having  a  tendency  to  exclude  the  jurisdiction  of  the  courts."  Hurst 
V.  Litchfield,  39  N.  Y.  377. 

"Such  agreements  have  repeatedly  been  held  to  be  against  public  policy  and  void." 
Prince  Co.^i;.  Lehman  (D.  C.)  39  Fed.  704,  6  L.  R.  A.  464. 

The  above  are  two  examples  of  the  cruder  forms  of  statement; 
but  of  late  years  the  higher  courts  have  been  somewhat  chary  of  the 
phrase  "public  policy"  and  Insurance  Co.  tK  Morse,  20  Wall.  457, 
22  L.  Ed.  365,  Hunt,  J.,  quotes  approvingly  from  Story's  Commen- 
taries, thus : 

'  ft 

"Where  the  stipulation,  though  not  against  the  pohcy  of  the  law,  yet  is  an  effort 
to  divest  the  ordinary  jurisdiction  of  the  common  tribunals  of  justice,  such  as  an 
agreement  in  case  of  dispute  to  refer  the  same  to  arbitration,  a  court  of  equity  will 
not,  any  more  than  a  court  of  law,  interfere  to  enforce  the  agreement,  but  will  leave 
the  parties  to  their  own  good  pleasure  in  regard  to  such  agreements." 

But  neither  the  court  nor  the  commentator  pointed  out  any  other 
method  by  which  an  arbitration  agreement  could  be  against  the 
policy  of  the  law,  unless  it  were  by  seeking  to  divest  the  "ordinary 
jurisdiction  of  the  common  tribunals  of  justice." 

Having  held  up  the  doctrine  that  any  contract  which  involves 
an  "ouster  of  jurisdiction"  is  invalid,  the  Supreme  Court  of  the 
United  States  has  been  able  of  late  years  to  give  decision  without 
ever  going  behind  that  statement.  Thus  in  Insurance  Co.  v.  Morse. 
supra,  it  is  said  : 

"Agreements  in  advance  to  oust  the  courts  of  the  jurisdiction  conferred  by  law 
are  illegal  and  void." 

In  Doyle  v.  Continental  Insurance  Co.,  94  U.  S.  535,  24  L.  Ed. 
148,  the  case  cited  last  is  distinctly  reaffirmed.  The  lower  courts 
have  followed,  and  in  Perkins  v.  United  States,  etc.,  Co.  (C.  C.)  16 
Fed.  153,  Wallace  J.,  said: 

"It  i.4  familiar  doctrine  that  a  simjilc  agreement  inserted  in  a  contract,  that  the 
partic>s  will  refcir  any  dispute  arising  thereunder  to  arbitration,  will  not  oust  courts 
of  law  of  their  ordinary  jurisdiction." 

Ev(ui  a  piirtijil  ouster  was  lield  "evidently  invalid"  when  inserted 
in  a  bill  of  lading,  in  the  Etoiia  (D.  0.)  64  Fed.  880,  citing  Slocum 
V.  Western'  Assurance  Co.  (D.  C.)  42  Fed.  236,  and  the  Guildhall 
(D.  C.)  58  Fed.  796. 


SECT.    Ill]  ASPHALT   CO.    V.    TRINIDAD    CO.  87!; 


The  Doctrine  That  the  Covenant  to  Refer  is  Collateral  Only 

This  idea  is  set  forth  with  his  customary  clearness  by  Jessel,  M. 
K.,  in  Dewson  v.  Fitzgerald,  1  Ex.  D.  257.  It  is  repeated  in  Perkins 
V.  United  States,  etc.,  Co.,  supra,  and  accepted  in  Crossley  v.  Con- 
necticut, etc.,  Co.,  (C.  C.)  27  Fed.  30.  The  worthlessness  of  the 
theory  was  amply  demonstrated  in  Munson  v.  Straits  of  Dover  (D. 
C.)  99  Fed.  787,  affirmed  102  Fed.  926,  43  C.  C.  A.  57,  where  Judge 
Brown,  accepting  without  query  or  comment  the  doctrine  that  any 
agreement  which  completely  ousted  the  courts  of  jurisdiction  was 
specifically  unenforceable,  found  himself  unable  to  award  more  than 
nominal  damages  for  the  breach  of  the  collateral  agreement.  The 
opinion  for  affirmance  (102  Fed.  926,  C.  C.  A.  57)  is  written  by 
Wallace,  J.,  who  had  himself  pointed  out  in  Perkins  v.  United 
States,  etc.,  Co.,  supra,  that  the  action  for  the  breach  of  the  collateral 
agreement  to  refer  was  a  remedy  against  the  contract  breaker  who 
sued  when  he  had  promised  not  to.  Comment  seems  superfluous 
upon  any  theory  of  law  (if  law  be  justice)  that  can  come  to  such 
conclusions. 


The  Theory  That  Arbitration  Agreements  Violate  the  Spirit 
of  The  Laws  Creating  the  Courts 

This  is  the  accepted  doctrine  in  New  York,  as  shown  in  Meacham 
V.  Jamestown  etc.,  Railroad,  supra.  Yet  it  is  surely  a  -singular 
view  of  judicial  sanctity  which  reasons  that,  because  the  Legis- 
lature has  made  a  court,  therefore  everybody  must  go  to  the  Court. 

The  Theory  That  a  Limited  Arbitration,  Not  Ousting  the  Courts 
of  Jurisdiction,  May  be  Valid 

This  is  thought  to  be  the  doctrine  of  the  Delaware  Co.,  v.  Penn- 
sylvania, etc.,  Co.,  50  N.  Y.  265,  and  it  is  plainly  accepted  by  the 
Supreme  Court  of  the  United  States.  Hamilton  v.  Liverpool,  etc., 
Insurance  Co.,  136  U.  S.  at  page  255,  10  Sup.  Ct.  945,  34  L.  Ed. 
419,  shows  the  familiar  proviso  in  an  insurance  policy  by  which  the 
amount  of  loss  or  damage  to  the  property  insured  shall  be  ascer- 
tained by  arbitrators  or  appraisers,  and  further  that,  until  such  an 
award  should  be  obtained,  the  loss  should  not  be  payable  and  no 
action  should  lie  against  the  insurer.  This  makes  the  appraisal 
or  partial  arbitration  a  condition  precedent  to  suit.     Gray,  J.,  said: 

"Such  a  stipulation,  not  ousting  the  jurisdiction  of  the  courts,  but  leaving  the 
general  question  of  liability  to  be  judicially  determined,  and  simply  providing  a 
reasonable  method  of  estimating  and  ascertaining  the  amount  of  the  loss,  is  unques- 
tionably valid,  according  to  the  uniform  current  of  authority  in  England  and  in  this 
country." 


874  ASPHALT   CO.    V.    TRINIDAD   CO.  [CHAP.   VI 

In  Hamilton  v.  Home  Insurance  Co.,  137  U.  S.  at  page  385,  11  Sup. 
Ct.  at  page  138,  34  L.  Ed.  708,  the  same  learned  Justice  said  (of  a 
somewhat  similar  proviso  in  an  insurance  policy)  : 

"If  the  contract  .  .  .  provides  that  no  action  upon  it  shall  be  maintained  until 
after  such  an  award,  .  .  .  the  award  is  a  condition  precedent  to  the  right  of  action." 

But  persons  who  would  thus  far  avail  themselves  of  compulsory- 
arbitration  must  be  careful,  for  it  has  been  said: 

"While  parties  may  impose,  as  a  condition  precedent  to  applications  to  the  courts, 
that  they  shall  first  have  settled  the  amount  to  be  recovered  by  an  agreed  mode, 
they  cannot  entirely  close  the  access  to  the  courts  of  law.  .  .  .  Such  stipulations  are 
repugnant  to  the  rest  of  the  contract  and  assume  to  divest  courts  of  their  established 
Jurisdiction.  As  conditions  precedent  to  an  appeal  to  the  courts,  they  are  void." 
Stephenson  v.  Insurance  Co.,  54  Me.  70,  cited  in  Insurance  Co.  v.  Morse,  supra. 

Finally,  in  Guaranty,  etc.,  Co.  v.  Green  Cove,  etc.,  B.  B.  Co.  139 
U.  S.  at  page  142,  11  Sup.  Ct.  at  page  514,  35  L.  Ed.  116,  Brown,  J., 
considered  a  proviso  in  a  mortgage  to  the  effect  that  a  sale  by  the 
trustee  should  be  "exclusive  of  all  other"  methods  of  sale,  and  he 
laid  down  the  law  thus  : 

"This  clause,  ...  is  open  to  the  objection  of  attempting  to  provide  against  a 
remedy  in  the  ordinary  course  of  judicial  proceedings,  and  oust  the  jurisdiction  of 
the  courts,  which  (as  is  settled  by  the  uniform  current  of  authority)  cannot  be  done." 

This  decision  was  filed  in  1890.  The  latest  opinion  in  this  circuit 
known  to  me  is  Gough  v.  Hamburg,  etc.,  Co.,  (D.  C.)  158  Fed.  174, 
where  Adams,  J.,  lays  down  the  rule  without  comment  that  the 
limitation  upon  the  jurisdiction  of  courts  contained  in  a  contract  is 
void. 

Whatever  form  of  statement  the  rule  takes,  the  foregoing  citations 
show  that  it  always  amounts  to  the  same  thing,  viz.  The  courts  will 
scarcely  permit  any  other  body  of  men  to  even  partially  perform  ju- 
dicial work,  and  will  never  permit  the  absorption  of  all  business 
growing  out  of  disputes  over  contracts  by  any  body  of  arbitrators, 
unless  compelled  to  such  action  by  statute.  Even  such  cases  as  Mit- 
tenthal  v.  Mascagni,  183  Mass.  19,  N.  E.  425,  L.  E.  A.  812,  97  Am. 
St.  Rep.  404,  show  no  more  than  a  belated  acceptance  of  the  right  to 
confine  litigation  by  contract  to  a  particular  court,  for  even  that 
opinion  does  not  recognize  the  right  of  mankind  to  contract  them- 
selves out  of  all  courts.^ 

The  English  Arbitration  Act,  supra,  is  such  a  statute.  It  has 
compelled  the  courts  of  that  country  to  abandon  the  doctrine  that  it 
is  wrong  or  wicked  to  agree  to  stay  away  from  the  courts  when 
disputf!s  arise.  Tt  is  highly  characteristic  of  lawyers  that,  Avhen  thus 
cotTced  by  the  Legislature,  the  wisdom  of  previous  decisions  begins  to 
be  doubtfHJ.  In  Hamlyn  v.  Talisker  Distillery  [1894]  App.  Cas.  202, 
Lord  W:itsoii  said : 

'  I'or  n  comparison  of  curlier  cases  in  Miissiicliusetts  with  the  Kn^lish  cases,  see 
an  article  on  "Arbitration  as  a  Condition  Precedent,"  11  Harvard  Law  Rev.  234. 


SECT.    Ill]  ASPHALT   CO.    V.    TRINIDAD   CO.  875 

"The  rule  that  a  reference  to  arbitrators  not  named  cannot  be  enforced  does  not 
appear  to  me  to  rest  on  any  essential  considerations  of  public  policy.  Even  if  an 
opposite  inference  were  deducible  from  the  authorities  by  which  it  was  established, 
the  rule  has  been  so  largely  tranched  upon  by  the  legislation  of  the  last  50  years  .  .  . 
that  I  should  hesitate  to  affirm  that  the  policy  upon  which  it  was  originally  based 
could  now  be  regarded  as  of  cardinal  importance." 

ISTeither  tlie  Legislature  of  New  York  nor  the  Congress  lias  seen  fit 
thus  to  modernize  the  ideas  of  the  judges  of  their  respective  jurisdic- 
tions. 

[1]  The  question  presented  by  these  motions  is  to  be  regarded  as 
one  of  general  law;  i.e.,  one  wherein  the  courts  of  the  United  States 
are  not  bound  to  follow  or  sonform  to  the  decisions  of  the  state 
jurisdiction  in  which  they  may  happen  to  sit.  This  was  intimated 
by  Dallas,  J.,  in  Mitchell  v.  Dougherty,  90  Fed.  639,  C.  C.  A.  205, 
and  explicitly  held  in  Jefferson  Fire  Insurance  Co.  v.  Bierce  (C.  C.) 
183  Fed.  588. 

Furthermore  the  question  is  one  of  remedy,  and  not  of  right. 
Such  was  substantially  the  holding  in  Mitchell  v.  Dougherty,  supra, 
and  in  Stephenson  v.  Insurance  Co.,  supra,  it  is  pointed  out  that : 

"The  law  and  not  the  contract  prescribes  the  remedy;  and  parties  have  no  more 
right  to  enter  into  stipulations  against  a  resort  to  the  courts  for  their  remedy,  in  a 
given  case,  than  they  have  to  provide  a  remedy  prohibited  by  law." 

Finally  it  has  been  well  said  by  Cardozo,  J.,  in  Meacham  v.  James- 
town, etc.,  R.  R.  Co.,  supra,  that: 

"An  agreement  that  .  .  .  differences  arising  under  a  contract  shall  be  submitted 
to  arbitration  relates  to  the  law  of  remedies,  and  the  law  that  governs  remedies  is 
the  law  of  the  forum." 

It  follows  that  the  final  question  for  determination  under  these 
motions  is  whether  the  law  as  laid  down  by  the  Supreme  Court  of 
the  United  States  permits  the  enforcement  as  a  remedy  of  the 
arbitration  clause  contained  in  a  contract,  assuming  that  such  clause 
(as  here)  is  intended  to  oust  the  courts  and  all  courts  of  their 
jurisdiction.^ 

[2]  I  think  the  decisions  cited  show  beyond  question  that  the 
Supreme  Court  has  laid  down  the  rule  that  such  a  complete  ouster 
of  jurisdiction  as  is  shown  by  the  clause  quoted  from  the  charter 
parties  is  void  in  a  federal  forum.  It  was  within  the  power  of  that 
tribunal  to  make  this  rule.  Inferior  courts  may  find  convincing 
reason  for  it ;  but  the  rule  must  be  obeyed,  and  these  motions  severally 
denied.^ 

1  It  has  not  seemed  necessary  to  pursue  this  subject  beyond  the  courts  of  the 
United  States,  New  York,  and  Massachusetts;  but,  with  the  possible  exception  of 
Pennsylvania,  the  result  would  not,  I  think,  be  different. 

2  New  York  now  has  a  statute  under  which  agreements  to  arbitrate  are  a  bar 
to  actions  in  the  courts.  Spiritus  Fabriek  v.  Sugar  Products  Co.  130  N.  E. 
Rep.  288. 


876  TRIST    V.    CHILD  [CHAP.    VI 

SECTION  IV 

CONTRACTS     TENDING    TO     CORRUPTION 


TRIST  V.  CHILD 

Supreme  Couet  of  The  United  States^,  October  Term,  1874 

[Reported  in  21  Wallace,  441] 

Appeal  from  the  Supreme  Court  of  the  District  of  Columbia;  the 
case  being  thus : — 

I*^.  P.  Trist  having  a  claim  against  the  United  States  for  his  ser- 
vices, rendered  in  1848,  touching  the  treaty  of  Guadelupe  Hidalgo, — 
a  claim  which  the  government  had  not  recognized, — resolved,  in 
1866-67,  to  submit  it  to  Congress  and  to  ask  payment  of  it.  And  he 
made  an  agreement  with  Linus  Child,  of  Boston,  that  Child  should 
take  charge  of  the  claim  and  prosecute  it  before  Congress  as  his 
agent  and  attorney.  As  a  compensation  for  his  services  it  was  agreed 
that  Child  should  receive  25  per  cent  of  whatever  sum  Congress  might 
allow  in  payment  of  the  claim.  If  nothing  was  allowed.  Child  was 
to  receive  nothing.  His  compensation  depended  wholly  upon  the  con- 
tingency of  success.  Child  prepared  a  petition  and  presented  the 
claim  to  Congress.  Before  final  action  was  taken  upon  it  by  that 
body  Child  died.  His  son  and  personal  representative,  L.  M.  Child, 
who  was  his  partner  when  the  agreement  between  him  and  Trist  was 
entered  into,  and  down  to  the  time  of  his  death,  continued  the  prose- 
cution of  the  claim.  By  an  act  of  the  20th  of  April,  1871,  Congress 
appropriated  the  sum  of  $14,559  ti  pay  it.  The  son  thereupon  applied 
to  Trist  for  payment  of  the  25  per  cent,  stipulated  for  in  the  agree- 
ment between  Trist  and  his  father.  Trist  declined  to  pay.  Hereupon 
Child  applied  to  the  Treasury  Department  to  suspend  the  payment 
of  the  money  to  Trist.  Payment  was  suspended  accordingly,  and 
the  money  was  still  in  the  treasury. 

Child,  the  son,  now  filed  his  bill  against  Trist,  praying  that  Trist 
might  be  enjoined  from  withdrawing  the  $14,559  from  the  treasury 
until  he  had  complied  with  his  agreement  about  the  compensation, 
and  that  a  decree  might  pass  commanding  him  to  pay  to  the  com- 
plainant $5,000  and  for  general  relief. 

The  defendant  answered  the  bill  asserting,  with  other  defences 
going  to  the  merits,  that  all  the  services  as  set  forth  in  their  bill  were 
"of  such  a  nature  as  to  give  no  cause  of  action  in  any  court,  either 
of  common  law  or  equity." 

The  case  was  heard  upon  the  pleading  and  much  evidence.  A  part 
of  the  evidence  consisted  of  correspondence  between  the  parties.  It 
tenrlfid  tf)  provf!  tliat  Cbilds,  father  and  son,  had  been  to  see  vari- 
ous members  of  Congress,  soliciting  their  influence  in  behalf  of  a 


SECT.    IV]  TRIST    V.    CHILD  877 

bill  introduced  for  the  benefit  of  Mr,  Trist,  and  in  several  instances 
obtaining  a  promise  of  it.  There  was  no  attempt  to  prove  that  any 
kind  of  bribe  had  been  olfered  or  even  contemplated;  but  the  follow- 
ing letter,  one  in  the  correspondence  put  in  evidence,  was  referred 
to  as  showing  the  effects  of  contracts  such  as  the  one  in  this  case; — 

From  Child,  Jr.,  to  Tkist. 

House  of  Representatives, 
Washington,  D.  C,  Feb.  20,  1871. 

Mr.  Trist:     Everything  looks  very  favorable.     I  found  that  my 

father  has  spoken  to  C and  B ,  and  other  members  of  the 

House.    Mr.  B says  he  will  try  hard  to  get  it  before  the  House. 

He    has    two    more    chances,    or    rather,    "morning    hours,"    before 

Congress  adjourns.     A will  go  in  for  it.     D promises  to  go 

for  it.  I  have  sent  your  letter  and  report  to  Mr.  W ,  of  Penn- 
sylvania. It  may  not  be  reached  till  next  week.  Please  write  to 
your  friends  to  write  immediately  to  any  member  of  Congress.  Every 
vote  tells;  and  a  simple  request  to  a  member  may  secure  his  vote,  he 
not  caring  anything  about  it.  Set  every  man  you  know  at  work  even 
if  he  knows  a  page,  for  a  page  often  gets  a  vote.  The  most  I  fear 
is  indifference. 

Yours,  &c.  L.  M.  Child. 

The   Court  below  decreed — 

1st.  That  Trist  should  pay  to  the  complainant  $3,639,  with  interest 
from  April  20th,  1871. 

2nd.  That  until  he  did  so,  he  should  be  enjoined  from  receiving 
at  the  treasury  "  any  of  the  moneys  appropriated  to  him"  by  the 
above  act  of  Congress,  of  April  20th,  1871. 

From  this  decree  the  case  was  brought  here. 

The  good  character  of  Messrs.  Child,  father  and  son,  was  not 
denied. 

Messrs.  Durant  and  Homer,  for  the  appellants. 

Messrs.  B.  F.  Butter  and  R.  D.  Mussey.  contra. 

Mr.  Justice  Swain  delivered  the  opinion  of  the  court. 

The  court  below  decreed  to  the  appellee  the  amount  of  his  claim, 
and  enjoined  Trist  from  receiving  from  the  treasury  "any  of  the 
money  appropriated  to  him"  by  Congress,  until  he  should  have  paid 
the  demand  of  the  appellee. 

This  decree,  as  regards  that  portion  of  the  fund  not  claimed  by  the 
appelle,  is  an  anomaly.  Why  the  claim  should  affect  that  part  of 
the  fund  to  which  it  had  no  relation,  is  not  easy  to  be  imagined.  This 
feature  of  the  decree  was  doubtless  the  result  of  oversight  and  inad- 
vertence. The  bill  proceeds  upon  the  ground  of  the  validity  of  the 
original  contract,  and  a  consequent  lien  in  favor  of  the  complainant 


878  TRIST    V.    CHILD  [CHAP.   VI 

upon  the  fund  appropriated.     We  shall  examine  the  latter  ground 
first.    Was  there,  in  any  view  of  the  case,  a  lien? 

It  is  well  settled  that  an  order  to  pay  a  debt  out  of  a  particular 
fund  belonging  to  the  debtor  gives  to  the  creditor  a  specific  equitable 
lien  upon  the  fund,  and  binds  it  in  the  hands  of  the  drawee.  A  part 
of  the  particular  fund  may  be  assigned  by  an  order,  and  the  payee 
may  enforce  payment  of  the  amount  against  the  drawee.  But  a 
mere  agreement  to  pay  out  of  such  fund  is  not  sufficient.  Some- 
thing more  is  necessary.  There  must  be  an  appropriation  for  the 
fund  pro  tanto,  either  by  giving  an  order  or  by  transferring  it  other- 
wise in  such  a  manner  that  the  holder  is  authorized  to  pay  the  amount 
directly  to  the  creditor  without  the  further  intervention  of  the 
debtor. 

Viewing  the  subject  in  the  light  of  these  authorities,  we  are  brought 
to  the  conclusion  that  the  appellee  had  no  lien  upon  the  fund  here  in 
question.  The  understanding  between  the  elder  Child  and  Trist  was 
a  personal  agreement.  It  could  in  no  wise  produce  the  effect  insisted 
upon.  For  a  breach  of  the  agreement,  the  remedy  was  at  law,  not  in 
equity,  and  the  defendant  had  a  constitutional  right  to  a  trial  by 
jury.     If  there  was  no  lien,  there  was  no  jurisdiction  in  equity. 

There  is  another  condition  fatally  adverse  to  the  claim  of  a  lien. 
The  first  section  of  the  act  of  Congress  of  February  26,  1853, 
declares  that  all  transfers  of  any  part  of  any  claim  against  the  United 
States,  "or  of  any  interest  therein,  whether  absolute  or  conditional, 
shall  be  absolutely  null  and  void,  unless  executed  in  the  presence  of 
at  least  two  attesting  witnesses  after  the  allowance  of  such  claim, 
ascertainment  of  the  amount  due,  and  the  issuing  of  a  warrant 
therefor."  That  the  claim  set  up  in  the  bill  to  a  specific  part  of  the 
money  appropriated  within  this  statute  is  too  clear  to  admit  of  doubt. 
It  would  be  a  waste  of  time  to  discuss  the  subject. 

But  there  is  an  objection  of  still  greater  gravity  to  the  appellee's 
case.  Was  the  contract  a  valid  one?  It  was,  on  the  part  of  Child,  to 
procure  by  lobby  service,  if  possible,  the  passage  of  a  bill  providing 
the  payment  of  the  claim.  The  aid  asked  by  the  younger  Child  of 
Trist,  which  indicated  what  he  considered  needful,  and  doubtless  pro- 
posed to  do,  and  did  do  himself,  is  thus  vividly  pictured  in  his  letter 
to  Trist  of  the  20th  February,  1871.  After  giving  the  names  of 
several  members  of  Congress,  from  whom  he  had  received  favorable 
assurances,  he  proceeds :  "Please  write  to  any  of  your  friends  to 
write  to  any  member  of  Congress.  Every  vote  tells,  and  a  simple 
request  may  secure  a  vote,  he  not  caring  anything  about  it.  Set 
every  man  you  know  at  work.  Even  if  he  knows  a  page,  for  a  page 
often  gets  a  vote." 

In  the  Tloman  law  it  was  declared  tliat  "a  promise  made  to  effect 
a  base  purpose,  as  to  commit  homiciclc  or  sacrilege,  is  not  binding." 
In  our  jurisprudence  a  contract  may  be  illegal  and  void  because 
it  is  contrary  to  a  constitution  or  statute,  or  inconsistent  with  sound 


SECT.  IV]  TRIST    V.    CHILD  879 

policy  and  good  morals.  Lord  Mansfield  said:  "Many  contracts 
wliicli  are  not  against  morality  are  still  void  as  being  against  the 
maxims  of  sound  policy." 

It  is  a  rule  of  the  common  law  of  application,  that  where  a 
contract  expressed  or  implied  is  tainted  with  either  of  the  vices  last 
named,  as  to  the  consideration  of  the  thing  to  be  done,  no  alleged  right 
founded  upon  it  can  be  enforced  in  a  court  of  justice. 

Before  considering  the  contract  here  in  question,  it  may  be  well,  by 
way  of  illustration,  to  advert  to  some  of  the  cases  presenting  the  sub- 
ject in  other  phases,  in  which  the  principle  has  been  adversely  applied. 

Within  the  condemned  category  are: — 

An  agreement  to  pay  for  supporting  for  election  a  candidate  for 
sheriff;  to  pay  for  resigning  a  public  position  to  make  room  for  an- 
other; to  pay  for  not  bidding  at  a  sheriff's  sale  of  real  property;  to 
pay  for  not  bidding  for  articles  to  be  sold  by  the  government  at  auc- 
tion; to  pay  for  not  bidding  for  a  contract  to  carry  the  mail  on  a 
specified  route;  to  pay  a  person  for  his  aid  and  influence  in  procur- 
ing an  office,  and  for  not  being  a  candidate  himself;  to  pay  for  pro- 
curing a  contract  from  the  government;  to  pay  for  procuring  sig- 
natures to  a  petition  to  the  governor  for  a  pardon;  to  sell  land  to  a 
particular  person  when  the  surrogate's  order  to  sell  should  have  been 
obtained ;  to  pay  for  suppressing  evidence  and  compounding  a  felony ; 
to  convey  and  assign  a  part  of  what  should  come  from  an  ancestor 
by  descent,  devise,  or  distribution;  to  pay  for  promoting  a  marriage; 
to  influence  the  disposition  of  property  by  will  in  a  particular  way. 

The  question  now  before  us  has  been  decided  in  four  American 
cases.  They  were  all  ably  considered,  and  in  all  of  them  the  contract 
was  held  to  be  against  public  policy,  and  void.  We  entertain  no  doubt 
that  in  such  cases,  as  under  all  other  circumstances,  an  agreement 
express  or  implied  for  purely  professional  services  is  valid.  Within 
this  category  are  included,  drafting  the  petition  to  set  forth  the  claim, 
attending  to  the  taking  of  testimony,  collecting  facts,  preparing 
arguments,  and  submitting  them,  orally  or  in  writing,  to  a  committee 
or  other  proper  authority,  and  other  services  of  like  character. 
All  these  things  are  intended  to  reach  only  the  reason  of  those  sought 
to  be  influenced.  They  rest  on  the  same  principle  of  ethics  as  pro- 
fessional services  rendered  in  a  court  of  justice,  and  are  no  more 
exceptional.^  But  such  services  are  separated  by  a  broad  line  of 
demarcation  from  personal  solicitation,  and  the  other  means  and 
appliances  which  the  correspondence  shows  was  resorted  to  in  this 
case.  There  is  no  reason  to  believe  that  they  involved  anything  cor- 
rupt or  different  from  what  is  usually  practised  by  all  paid  lobby- 
ists in  the  prosecution  of  their  business, 

1  Salinas  v.  Stillman,  66  Fed.  Rep.  (C.  C.  A.)  677;  Bergen  v.  Frisbie,  125  Cal.  168; 
Barry  v.  Capen.  151  Mass.  99;  ChesebrouRh  v.  Conover,  140  N.  Y.  382;  Yates  v. 
Robertson,  80  Va.  475;  Hoiilton  v.  Nichol,  93  Wis.  393,  ace.  See  also  Davis  v.  Com- 
monwealth, 164  Mass.  241;    3  Williston,  Contracts,  §1727. 


880  TRIST    V.    CHILD  [CHAP.    VI 

The  foundation  of  a  republic  is  the  virtue  of  its  citizens.  They 
are  at  once  sovereigns  and  subjects.  As  the  foundation  is  under- 
mined, the  structure  is  weakened.  When  it  is  destroyed  the  fabric 
must  fall.  Such  is  the  voice  of  universal  history.  The  theory  of  our 
government  is  that  all  public  stations  are  trusts,  and  that  those  clothed 
with  them  are  to  be  animated  in  the  discharge  of  their  duties  solely  by 
considerations  of  right,  justice,  and  the  public  good.  They  are  never 
to  descend  to  a  lower  plane.  But  there  is  a  correlative  duty  resting 
upon  the  citizen.  In  his  intercourse  with  those  in  authority,  whether 
executive  or  legislative,  touching  the  performance  of  their  functions, 
he  is  bound  to  exhibit  truth,  frankness  and  integrity.  Any  departure 
from  the  line  of  rectitude  in  such  cases  is  not  only  bad  in  morals,  but 
involves  a  public  wrong.  I^o  people  can  have  any  higher  public 
interest,  except  the  preservation  of  their  liberties,  than  integrity 
in  the  administration  of  their  government  in  all  its  departments. 

The  agreement  in  the  present  case  was  for  the  sale  of  the  influence 
and  exertions  of  the  lobby  agent  to  bring  about  the  passage  of  a  law 
for  the  payment  of  a  private  claim,  without  reference  to  its  merits, 
by  means  which,  if  not  corrupt,  were  illegitimate,  and  considered  in 
connection  with  the  pecuniary  interest  of  the  agent  at  stake,  contrary 
to 'the  plainest  principles  of  public  policy.  No  one  has  a  right  in 
such  circumstances,  to  put  himself  in  a  position  of  temptation  to  do 
what  is  regarded  as  so  pernicious  in  its  character.  The  law  forbids  the 
inchoate  step,  and  puts  the  seal  of  reprobation  upon  the  undertaking. 

If  any  of  the  great  corporations  of  the  country  were  to  hire  adven- 
turers who  make  market  of  themselves  in  this  way,  to  procure  the 
passage  of  a  general  law  with  a  view  to  the  promotion  of  their  private 
interests,  the  moral  sense  of  every  right-minded  man  would  instinc- 
tively denounce  the  employer  and  employed  as  steeped  in  corruption, 
and  the  employment  as  infamous. 

If  the  instances  were  numerous,  open,  and  tolerated,  they  would  be 
regarded  as  measuring  the  decay  of  the  public  morals  and  degeneracy 
of  the  times.  N^o  prophetic  spirit  would  be  needed  to  foretell  the  con- 
sequences near  at  hand.  The  same  thing  in  lesser  legislation,  if  not 
so  prolific  of  alarming  evils,  is  not  less  vicious  in  itself,  nor  less  to 
be  condemned.  The  vital  principle  of  both  is  the  same.  The  evils  of 
the  latter  are  of  sufficient  magnitude  to  invite  the  most  serious 
consideration.  The  prohibition  of  the  law  rests  upon  a  solid  founda- 
tion. A  private  bill  is  apt  to  attract  little  attention.  It  involves  no 
great  public  interest,  and  usually  fails  to  excite  much  discussion. 
'Not  u II frequently  the  facts  are  whispered  to  those  whose  duty  it  is  to 
investigate,  vouched  for  by  them,  and  the  passage  of  the  measure  is 
thus  secured.  If  the  agent  is  truthful,  and  conceals  nothing,  all  is 
well.  If  he  uses  nefarious  means  with  success,  the  spring-head  and 
the  stream  of  legislation  are  polluted.  To  legalize  the  traffic  of  such 
Bervic(!  would  oficn  a  door  at  which  fraud  and  falsehood  would  not  fail 
to  enter  and  make  themselves  felt  at  every  accessible  point.    It  would 


SECT.    IV]  TRIST    V.    CHILD  881 

invite  their  presence  and  offer  them  a  premium.  If  the  tempted 
agent  be  corrupt  himself,  and  disposed  to  corrupt  others,  the  tran- 
sition requires  but  a  single  step.  He  has  the  means  in  his  hands,  with 
every  facility  and  a  strong  incentive  to  use  them.  The  widespread 
suspicion  which  prevails,  and  charges  openly  made  and  hardly  denied, 
lead  to  the  conclusion  that  such  events  are  not  of  rare  occurrence. 
Where  the  avarice  of  the  agent  is  inflamed  by  the  hope  of  a  reward 
contingent  upon  success,  and  to  be  graduated  by  a  percentage  upon 
the  amount  appropriated,  the  danger  of  tampering  in  its  worst  form 
is  greatly  increased. 

It  is  by  reason  of  these  things  that  the  law  is  as  it  is  upon  the  sub- 
ject. It  will  not  allow  either  party  to  be  led  into  temptation  where  the 
thing  to  be  guarded  against  is  so  deleterious  to  private  morals  and  so 
injurious  to  the  public  welfare.  In  expressing  these  views,  we  follow 
the  lead  of  reason  and  authority. 

We  are  aware  of  no  case  in  English  or  American  jurisprudence  like 
the  one  here  under  consideration,  where  the  agreement  has  not  been 
adjudged  to  be  illegal  and  void. 

We  have  said  that  for  professional  services  in  this  connection  a 
just  compensation  may  be  recovered.  But  where  they  are  blended  and 
confused  with  those  which  are  forbidden,  the  whole  is  a  unit  and 
indivisible.  That  which  is  bad  destroys  that  which  is  good,  and  they 
perish  together.  Services  of  the  latter  character,  gratuitously  ren- 
dered, are  not  unlawful.  The  absence  of  motive  to  wrong  is  the 
foundation  of  the  sanction.  The  tendency  to  mischief,  if  not  want- 
ing, is  greatly  lessened.  The  taint  lies  in  the  stipulation  for  pay. 
Where  that  exists,  it  affects  fatally,  in  all  its  parts,  the  entire  body 
of  the  contract.  In  all  such  cases,  potior  conditio  defenditis. 
Where  there  is  turpitude,  the  law  will  help  neither  party. 

The  elder  agent  in  this  case  is  represented  to  have  been  a  lawyer  of 
ability  and  high  character.  The  appellee  is  said  to  be  equally  worthy. 
This  can  make  no  difference  as  to  the  legal  principles  we  have  con- 
sidered, nor  in  their  application  to  the  case  in  hand.  The  law  is  no 
respecter  of  persons. 

Decree  reversed,  and  the  case  remanded,  with  directions  to 

Dismiss  the  hill} 

1  Providence  Tool  Co.  v.  Norris,  2  Wall.  45;  Oscanyan  v.  Arms  Co.,  103  U.  S.  261; 
Findlay  v.  Pertz,  66  Fed.  Rep.  (C.  C.  A.)  427;  Hayward  v.  Nordberg  Mfg.  Co.,  85 
Fed.  Rep.  (C.  C.  A.)  4;  Hunt  v.  Test,  8  Ala.  713;  Weed  v.  Black,  2  McArthur  (D.  C), 
268;  Doane  v.  Chicago  City  R.  R.  Co.,  160  111.  22;  Bermudez  Co.  v.  Crichfield,  62 
111.  App.  221,  174  111.  466;  Elkhart  County  Lodge  v.  Crary,  98  Ind.  238;  Kansas, 
&c.  Ry.  Co.  V.  McCoy,  8  Kan.  543;  McBratney  v.  Chandler,  22  Kan.  692;  Deering 
V.  Cunningham,  63  Kan.  174;  Wood  v.  McCann,  6  Dana,  366;  Wildly  v.  Collier, 
7  Md.  273;  Houlton  v.  Dunn,  60  Minn.  26;  Richardson  v.  Scott's  Bluff  County,  59 
Neb.  400;  Lyon  v.  Mitchell,  36  N.  Y.  235;  Mills  v.  Mills,  40  N.  Y.  546;  Veazey  v. 
Allen,  173  N.  Y.  359;  Winpenny  v.  French,  18  Ohio  St.  469;  Sweeney  v.  McLeod,  15 
Oreg.  330;  Clippinger  v.  Kepbaugh,  5  W.  &  S.  315;  Spalding  v.  Ewing,  149  Pa.  375; 
Powers  V.  Skinner,  34  Vt.  274;  Bryan  v.  Reynolds,  5  Wis.  200;  Chippewa  Valley  Co. 
V.  Chicago,  &c.  Co.,  75  Wis.  224;  Houlton  v.  Nichol,  93  Wis.  393,  ace.  See  also  Wash- 
ington Irrigation  Co.  v.  Krutz,  119  Fed.  Rep.  (C.  C.  A.)  279;    Brown  v.  First  Nat. 


882  MEGUIRE    V.    CORWINE  [CHAP.   VI 


MEGUIEE  V.  CORWINE 
Supreme  Court  of  the  United  States^  October  Term,  1897 
[Reported  in  101  United  States,  108] 

Error  to  the  Supreme  Court  of  the  District  of  Columbia. 

The  facts  are  stated  in  the  opinion  of  the  court. 

Mr,  Frederick  P.  Stanton,  for  the  plaintiff  in  error. 

Mr.  Enoch  Totten,  for  the  defendant  in  error. 

Mr.  Justice  Swayne  delivered  the  opinion  of  the  court: — 

The  plaintiff  in  the  court  below  is  the  plaintiff  in  error  here. 

The  first  count  of  the  declaration  avers  that  in  consideration  of 
the  assistance  to  be  rendered  by  him  to  the  defendant's  testator  in 
procuring  him  to  be  appointed  special  counsel  of  the  United  States 
in  certain  litigated  cases  known  as  the  "Farragut  prize  cases,"  and 
also  in  consideration  of  the  assistance  to  be  rendered  by  the  plaintiff 
in  managing  and  carrying  on  the  defence  in  those  cases, — which 
assistance  was  accordingly  rendered,  the  testator  promised  the 
plaintiff  to  pay  him  one  half  of  all  the  fees  which  the  testator  should 
receive  as  such  special  counsel,  and  that  the  testator  did  receive  as 
such  special  counsel  in  those  cases  $29,950,  of  which  sum  the 
plaintiff  was  entitled  to  be  paid  one  half,  &c. 

The  second  count  is  substantially  the  same  with  the  first,  except 
that  it  avers  the  consideration  of  the  contract  to  have  been  the 
assistance  to  be  rendered  by  the  plaintiff'  in  the  defence  of  the  cases 
named,  and  is  silent  as  to  the  stipulation  that  he  was  to  assist  in  pro- 
curing the  appointment  of  the  testator  as  special  counsel  for  the 
government. 

The  third  is  a   common  count   alleging  the  indebtedness  of   the 

testator  to  the  defendant  for  work  and  labor  to  the  amount  of  $12,975. 

It  appears  by  the  bill  of  exceptions  that  the  plaintiff  called  three 

witnesses  to  establish  the  contract  upon  which  he  sought  to  recover. 


Bank,  137  Ind.  655;    Thompson  v.  Wharton,  7  Bush,  563;    Buck  v.  First  Nat.  Bank, 
27  Mich.  293;    2  Williston,  Contracts,  §  1727. 

In  Southard  v.  Boyd,  51  N.  Y.  177,  the  defendant,  a  ship-owner,  residing  in  Bos- 
ton, hearin-/  of  the  Ranks  expedition,  came  to  New  York,  seeking  employment  in  this 
expedition  for  one  of  his  ships  known  as  the  "Red  Gauntlet."  Failing  to  charter  it 
himself,  he  called  at  the  office  of  the  plaintiffs  and  left  his  sliip  for  charter,  limiting 
them,  however,  to  a  charter  for  troops,  and  rotiirncd  to  Boston.  At  this  interview  he 
wa.s  informed  that  the  commissions,  in  case  of  charter,  would  be  five  per  cent.  In  its 
opinion  the  court  say:  "The  further  claim  is  made  that  the  contracts  with  the  plain- 
tiff was  for  an  illegal  service,  in  that  they  charged  a  commission  for  claiming  to  have 
influence  with  a  government  agent  to  accept  a  vessel  already  offered,  but  not  yet  ac- 
cepterl.  It  is  tnie  that  one  of  the  i)laintiffs  was  a  son,  and  that  another  was  a  son-in- 
law  of  one  of  the  gf)vc?mment  agents,  whose  husinc.ss  it  was  to  select  the  vessels  for 
the  government,  and  the  T)laintiffH  r)robahly  had  facilities  for  chartering  vessels  which 
othf;r.s  difl  not  have  But  the  plaintiffs  <lid  not  contract  to  do  an  illegal  service.  They 
did  not  a'n-f!e  to  mhc  any  corrupt  means  to  procure;  the  charter.  The  fact  that  the 
plaintifTs  had  intimatr;  relations  with  tlu;  government  agents,  and  could  probalily 
therefore  influtmce  their  action  much  more  n^adily  than  others,  did  not  forbid  their 
employm'int.     Lyon  v.  Mitchell,  '.W  N.  Y.  235." 


SECT.    IV]  MEGUIRE    V.    CORWINE  883 

Lovel  testified  that  "the  testator  also  stated  that  he  had  agreed 
to  pay  the  plaintiff  one  half  of  all  the  fees  he  should  receive  in  said 
cases,  for  his  aid  in  getting  the  appointment  of  special  counsel  and  for 
the  assistance  which  the  plaintiff  was  to  render  in  procuring  testimony 
and  giving  information  for  the  management  of  the  defence  in  said 
cases." 

"On  cross-examinaton,  the  witness  said  he  knew,  before  his  said 
conversation  with  R.  M.  Corwine,  and  before  Corwine  was  employed, 
that  Mr,  Meguire,  the  plaintiff,  had  the  selection  of  counsel  in  said 
cases,  the  Treasury  department  only  restricting  him  to  the  selection  of 
a  man  who  was  familiar  with  admiralty  practice,  and  Mr.  Meguire 
was  to  utilize  the  information  he  professed  to  have  at  that  time.  The 
bargain,  as  witness  understood  it,  was  that,  in  consideration  of 
Meguire's  procuring  Corwine  to  be  employed  as  special  counsel  in 
those  cases,  and  of  assisting  him  in  getting  evidence  and  information, 
Corwine  agreed  to  pay  to  the  plaintiff  (Meguire)  one  half  of  the  fees 
which  he  (Corwine)  might  receive  from  the  United  States  for  ser- 
vices in  said  cases. 

"The  plaintiff  then  called  Lewis  S.  Wells,  another  witness  in  his 
behalf,  who,  being  duly  sworn,  stated  that  since  the  commencement 
of  this  suit — he  thought  some  time  last  year — he  met  the  testator  (K. 
M.  Corwine,  deceased)  in  the  Treasury  department,  and  had  a  con- 
versation with  him  about  the  plaintiff  and  the  Farragut  cases.  Mr. 
Corwine  was  very  angry,  and  said  that  he  had  agreed  to  pay  Mr. 
Meguire  one  half  of  his  fees  in  the  Farragut  cases,  and  paid  him  one 
half  the  retainer  received  in  1869,  and  $4,000  in  July,  1873,-  and  had 
taken  his  receipt  in  full.  That  he  had  found  out  that  plaintiff  had 
not  been  the  means  of  his  appointment  as  special  counsel,  and  he 
thought  he  had  paid  the  plaintiff  enough." 

Wells  testified  further  that  upon  two  occasions  the  testator  told 
him  the  plaintiff  was  assisting  him  in  the  preparation  of  the  defence 
in  the  Farragut  cases,  and  that  he  had  agreed  to  pay  to  the  plaintiff 
one  half  of  his  fees  for  the  plaintiff's  services.  This  is  all  that  is 
found  in  the  record  touching  the  terms  and  consideration  of  the  eon- 
tract.  It  was  in  proof  by  a  late  solicitor  of  the  treasury  that  the 
plaintiff  strongly  urged  on  him  the  employment  of  the  testator  as 
special  counsel,  and  that  at  the  instance  of  the  plaintiff  he  called  the 
attention  of  the  Secretary  of  the  Treasury  to  the  subject,  and  that 
the  appointment  of  the  testator  was  thus  brought  about.  The  plain- 
tiff had  been  a  clerk  in  ISTew  Orleans,  in  the  office  of  Colonel  Holabird, 
Chief  Quartermaster  of  the  Department  of  the  Gulf,  during  the 
war,  and  had  possession  of  Holabird's  papers,  from  which  he  derived 
the  facts  communicated  to  the  testator  for  the  defence  of  government 
in  the  prize  suits  in  question.  It  was  not  controverted  that  the 
amount  of  fees  received  by  the  testator  was  $25,950,  and  that  he  paid 
over  to  the  plaintiff  $4,475  before  the  breach  occurred  between  thorn. 
The  further  sum  of  $8,500  was  claimed  by  the  plaintiff,  and  this 


884  MEGUIRE    V.    CORWINE  [CHAP.   VI 

suit  was  brought  to  recover  it.  The  learned  counsel  for  the  plaintiff  in 
error  complains  in  his  brief  that  "in  the  charge  of  the  court,  page  10, 
the  jury  was  instructed  that  'the  contract  set  out  in  the  first  count 
of  the  declaration  was  illegal  and  void,  and  that  the  plaintiff  could 
not  recover  on  the  second  count  unless  the  jury  should  find  that 
the  parties  had  made  another  and  a  distinct  contract;'  and  in  the 
first  instruction  asked  by  the  defendants  and  given  by  the  court  the 
jury  were  told  'that  such  an  arrangement  is  void,  because  it  is  con- 
trary to  public  policy,  and  the  plaintiff  cannot  recover  in  any  form  of 
action  for  any  services  rendered  or  labor  performed  in  pursuance 
thereof.'  .  .  .  There  can  be  no  doubt  that  this  charge  was  fatal 
to  the  plaintiff's  whole  case.  The  jury  was  not  allowed  to  infer,  as 
they  well  might  have  done  from  the  testimony  of  more  than  one  of 
the  witnessess,  that  the  testator,  after  his  appointment  as  special 
counsel,  recognized  an  implied  agreement  to  pay  the  plaintiff  half  of 
his  fees  for  the  services  of  the  latter  rendered  during  the  progress  of 
the  business." 

In  our  view  of  the  record  this  is  the  turning  point  of  the  case.  The 
objection  taken  to  the  instructions  referred  to  is  not  so  much  to  them 
in  the  abstract  as  the  concrete.  The  complaint  is  that  they  closed 
the  door  against  the  inference  of  another  contract  which  the  jury 
might  have  drawn  from  the  testimony  in  the  case.  To  this  there  are 
several  answers.  If  there  were  such  testimony,  it  should  have  been 
set  forth  in  the  record.  After  a  careful  examination,  we  should  have 
been  unable  to  find  any.  The  instructions  expressly  saved  the  right 
of  the  jury  to  find  another  and  a  different  contract,  and  their  atten- 
tion was  called  to  the  subject.  They  found  none.  The  contract 
objected  to  by  the  court  as  fatally  tainted  was  proved  by  witnessess 
called  by  the  plaintiff  himself.  He  neither  proved  nor  attempted  to 
prove  any  other.  It  was,  then,  neither  claimed  nor  intimated  that 
any  other  had  been  made.  After  the  views  of  the  court  were 
announced  it  was  too  late  for  the  plaintiff  to  change  his  position  and 
claim  for  the  jury  the  right  to  wander  at  large  in  the  field  of  con- 
jecture and  find  as  a  fact  what  the  evidence  wholly  failed  to  establish, 
and  which,  if  found,  would  have  thrown  on  the  court  the  necessity  to 
set  aside  the  verdict  and  award  a  new  trial. 

A  judge  has  no  right  to  submit  a  question  where  the  state  of  the 
evidence  forbids  it.  Michigan  Bank  /;.  Eldred,  9  Wall.  544.  On  the 
contrary,  where  there  is  an  entire  absence  of  testimony,  or  it  is  all 
one  way,  and  its  conclusiveness  is  free  from  doubt,  it  is  competent 
for  the  court  to  direct  the  jury  to  find  accordingly.  Merchants'  Bank 
V.  State  Bank,  10  id.  604.  The  practice  condemned  in  Micliigan 
Bank  /;.  Eldrcnl  is  fraught  witli  evil.  It  tends  to  create  doubts  which 
otherwise  might  not,  and  ought  not  to  exist,  and  may  confuse  the 
minrls  of  the  jury  and  lead  them  to  wrong  conclusions.  If  the  instruc- 
tions h(Te  uiuler  conairloration  are  linblf  to  any  criticism,  it  is  that 
they  were  more  favorable  to  the  plaint  i(T  in  error  than  ho  had  a  right 
to  claim. 


SECT.    IV]  GUERNSEY    V.    COOK  885 

The  law  touching  contracts  like  the  one  here  in  question  has  been 
often  considered  by  this  court,  and  is  well  settled  by  our  adjudica- 
tions. Marshall  v.  Baltimore  &  Ohio  Railroad  Co.,  16  How.  314;  Tool 
Company  v.  Norris,  2  Wall.  45 ;  Trist  v.  Child,  21  id.  441 ;  Coppel  v. 
Hall,  7  id.  542.  It  cannot  be  necessary  to  go  over  the  same  ground 
again.  To  do  so  would  be  a  waste  of  time.  The  object  of  this  opin- 
ion is  rather  to  vindicate  the  application  of  our  former  rulings  to 
this  record  than  to  give  them  new  support.  They  do  not  need  it. 
Frauds  of  the  class  to  which  the  one  here  disclosed  belongs  are  an  un- 
mixed evil.  Whether  forbidden  by  a  statute  or  condemned  by  public 
policy,  the  result  is  the  same.  No  legal  right  can  spring  from  such  a 
source.  They  are  the  sappers  and  miners  of  the  public  welfare,  and  of 
free  government  as  well.  The  latter  depends  for  its  vitality  upon  the 
virtue  and  good  faith  of  those  for  whom  it  exists,  and  of  those  by  whom 
it  is  administered.  Corruption  is  always  the  forerunner  of  despotism. 

In  Trist  v.  Child  {supra),  while  recognizing  the  validity  of  an 
honest  claim  for  services  honestly  rendered,  this  court  said :  "But 
they  are  blended  and  confused  with  those  which  are  forbidden; 
the  whole  is  a  unit  and  indivisible.  That  which  is  bad  destroys  that 
which  is  good,  and  they  perish  together.  .  .  .  Where  the  taint  exists 
it  aifects  fatally,  in  all  its  parts,  the  entire  body  of  the  contract.  lu 
all  such  cases  potior  conditio  defendentis.  .Where  there  is  turpitude, 
the  law  will  help  neither  party."  These  remarks  apply  here.  The 
contract  is  clearly  illegal,  and  this  action  was  brought  to  enforce  it. 
This  conclusion  renders  it  unnecessary  to  consider  the  plaintiff's 
other  assignments  of  error.  The  case  being  fundamentally  and 
fatally  defective,  he  could  not  recover.  Conceding  all  his  excep- 
tions, other  than  those  we  have  considered,  to  be  well  taken,  the 
errors  commited  could  have  done  him  no  harm,  and  opposite  rulings 
would  have  done  him  no  good.  In  either  view,  these  alleged  errors 
are  an  immaterial  element  in  the  case.  Barth  v.  Clise,  Sheriff,  12 
Wall.  400.  Judgment  affirmed.'^ 


GEORGE  A.  GUERNSEY  v.   JAMES  P.  COOK 

Supreme  Judicial  Court  of  Massachusetts,  March  10- 

Septemher   8,    1876 

[Reported  in  120  Massachusetts,  501] 

Colt,  J.    The  contract  declared  on  has  been  held  to  be  the  personal 

contract   of  the  defendant.      117   Mass.    548.     It   provided  in   sub- 

1  See  also  Schloss  v.  Hewlett,  81  Ala.  266;  Edwards  v.  Handle,  63  Ark.  216;  Martin 
V.  Wade,  37  Cal.  168;  Conner  v.  Canter,  15  Ind.  App.  690;  Glover  v.  Taylor.  38  La. 
Ann.  634;  Harris  v.  Chamberlain,  126  Mich.  280;  Dickson  v.  Kittson,  75  Minn. 
168;  Gray  v.  Hook,  4  N.  Y.  449;  Basket  v.  Moss,  115  N.  C.  448;  Hunter  v.  NoK,  71 
Pa.  282;  Whitman  v.  Ewin,  39  S.  W.  Rep.  (Tenn.  Ch.)  742;  Willis  v.  Compress  Co., 
66  S.  W.  Rep.  (Tex.  Civ.  App.)  472;  Meacham  v.  Dow,  32  Vt.  71.  See  further  2 
Williston,  Contracts,   §§  1730,   1732. 

On  the  validity  of  contracts  relating  to  the  location  of  railroads,  railroad  stations 
or  public  buildings,  see  ibid.,  §  1733. 


886  GUERNSEY    V.    COOK  [CHAP.   VI 

stance  on  the  part  of  the  defendant,  and  Mr.  Beebe,  who  together 
owned  a  majority  of  the  stock  of  the  India  Company,  that  the  plain- 
tiff should  be  made  treasurer  of  that  company  at  a  stipulated  salary; 
the  plaintiff  on  his  part  agreeing  to  take  part  of  their  stock  at  par, 
with  an  agreement  that  it  should  be  taken  back,  and  an  allowance 
made  for  interest,  "in  case  it  should  be  desirable  for  any  reason 
to  dispense  with  the  plaintiff's  service  as  treasurer."  The  question 
is  whether  such  a  contract  is  void  as  being  against  public  policy. 
Its  decision  depends  upon  the  construction  which  must  be  fairly 
given  to  the  terms  of  the  contract. 

In  consideration  of  the  purchase  of  a  part  of  their  stock  at  a 
price  named,  two  of  the  stockholders  agree  to  secure  to  the  pur- 
chaser the  treasurership  of  the  corporation,  of  which  they  are  mem- 
bers, and  to  secure  to  him  also  a  sum  named,  as  the  annual  salary 
of  the  office.  The  purchase  of  the  defendant's  stock  and  the  agree- 
ment relating  to  the  office  are  incorporated  into  the  contract  as 
part  of  one  transaction;  and  each  agreement  is  the  valuable  con- 
sideration of  the  other.  The  contract,  if  reasonably  susceptible  of 
tAvo  meanings,  one  legal  and  the  other  not,  must  indeed  receive  an 
interpretation  which  will  support  rather  than  defeat  it,  and  the 
presumption  is  in  favor  of  its  legality.  But  this  contract  necessarily 
implies  that  the  defendant  intended  to  derive,  and  the  plaintiff 
intended  to  give  to  him,  a  private  advantage,  not  shared  by  the 
other  stockholders,  in  consideration  of  his  election  as  treasurer. 
And  there  is  nothing  in  the  facts  disclosed  at  the  trial  to  show  that 
such  was  not  in  fact  the  result  of  the  transaction,  or  that  the  agree- 
ment in  question  was  known  and  consented  to  by  the  other  mem- 
bers of  the  corporation. 

It  was  the  purpose  and  effect  of  the  contract  to  influence  the 
defendant,  in  the  decision  of  a  question  affecting  the  private  rights 
of  others,  by  considerations  foreign  to  those  rights.  The  promise 
was  placed  under  direct  inducement  to  disregard  his  duties  to  the 
other  members  of  the  corporation,  who  had  a  right  to  demand  his 
disinterested  action  in  the  selection  of  suitable  officers.  He  was  in 
a  relation  of  trust  and  confidence,  which  required  him  only  to  look 
to  the  best  interest  of  the  whole,  uninfluenced  by  private-  gain.  The 
contract  operated  as  a  fraud  upon  his  associates. 

In  Fuller  v.  Dame,  18  Pick.  472,  a  contract  was  held  to  be  con- 
trary to  public  policy,  and  to  open,  upright,  and  fair  dealing, 
whicli  tended  injuriously  to  affect  tlic  interest  of  the  corporations 
of  which  the  promisee  was  a  member.  It  was  compared  to  the  case 
of  a  composition  deed  where  all  the  creditors  release  the  common 
debtor  n{)oii  tbe  payment  of  a  certain  percentage,  and  where  a  stipu- 
ljitif)ii  for  a  separate  and  distinct  advantage  is  held  to  be  a  fraud  on 
oth(T  creditors  and  void.  Case  v.  Gerrish,  15  Pick.  49.  Upon  the 
same  principle,  agreements  not  to  bid  against  others  at  a  public 
auction,  as  well  as  agreements  for  the  employment  of  underbiddera 


SECT.    IV]  HOLCOMB    V.    WEAVER  887 

and  puffers,  are  held  to  be  a  fraud  upon  the  bidders  at  the  sale, 
and  void  as  against  public  policy.  So  contracts  with  brokers  or 
agents,  upon  a  consideration  founded  on  violations  of  duty  to  the 
principal,  are  void.  Smith  v.  Townsend,  109  Mass.  500;  Phippen 
V.  Stickney,  3  Met.  384;  Gibbs  v.  Smith,  115  Mass.  592;  Curtis  v. 
Aspinwall,  114  Mass.  187.  See  also  Waldo  v.  Martin,  4  B.  &  C. 
319;  Marshall  v.  Baltimore  &  Ohio  Railroad,  16  How.  314;  Elliot 
V.  Eichardson,  L.  R.  5  C.  P.  744. 

Upon  the  facts  disclosed,  this  action,  which  is  not  in  avoidence 
but  in  direct  affirmance  of  the  contract,  cannot  be  maintained. 
White  V.  Franklin  Bank,  22  Pick.  181.  The  objection  that  the 
contract  is  illegal,  although  it  comes  with  no  good  grace  from  the 
defendant,  is  allowed  to  prevail,  not  as  a  protection  to  him,  but  for 
the  sake  of  the  public  good,  and  because  the  court  will  not  lend  its 
aid  to  enforce  an  illegal  contract.  Myers  v.  Meinrath,  101  Mass. 
366;  Taylor  v.  Chester,  L.  R.  4  Q.  B.  309. 

Judgment   for   the   defendants 


HENRY  HOLCOMB  v.   THOMAS  H.  WEAVER 

Supreme   Judicial   Court   of   Massachusetts,   October   25,    1883- 
January  29,   1884 

[Reported  in  136  Massachusetts,  265] 

Holmes,  J.  The  plaintiff  in  ISTew  Bedford  was  written  to  from 
New  York  on  behalf  of  the  Basque  Island  Club,  and  requested  to 
find  a  builder  who  could  erect  a  building  for  them  cheaper  than 
the  New  York  builders.  The  letter  continued,  "but  we  only  want 
parties  that  you  can  endorse  in  every  way  responsible  and  reliable." 
The  plaintiff  in  reply  introduced  the  defendant,  who  made  his 
estimates,  was  employed,  erected  the  building,  and  was  paid.  At 
an  early  stage  of  the  proceedings  the  plaintiff  asked  and  obtained 
a  promise  from  the  defendant  to  pay  $250,  "as  a  commission  or 
compensation  for  his  trouble  in  the  matter,"  which  is  the  promise 
sued  upon.  The  plaintiff  testified  that  this  promise  was  made 
without  the  knowledge  even  of  the  club,  but  that  he  expected  no  pay 
from  them  for  procuring  the  defendant  to  erect  the  building.     The 

1  West  V.  Camden,  135  U.  S.  507;  Noel  v.  Drake,  28  Kan.  265;  Noyes  v.  Marsh, 
123  Mass.  286:  Woodruff  v.  Wentworth,  133  Mass.  309;  Wilbur  v.  Stoepel,  82  Mich. 
344;  Cone  v.  Russell,  48  N.  J.  Eq.  208;  Fenness  v.  Ross,  5  N.  Y.  App.  Dlv.  342;  Snow 
V.  Church,  13  N.  Y.  App.  Div.  108;  Gage  v.  Fisher,  5  N.  Dak.  297;  Withers  v.  Ed- 
wards, 62  S.  W.  Rep.  (Tex.)  795,  ace. 

See  also  Elliott  v.  Richardson,  L.  R.  5  C.  P.  744;  Blue  v.  Capital  Nat.  Bank,  145 
Ind.  518;  McClure  v.  Law,  161  N.  Y.  78;  Onbert  v.  Finch,  173  N.  Y.  455;  Wood  v. 
Manchester,  &c.  Co.,  54  N.  Y.  App.  Div.  522;  Flaherty  v.  Cary.  62  N.  Y.  App.  Div.  1. 
But  compare  Almy  v.  Orne,  165  Mass.  126;  Gassett  v.  Glazier,  165  Mass.  473;  Sey- 
mour V.  Detroit,  &c.  Mills,  56  Mich.  117;  Barnes  v.  Brown,  80  N.  Y.  527;  Bonta  v. 
Gridley,  77  N.  Y.  App.  Div.  33;    Manson  v.  Curtis,  223  N.  Y.  313. 


888  HOLCOMB    V.    WEAVER  [CHAP.   VI 

court  ruled  that  tlie  plaintiff  could  not  recover;  and  the  plaintiff 
excepted. 

The  ruling  was  clearly  right.  The  plaintiff  was  not  merely  asked 
to  introduce  a  possible  contractor,  who  was  to  be  dealt  with  by  the 
club  on  the  same  footing  as  any  one  else,  and  to  stand  at  no  advan- 
tage in  bargaining  with  them  by  reason  of  the  introduction,  as  in 
Eupp  V.  Sampson,  16  Gray,  398.  He  was  asked  to  recommend 
some  one  as  in  every  way  responsible.  His  recommendation  obvi- 
ously was  expected  to  have  weight  with  the  club,  and  did  have  it. 
If  his  agreement  with  the  defendant  was  made  before  his  recommen- 
dation, it  had  a  necessary  tendency  to  give  bias  to  what  they  knew  the 
club  relied  on  as  disinterested.  A  recommendation  under  these  cir- 
cumstances would  have  been  a  fraud,  even  if  gratuitous,  and  it  is 
therefore  immaterial  whether  the  club  was  to  pay  for  it  or  not, 
although  it  is  hard  to  see  why  the  plaintiff  could  not  have  recovered 
for  his  trouble  if  he  had  dealt  fairly.  If,  then,  the  agreement  was 
made  at  the  time  supposed,  it  was  open  to  all  the  objections  so  fully 
stated  in  Fuller  v.  Dame,  18  Pick.  472,  and  was  void  by  that  and  other 
Massachusetts  decisions.  Rice  v.  Wood,  113  Mass.  133.  See  also 
Atlee  V.  Fink,  75  Mo.  100;  Harrington  v.  Victoria  Graving  Dock  Co., 
3  Q.  B.  D.  549 ;  Panama  &  South  Pacific  Telegraph  v.  India  Rubber, 
Gutta  Percha,  &  Telegraph  Works,  L.  R.  10  C.  H.  515. 

The  agreement  was  open  to  the  same  objections  on  another  ground, 
whether  made  before  or  after  the  plaintiff  had  written  his  recommen- 
dation. It  was  made  at  all  events  before  the  defendant  had  completed 
his  bargain  with  the  club.  The  parties  knew  that  the  club  were 
seeking  to  get  the  work  done  as  cheaply  as  they  could  get  a  trust- 
worthy man  to  do  it.  If  the  defendant  had  to  pay  the  plaintiff,  he 
would  naturally  charge  it  to  the  club  in  his  estimate,  or  in  some 
way  make  the  club  pay  him  back.  The  tendency  of  the  contract 
was  to  induce  the  defendant  to  charge,  and  to  make  the  club  pay, 
more  than  was  necessary  or  fair,  when  the  plaintiff  had  led  them  to 
expect  that  they  would  be  dealt  with  honestly  and  economically, 
and  certainly  with  no  adverse  interest  emanating  from  the  plaintiff. 

We  may  add,  that,  if  the  date  of  the  promise  in  suit  were 
material  and  left  in  doubt,  we  should  assume  the  fact  to  be  that 
which  was  most  favorable  to  the  ruling;  and  also  that,  if  the 
promise  was  made  after  the  plaintiff  had  written  to  'New  York 
recommending  the  defendant,  the  plaintiff  would  have  a  great  deal 
of  difficulty  in  showing  a  consideration  which  was  not  executed 
before  the  promise  was  made.  For  the  trouble  for  which  the 
plaintiff  was  to  have  a  commission  obviously  meant  his  recom- 
mendation of  the  defendant.  He  does  not  appear  to  have  taken 
any  ofbor.  Judgment  affirmed. 


SECT.    V]  HOLMAN    V.    JOHNSON  889 

SECTION  V. 
MISCELLANEOUS    CASES    OF    ILLEGAL    CONTRACTS 


HOLMAN  ET  AL.  V.  JOHNSON 

In  the  King's  Bench,  July  5,  1775 

{Reported  in  1  Cowper,  341] 

Assumpsit  for  goods  sold  and  delivered:  Plea  non  assumpsit,  and 
verdict  for  the  plaintiff.  Upon  a  rule  to  show  cause  why  a  new  trial 
should  not  be  granted,  Lord  Mansfield  reported  the  case,  which  was 
shortly  this :  The  plaintiff,  who  was  resident  at  and  inhabitant  of 
Dunkirk,  together  with  his  partner,  a  native  of  that  place,  sold 
and  delivered  a  quantity  of  tea,  for  the  price  of  which  the  action 
was  brought,  to  the  order  of  the  defendant,  knowing  it  was  intended 
to  be  smuggled  by  him  into  England;  they  had,  however,  no  concern 
in  the  smuggling  scheme  itself,  but  merely  sold  this  tea  to  him,  as 
they  would  have  done  to  any  other  person  in  the  common  and  ordi- 
nary course  of  their  trade. 

Mr.   Mansfield,  for   the  defendant. 

Mr.  Dunning,  Mr.  Davenport,  and  Mr.  Duller,  for  the  plaintiff. 

Lord  Mansfield.  There  can  be  no  doubt  that  every  action 
tried  here  must  be  tried  by  the  law  of  England;  but  the  law  of 
England  says  that  in  a  variety  of  circumstances,  with  regard  to 
contracts  legally  made  abroad,  the  laws  of  the  country  where  the 
cause  of  action  arose  shall  govern.  There  are  a  great  many  cases 
which  every  country  says  shall  be  determined  by  the  laws  of  for- 
eign countries  where  they  arise.  But  I  do  not  see  how  the  prin- 
ciples on  which  that  doctrine  obtains  are  applicable  to  the  present 
case.  For  no  country  ever  takes  notice  of  the  revenue  laws  of 
another. 

The  objection  that  a  contract  is  immoral  or  illegal  as  between 
plaintiff'  and  defendant,  sounds  at  all  times  very  ill  in  the  mouth 
of  the  defendant.  It  is  not  for  his  sake,  however,  that  the  obiec- 
tion  is  ever  allowed ;  but  it  is  founded  in  general  principles  of  policy, 
which  the  defendant  has  the  advantage  of,  contrary  to  the  real 
justice  as  between  him  and  the  plaintiff,  by  accident,  if  I  may  so 
say.  The  principle  of  public  policy  is  this:  Ex  dolo  mala  non 
oritur  actio.  No  court  will  lend  its  aid  to  a  man  who  founds  his 
cause  upon  an  immoral  or  illegal  act.  If,  from  the  plaintiff's  own 
stating  or  otherwise,  the  cause  of  action  appears  to  arise  ex  turpi 
causa,  or  the  transgression  of  a  positive  law  in  this  country,  there 
the  court  says  he  has  no  right  to  be  assisted.  It  is  upon  that  ground 
the  court  goes;  not  for  the  sake  of  defendant,  but  because  they  Avill 
not  lend  their  aid  to  snch  a  plaintiff.    So  if  the  plaintiff  and  defend- 


890  HOLMAN    V.    JOHNSON  [CHAP.   VI 

ant  were  to  change  sides,  and  the  defendant  was  to  bring  his  action 
against  the  plaintiff,  the  latter  would  then  have  the  advantage  of  it; 
for  where  both  are  equally  in  fault,  potior  est  conditio  defenditis. 

The  question  therefore  is,  whether  in  this  case  the  plaintiff's  demand 
is  founded  upon  the  ground  of  any  immoral  act  or  contract,  or 
upon  the  ground  of  his  being  guilty  of  anything  which  is  prohib- 
ited by  a  positive  law  of  this  country.  An  immoral  contract  it  cer- 
tainly is  not;  for  the  revenue  laws  themselves,  as  well  as  the 
offences  against  them,  are  all  positivi  juris.  What,  then,  is  the  con- 
tract of  the  plaintiff?  It  is  this:  being  a  resident  and  inhabitant 
of  Dunkirk,  together  with  his  partner,  who  was  born  there,  he  sells 
a  quantity  of  tea  to  the  defendant,  and  delivers  it  at  Dunkirk  to 
the  defendant's  order,  to  be  paid  for  in  ready  money  there,  or  by 
bills  drawn  personally  upon  him  in  England.  This  is  an  action 
brought  merely  for  the  goods  sold  and  delivered  at  Dunkirk.  Where, 
then,  or  in  what  respect  is  the  plaintiff  guilty  of  any  crime?  Is 
there  any  law  of  England  transgresed  by  a  person  making  a  com- 
plete sale  of  a  parcel  of  goods  at  Dunkirk,  and  giving  credit  for 
them  ?  The  contract  is  complete,  and  nothing  is  left  1  o  be  done.  The 
seller,  indeed,  knows  what  the  buyer  is  going  to  do  with  the  goods, 
but  he  has  no  concern  in  the  transaction  itself.  It  is  not  a  bargain 
to  be  paid  in  case  the  vendee  should  suceed  in  landing  the  goods; 
but  the  interest  of  the  vendor  is  totally  at  an  end,  and  his  con- 
tract  complete   by  the   delivery   of  the  goods   at   Dunkirk. 

To  what  a  dangerous  extent  would  this  go  if  it  were  to  be 
held  a  crime.  If  contraband  clothes  are  bought  in  France,  and 
brought  home  hither,  or  if  glass  bought  abroad,  which  ought  to 
pay  a  great  duty,  is  run  into  England,  shall  the  French  tailor  or 
the  glass  manufacturer  stand  to  the  risk  or  loss  attending  their 
being  run  into  England  ?  Clearly  not.  Debt  follows  the  person, 
and  may  be  recovered  in  England,  let  the  contract  of  debt  be  made 
where  it  will;  and  the  law  allows  a  fiction  for  the  sake  of  ex- 
pediting the  remedy.  Therefore,  I  am  clearly  of  the  opinion 
that  the  vendors  of  these  goods  are  not  guilty  of  any  offence,  nor 
have  they  transgressed  against  the  provisions  of  any  act  of  Par- 
liament. 

I  am  very  glad  the  old  books  have  been  looked  into.  The  doc- 
trine Huberus  lays  down  is  founded  in  good  sense,  and  upon  gen- 
eral principles  of  justice.  I  entirely  agree  with  him.  He  puts  the 
case  in  question  thus  (Tit.  de  conflidu  legum,  vol.  ii.  p.  539)  :  "In 
certo  loco  merces  quaedam  prohibitas  sunt.  Si  vendantur  ibi,  con- 
tractus est  nullus.  Venim,  si  merx  eadem  alibi  sit  vendita,  ubi 
lion  erat  interdicta,  emptor  condemnabitur,  quia,  contractus  iude 
ab  initio  validus  fuit."  Translated,  it  might  be  rendered  thus: 
In  England,  tea  which  has  not  paid  duty  is  prohibited;  and  if  sold 
thf-re  the  contract  is  null  iind  void.  Hut  if  sold  and  delivered  at  a 
place  where  it  is  not  prohibited,  as  at  Dunkirk,  and  an  action  is 


SECT.   V]  PEARCE    V.    BROOKS  891 

brought  for  the  price  of  it  in  England,  the  buyer  shall  be  con- 
demned to  pay  the  price;  because  the  original  contract  was  good 
and  valid.  He  goes  on  thus:  "Verum  si  merces  vendita?  in  altero 
loco,  ubi  prohibitas  sunt  essent  tradense,  jam  non  fieret  condem- 
nation quia  repugnaret  hoc  juri  et  commodo  reipublicae  quae  mer- 
ces prohibuit."  Apply  this  in  the  same  manner.  But  if  the  goods 
were  to  be  delivered  to  England,  where  they  are  prohibited,  the 
contract  is  void,  and  the  buyer  shall  not  be  liable  in  an  action  for 
the  price,  because  it  would  be  an  inconvenience  and  prejudice  to 
the  State  if  such  an  action  could  be  maintained. 

The  gist  of  the  whole  turns  upon  this,  that  the  conclusive  deliv- 
ery was  at  Dunkirk.  If  the  defendant  had  bespoke  the  tea  at 
Dunkirk  to  be  sent  to  England  at  a  certain  price;  and  the  plaintiff 
had  undertaken  to  send  it  into"  England,  or  had  any  concern  in  the 
running  it  into  England,  he  would  have  been  an  offender  against 
the  laws  of  this  country.  But  upon  the  facts  of  the  case,  from 
the  first  to  the  last,  he  clearly  had  offended  against  no  law  of  Eng- 
land.    Therefore,  let  the  rule  for  a  new  trial  be  discharged. 

The  three  other  judges  concurred. 


PEAKCE    AND   ANOTHER   V.    BROOKS 

In  the  Exchequer  Chamber^  April  17,  1866 
[Reported  in  Law  Reports,  1  Exchequer,  213] 

Declaration  stating  an  agreement  by  which  the  plaintiffs  agreed 
to  supply  the  defendant  with  a  new  miniature  brougham  on  hire, 
till  the  purchase  money  should  be  paid  by  installments  in  a  period 
which  was  not  to  exceed  twelve  months;  the  defendant  to  have  the 
option  to  purchase  as  aforesaid,  and  to  pay  50?.  down;  in  case  the 
brougham  should  be  returned  before  a  second  installment  was  paid, 
a  forfeiture  of  fifteen  guineas  was  to  be  paid  in  addition  to  the 
50?.,  and  also  any  damage  except  fair  wear.  Averment,  that  the 
defendant  returned  the  brougham  before  the  second  installment  was 
paid,  and  that  it  was  damaged.  Breach,  nonpayment  of  fifteen  guin- 
eas, or  the  amount  of  the  damage.       Money  counts. 

Plea  3,  to  the  first  count,  that  at  the  time  of  making  the  supposed 
agreement  the  defendant  was  to  the  knowledge  of  the  plaintiffs  a 
prostitute,  and  that  the  supposed  agreement  was  made  for  the 
su{)ply  of  a  brougham  to  be  used  by  her  as  such  prostitute,  and  to 
assist  her  in  carrying  on  her  said  immoral  vocation,  as  the  plain- 
tiffs when  they  made  the  said  agreement  well  knew,  and  in  the 
expectation  by  the  plaintiffs  that  the  defendant  would  pay  the 
plaintiffs  the  moneys  to  be  paid  by  the  said  agreement  out  of  her 
receipts  as  such  prostitute.       Issue. 


892  PEARCE    V.    BROOKS  [CHAP.    VI 

The  case  was  tried  before  Bramwell,  B.,  at  Guildhall,  at  the 
sittings  after  Michaelmas  Term,  1865.  It  then  appeared  that  the 
plaintiffs  were  coach  builders  in  partnership,  and  evidence  was 
given  which  satisfied  the  jury  that  one  of  the  partners  knew  that 
the  defendant  was  a  prostitute;  but  there  was  no  direct  evidence 
that  either  of  the  plaintiffs  knew  that  the  brougham  was  intended 
to  be  used  for  the  purpose  of  enabling  the  defendant  to  prosecute 
her  trade  of  prostitution;  and  there  was  no  evidence  that  the 
plaintiffs   expected   to   be   paid    out   of   the   wages    of   prostitution. 

The  learned  judge  ruled  that  the  allegation  in  the  plea  as  to 
the  mode  of  payment  was  immaterial,  and  he  put  to  the  jury  the 
following  questions :  1.  Did  the  defendant  hire  the  brougham  for 
the  purpose  of  her  prostitution?  2.  If  she  did,  did  the  plain- 
tiffs know  the  purpose  for  which  it  was  hired?  The  jury  found 
the  carriage  was  used  by  the  defendant  as  part  of  her  display,  to 
attract  men;  and  that  the  plaintiffs  knew  it  was  supplied  to  be 
used  for  that  purpose.     They  gave  nothing  for  the  alleged  damage. 

On  this  finding  the  learned  judge  directed  a  verdict  for  the 
defendant,  and  gave  the  plaintiffs  leave  to  move  to  enter  a  verdict  for 
them  for  thei  fifteen  guineas  penalty. 

M.  Chambers,  Q.  C,  in  Hilary  Term,  obtained  a  rule  accordingly, 
on  the  ground  that  there  was  no  evidence  that  the  plaintiffs  knew 
the  purpose  for  which  the  brougham  was  to  be  used;  and  that  if 
there  was,  the  allegation  in  the  plea  that  the  plaintiffs  expected  to 
be  paid  out  of  the  receipts  of  defendant's  prostitution  was  a  mate- 
rial allegation,  and  had  not  been  proved.  Bowry  v.  Bennett,  1  Camp. 
348. 

[Pollock,  C.  B.,  referred  to  Cannan  ik  Bryce,  3  B.  &  A.  179.] 

Dighy  Seymour,  Q.  C,  and  Beresford,  showed  cause.  No  direct 
evidence  could  be  given  of  the  plaintiff's  knowledge  that  the  defend- 
ant was  about  to  use  the  carriage  for  the  purpose  of  prostitution; 
but  the  fact  that  a  person  known  to  be  a  prostitute  hires  an  orna- 
mental brougham  is  sufficient  ground  for  the  finding  of  the  jury. 

[Bramwell,  B.  At  the  trial  I  was  first  disposed  to  think  that 
there  was  no  evidence  on  this  point,  and  I  put  it  to  the  jury,  that,  in 
some  sense,  everything  which  is  supplied  to  a  prostitute  is  supplied  to 
her  to  enable  her  to  carry  on  her  trade,  as,  for  instance,  shoes  sold  to 
a  streetwalker ;  and  that  the  things  supplied  must  be  not  merely  such 
as  would  be  necessary  or  useful  for  ordinary  purposes,  and  might 
be  also  ajjplied  to  an  immoral  one;  but  they  must  be  such  as  would 
under  the  circumstances  not  be  required,  except  with  that  view. 
The  jury,  by  the  mode  in  which  they  answered  the  question,  showed 
that  they  appreciated  the  distinction ;  and  on  reflection  I  think  they 
were  entitled  to  draw  the  inference  which  they  did.  They  were 
entitled  to  bring  their  knowhulge  of  the  world  to  bear  upon  the 
facts  proved.  Tbe  inference  that  a  ])rostitute  (who  swore  that  she 
could   not   rc-ul   writing)   required   ;ni   ornnniental   brougham  for  the 


SECT.    V]  PEARCE    V.    BROOKS  893 

purposes  of  her  calling,  was  as  natural  a  one  as  that  a  medical  man 
would  want  a  bro:igham  for  the  purpose  of  visiting  his  patients; 
and  the  knowledge  of  the  defendant's  condition  being  brought  home 
to  the  plaintiffs,  the  jury  were  entitled  to  ascribe  to  them  also  the 
knowledge  of   her   purpose.] 

Upon  the  second  point,  the  case  of  Bowry  v.  Bennett,  1  Camp. 
348,  falls  short  of  proving  that  the  plaintiff  intended  to  be  paid  out 
of  the  proceeds  of  the  illegal  act.  The  report  states  that  the  evi- 
dence of  the  plaintiff's  knowledge  of  the  defendant's  way  of  life  was 
"very  slight;"  and  Lord  Ellenborough  appears  to  have  referred  to 
the  intention  as  to  payment,  not  as  a  legal  test,  but  as  a  matter  of 
evidence  with  reference  to  the  particular  circumstances  of  the  case. 
The  goods  supplied  there  were  clothes;  without  other  circumstances 
there  would  be  nothing  illegal  in  selling  clothes  to  a  known  prosti- 
tute; but  if  it  were  shown  that  the  seller  intended  to  be  paid  out  of 
her  illegal  earnings,  the  otherwise  innocent  contract  would  be  viti- 
ated, i^either  is  Lloyd  v.  Johnson,  1  B.  &  P.  340,  cited  in  the  note 
to  the  last  case,  an  authority  for  the  plaintiffs,  for  their  part  of  the 
contract  would  have  been  innocent,  and  all  that  the  court  says  is, 
that  it  cannot  "  take  into  consideration  which  of  the  articles  were 
used  by  the  defendant  to  an  improper  purpose,  and  which  were 
not;"  they  had  no  materials  for  doing  so.  The  present  case  rather 
resembles  the  case  of  Crisp  ?;.  Churchill,  cited  in  Lloyd  v.  Johnson, 
1  B.  &  P,  340,  where  the  plaintiff  was  not  allowed  to  recover  for 
the  use  of  the  lodgings  let  for  the  purpose  of  prostitution.  Apple- 
ton  V.  Campbell,  2  C.  &  P.  347,  is  to  the  same  effect. 

M.  Chambers,  Q.  C,  and  /.  0.  Griffits,  in  support  of  the  rule. 
As  to  the  first  point,  the  expressions  of  Butler,  J.,  in  Lloyd  v.  John- 
son, 1  B.  &  P.  at  page  341,  are  strongly  in  the  plaintiff's  favor, 
especially  his  remarks  on  the  case  of  the  lodgings :  "I  suppose  the 
lodgings  were  hired  for  the  express  purpose  of  two  persons  meeting 
there."  But  in  this  case  it  is  impossible  to  say  that  there  was  any 
express  purpose  of  prostitution;  the  defendant  might  have  used  the 
brougham  for  any  purpose  she  chose,  as  to  take  drives,  to  go  to  the 
theatre,  or  to  shop.  Even  if  there  were  evidence,  the  jury  have  not 
found  the  purpose  with  sufficient  distinctness.  But  secondly,  the  last 
allegation  in  the  plea  is  material;  the  plaintiffs  must  intend  to  be 
paid  out  of  the  proceeds  of  the  immoral  act.  The  words  of  Lord 
Ellenborough  in  Bowry  v.  Bennett,  1  Camp.  348,  are  very  plain; 
the  plaintiff  must  "expect  to  be  paid  from  the  profits  of  the  defend- 
ant's prostitution." 

[Bramwell,  B.  At  the  trial  I  refused  to  leave  this  question  to  the 
jury,  but  it  has  since  occurred  to  me  that  the  matter  was  doubtful. 
The  purpose  of  the  seller  in  selling  is,  that  he  may  obtain  the  profit, 
not  that  the  buyer  shall  put  the  thing  sold  to  any  particular  use ;  it  is 
for  the  buyer  to  determine  how  he  shall  use  it.  Suppose,  however, 
a  person  were  to  buy  a  pistol,  saying  to  the  seller  that  he  means  with 


894  PEARCE    V.    BROOKS  [CHAP.   VI 

it  to  shoot  a  man  and  rob  him ;  is  the  act  of  the  seller  illegal,  or  is  it 
further  necessary  that  he  should  stipulate  to  be  paid  out  of  the 
proceeds  of  the  robbery?  If  the  looking  to  the  proceeds  is  necessary 
to  make  the  transaction  illegal,  is  it  also  necessary  that  it  should  be 
part  of  the  contract  that  he  shall  be  so  paid?] 

Suppose  a  cab  to  be  called  by  a  prostitute,  and  the  driver  directed 
to  take  her  to  some  known  place  of  ill  fame,  could  it  be  said  that  he 
could  not  claim  payment? 

[Bramwell,  B.  If  he  could,  this  absurdity  would  follow,  that 
if  a  man  and  a  prostitute  engaged  a  cab  for  that  purpose,  and  if,  to 
meet  your  argument,  the  driver  reckoned  on  payment,  as  to  the 
woman,  out  of  the  proceeds  of  her  prostitution,  the  woman,  would  not 
be  liable,  but  the  man  would,  although  they  were  engaged  in  the  same 
transaction  and  for  the  same  purpose.] 

If  the  contract  is  void  for  this  reason,  the  plaintiffs  were  entitled 
to  resume  possession,  and  to  bring  trover  for  the  carriage;  a  test, 
therefore,  of  the  question  will  be,  whether  in  such  action,  if  the  jury 
found  the  same  verdict  as  they  have  found  here,  on  the  same  evidence, 
the  plaintiffs  would  be  entitled  to  recover. 

[Martin,  B.  I  think  they  would;  and  that  if  the  carriage  had  not 
been  returned  in  this  case,  the  plaintiffs  would,  on  our  discharging 
this  rule,  be  entitled  to  determine  the  contract  on  the  ground 
of  want  of  reciprocity,  and  to  claim  the  return  of  the  article.] 

Pollock,  C.  B.  We  are  all  of  opinion  that  this  rule  must  be 
discharged.  I  do  not  think  it  is  necessary  to  enter  into  the  sub- 
ject at  large  after  what  has  fallen  from  the  bench  in  the  course 
of  the  argument,  further  than  to  say  that  since  the  case  of  Cannan 
V.  Bryce,  3  B.  &  A.  179,  cited  by  Lord  Abinger  in  delivering  the 
judgment  of  this  court  in  the  case  of  M'Kinnel  v.  Robinson,  3  M.  & 
W.  at  p,  441,  and  followed  by  the  case  in  which  it  was  so  cited,  I 
have  always  considered  it  as  settled  by  law  that  any  person  who  con- 
tributes to  the  performance  of  an  illegal  act  by  supplying  a  thing 
with  the  knowledge  that  it  is  going  to  be  used  for  that  purpose, 
cannot  recover  the  price  of  the  thing  so  supplied.  If,  to  create  that 
incapacity,  it  was  never  considered  necessary  that  the  price  should 
be  bargained  or  expected  to  be  paid  out  of  the  fruits  of  the  illegal 
act  (which  I  do  not  stop  to  examine),  that  proposition  has  been 
overruled  by  the  cases  I  have  referred  to,  and  has  noAv  ceased  to  be 
the  law.  Wor  can  any  distinction  be  made  between  an  illegal 
and  an  immoral  purpose;  the  rule  which  is  applicable  to  the  matter 
is,  Ex  turpi  causa  non  oritor  actio,  and  whether  it  is  an  immoral 
or  an  illegal  purpose  in  which  the  plaintiff  has  participated,  it  comes 
equally  within  the  terms  of  the  maxim,  and  the  eifect  is  the  same; 
Tio  cause  of  action  can  arise  out  of  either  the  one  or  the  other.  The 
rnlf  of  the  law  was  well  settled  in  Cannan  v.  Bryce,  3  B.  &  A.  179 
that  was  u  case  which  at  time  it  was  decided,  I,  in  common  with 
many  other  lawyers  in  Westminster  Hall,  was  at  first  disposed   to 


SECT.    V]  GRAVES    V.    JOHNSON  895 

regard  with  surprise.  But  the  learned  judge  (then  Sir  Charles 
Abbott)  who  decided  it,  though  not  distinguished  as  an  advocate, 
nor  at  first  eminent  as  a  judge,  was  one  than  whom  few  have  adorned 
the  bench  with  clearer  views,  or  more  accurate  minds,  or  have  pro- 
duced more  beneficial  results  in  the  law.  The  judgment  in  that  case 
was,  I  believe,  emphatically  his  judgment;  it  was  assented  to  by  all 
the  members  of  the  Court  of  King's  Bench,  and  is  now  the  law  of  the 
land.  If,  therefore,  this  article  was  furnished  to  the  defendant  for 
the  purpose  of  enabling  her  to  make  a  display  favorable  to  her 
immoral  purposes,  the  plaintiffs  can  derive  no  cause  of  action  from 
the  bargain.  I  cannot  go  with  Mr,  Chambers  in  thinking  that  every- 
thing must  be  found  by  a  jury  in  such  a  case  with  that  accuracy  from 
which  ordinary  decency  would  recoil.  For  criminal  law  it  is  some- 
times necessary  that  details  of  a  revolting  character  should  be  found 
distinctly,  and  minutely,  but  for  civil  purposes  it  is  not  neces- 
sary. If  evidence  is  given  which  is  sufficient  to  satisfy  the  jury 
of  the  fact  of  the  immoral  purpose,  and  of  the  plaintiff's  knowledge 
of  it,  and  that  the  article  was  required  and  furnished  to  facilitate 
that  object,  it  is  sufficient,  although  the  facts  are  not  expressed  with 
such  plainness  as  would  offend  the  sense  of  decency.  I  agree  v/ith 
my  brother  Bramwell  that  the  verdict  was  right  and  that  the  rule 
must  be  discharged.^  Rule  discharged.^ 


CHESTER  H.  GRAVES  and  others  v.  WALTER  B. 
JOHNSON 

Supreme  Judicial  Court  of  Massachusetts^  January  26-May  6, 
1892,    and    March    13-May    22,    1901 

[Reported  in  156  Massachusetts,  211,  and  179  Massachusetts,  53.] 

Holmes  J.  This  is  an  action  for  the  price  of  intoxicating  liquors. 
It  is  found  that  they  were  sold  and  delivered  in  Massachusetts  by  the 
plaintiffs  to  the  defendant,  a  Maine  hotel  keeper,  with  a  view  to 
their  being  resold  by  the  defendant  in  Maine,  against  the  laws  of 
that  State.  These  are  all  the  material  facts  reported;  and  these 
findings  we  must  assume  to  have  been  warranted,  as  the  evidence  is 
not  reported,  so  that  no  question  of  the  power  of  Maine  to  prohibit 

1  Martin,  Pigott,  Bramwell,  BB.,  and  Pollock,  C.  B.,  delivered  concurring 
opinions. 

^  See  the  English  decisions  reviewed  in  Benjamin  on  Sales,  §  506,  et  seq.  Com- 
pare Postelle  V.  Rivers,  112  Ga.  850;  Hubbard  v.  Moore,  24  La.  Ann.  591;  Sampson 
V.  Townsend,  25  La  Ann.  78;  Mahood  v.  Tealza,  26  La.  Ann.  108;  Anheuser-Busch 
Brewing  Assoc,  v.  Mason,  44  Minn.  318;  Spras^ie  v.  Rooney,  82  Mo.  493,  104  Mo.  349; 
Emst  V.  Crosby,  140  N.  Y.  364;  Bishop  v.  Honey,  34  Tex.  245;  Reed  v.  Brewer,  90 
Tex.  144;  Hunstock  v.  Palmer,  23  S.  W.  Rep.  (Tex.  Civ.  App.)  294;  Standard  Furni- 
ture Co.  V.  Van  Alstine,  22  Wash.  670;   and  see  2  Wilhston,  Contracts,  §  1755. 


896  GRAVES    V.    JOHNSON  [CHAP.   VI 

the  sales  is  open.  The  only  question  is  whether  the  facts  as  stated 
show  a  bar  to  this  action. 

The  question  is  to  be  decided  on  principles  which  we  presume 
would  prevail  generally  in  the  administration  of  the  general  law  in 
this  country.  Not  only  should  it  be  decided  in  the  same  way  in 
which  we  should  expect  a  Maine  court  to  decide  upon  a  Maine  con- 
tract presenting  a  similar  question,  but  it  should  be  decided  as  we 
think  that  a  Maine  court  ought  to  decide  this  very  case  if  the  action 
were  brought  here.  It  is  noticeable,  and  has  been  observed  by  Sir 
F.  Pollock,  that  some  of  the  English  cases  which  have  gone  farthest 
in  asserting  the  right  to  disregard  the  revenue  laws  of  a  country 
other  than  that  where  the  contract  is  made  and  is  to  be  performed, 
have  had  reference  to  the  English  revenue  laws.  Holman  v.  John- 
son, 1  Cowp.  341;  Pollock,  Con  (5th  Ed.)  308.  See  also  M'Intyre  v. 
Parks,  3  Met.  207. 

The  assertion  of  that  right,  however,  no  doubt  was  in  the  interest 
of  English  Commerce  (Pellecat  v.  Angell,  2  Cr.,  M,  &  E.  311,  313), 
and  has  not  escaped  criticism  (Story,  Confl.  Laws,  §§  257,  264,  note, 
3  Kent  Com.  265,  266,  and  Wharton,  Confl.  Laws,  §  484),  although 
there  may  be  a  question  how  far  the  actual  decisions  go  beyond  what 
would  have  been  held  in  the  case  of  an  English  contract  affecting 
only  English  laws.  See  Hodgson  v.  Temple,  5  Taunt.  181 ;  Brown  v. 
Duncan,  10  B.  &  C.  93,  98,  99;  Harris  v.  Eunnels,  12  How.  79, 
83,  84. 

Of  course  it  would  be  possible  for  an  independent  State  to  enforce 
all  contracts  made  and  to  be  performed  within  its  territory,  without 
regard  to  how  much  they  might  contravene  the  policy  of  its 
neighbors'  laws.  But  in  fact  no  State  pursues  such  a  course  of 
barbarous  isolation.  As  a  general  proposition,  it  is  admitted  that  an 
agreement  to  break  the  laws  of  a  foreign  country  would  be  invalid. 
Pollock,  Con,  (5th  ed.)  308.  The  courts  are  agreed  on  the  invalidity 
of  a  sale  when  the  contract  contemplates  a  design  on  the  part  of  the 
purchaser  to  resell  contrary  to  the  laws  of  a  neighboring  State, 
and  requires  an  act  on  the  part  of  the  seller  in  furtherance  of  the 
scheme.  Waymell  v.  Reed,  5  T.  R.  599 ;  Gaylord  v.  Soragen,  32  Vt. 
110;  Fisher  v.  Lord,  63  N.  H.  514;  Hull  v.  Ruggles,  1^.  Y.  424,  429. 

On  the  other  hand,  plainly,  it  would  not  be  enough  to  prevent 
a  recovery  of  the  price  that  the  seller  had  reason  to  believe  that 
the  buyer  intended  to  resell  the  goods  in  violation  of  law;  he  must 
have  known  the  intention  in  fact.  Finch  v.  Mansfield,  97  Mass. 
89,  92;  Adams  v.  Coulliard,  102  Mass.  167,  173.  As  in  the  case  of 
torts,  a  man  has  a  right  to  expect  lawful  conduct  from  others.  In 
order  to  charge  him  with  the  consequences  of  the  act  of  an  inter- 
vening wrongdoer,  you  must  show  that  he  actually  contemplated  the 
act.     Hayes  v.  Hy(ie  Park,  153  Muss.  514,  515,  516. 

Between  these  two  extremes  a  line  is  to  be  drawn.  But  as  the 
point  where  it  slionld  full  is  to  be  determined  by  the  intimacy  of  the 


SECT.    V]  GRAVES    V.    JOHNSON  897 

connection  between  the  bargain  and  the  breach  o£  the  law  in  the 
particular  case,  the  bargain  having  no  general  and  necessary  ten- 
dency to  induce  such  a  breach,  it  is  not  surprising  that  courts  should 
have  drawn  the  line  in  slightly  different  places.  It  has  been  thought 
not  enough  to  invalidate  a  sale,  that  the  seller  merely  knows  that 
the  buyer  intends  to  resell,  in  violation  even  of  the  domestic  law. 
Tracy  v.  Talmage,  4  Kernan,  162;  Hodgson  v.  Temple,  5  Taunt. 
181.  So  of  the  law  of  another  State.  M'Intyre  v.  Parks,  3  Met.  207; 
Sortwell  V.  Hughes,  1  Curt.  C.  C.  244;  Green  v.  Collins,  3  Cliff. 
494;  Hill  v.  Spear,  50  N.  H.  253.  (Dater  v.  Earl,  3  Gray,  483,  is  a 
decision  on  New  York  Law.) 

But  there  are  strong  intimations  in  the  later  Massachusetts  cases 
that  the  law  on  the  last  point  is  the  other  way.  Finch  v.  Mansfield, 
97  Mass.  89,  92;  Suit  v.  Woodhall,  113  Mass  391,  395.  And  the 
English  decisions  have  gone  great  lengths  in  the  case  of  knowledge 
of  intent  to  break  the  domestic  law.  Pearce  v.  Brooks,  L.  R.  1  Ex. 
213;  Taylor  v.  Chester,  L.  R.  4  Q.  B.  309,  311. 

However  this  may  be,  it  is  decided  that  when  a  sale  of  intoxicating 
liquor  in  another  State  has  just  so  much  greater  proximity  to  a 
breach  of  the  Massachusetts  law  as  implied  in  the  statement  that  it 
was  made  with  a  view  to  such  a  breach,  it  is  void.  Webster  v. 
Munger,  8  Gray,  584;  Orcutt  v.  Nelson,  1  Gray,  536,  551;  Hubbell 
V.  Flint,  13  Gray,  277,  279 ;  Adams  v.  Coulliard,  102  Mass.  167,  172, 
173.  Even  in  Green  v.  Collins  and  Hill  v.  Spear,  the  decision  in 
"Webster  v.  Munger  seems  to  be  approved.  See  also  Langton  v. 
Hughes,  1  M.  &  S.  593 ;  M'Kinnell  v.  Robinson,  3  M.  &  W.  434,  441 ; 
White  V.  Buss,  3  Cush.  448.  If  the  sale  vv^ould  not  have  been  made 
but  for  the  seller's  desire  to  induce  an  unlawful  sale  in  Maine,  it 
would  be  an  unlawful  sale  on  the  principles  explained  in  Hayes  v. 
Hyde  Park,  152  Mass.  514,  and  Tasker  v.  Stanley,  153  Mass.  148. 
The  overt  act  of  selling,  which  otherwise  would  be  too  remote  from 
the  apprehended  result,  an  unlawful  sale  by  some  one  else,  would  be 
connected  with  it,  and  taken  out  of  the  protection  of  the  law  by  the 
fact  that  the  result  was  actually  intended.  We  do  not  understand 
the  judge  to  have  gone  so  far  as  we  have  just  supposed.  We  assume 
that  the  sale  would  have  taken  place,  whatever  the  buyer  had  been 
expected  to  do  with  the  goods.  But  we  understand  the  judge  to  have 
found  that  the  seller  expected  and  desired  the  buyer  to  sell  unlaw- 
fully in  Maine,  and  intended  to  facilitate  his  doing  so,  and  that  he  was 
known  by  the  buyer  to  have  that  intent.  The  question  is  whether  the 
sale  is  saved  by  the  fact  that  the  intent  mentioned  was  not  the  con- 
trolling inducement  to  it.  As  the  connection  between  the  act  in 
question,  the  sale  here,  and  the  illegal  result,  the  same  in  Maine — 
the  tendency  of  the  act  to  produce  the  result — is  only  through  the 
later  action  of  another  man,  the  degree  of  connection  or  tendency 
may  vary  by  delicate  shades.  If  the  buyer  knows  that  the  sale  is  made 
only  for  the  purpose  of  facilitating  his  illegal  conduct,  the  connection 


898  GRAVES    V.    JOHNSON  [CHAP.   VI 

is  at  the  strongest.  If  the  sale  is  made  with  the  desire  to  help  him  to 
his  end,  although  primarily  made  for  money,  the  seller  cannot 
complain  if  the  illegal  consequence  is  attributed  to  him.  If  the 
buyer  knows  that  the  seller,  while  aware  of  his  intent,  is  indifferent 
to  it,  or  disapproves  of  it,  it  may  be  doubtful  whether  the  connection 
is  sufficient.  Compare  Commonwealth  v.  Churchill,  136  Mass.  148, 
150.  It  appears  to  us  not  unreasonable  to  draw  the  line  as  it  was 
drawn  in  Webster  v.  Munger,  and  to  say  that,  when  the  illegal  intent 
of  the  buyer  is  not  only  known  to  the  seller,  but  encouraged  by  the 
sale  as  just  explained,  the  sale  is  void.  The  accomplice  is  none  the 
less  an  accomplice  because  he  is  paid  for  his  act.  See  Commonwealth 
V.  Harrington,  3  Pick.  26. 

The  ground  of  the  decision  in  Webster  v.  Munger  is,  that  con- 
tracts like  the  present  are  void.  If  the  contract  had  been  valid, 
it  would  have  been  enforced.  Dater  v.  Earl,  3  Gray,  482;  M'Intyre 
V.  Parks,  3  Met.  207.  As  we  have  said  or  implied  already,  no  distinc- 
tion can  be  admitted  based  on  the  fact  that  the  law  to  be  violated  in 
that  case  was  the  lex  fori.  Por  if  such  a  distinction  is  ever  sound, 
and  again  if  the  same  principles  are  not  always  to  be  applied, 
whether  the  law  to  be  violated  is  that  of  the  State  of  the  contract  or 
of  another  State  (see  Tracy  v.  Talmage,  4  Kernan,  162,  213),  at 
least  the  right  to  contract  with  a  view  to  a  breach  of  the  laws  of 
another  State  of  this  Union  ought  not  to  be  recognized  as  against 
a  statute  passed  to  carry  out  fundamental  beliefs  about  right  and 
wrong,  shared  by  a  large  part  of  our  own  citizens.  Territ  v.  Bart- 
lett,  21  Vt.  184,  188,  189.  In  the  opinion  of  a  majority  of  the  court, 
this  case  is  governed  by  Webster  v.  Munger,  and  we  believe  that 
it  would  have  been  decided  as  we  decide  it,  if  the  action  had  been 
brought  in  Maine  instead  of  here.    Banchor  v.  Mansel,  47  Maine,  58. 

Exceptions   sustained. 

Holmes  C.  J.  This  is  the  second  time  that  this  case  comes  before 
this  court.  156  Mass.  211.  It  is  a  suit  for  the  price  of  intoxicating 
liquors  sold  here.  At  the  first  trial  it  was  found  that  they  were  sold 
with  a  view  to  their  being  resold  by  the  defendant  in  Maine  against 
the  laws  of  that  State;  and  on  that  state  of  facts  it  was  held  that  the 
action  would  not  lie.  At  the  second  trial  it  was  found  that  the 
plaintiff's  agent  supposed,  rightly,  that  the  defendant  intended  to 
resell  the  liquors  in  Maine  unlaAvfully,  but  that  the  plaintiifs  and 
their  agent  were  and  wore  known  by  the  defendant  to  be  indifferent 
to  what  he  did  with  the  goods,  and  to  have  no  other  motive  or  pur- 
pose than  to  sell  them  in  Massachusetts  in  the  usual  course  of  business. 
Seemingly  the  plaintiffs  did  not  act  in  the  aid  of  the  defendant's 
intent  beyond  selling  him  tbcir  goods.  The  judge  refused  to  rule 
that  the  plaintiffs'  knowledge  of  the  defendant's  intent  would  pre- 
vent their  recovery,  and  the  case  is  here  again  on  exceptions. 

The  j)rincipleH  involved  are  stated  and  some  of  the  cases  are  col- 


SECT.   V]  GRAVES    V.   JOHNSON  899 

lected  in  the  former  decision.  All  that  it  is  necessary  for  us  to  say 
now  is  that  in  our  opinion  a  sale  otherwise  lawful  is  not  connected 
with  subsequent  unlawful  conduct  by  the  mere  fact  that  the  seller 
correctly  divines  the  buyer's  unlawful  intent,  closely  enough  to  make 
the  sale  unlawful.  It  will  be  observed  that  the  finding  puts  the  plain- 
tiff's knowledge  of  the  defendant's  intent  no  higher  than  an  uncom- 
municated  inference  as  to  what  the  defendant  was  likely  to  do.  Of 
course  the  defendant  was  free  to  change  his  mind,  and  there  was  no 
communicated  desire  of  the  plaintiffs  to  cooperate  with  the  defendant's 
present  intent,  such  as  was  supposed  in  the  former  decision,  but  on 
the  contrary  an  understood  indifference  to  everything  beyond  an  ordi- 
nary sale  in  Massachusetts.  It  may  be  that,  as  in  the  case  of  attempts 
(Commonwealth  v.  Peaslee,  177  Mass.  267;  Commonwealth  v.  Ken- 
nedy, 170  Mass.  18,  22),  the  line  of  proximity  will  vary  somewhat 
according  to  the  gravity  of  the  evil  apprehended,  Steele  v.  Curie,  4 
Dana,  381,  385-388,  Hanauer  v.  Doane,  12  Wall.  342,  446 ;  Bickel  v. 
Sheets,  24  Ind.  1,  4,^  and  in  different  courts  with  regard  to  the  same 
or  similar  matters.  Compare  Hubbard  v.  Moore,  24  La.  Ann.  591 ; 
Michael  v.  Bacon,  49  Mo.  474,  with  Pearce  v.  Brooks,  L.  R.  1  Ex.  213. 
But  the  decisions  tend  more  and  more  to  agree  that  the  connection 
with  the  unlawful  act  in  cases  like  the  present  is  too  remote.  M'Intyre 
V.  Parks,  3  Met.  207;  Sortwell  v.  Hughes,  1  Curt.  C.  C.  244,  247; 
Green  t'.  Collins,  3  Cliff.  494;  Hill  v.  Spear,  50  N.  H.  253;  Tracy  v. 
Talmage,  4  Kernan,  162;  Distilling  Co.  v.  Nutt,  34  Kan.  724,  729; 
Webber  v.  Donnelly,  33  Mich.  469;  Tuttle  v.  Holland,  43  Yt.  542; 
Braunn  v.  Keally,  146  Pa.  St.  519,  524;  Wallace  v.  Lark,  12  S.  C. 
576,  578 ;  Rose  v.  Mitchell,  6  Col.  102 ;  Jameson  v.  Gregory,  4  Met. 
(Ky.)  363,  370;  Bickel  v.  Sheets,  Hubbard  v.  Moore,  and  Michael  v. 
Bacon,  ubi  supra.^ 

Although  a  different  rule  was  assumed  in  Suit  v.  Woodhall,  113 
Mass.  391,  it  will  seen  that  it  equally  was  assumed  by  the  instruc- 
tions given  at  the  trial,  and  that  the  exceptions  and  the  point  decided 
in  that  case  concerned  only  the  imputation  to  the  plaintiffs  of  their 
agent's  knowledge.  M'Intyre  v.  Parks  never  has  been  overruled. 
Dater  v.  Earl,  3  Gray,  482;  Webster  v.  Munger,  8  Gray,  584,  587; 

1  See  also  Green  v.  Collins,  3  Cliff.  494;    Tracy  v.  Talmage,  14  N.  Y.  162,  215. 

2  Longnecker  D.  Shields,  1  Col.  App.  264;  Singleton  v.  Bank  of  Monticello,  113 
Ga.  527;  Sondheim  v.  Gilbert,  117  Ind.  71;  Jackson  v.  City  Bank,  125  Ind.  347; 
Brunswick  v.  Valleau,  50  Iowa,  120;  Feineman  v.  Sacho,  33  Kan.  621;  Tyler  v.  Car- 
lisle, 79  Me.  210;  Gambs  v.  Sutherland's  Est.,  101  Mich.  355;  Chamberlin  v.  Fisher, 
117  Mich,  428;  Darling  v.  Kip,  93  Neb.  781;  Main  v.  Berlin  Dry  Goods  Co.,  75  N.  H. 
511;  Brooklyn  Co.  v.  Standard  Co.,  120  N.  Y.  App.  D.  237;  Waugh  v.  Beck,  114  Pa. 
422;   Gaylord  v.  Soragen,  32  Vt.  110,  ace.    See  also  Corbin  v.  Wachhorst,  73  Cal.  411. 

B\it  see.  contra,  Milner  v.  Patton,  49  Ala.  423;  Oxford  Iron  Co.  v.  Spradley,  51  Ala. 
171;  Ware  v.  Jones,  61  Ala.  288;  Lewis  v.  Latham,  74  N.  C.  283;  and  compare  Plank 
V.  Jackson,  128  Ind.  424;  Williamson  v.  Baley,  78  Mo.  636;  Fisher  v.  Lord,  63  N.  H. 
514;  Hill  V.  Ruggles,  56  N.  Y.  424;  Arnot  v.  Pittston  Coal  Co.,  68  N.  Y.  558;  Materne 
V.  Horwitz,  101  N.  Y.  469;  Spurgeon  v.  McElwein,  6  Ohio,  442;  Mordecai  v.  Dawkins, 
9  Rich.  L.  262;  Oliphant  v.  Markham,  79  Tex.  543;  Aiken  v.  Blaisdell,  41  Vt.  655; 
Mound  V.  Barker,  71  Vt.  253;    Levy  v.  Davis,  115  Va.  814. 


900  CHURCH    V.    PROCTOR  [CHAP.   VI 

Adams  v.  Coulliard,  102  Mass.  167,  172 ;  Milliken  v.  Pratt,  125  Mass. 
374,  376. 

Exceptions  to  the  admission  of  letters  of  the  plaintiffs'  agent  to 
them  for  the  purpose  of  showing  what  they  knew  are  not  argued. 

Exceptions  overruled. 


CHUECH  ET  AL.  V.  PEOCTOR 

United  States  Ciecuit  Coukt  of  AppealS;,  Pirst  Circuit^  Pebruary 

2,  1895 

[Reported  in  66  Federal  Reporter,  240] 

In  error  to  the  Circuit  Court  of  the  United  States  for  the 
District  of  Ehode  Island. 

This  was  an  action  by  Joseph  O.  Proctor,  Jr.,  against  Daniel  T. 
Church  and  others,  to  recover  damages  for  breach  of  a  contract.  On 
the  trial  in  the  circuit  court,  the  jury  gave  a  verdict  for  the  plaintiff. 
Defendants  bring  error. 

William  G.  Roelker,  for  plaintiffs  in  error. 

William  A.  Peiv,  Jr.,  Thomas  A.  Jenckes,  Charles  A.  Wilson,  for 
defendant  in  error. 

Before  Putnam,  Circuit  Judge,  and  IsTelson  and  Aldrich,  District 
Judges. 

Aldrich,  District  Judge.^  At  the  time  the  parties  entered  into  the 
contract  involved  in  this  controversy,  Proctor,  the  plaintiff  below, 
was  engaged  in  a  general  fishing  business  at  Gloucester,  in  the  State 
of  Massachusetts,  and  in  preparing  and  placing  on  the  general 
market  different  kinds  of  fish,  and  especially  in  splitting  and  sliver- 
ing a  fish  called  "menhaden,"  and  placing  the  same  upon  the  market ; 
and  the  defendants,  at  Tiverton,  in  the  State  of  Ehode  Island,  were 
engaged  in  the  business  of  catching  and  supplying  menhaden.  [By 
the  terms  of  the  contract  the  defendants  agreed  to  sell,  and  the 
plaintiff  to  buy,  such  quantities  of  menhaden  as  should  be  reason- 
ably required  by  the  plaintiff's  business,  in  no  event,  however,  in 
excess  of  the  defendants'  catch.] 

It  is  said  by  Church  &  Co.  that,  looking  further  to  the  subject- 
matter  as  disclosed  by  the  record,  the  contract  is  altogether  void,  for 
the  reason  that  it  is  against  public  policy.  The  ground  of  this 
objection,  stated  generally,  is  that  Proctor,  taking  advantage  of  the 
ficarfity  of  mackerel  in  18SS,  conceived  the  idea  of  putting  upon  the 
markets  generally  the  menhaden,  as  a  food  fish,  split  and  salted, 
packed  in  barrels,  tubs,  pails,  and  other  packages,  and  variously 
braiiflfHl  with  misleading  and  deceptive  marks,  and  characters,  as, 
for  iiiHtarif'f!  "Alnskji  M.'ifkorel,  for  Family  Use."     Proceeding  upon 

'  A  ])(>ri'u)it  of  the  opinion,  rdatinH  to  the  conatruction  of  the  ontract,  is  omitted. 


SECT.    V]  CHURCH    V.    PROCTOR  901 

the  theory  that  the  facts,  if  shown,  would  disclose  a  contract  which 
would  not  be  upheld,  Church  &  Co.  offered  evidence  to  show  the 
character  of  the  marks  and  brands  placed  upon  the  casks  and  barrels 
containing  the  fish,  and  upon  Proctor's  objection,  this  evidence  was 
excluded  subject  to  exception.  At  the  conclusion  of  all  the  evidence 
in  the  case,  the  defendants  moved  for  a  verdict  "on  the  ground  that  it 
appeared  from  the  plaintiff's  testimony  that  the  piu'pose  for  which 
he  intended  to  use  and  did  use  the  fish  which  were  the  subject  matter 
of  the  contract  sued  upon  was  illegal,  and  against  public  policy,  as 
being  a  fraud  and  an  imposition  on  the  public,  and  .  .  .  illegal, 
in  being  in  violation  of  chapter  114  of  the  public  statutes  of  Rhode 
Island."  The  court  below  refused  to  direct  the  verdict,  and  the 
defendants  excepted. 

The  record  does  not  clearly  show  that  Proctor's  deceptive  and 
unwarrantable  purpose  existed  during  the  entire  period  covered  by 
the  contract,  and  for  this  reason  the  court  below  could  not  have 
properly  directed  a  verdict  upon  the  ground  stated  in  the  motion. 
We  think,  however,  that  Church  &  Co.,  under  the  line  of  defence 
disclosed,  were  entitled  to  show  fully  the  purpose  of  Proctor  at  the 
time  of  the  contract,  the  use  which  he  made  of  the  fish  furnished 
and  in  the  manner  in  which  they  were  placed  upon  the  market,  and 
that  the  court  erred  in  excluding  evidence  as  to  the  marks  and 
brands  upon  the  casks  and  barrels.  The  evidence  excluded  was  com- 
petent and  material  upon  the  issue  raised  by  the  defence,  and  would 
tend  to  show  that  the  public  was  being  deceived  and  cheated  through 
false  and  misleading  brands  and  characters  used  for  the  purpose  of 
advancing  the  sale  of  a  product  beyond  that  which  would  result  from 
its  true  merit.  The  point  is  made  that  the  Rhode  Island  statute  does 
not  apply,  for  the  reason  that  the  evidence  shows  that  the  fish  in 
question  were  designated  as  "salted  fish,"  while  the  statute  has 
reference  to  "pickled  fish."  This  is  a  distinction  which  the  trade 
might  make,  but  which,  perhaps,  the  jury  would  not  be  required  to 
make,  or  which,  if  made,  might  have  been  overcome  by  the  jury  in 
view  of  the  evidence  that  the  fish  were  put  up  for  the  trade  in  barrels 
and  casks  and  in  closed  packages  of  various  forms.  All  pickled  fish 
in  the  ordinary  fish  business  are  salted,  although  all  salted  fish  are 
not  pickled.  In  view  of  all  the  evidence,  we  cannot  say  that  the 
jury  would  not  have  been  warranted  in  finding  that  the  witnesses  in 
using  the  term  "salted  fish"  intended  to  describe  the  fish  in  question 
as  pickled.  The  purpose  of  the  evidence,  as  to  the  manner  of  placing 
the  fish  upon  the  market,  was  a  double  one,  first,  to  show  that  a  statute 
of  Rhode  Island  was  violated,  and,  second,  to  show  a  scheme  which 
involved  a  fraud  on  the  consumers  of  fish  as  an  article  of  food.  As 
bearing  upon  the  general  question  whether  Proctor's  purpose  and 
manner  of  doing  business  was  such  as  to  render  the  contract  void  as 
against  public  policy,  we  think  the  Rhode  Island  statute  might 
properly  be  urged,  and  that  it  was  material  to  know  whether  Proctor's 


902  CHURCH    V.    PROCTOR  [CHAP.    VI 

manner  of  doing  business  conformed  to  the  statute,  or  whether  it 
was  in  plain  violation  of  a  statute  intended  to  protect  the  public 
generally  against  fraud  and  imposition.  Chapter  114  of  the  Public 
Statutes  of  Rhode  Island,  which  was  in  force  in  1888,  provides, 
among  other  things,  that  ''casks  for  menhaden  and  herrings 
shall  be  of  the  capacity  to  hold  twenty-eight  gallons,"  and  "every 
cask  before  being  packed  or  repacked  for  exportation  shall  be  first 
searched,  examined,  and  approved  by  the  packer,  and  shall,  when  so 
packed  or  repacked  for  exportation,  be  branded  legibly  on  one  head 
with  the  kind  of  fish  it  contains  and  the  weight  thereof,  or  the  capacity 
of  the  cask  with  the  first  letter  of  the  Christian  and  the  whole  of  the 
surname  of  the  packer,  the  name  of  the  town,  and  the  words  Rhode 
Island,  in  letters  not  less  than  three-fourths  of  an  inch  long,  to 
denote  that  the  same  is  merchantable  and  in  good  order  for  exporta- 
tion." It  is  further  provided,  through  section  8  of  the  same  statute, 
that  "every  person  who  shall  offer  for  sale  in  or  or  attempt  to  export 
from  the  State  any  pickled  fish  which  have  not  been  approved  by 
a  sworn  packer,  or  in  casks  which  are  not  branded  as  aforesaid,  shall 
forfeit  fifty  dollars  for  each  offence."  It  is  manifest  that  this  stat- 
ute regulating  the  packing  of  fish  in  Rhode  Island  was  intended 
for  the  protection  of  the  public  generally,  not  Rhode  Island  aonsumers 
alone,  but  consumers  generally.  It  was  to  prevent  fraud  upon  the 
public,  and  public  policy  requires  that  no  action  shall  be  sucessfully 
maintained  in  favor  of  those  who  pack  and  ship  food  fish  in  open  vio- 
lation of  the  wholesome  provisions  of  this  statute.  It  is  conceded  that 
the  plaintiff  below  not  only  did  not  conform  to  the  statute,  but  that  the 
packages  were  falsely  marked.  The  maxim,  "Ex  dolo  malo  no  oritur 
actio/'  fairly  and  forcibly  applies  to  such  a  situation.  If,  upon  a 
jury  trial,  the  fact  should  be  established  that  the  packages  prepared 
and  shipped  by  Proctor  were  pickled  fish  within  the  meaning  of  the 
Rhode  Island  statute,  then  for  such  time  as  he  was  actually  engaged, 
or  had  the  purpose  to  engage,  in  packing  and  shipping  pickled  fish, 
without  conforming  to  the  provisions  of  the  statute,  he  would  not  be 
entitled  to  maintain  his  action  for  damages  resulting  from  non-deliv- 
ery of  the  subject-matter  intended  to  be  used  in  violation  of  the  stat- 
ute law.  Bank  v.  Owens,  2  Pet.  527,  539 ;  Miller  v.  Ammon,  145  U. 
S.  421,  12  Sup.  Ct.  884;  Forster  v.  Taylor,  5  Barn.  &  Adol.  887; 
Eaton  V.  Keegan,  114  Mass.  34 ;  Pol.  Cont.  322;  Curtis  v.  Leavitt,  15 
N".  Y.  9 ;  Benj.  Sales,  §  654. 

Looking  at  the  transaction  aside  from  the  local  statute,  and  inde- 
pendent of  the  question  whether  the  packages  contained  pickled  or 
saltfr]  fisli,  the  authorities  conform  to  a  wholesome  and  sound  rule 
of  pnblif  policy  that  no  cause  of  action  shall  arise  in  behalf  of  a 
person  engaged  in  a  business  wbicli  is  illcgnl,  or  which  is  a  fraud  and 
imposition  upon  the  public,  and  tlic  law  will  not  uphold  or  enforce 
a  contract,  or  aid  a  party,  where  the  purpose  is  to  cheat  and  deceive 
the  f)nbHc  generally.    We  feel  bound  to  recognize  the  modern  public 


SECT.   V]  CHURCH    V.    PROCTOR  903 

policy  indicated  by  tlie  various  statutes,  as  sustained  by  judicial 
authority,  designed  for  tbe  protection  of  tbe  public,  and  which,  in 
the  interest  of  health  and  fair  dealing,  undertake  to  regulate  traffic 
in  food  products.     The  point  is  taken  that  the  purpose  of  Proctor 
to  place  this  product    (innocent  of  itself)   upon  the  market  in  an 
improper  manner  was  not  known  to  Church  &  Co.  at  the  time  of  the 
alleged  breach,  and  that,  therefore,  the  objection  is  not  open  to  the 
defence.     This  is  not  an  answer.     The  defence  of  public  policy  does 
not    proceed    so   much   upon   the   idea    of    relief   to    the    defendant 
as  protection  to  the  public,  by  withholding  legal  remedy  from   a 
party  contemplating  or  practising  imposition.    It  would  be  a  strange 
rule  of  law  which  would  extend  relief  to  a  particeps  criminis,  and 
withhold  relief  from  an  innocent  party  who  seeks  to  avail  himself  of 
its  protection  when  the  imposition  is  discovered.    Cowan  v.  Milbourn, 
L.  E.  2  Exch.  230;  Spotswood  v.  Barrow,  5  Exch.  110;  Holman  v. 
Johnson,  Cowp.  341.    The  wholesome  and  salutary  maxim,  "Ex  turpi 
causa  non  oritur  actio,"  has  been  so  far  enlarged  that  it  may  now  be 
said  that  the  law  will  not  afford  a  remedy  to  a  wrongdoer  in  a  scheme 
to  deceive  and  defraud  the  public,  and  this  modern  doctrine  does  not 
depend  upon  the  consideration,  or  the  innocence,  or  lack  of  innocence, 
of  the  party  who  seeks  to  interpose  the  objection.     It  becomes  a  de- 
fence, and  may  be.  interposed  whenever  the  fraud  is  discovered.     It 
must  be  observed,  however,  that  it  would  not  always  be  enough  to 
avoid  a  contract  for  a  sale  of  articles  innocent  of  themselves  that  the 
party  who  acquired  them,  or  sought  to  acquire  them,  occasionally 
used  them  unlawfully.    In  order  that  this  doctrine  should  operate  in 
avoidance  of  a  contract,  except  where  the  illegality  involves  life,  or 
offences  of  the  higher  grade,  it  must  appear  that  the  party  acquiring 
the  product  intended  to  use  it  unlawfully  when  the  contract  was 
made,  or  when  possession  was  sought,  or  that  he  was  engaged  in  a  gen- 
eral scheme  involving  illegality,  or  the  general  purpose  was  to  use  the 
product  in  a  deceptive  and  fraudulent  manner.     The  record  shows 
that  the  ''plaintiff  testified  that  under  the  arrangement  contemplated 
by  him,  and  the  contract  made  Avith  the  defendants,  the  fish  were  to 
be  landed  at  Still's  Wharf,  at  Tiverton,  in  the  State  of  Rhode  Island, 
and  immediately  there  split  and  salted,  and  packed  up  in  barrels, 
tubs,  pails,  and  other  packages,  and  marked  and  branded  and  shipped 
to  fill  these  orders  to  various  parts  of  the  country,  and  that  all  the  fish 
were  actually  received  by  him  under  this  contract  with  the  defendants, 
and  otherwise  during  the  season  of  1888,  at  Tiverton,  R.  I.,  were  so 
packed  and  marked  there  on  the  spot,"  and  shipped  from  that  point. 
It  also  shows  that  the  barrels,  casks,  and  packages  were  variously 
branded  "Alaska  Mackerel,"  "Russian  Mackerel,"  "California  Mack- 
erel," "Family  White  Fish,"  and  "Fat  Family  Silversides."     It  is 
obvious  that  the  real  object  of  marking  the  packages  thus  was  to 
make  the  product  "appear  to  be  what  it  was  not,  and  thus  induce 
unwary  purchasers." — Plumley  v.  Massachusetts,  155  U.  S.  461,  Sup. 


904  SCOTT    V.    BROWN  [CHAP,    VI 

Ct.  154, — who  could  not  scrutinize  the  contents,  to  buy  it  as  mackerel. 
Humanity  is  entitled  to  know  what  it  buys  and  consumes.  Govern- 
ment is  instituted  and  maintained,  and  law  is  administered,  for  the 
protection  of  the  people ;  and  justice  injfluenced  by  enlightened  public 
policy,  and  controlled  by  legal  principles,  requires  that  contracts  shall 
not  be  upheld  and  enforced  for  the  benefit  of  the  wrongdoer,  where  the 
subject-matter  therefor  is  designed  to  be  used  in  furtherance  of  a 
business  enterprise  which  contemplates  imposition  upon  the  general 
public  through  false,  misleading,  and  deceptive  brands  and  labels, 
placed  upon  sealed  packages  of  food  products  in  a  manner  calculated 
to  deceive,  and  forward  the  sale  of  such  articles  for  what  they  are  not. 
Looking  at  the  record  as  a  whole,  however,  it  does  not  clearly  and 
distinctly  appear  when  the  plaintiff  below  entered  upon  such  scheme 
or  business,  and  for  this  reason  we  cannot  say  there  was  error  in  the 
refusal  of  the  court  to  direct  a  verdict  for  the  defendants.  If  upon 
any  subsequent  trial  this  issue  should  be  raised,  and  evidence  adduced 
in  support  thereof,  we  think  that  the  jury  should  be  instructed  that  no 
damages  can  be  recovered,  and  no  action  maintained,  covering  any 
period  in  which  the  plaintiff  below  contemplated,  or  was  actually 
engaged  in  placing  upon  the  market  the  fish  described  in  the  contract, 
under  false,  deceptive  and  misleading  brands,  designed  to  attract  and 
induce  trade.  During  the  time  he  entertained  such  purpose  (Cowan 
r.  Milbourn,  L.  E.  2  Exch.  230,  236;  Materne  v.  Horwitz,  N.  Y. 
469,  5  !N".  E.  331),  or  was  actually  engaged  in  such  business,  the  law 
will  not  help  him.  The  verdict  should  be  set  aside  for  the  reasons 
stated,  and  it  becomes  unnecessary  to  consider  the  other  questions 
raised  by  the  plaintiffs  in  error. 

Judgment  of  the  circuit  court  reversed;  new  trial  ordered. 


SCOTT  V.  BROWN",  DOERING,  MclSTAB,  &  CO. 
SLAUGHTER  &  MAY  v.  BROW^,  DOERING,  McNAB,  &  CO. 

In  the  Court  of  Appeal,  July  16,  18,  August  1,  1892 
[Reported  in   [1892]    Queen's  Bench,  724] 

A.  L.  Smith,  L.  J.^  The  plaintiff  Scott  applies  to  this  court  to  set 
aside  a  nonsuit  which  passed  against  him  at  the  Guildhall.  He 
asserts  that  there  was  evidence  to  go  to  the  jury  of  his  cause  of  action, 
which  was  for  the  return  of  £632  3.s.  5d.,  paid  to  the  defendants 
under  contract  to  purchase  shnres  in  a  company,  upon  the  ground 
amongst  others,  that  the  defendants,  while  acting  as  his  brokers,  had 
passed  off  their  OAvn  shares  to  him  instead  of  purchasing  them  upon 
the  market.  The  ])laintiff  and  the  defendant  McN'ab  were  jointly 
'  LiNDi.KY,  Tj.  J.,  ;ind  Lopes,  L.  .1.,  delivered  concurring  opiniona. 


SECT.    V]  SCOTT    V.    BROWN  905 

interested  with  others  in  bringing  out  this  company  and  the  £632  3s. 
5d.  sought  to  be  recovered  was  paid  in  pui*suance  of  an  agreement 
that  McNab  should  therewith  purchase  five  hundred  shares 
of  the  projected  company,  when  brought  out,  at  a  premium  (at  the 
time  of  the  agreement  there  was  neither  company  nor  market, 
the  sole  object  of  such  purchase  being  that  the  public  might  thereby 
be  induced  to  believe  that  there  was  a  real  market  for  the  shares, 
and  that  they  were  at  a  real  premium,  whereas,  as  the  plaintiff  and 
the  defendant  McNab  well  knew,  they  were  not.  ISTeither  the  plain- 
tiff nor  the  defendants  would  raise  the  point  of  the  illegality  of  the 
transaction. 

If  two  or  more  persons  agree  to  cheat  and  defraud  others  by 
means  of  deceit  and  fraud,  there  can  be  no  doubt  that  each  and 
all  are  indictable  for  a  criminal  conspiracy  at  common  law.  It 
has  been  held  that  it  is  a  criminal  conspiracy  for  two  or  more  to 
agree  by  false  rumors  to  endeavor  to  raise  the  price  of  the  public 
funds  on  a  particular  day.  Rex  v.  Berenger,  3  M.  &  S.  67.  It  has 
also  been  held,  in  Reg.  v.  Aspinall,  1  Q.  B.  D.  730,  2  Q.  B.  D.  48, 
that  an  agreement  by  two  or  more  to  cheat  and  defraud  by  means  of 
false  pretences  those  who  might  buy  shares  in  a  company  was  an 
indictable  conspiracy.  False  pretences  here  do  not  mean  such 
false  pretences  as  would  support  an  indictment  for  obtaining 
money  or  goods  by  false  pretences.  See  Reg.  v.  Hudson,  Bell,  C.  C. 
263.  Lopes,  L.  J.,  has  gone  fully  into  the  correspondence;  but  the 
telegram  and  letter  of  December  6,  1890,  from  the  defendant 
MclSTab  to  the  plaintiff,  the  letter  of  December  7,  1890,  from  the 
plaintiff  to  Slaughter,  and  of  December  8,  1890,  from  Slaughter  to 
MciSTab,  in  my  judgment,  are  sufficient.  These  documents  contain 
conclusive  proof  that  the  plaintiff  and  MclSTab  agreed  together  to  cheat 
and  defraud  those  who  might  buy  shares  in  the  company  by  leading 
them  to  believe  that  the  shares  were  at  a  genuine  premium  in  the  mar- 
ket, whereas  to  their  knowledge  they  were  not,  the  fictitious  premium 
being  sought  to  be  brought  about  by  means  of  the  purchases  to  be 
made  with  the  plaintiff's  £632  3s.  5d.  by  McNab,  and  which  were  to 
be  made  for  the  sole  purpose  of  creating  such  fictitious  premium. 
These  documents  were  read  by  the  plaintiff's  counsel  when  he  opened 
the  case,  as  showing  the  purposes  for  which  the  plaintiff  and  the 
defendant  MclSTab  had  agreed  that  the  purchases  should  be  made. 
The  agreement  between  two  or  more  to  do  an  illegal  act  has  been 
proved. 

The  next  question  is.  Was  it  shown  that  the  plaintiff  and  McN"ab 
agreed  to  carry  out  this  intention  by  illegal  means, — viz.,  by  deceit 
and  fraud  ?  For,  if  so,  there  can  be  no  possible  doubt  that  an  indict- 
able conspiracy  has  been  committed, — viz.,  the  agreement  to  do  an 
illegal  act  by  illegal  means.  It  is  not  necessary  in  this  case  to  discuss 
whether  the,  whole  of  this  must  be  proved  to  constitute  an  indictable 
conspiracy.    It  is  said  for  the  plaintiff  that  there  was  nothing  deceit- 


906  SCOTT    V.    BROWN  [CHAP.   VI 

ful  or  fraudulent  in  the  fact  of  his  paying  his  £632  3s.  5d.  to  Mcl^ab 
to  purchase  shares  with  upon  the  open  market,  and  if  that  had  been 
all,  I  agree ;  but  the  question  is,  Was  the  payment  made  as  it  was  for 
the  sole  purpose  of  creating  therewith  a  fictitious  premium,  in  order 
to  induce  the  public  to  purchase  shares  in  the  company,  and  thereby 
benefit  the  plaintiff  and  McNab  at  the  expense  of  the  buyer, — a 
deceitful  and  fraudulent  means  whereby  to  cheat  and  defraud  those 
who  might  buy  shares  in  the  company?  I  am  of  the  opinion  that  it 
was? 

Test  it  in  this  way.  Suppose  a  purchaser  induced  to  purchase 
shares  of  the  plaintiff  of  Mcl^ab  by  means  of  the  fictitious  premium 
created  by  them  solely  for  the  purpose  of  inducing  such  purchaser 
and  others  to  buy,  could  he  or  not  have  successfully  sued  either  or 
both  for  a  false  and  fraudulent  representation?  I  say  that  he  could, 
and  this  is  another  way  of  stating  the  same  proposition, — viz.,  that 
the  plaintiff  and  McISTab  agreed  by  means  of  deceit  and  fraud  to 
cheat  and  defraud  the  would-be  purchaser  of  shares.  The  agreement 
to  do  an  illegal  act  by  illegal  means  is  proved,  and  for  the  reasons 
above  both  the  plaintiff  and  MdSTab  were  liable  to  be  indicted  for 
conspiring  to  cheat  and  defraud. 

Now,  how  does  the  law  stand  upon  the  subject  ?  If  a  plaintiff  can- 
not maintain  his  cause  of  action  without  showing,  as  part  of  such 
cause  of  action,  that  he  has  been  guilty  of  illegality,  then  the  courts 
will  not  assist  him  in  his  cause  of  action.  This  was  decided  in  Taylor 
V.  Chester,  L.  R.  4  Q.  B.  309,  where  the  illegality  was  pleaded,  and 
also  in  Begbie  v.  Phosphate  Sewage  Co.,  Law  Rep.  10  Q.  B,  491, 
where  it  was  not  pleaded,  but,  the  fraud  being  apparent,  the  court 
would  not  interfere.  Wlien  the  plaintiff's  statement  of  claim  is 
looked  at  it  will  be  seen  that  he  there  states  the  purposes  for  which 
he  handed  the  money  to  the  defendants, — viz.,  to  ''keep  up  the  price 
of  shares,"  which  upon  the  evidence  was  shown  to  be  to  "create  a 
fictitious  premium." 

In  my  judgment,  the  plaintiff,  when  suing  the  defendants  for  breach 
of  contract,  as  he  does,  has  to  prove  the  whole  contract,  and  it  was  not 
competent  for  him  to  put  in  evidence  only  half  of  the  contract,  and 
he  did  not  do  so,  for  the  letters  above  read  were  opened  by  his 
learned  counsel  as  part  of  his  case.  Immediately  the  whole  contract 
upon  which  the  plaintiff  sues  is  put  in,  the  illegality  of  the  con- 
duct of  the  plaintiff  and  of  McISTab  at  once  becomes  apparent.  In  my 
opinion,  the  maxim  "In  pari  delicto  potior  est  conditio  possidentis" 
applies,  and  this  court  ought  not  to  assist  the  plaintiff  when  he  seeks 
to  recover  the  €632  3.s-.  .5r?.  back  from  the  defendants.  Upon  these 
grounds,  and  without  going  further  into  the  case,  this  appeal  must 
be  dismissed,  and  with  costs.' 

Appeal  dismissed. 

*  Sec  alHO  NickcFHOn  v.  English,  142  Mass.  267. 


SECT.    V]  KULLMAN    V.    GREENEBAUM  907 

SIMON  KULLMAN  et  al.,  Eespondents,  v.  JACOB  GREENE- 
BAUM ET  AL.,  Appellants 

California  Supreme  Court,  December  17,  1891 

[Reported  in  92  California,  403] 

Appeal  from  an  order  of  the  Superior  Court  of  the  city  and  county 
of  San  Francisco  denying  a  new  trial. 

The  action  was  brought  to  recover  the  sum  of  eighteen  thousand 
dollars  for  the  conversion  by  the  defendants  of  mining  stocks  belong- 
ing to  the  iDlaintiffs  valued  at  that  sum,  which  the  defendants  refused 
to  deliver  to  the  plaintiffs  upon  demand  made  upon  them  on  the 
second  day  of  December,  1886.  The  complaint  alleges  that  there- 
after, on  the  tenth  day  of  December,  1886,  they  were  fraudulently 
induced  to  sign  a  pretended  composition  of  the  creditors  of  the 
defendants,  which  was  fraudvilent  and  void  as  to  them  by  reason 
of  secret  preferences  of  other  creditors,  of  which  the  plaintiffs  were 
ignorant,  and  which  they  rescinded  upon  discovery  of  the  fraudulent 
preferences.  The  plaintiffs  recovered  judgment  for  the  whole  amount 
claimed  as  the  value  of  the  stocks.  Further  facts  are  stated  in  the 
opinion  of  the  court. 

John  R.  Jarhoe,  William  S.  Goodfellow,  and  Edward  R.  Taylor, 
for  appellants.  ' 

Wal.  J.  Tusha,  for  respondents. 

McFarland,  J.  The  main  question  in  this  case  is  about  the  validity 
of  a  composition  deed,  by  which  the  respondents  and  other  credi- 
tors of  appellants  agreed  to  receive  pro  rata  the  proceeds  of  the  sale 
of  appellant's  assets  and  thereupon  to  release  them  from  all  claims 
and  demands.  Respondents  contend  that  said  agreement  is  invalid, 
because  a  fraudulent  preference  was  given  to  certain  of  the  creditors 
who  signed  it,  and  the  court  below  so  found.  The  court  found,  as 
facts,  that  some  of  the  creditors  at  first  refused  to  sign  the  agreement, 
and  that,  to  induce  them  to  sign,  "some  of  the  relatives  and  friends 
of  the  defendants  did  pay  such  creditors  the  full  amount  of  their 
several  demands,  with  the  knowledge,  but  without  the  direction  of 
the  defendants,  and  not  out  of  the  assets  of  the  said  defendants,  nor 
under  any  promise  or  expectation  of  repayment,  and  thereby  did 
make  a  preference  of  such  creditors,  and  induced  them  to  sign  the 
said  composition ;  and  that  such  creditors  did  receive  a  larger  propor- 
tion or  sum  than  secured  by  said  agreement ;  of  all  of  which  facts  the 
plaintiffs  at  the  time  of  signing  such  composition  were  ignorant, 
and  upon  the  discovery  thereof  notified  the  defendants,"  etc. 

We  think  that  the  ruling  of  the  court  below  was  right,  and  in  line 
with  the  current  of  authorities.  The  general  rule  is  correctly  laid 
down  in  Story's  Equity  Jurisprudence,  §  378;  and  we  stated  it 
quite  fully  in  the  recent  case  of  O'Brien  v.  Greenebaum,  ante,  p.  104. 


908  KULLMAN    V.    GREENEBAUM  [CHAP.   VI 

It  is  strenuously  argued  by  counsel  for  appellants  that  the  principle 
does  not  apply  here,  for  the  reasons  that  the  payments  to  the  preferred 
creditors  were  not  made  by  the  debtors  or  their  agents;  and  particu- 
larly that  the  payments  were  not  made  out  of  the  debtor's  assets, — 
that  is,  out  of  the  actual  and  disposable  property  which  they  then 
had.  It  is  to  be  noticed,  however,  that  the  appellants  knew  of  these 
secret  payments  to  preferred  creditors;  and  as  the  utmost  good  faith 
is  required  in  such  transactions,  the  appellants  can  hardly  be  said  to 
be  innocent  of  the  imposition  practised  upon  respondents.  But 
beyond  all  that,  the  rule  does  not,  by  any  means,  rest  solely  upon  the 
participation  of  the  debtor  in  the  fraud,  and  the  diminution  of  the 
actual  assets.  In  a  composition  agreement  each  creditor  is  a  party 
as  to  each  other  creditor,  as  well  as  to  the  debtor.  "Creditors  sign 
upon  the  consideration  that  others  sign  upon  the  same  terms;  and 
if  they  are  deceived,  they  are  misled  into  an  act  to  which  they  might 
not  otherwise  have  assented."  (See  Story's  Eq.  Jur.,  §  379,  and 
notes.)  Solinger  v.  Earle,  82  N.  Y.,  393,  was  a  case  where  a  brother- 
in-law  (as  in  the  case  at  bar)  had  given  his  note  to  induce  a  creditor 
to  sign  a  composition  deed;  and  in  the  opinion  of  the  court  in  that 
case  there  is  aptly  expressed  the  views  which  are  determinative  of  the 
point  in  question  against  appellants  in  the  case  at  bar.  The  court 
says :  "The  agreement  between  the  plaintiff  and  the  defendants,  to 
secure  to  the  latter  payment  of  a  part  of  their  debt  in  excess  of  the 
ratable  portion  payable  under  the  composition,  was  a  fraud  upon 
other  creditors.  The  fact  that  the  agreement  to  pay  such  excess 
was  not  made  by  the  debtor,  but  a  third  person,  does  not  divest 
the  transaction  of  its  fraudulent  character.  A  composition  agreement 
is  an  agreement  as  well  between  the  creditors  themselves  as  between 
the  creditors  and  their  debtor.  Each  creditor  agrees  to  receive  the 
sum  fixed  by  the  agreement  in  full  of  his  debt.  The  signing  of  the 
agreement  by  one  creditor  is  often  an  inducement  to  the  others  to 
unite  in  it.  If  the  composition  provides  for  a  pro  rata  payment  to 
all  creditors,  a  secret  agreement,  by  which  a  friend  of  the  debtor 
undertakes  to  pay  to  one  of  the  creditors  more  than  his  pro  rata 
share,  to  induce  him  to  unite  in  the  composition,  is  as  much  a  fraud 
upon  the  other  creditors  as  if  the  agreement  was  directly  between 
the  debtor  and  such  creditor.  It  violates  the  principles  of  equity 
and  the  mutual  confidence  as  between  creditors  upon  which  the 
agreement  is  based,  and  diminishes  the  motive  of  the  creditor  who 
is  a  party  to  the  secret  agreement  to  act  in  view  of  the  common  inter- 
est in  making  the  composition.  Fair  dealing  and  common  honesty 
oondrmin  such  a  transaction."  ^ 

Judgment  and  order  affirmed. 
Dk  Haven,  J.,  and  SnAKPSTiaN,  J.,  concurred. 

'  The  r<!iiniin(l(T  of  ili<^  oi)inion,  relating  to  another  point,  is  omitted. 
-■  Kt.  parte.   Milncr,    IT,  Q.  H.  D.  (105;     Hank  of  ComriKTce  v.  Hochor.  88   Mo.  37; 
SolinKor  v.  Karic,  SL'  N.  Y.  '.Mi,  ace.    See  also  Coleman  v.  Waller,  .3  Y.  &  J.  212;   Knight 


SECT.    V]  GIBBS    V.    SMITH  909 

N.   G.    GIBBS   AND   ANOTHER   V.   L.    C.    SMITH 

Supreme  Judicial  Court  of  Massachusetts,  September  21-26,  1874 

[Reported  in  115  Massachusetts,  592] 

Contract  to  recover  for  the  breach  of  the  following  written  agree- 
ment signed  by  the  parties  thereto :  "An  agreement  made  this  day 
between  N,  G.  Gibbs,  S.  A,  Cornell,  L.  C.  Smith,  and  J.  C.  Kingsley, 
that  the  said  Gibbs  and  Cornell  will  not  bid  or  influenec  any  one  to 
bid,  and  will  not  accept  the  contract  of  any  one  else;  and  further, 
the  said  Kingsley  agrees  to  pay  the  said  Gibbs  and  Cornell  the  sum 
of  five  hundred  dollars  if  he  gets  the  contract  of  the  jail  for  the  com- 
ing three  years ;  and  further,  the  said  Smith  agrees  to  pay  said  Gibbs 
and  Cornell  eight  hundred  dollars  if  he  accepts  the  contract  of  the 
jail  for  the  next  three  years  and  runs  it." 

At  the  trial  in  the  Superior  Court,  before  Wilkinson,  J.,  the 
plaintiffs  offered  to  prove  that  the  agreement  related  to  the  letting 
upon  bids  advertised  for  by  the  overseers  of  the  house  of  correction  of 
Hampden  County,  for  the  services  and  labor  for  three  years,  of  the 
inmates  of  the  house  of  correction  of  the  county;  that  they  fully 
performed  their  agreement,  and  that  the  defendant  accepted  the  con- 
tract of  the  jail  as  specified  in  the  agreement  and  runs  it,  and  although 
requested  by  plaintiffs  to  pay  them  the  sum  of  eight  hundred  dollars, 
according  to  the  terms  of  the  said  agreement,  refuses  so  to  do ;  that  the 
plaintiffs,  by  reason  of  favoritism,  would  not  have  obtained  the  con- 
tract if  they  had  made  bids  therefor;  and  that  the  county  was, 
therefore,  in  no  manner  injured  by  the  agreement  of  said  parties. 

Upon  these  offers  the  presiding  judge  ruled  that  the  plaintiffs 
could  not  maintain  their  action,  on  the  ground  that  the  agreement 
was  against  public  policy  and  void,  and  directed  a  verdict  for  the 
defendant,  and  the  plaintiffs  alleged  exceptions. 

V.  Hunt,  5  Bing.  432;  Brown  v.  Nealley,  161  Mass.  1.  Compare  Continental  Nat 
Bank  v.  McGeoch,  92  Wis.  286.  If  the  debtor  is  ignorant  of  the  advantage  given  by 
a  third  person  to  one  creditor,  other  creditors  cannot  avoid  the  composition.  Martin 
V.  Adams,  81  Hun.  9.  See  also  Ex  parte  Milner,  15  Q.  B.  D.  605;  Bank  of  Commerce 
V.  Hoeber,  88  Mo.  37,  44. 

On  the  ground  that  the  debtor  is  presumed  to  act  under  compulsion  and  is,  there- 
fore, not  in  pari  delicto,  it  has  been  held  that  money  paid  by  a  debtor  to  secure  a 
creditor's  assent  to  a  composition  may  be  recovered  by  the  debtor.  Atkinson  v. 
Denby,  6  H.  &  N.  778;  7  H.  &  N.  934;  Bean  v.  Brookmire,  2  Dill.  108;  Bean  v. 
Amsink,  10  Blatchf.  361;  Brown  v.  Everett,  &c.  Co.,  Ill  Ga.  404;  Crossley  v.  Moore, 
40  N.  J.  L.  27.  But  see  Frost  v.  Gage,  3  Allen,  560;  Solinger  v.  Earle,  82  N.  Y.  393. 
If,  however,  the  debtor  makes  the  payment  after  the  composition  has  been  made, 
though  in  compliance  with  a  promise  made  as  an  inducement  thereto,  the  payment 
is  voluntary'  and  cannot  be  recovered.  Wilson  v.  Ray,  10  A.  &  E.  82;  Batchelder  & 
Lincoln  Co.  v.  Whitmore,  122  Fed.  355  (C.  C.  A.). 

If  the  creditor  bargains  for  an  improper  advantage  as  consideration  for  entering 
into  a  composition,  it  has  been  held  in  England  to  preclude  any  recovery  on  his  claim, 
the  release  in  the  composition  binding  him,  though  he  is  unable  to  enforce  the  debtor's 
promise  to  pay  either  the  regular  composition  or  the  illicit  advantage.  Mallalieu  v. 
Hodgson,  16  Q.  B.  689;  Mayhew  v.  Boyes,  103  L.  T.  (N.  S.)  1.  But  see  contra  Batch- 
elder  &  Lincoln  Co.  v.  Whitmore,  122  Fed.  Rep.  355  (C.  C.  A.) ;  Hanover  Nat.  Bank 
V.  Blake,  142  N.  Y.  404. 


910  GIBBS    V.    SMITH  [CHAP.    VI 

E.  B.  Gillett  and  E.  B.  Stevens,  for  the  plaintiffs. 

G.  M.  Stearns  and  M.  P.  Knowlton,  for  the  defendant. 

Devens,  J.  An  agreement  between  two  or  more  persons  that  one 
shall  bid  for  the  benefit  of  all  upon  property  about  to  be  sold  at  pub- 
lic auction  which  they  desire  to  purchase  together,  either  because  they 
propose  to  hold  it  together,  or  afterwards  divide  it  into  such  parts  as 
they  wish  individually  to  hold,  neither  desiring  the  whole,  or  for  any 
similar  honest  or  reasonable  purpose,  is  legal  in  its  character  and 
will  be  enforced;^  but  such  agreement,  if  made  for  the  purpose  of 
preventing  competition  and  reducing  the  price  of  the  property  to 
be  sold  below  its  fair  value,  is  against  public  policy  and  in  fraud  of 
the  just  rights  of  the  party  offering  it,  and  therefore  illegal.^  Phippen 
V.  Stickney,  3  Met.  384,  387;  1  Story  Eq.  Jur.  §  293;  Story  Sales, 
§  484. 

The  contract  in  the  present  case  is  manifestly  of  the  latter  class. 
The  labor  of  the  inmates  of  the  house  of  correction  was  to  be  sold  at 
auction.  The  plaintiffs  contracted  with  the  defendant  not  to  bid  for 
it  if  the  defendant  would  pay  them  a  certain  sum  if  he  obtained  it. 
The  only  consideration  for  the  defendant's  promise  was  that  the 
plaintiffs  should  abstain  from  the  bidding.     Competition  would  thus 

»  Kearney  v.  Taylor,  15  How.  494,  519;  Jenkins  v.  Fink,  30  Cal.  586;  Switzer  v. 
Skiles,  8  ni.  529;  Hunt  v.  EUiott,  80  Ind.  245;  Smith  v.  Ullman,  58  Md.  183;  Phip- 
pen V.  Stickney,  3  Met.  384;  Stillwell  v.  Glasscock,  91  Mo.  658;  Murphy  v.  De  France, 
105  Mo.  53;  Whalen  v.  Brennan,  34  Neb.  129;  Gulick  v.  Webb,  41  Neb.  706;  Olson  v. 
Lamb,  56  Neb.  104;  Bellows  v.  Russell,  20  N.  H.  427;  Huntington  v.  Bardwell,  46 
N.  H.  492;  National  Bank  v.  Sprague,  20  N.  J.  Eq.  159,  168;  De  Baun  v.  Brand,  61 
N.  J.  L.  624;  Marsh  v.  Russell,  66  N.  Y.  228;  Marie  ».  Garrison,  83  N.  Y.  14;  Smith 
V.  Greenlee,  2  Dev.  L.  126;  Goode  v.  Hawkins,  2  Dev.  Eq.  393;  Breslin  v.  Brown,  24 
Ohio  St.  565;  Smull  v.  Jones,  6  W.  &  S.  122;  Maffet  v.  Ijams,  103  Pa.  266;  McMinn's 
Legatees  v.  Phipps,  3  Sneed,  196;  James  v.  Fulcord,  5  Tex.  512;  Flanders  v.  Wood, 
83  Tex.  277;  DaUey  v.  Hollis,  27  Tex.  Civ.  App.  570;  Barnes  v.  Morrison,  97  Va.  372, 
ace.  Compare  Woodruff  v.  Berry,  40  Ark.  251 ;  Marshalltown  Stone  Co.  v.  Des  Moines 
Brick  Co.,   114  Iowa,  574. 

2  Hyer  v.  Richmond  Traction  Co.,  80  Fed.  Rep.  (C.  C.  A.)  839,  168  U.  S.  471; 
McMullen  v.  Hoffman,  174  U.  S.  639;  Atlas  Nat.  Bank  v.  Holm,  71  Fed.  Rep.  489, 
Swan  V.  Chorpenning,  20  Cal.  182;  Ray  v.  Mackin,  100  111.  246:  Devine  v.  Harkness; 
117  111.  145;  Conway  v.  Garden  City  Co.,  190  111.  89;  Hunter  v.  Pfeiffer,  108  Ind.  197; 
Clark  V.  Stanhope,  109  Ky.  521;  Gardiner  v.  Morse,  25  Me.  140;  Weld  v.  Lancaster 
56  Me.  453;  Hanna  v.  Fife,  27  Mich.  172;  Boyle  v.  Adams,  50  Minn.  255;  Wooton 
V.  Hmkle,  20  Mo.  290;  Miltenberger  v.  Morrison,  39  Mo.  71;  Goble  v.  O'Connor,  43 
Neb.  49;  McClelland  v.  Citizens'  Bank,  60  Neb.  90;  Gulick  v.  Ward  5  Halst  87- 
Brooks  V.  Cooper,  50  N.  J.  Eq.  761;  Kenny  v.  Lembeck,  53  N.  J.  Eq'.  20-  Jones  v 
Caswell,  3  Johns.  Cas.  29;  Doolin  v.  Ward,  6  .Johns.  194;  Wilbur  v.  How'  8  Johns 
444;  Thomp.son  v.  Davies,  13  .Johns.  112;  People  v.  Stephens,  71  N.  Y.  527-  Hopkins 
a.  En.sign,  122  N.  Y.  144;  Baird  v.  Sheehan,  166  N.  Y.  631;  Coverlv  ?).' Terminal 
Warehou.se  Co.,  81  N.  Y.  Supp.  (App.  Div.)  369;  Ingram  v.  Ingram,  4Jones  L  188- 
King  V.  Wmants,  71  N.  C.  469;  Kine  v.  Turner,  27  Oreg.  3.56;  Saxton  v.  Seiberling! 
48  Ohio  St.  554,  562;  Barton  v.  Benson,  120  Pa.  431;  Hay's  Estate  159  Pa  .381- 
Dudley  V.  Odom.  5  S.  C.  131;  Wilson  v.  Wall,  99  Va.  353,  3.56;  Ralphsnyder  7-.' Shaw', 
45  W.  Va.  6S0,  occ.  See  also  Fcnner  v.  Tucker.  6  R.  I.  551 ;  Herndon  v.  Gibson.  3S 
S.  C.  357;  20  L.  R.  A.  545,  n.  Compare  Jiroslin  v.  Brown,  24  Ohio  St.  565.  The 
EnglJHh  authorities.  cHpecially  in  equity,  seem  to  permit  greater  freedom  of  combina- 
tion to  uffect  th(!  price  than  the  American.  Galton  v.  Emu.sa,  1  Coll.  Ch.  243-  Re 
Carew'H  KHtatc.  20  Beav.  1S7;  Heffcr  v.  Martyn,  36  L.  J.  Ch.  .372;  Chattock  ;».  Muller, 
8  Ch.  D.  177.  Compare  Levi  v.  Levi,  6  C.  &  P.  '2.39;  Rawlings  v.  General  Trading  Co.', 
[1920]  3  K.  B.  30,  commented  on  in  36  L.  Qu.  Rev.  .331. 


SECT.   V]  JEWETT   PUBLISHING   CO.    V.    BUTLER  911 

be  destroyed  so  far  as  these  parties  were  concerned,  and  the  labor 
might  thus  be  obtained  at  a  rate  lower  than  its  fair  market  value. 
The  contract  thus  being  made  against  public  policy,  no  action  can  be 
maintained  upon  it  by  the  parties  thereto.  Fuller  v.  Dame,  18  Pick. 
472;  Rice  v.  Wood,  113  Mass.  133. 

JSTor  is  it  any  answer  to  show  that  no  injury  has  been  done  to 
the  party  selling.  That  which  renders  the  contract  illegal  is  not  the 
injury  the  parties  have  actually  occasioned,  but  the  purpose  which 
they  must  have  contemplated  when  it  was  made;  its  validity  is 
tested  not  by  its  results,  but  by  its  objects  as  shown  by  the  terms. 

Exceptions  overruled. 


C.  F.  JEWETT  PUBLISHIN'G  COMPAISTY  v.  BUTLER 

Supreme  Judicial  Court  of  Massachusetts,  October  19,  1893 
[Reported  in  159  Massachusetts,  517] 

This  was  an  action  to  recover  for  breach  of  an  agreement  to 
allow  the  plaintiff  corporation  to  publish  "Butler's  Book."  In  the 
Supreme  Judicial  Court,  Holmes,  J.,  found  that  if  the  contract  relied 
on  by  the  plaintiff  was  valid,  the  plaintiff  was  entitled  to  recovei* 
$2,500  with  interest,  and  reported  the  case  to  the  full  court.  The 
material  facts  are  in  the  opinion.^ 

E.  C.  Bumpus,  8.  J.  Elder,  and  W.  C.  Wait,  for  the  plaintiff. 

J.  Loiuell  and  E.  M.  Johnson,  for  the  defendant. 

Morton,  J.  The  first  question  is  whether  the  contract  is,  as  the 
defendant  contends,  illegal  on  its  face.  The  words  relied  on  to  show 
that  it  is  are  as  follows :  "The  party  of  the  first  part  agrees  to  accept 
full  responsibility  of  all  matter  contained  in  such  work,  and  to  defend 
at  his  own  cost  any  suits  which  may  be  brought  against  the  party  of 
the  second  part  for  publishing  any  statements  contained  in  said  work, 
and  to  pay  all  costs  and  damages  arising  from  said  suits."  The  presid- 
ing justice  found  that  "the  contract  was  made  without  illegal  intent, 
unless  and  except  so  far  as  the  words  used  import  one  as  matter  of 
law."  Do  the  words  used  as  quoted  above  import  one  as  matter  of 
law?  We  think  not.  The  parties  were  contracting  respecting  a  book 
which  was  not  in  existence,  but  was  to  be  written.  There  was  nothing 
in  the  character  of  the  proposed  work  which  naturally  or  necessarily 
involved  the  publication  of  scandalous  or  libellous  matter,  as  was  the 
case,  for  instance,  in  Shackell  v.  Rosier,  2  Bing.  N".  C.  634,  referred  to 
by  the  defendant.  At  the  same  time  it  was  not  impossible  that  in  spite 
of  due  care  and  good  faith  on  the  part  of  the  author  and  publisher, 
the  proposed  book  might  contain  matter  which  others  perhaps  would 
deem  libellous.     In  such  case  it  would  be  no  more  unlawful  for  the 

>  The  statement  of  the  case  is  abbreviated. 


912  JEWETT   PUBLISHING    CO.    V.    BUTLER  [CHAP.   VI 

parties  to  provide  that  the  author  should  save  the  publisher  harmless 
from  all  costs  and  damages  to  which  he  might  be  subjected  by  reason 
of  the  publication  of  the  book,  than  it  would  be  for  a  patentee  to  agree 
with  his  licensee  that  he  would  protect  him  against  all  costs  and 
damages  to  which  he  might  be  subjected  in  consequence  of  using  the 
patent  to  which  the  license  applied.  The  case  stands  on  grounds 
entirely  different  from  those  on  which  it  would  stand  if  it  appeared 
that  the  -parties  intended  to  publish  or  contemplated  the  publication 
of  libellous  matter.  There  is  nothing  in  the  agreement  fairly  to  show 
that  such  was  their  purpose.  The  most  that  can  be  said  is  that  though 
there  was  no  intention  to  write  or  publish,  nor  any  contemplation  of 
writing  or  publishing  libellous  matter  on  the  part  of  the  author  or 
publisher,  it  might  turn  out  after  the  book  was  published  that  it  did 
contain  libellous  matter.  But  that  is  very  far  from  saying  that  the 
parties  had  in  view  an  illegal  purpose  in  publishing  the  book. 
We  see  nothing  unlawful  in  a  contract  which  provides,  without  any- 
thing more,  that  the  author  shall  indemnify  the  publisher  for  costs 
and  damages  to  which  he  may  be  subjected  by  reason  of  the  publica- 
tion of  a  book  to  be  written  by  the  author. 

Moreover,  it  was  possible  in  this  case  that  the  book  might  not 
contain  libellous  matter,  although  libel  suits  against  the  publisher 
might  grow  out  of  it.  It  would  be  hard  to  say  in  such  event  that  the 
publisher  who  might  have  published  the  book  without  any  libellous 
purpose,  and  in  the  full  belief  that  it  contained  nothing  libellous,  could 
not  recover  of  the  author  under  this  clause  in  the  contract  the  costs 
and  damages  to  which  he  had  been  put  by  such  suits.  In  order,  we 
think,  to  render  the  contract  unlawful,  it  should  appear  that  there  was 
an  intention  on  the  part  of  the  author  and  publisher  to  write  and 
publish  libellous  matter;  or  that  the  author  proposed,  with  the 
knowledge  and  acquiescence  of  the  publisher,  to  write  libellous  mat- 
ter, or  that  the  contract  on  its  face  provided  for  or  promoted  an 
illegal  act.  We  do  not  think  the  clause  in  question  is  fairly  suscep- 
tible of  either  construction.  Fletcher  v.  Harot,  55;  s.c.  suh  nom 
Battersey's  case.  Winch.  48 ;  Betts  v.  Gibbons,  2  A.  &  E.  57 ;  Adamson 
V.  Jarvis,  4  Bing.  QQ ;  Waugh  v.  Morris,  L.  E.  8  Q.  B.  202 ;  Pearce  v. 
Brooks,  L.  R.  1  Ex.  213 ;  Cannan  v.  Bryce,  3  B.  &  Aid.  179 ;  Graves  v. 
Johnson,  156  Mass.  211. 

The  defendant  contends,  in  the  next  place,  that  he  was  justified  in 
his  refusal  to  go  on  with  the  contract,  because  of  his  doubts  as  to  the 
solvency  of  the  plaintiff  corporation,  and  because  of  the  disgrace 
attached  to  its  name  in  consequence  of  the  conduct  of  Jewett. 

The  first  ground  thus  taken  would  seem  to  be  disposed  of  by  the 
recent  ease  of  Hobbs  v.  Columbia  Falls  Brick  Co.,  157  Mass.  109, 
and  need  not,  therefore,  be  further  considered. 

As  to  the  second  ground,  it  is  to  be  observed  that  the  contract  was 
not  made  with  Jewett  personally,  but  with  the  corporation  which  bore 
his  name.     Moreover,  Jewett  had  fled,  and  it  fairly  may  be  presumed 


SECT.    V]  JEWETT   PUBLISHING    CO.    V.    BUTLER  913 

that  his  place  as  president  and  manager  has  been  filled  by  the  election 
of  another  person,  so  that  the  defendant  cannot  and  will  not  be 
obliged  to  come  into  further  association  with  him.  It  is  well  known 
that  corporations  are  frequently  organized  which  bear  as  part  of 
their  corporate  name  the  name  of  some  individual.  The  contention 
of  the  defendant  would  require  us  to  hold  that  in  all  such  cases  a 
party  making  a  contract  with  such  a  corporation  would  be  justified 
in  refusing  to  go  on  with  it,  if  the  person  whose  name  the  corporation 
bore  committed  an  act  rendering  him  liable  to  punishment  as  a  crim- 
inal, or  bringing  him  into  disgrace  and  rendering  further  association 
with  him  unprofitable  and  injurious  to  the  other  party  to  the  con- 
tract. But  a  corporation  does  not,  in  such  a  case,  impliedly 
guarantee,  as  an  element  of  the  contract  entered  into  with  it,  that 
the  person  whose  name  it  bears  shall  continue  to  be  a  reputable  mem- 
ber of  society.  The  corporation  is  distinct  from  the  person  whose 
name  it  bears.  Its  interests  and  those  of  its  stockholders  in  contracts 
made  by  it  with  other  parties,  are  not  to  be  affected  by  the  disgrace- 
ful or  criminal  conduct  of  the  person  whose  name  it  bears,  and  for 
which  it  is  in  no  way  responsible.  A  majority  of  the  court  think 
the  entry  should  be,  judgment  for  plaintiff  for  $2,500,  and  interest 
from  June  9,  1890,  and  it  is  So  ordered. 

Lathrop,  J.  I  am  unable  to  concur  in  the  opinion  of  the  major- 
ity of  the  court,  that  the  contract  sought  to  be  enforced  is  a  valid 
contract.  The  contract  provides  for  the  publication  of  a  work  to 
contain  the  author's  autobiography,  "or  reminiscences  of  his 
life,  and  the  acts  and  doings  of  other  public  men,  so  far  as  they  may 
seem  to  him  to  elucidate  the  history  of  the  country  or  public  affairs." 
It  is  in  reference  to  a  work  of  this  character  that  the  defendant 
agrees  to  do  three  things :  First  "to  accept  full  responsibility  of  all 
matters  contained  in  said  work."  Secondly,  "to  defend  at  his  own  cost 
any  suits  which  may  be  brought  against  the  party  of  the  second  part 
for  publishing  any  statements  contained  in  said  work."  Thirdly,  "to 
pay  all  costs  and  damages  arising  from  such  suits."  The  obligation  of 
the  defendant  is  not  limited  to  paying  legal  expenses,  but  includes 
costs  and  damages  recovered  against  the  publisher  "for  publishing  any 
statement  contained  in  said  work."  While  it  is  found  that  the  parties 
acted  without  illegal  intent,  yet  if  the  legal  effect  of  the  language 
used  is  to  make  the  contract  against  the  policy  of  the  law,  this  court 
ought  not  to  enforce  it.  It  seems  to  me  to  be  impossible  to  say  that 
the  language  used  applies  only  to  groundless  suits,  and  that  it  should 
be  so  construed.  What  the  parties  contemplated,  and  what  they 
intended  to  provide  for,  was  that  actions  might  be  brought  against 
the  publisher  for  libellous  matter  contained  in  the  work;  that  these 
actions  might  be  successfully  maintained  against  the  publisher,  who 
would  then  be  compelled  to  pay  damages  and  costs.  In  this  event 
the  writer  agreed  to  indemnify  the  publisher.  Could  such  an  agree- 
ment have  been  enforced?     In  my  opinion  it  could  not,   and  this 


914  TILLOCK    V.    WEBB  [CHAP.   VI 

view  is  sustained  by  the  authorities,  Shackell  v.  Rosier,  2  Bing  X.  C. 
634;  Colburn  v.  Patmore,  1  C.  M.  &  R.  73;  Gale  v.  Leckie,  2  Stark. 
107;  Clay  v.  Yates,  1  H.  &  -N".  73;  Arnold  v.  Clifford,  2  Sumn.  238;^ 
Odgers  Libel  and  Slander,  2d  ed.  8,  See  also  Bradlaugh  v.  ISTewde- 
gate,  11  Q.  B.  D.  1,  12;  Babcock  v.  Terry,  97  Mass.  482.  It  follows 
that  the  whole  contract  was  tainted  with  illegality,  and  neither  party 
was  bound  to  go  on  with  it,  Robinson  v.  Green,  3  Met,  159,  161; 
Perkins  v.  Cummings,  2  Gray,  258;  "Woodruff  v.  Wentworth,  133 
Mass.  309 ;  Bishop  v.  Palmer,  146  Mass.  469 ;  Lound  v.  Grimwade, 
39  Ch.  D.  605,  613.^ 


J.  N.  TILLOCK  V.  JOHIN'  WEBB 

SuPEEME  Judicial  Court  of  Maine,  1868 

[Reported  in  56  Maine,  100] 

On  exceptions  to  the  ruling  of  Goddard,  J.,  in  the  Superior  Court. 

Assumpsit  on  a  note  for  $48,  given  by  the  defendant  to  the  plain- 
tiff, dated  April  13,  1867.  Plea,  general  issue,  with  brief  statement 
denying  any  consideration,  and  also  alleging  that  the  consideration 
was  an  unlawful  one. 

The  case  was  tried  by  the  judge  (without  the  intervention  of  a 
jury),  whose  decision  was  subject  to  exceptions  in  matters  of  law. 

The  judge  found,  as  matter  of  fact,  that  the  defendant,  at  Bucks- 
port,  at  half-past  four  o'clock  on  one  Sunday  afternoon  in  July,  1865, 
hired  a  horse  and  carriage  of  the  plaintiff,  who  was  a  stable-keeper, 
and  took  from  the  house  where  the  defendant  was  living,  two  young 
ladies,  one  of  whom  had  come  from  church  about  an  hour  previous, 
whither  she  had  walked  that  day  from  her  home,  two  or  three  miles 

1  Lea  V.  Collins,  4  Sneed,  393;    Atkins  v.  Johnson,  43  Vt.  78,  ace. 

2  A  promise  to  indemnify  one  from  the  consequences  of  doing  an  act  which  is  neces- 
sarily illegal  is  unenforceable.  Williston,  Contracts,  §  1751.  But  where  the  legality 
of  the  act  depends  on  extrinsic  facts  unknown  to  the  promisee,  enforcement  of  a 
promise  to  indemnify  him  from  the  consequences  of  doing  the  act  is  not  opposed  to 
public  policy.  Arundel  v.  Gardiner,  Cro.  Jac.  652;  Fletcher  v.  Harcott,  Winch,  48; 
Merriweather  v.  Nixon,  8  T.  R.  18G;  Botts  v.  Gibbons,  2  A.  &  E.  57;  Elliston  v.  Berry- 
man,  15  Q.  B.  205;  Moore  v.  Appleton,  26  Ala.  633;  Stark  v.  Raney,  18  Cal.  622; 
Lerch  v.  Gallup,  67  Cal.  595;  Marcy  v.  Crawford,  16  Conn.  549;  Higgins  v.  Russo, 
72  Conn.  238;  Wolfe  v.  McClure,  79  111.  564;  Marsh  v.  Gold,  2  Pick.  284;  Train  v. 
Gold,  5  Pick.  379;  Avery  v.  Halsey,  14  Pick.  174;  ShotweU  r-.  HambHn,  23  Miss.  156; 
Forinquet  v.  Te'^arden,  24  Miss.  96;  Moore  v.  Alien,  25  Miss.  363;  McCartney  v. 
Shopard,  21  Mo.  573;  Harrington's  Adm.  v.  Crawford,  136  Mo.  467,  472;  Allaire 
V.  Onland,  2  .Johns.  Cas.  54;  Coventry  v.  Barton,  17  Johns.  142;  Trustees  v.  Gala- 
tian,  4  Cow.  346;  Chamberlain  v.  Boiler,  18  N.  Y.  115;  Ives  v.  Jones,  3  Ired.  538; 
Miller  v.  Rhodes,  20  Ohio  St.  494;  Mays  v.  Joseph,  34  Ohio  St.  22;  Comm.  v.  Van- 
fiyk",  57  Pa.  34;  .lamison  v.  Calhomi,  2  Speer,  19;  Davis  v.  Arledge,  3  Hill,  170; 
Hunter  v.  Agee,  5  Humph.  57;  Ballard  v.  Pope,  3  U.  C.  Q.  B.  317;  Robertson  v. 
Broadfoot,  11  U.  C.  Q.  R.  407.  See  also  Vandiver  v.  PoUak,  97  Ala.  467,  107  Ala. 
547;    Union  Stave  Co.  v.  Smith,  116  Ala.  416;   Griffiths  v.  Hardenbergh,  41  N.  Y.  464. 

A  contract  to  indemnify  a  surety  on  a  bail  bond  is  illegal  in  England,  Consolidated 
Finance  Co.  v.  Messgrave  [1900]  1  Ch.  37,  but  generally  permitted  in  the  United 
States.  3  Williaton,  Contracts,    §  1717. 


SECT.    V]  TILLOCK    V.    WEBB  915 

distant;  that  he  drove  about  one  half  a  mile  beyond  her  house,  and 
while  in  the  act  of  turning  the  horse  and  carriage  for  the  purpose 
of  going  back  to  leave  her  at  her  house,  upset  and  badly  injured  the 
buggy,  and  frightened  and  more  or  less  thereby  injured  the  horso 
for  stable  use;  that,  after  tying  together  the  broken  buggy,  the 
defendant  undertook  to  lead  the  horse  back,  but  the  horse  got  away 
from  him  and  ran  home  with  the  buggy;  that  the  plaintiff  had  the 
carriage  repaired  at  an  expense  of  $60;  that  the  defendant  paid 
the  j)laintiff  $30,  and  gave  the  note  in  suit  for  the  balance  of  dam- 
ages claimed. 

The  judge  ruled  that  the  facts  disclosed  a  sufficient  consideration 
for  the  note,  and  that  the  consideration  was  lawful.  To  which 
ruling  the  defendant  alleged  exceptions. 

Thos.  B.  Reed,  for  the  plaintiff. 

/.  O'DonneU,  for  the  defendant. 

Appleton,  C.  J.  The  defendant  hired  of  the  plaintiff  and  his 
partner  a  horse  and  wagon  to  ride  on  Sunday.  The  hiring  was  not 
for  any  purpose  of  necessity  or  charity.  Being  illegal  between  the 
the  parties,  it  is  not  made  legal  because  the  hirer  did  a  kind  act  by 
conveying  a  young  lady  home,  who  had  been  "to  meeting"  during  the 
day.  The  contract,  so  far  as  disclosed,  was  indefinite  as  to  time, 
distance  and  use,  and  not  being  for  any  purpose  of  necessity  or 
charity,  was  one  which  the  law  will  not  enforce,  nor  will  it  give  com- 
pensation for  its  violation.  Way  v.  Foster,  1  Allen,  408;  Morton  v. 
Gloster,  46  Maine,  520. 

If  the  defendant  injured  the  horse  and  wagon  by  his  careless  or 
negligent  driving,  the  remedy  for  the  bailors  would  be  against  him 
for  breach  of  his  duty  as  bailee, —  that  is,  for  a  breach  of  the  duties 
arising  from  and  under  the  contract  of  bailment.  But,  as  that  con- 
tract was  against  the  provisions  of  the  statute,  no  action  could  have 
been  maintained  upon  it. 

The  only  consideration  for  the  note  is  the  liability  of  the  defendant 
under  a  contract  prohibited  by  law.  But  this  cannot  be  regarded  as 
a  legal  consideration.  The  rights  of  the  parties  remain  as  if  no  note 
had  been  given.  The  original  contract,  being  void,  was  not  suscep- 
tible of  ratification.    Day  v.  McAllister,  15  Gray,  433. 

In  Morton  v.  Gloster,  46  Maine,  520,  and  in  Woodman  v.  Hubbard, 
5  Poster,  520,  the  bailee  was  guilty  of  a  conversion  of  the  property 
bailed,  and  was  held  liable  therefor  in  trover.  Not  so  here.  The 
defendant  is  not  proved  to  have  kept  the  horse  and  wagon  longer  or 
to  have  driven  further  than  he  agreed  to.  He  is  not  shown  to  have 
been  guilty  of  any  act  of  conversion.  Exceptions  sustained. 

Kent,  Walton,  Dickerson,   and   Danforth,   JJ.,   concurred.^ 

^  On  the  effect  of  transactions  on  Sunday,  see  Harris,  Sunday  Laws;  Rinpjrolrl, 
Law  of  Sunday;  Greenhood  on  Public  Policy,  546  et  seq.;  3  Williston,  Contracts. 
§  1700,  et  seq. 


916  STEWART   V.   THAYER  [CHAP.   VI 


GEORGE  W.  STEWART  v.  CHARLES  H.  THAYER 

SuPEEME  Judicial  Couet  of  Massachusetts,  March  2-30,  1898 

[Reported  in  170  Massachusetts,  560] 

Holmes,  J.  This  is  an  action  upon  an  account  annexed,  for 
music  furnished  to  the  defendant  by  the  plaintiff.  The  case  already 
has  been  before  this  court  after  a  trial  on  the  first  count.  Stewart  v. 
Thayer,  168  Mass.  519.  It  has  been  decided  that  the  contract  testi- 
fied to  by  the  plaintiff  was  entire,  and  is  not  to  be  enforced  because  a 
part  of  the  services  which  it  called  for  were  to  be  rendered  on  Sunday, 
and  were  within  the  prohibition  of  Pub.  Sts.  c.  98,  §§  1,  2.  We 
assume  this  to  be  settled,  and  shall  discuss  it  no  further.^ 

When  the  case  came  on  for  trial  a  second  time,  the  plaintiff  was 
allowed  to  amend  his  declaration  by  adding  a  second  count,  like  the 
first  on  an  account  annexed,  but  intended  seemingly,  by  some  changes 
of  dates,  etc.,  to  avoid  showing  that  any  of  the  services  rendered  were 
on  Sunday,  the  contract  under  which  they  were  rendered  not  being 
mentioned,  of  course.  It  was  objected  on  behalf  of  the  sureties  on  a 
bond  given  to  dissolve  the  attachment  in  this  suit  that  the  amendment 
was  not  for  the  same  cause  of  action,  but  the  amendment  was  allowed 
and  the  sureties  excepted. 

We  assume  that  the  sureties  have  a  locus  standi  to  except,  even  if 
their  rights  would  be  protected  sufficiently  by  leaving  it  open  to  them 
to  deny  the  cause  of  action  was  the  same  when  sued  upon  their 
bond.  Pub.  Sts.  c.  167,  §  85.  Kellogg,  v.  Kimball,  142  Mass.  124, 
128,  129.  But  we  think  it  needs  no  argument  or  express  evidence  to 
show  that  the  new  count  is  for  the  same  cause  of  action  as  the  old, 
within  the  requirements  of  Pub.  Sts.  c.  §  §  42,  85.  Mann  v.  Brewer, 
7  Allen,  202.  They  both  claim  the  same  sum  for  services  during 
the  same  months  of  the  year,  and  for  services  shown  to  have  to 
do  with  music,  in  the  first  count  by  the  words  "orchestra  and  music 
boxes,"  in  the  second  by  the  words  "leader  and  music  boxes."  Even 
if  the  finding  had  not  been  warranted  when  the  amendment  was 
allowed,  it  was  shown  to  be  correct  as  soon  as  the  plaintiff  offered  his 
evidence.     This  exception  is  overruled. 

When  it  came  to  the  evidence,  the  plaintiff  proposed  to  prove  that 
he  rendered  the  services  declared  for  on  secular  days,  bat  admitted 
that  on  cross-examination  his  testimony  would  be  the  same  as  at  the 
former  trial,  which  moans  that  it  would  shoAv  the  services  to  have  been 

'  It  appears  from  the  report  in  168  Mass.  .'510,  that  the  defendant,  proprietor  of  a 
seaside  resort,  contracted  in  1S93  with  the  i)hiintifF,  leader  of  a  hand,  for  the  services 
of  the  hand  (hirint;  July  and  Antnist  at  certain  i)rices  for  each  week  of  seven  days. 
The  plaintiff  and  tlic;  hand  played  durinK  the  aureed  time.  On  Sundays  there  were 
concerts  in  the  afternoon  anrl  evening. 

Siit)sc()iient  to  XH'.y.i,  som(!  additions  were  made  by  statute  in  Massachusetts  to  the 
amusements  or  matters  of  business  which  niieht  lawfully  be  done  on  Sunday.  See 
Rov.  Laws,  c.  98;   Acts  of  11)18,  c.  257;   Acts  of  1020,  c.  240. 


SECT.    V]  STEWART    V.    THAYER  917 

rendered  under  a  contract  which,  as  we  have  said,  already  has  been 
passed  upon  by  this  court.  Thereupon  the  court  ruled  that  the  action 
could  not  be  maintained,  and  the  plaintiff  excepted. 

It  was  suggested  that  the  defendant  was  not  entitled  to  bring  out 
what  the  real  contract  was,  and  that  it  would  be  taking  advantage  of 
his  own  unlawful  act.  But  when  the  plaintiff  tried  to  establish  a  cer- 
tain contract,  namely,  a  promise  expressed  by  conduct  to  pay  a  fair 
and  reasonable  price  for  services  rendered  on  week  days,  the  defendant 
had  a  right  to  show  that  he  did  make  that  contract,  and  he  might 
prove  it  as  well  by  showing  that  he  made  a  different  contract  as  by 
showing  that  he  made  none.  Phipps  v.  Mahon,  141  Mass,  471,  473 ; 
Starratt  v.  Mullen,  148  Mass.  570,  For  this  negative  purpose  it  does 
not  matter  whether  the  contract  actually  made  was  valid  or  not.  See 
Starrett  v.  Mullen,  148  Mass.  570;  New  York  &  JSTew  England  Rail- 
road V.  Sanders,  134  Mass.  53,  55. 

It  will  be  noticed  that  this  contract  was  bad,  not  because  of  the 
time  when  it  was  made,  but  because  of  its  contents.  Unless  the  orig- 
inal contract  has  been  split  up,  of  which  there  was  no  pretence,  there 
could  be  no  question  of  fact  whether  a  valid  contract  was  not  made  at 
a  later  time,  such  as  sometimes  has  arisen  under  the  Sunday  law. 
Under  such  circumstances,  however  illegality  should  be  dealt  with,  it 
should  be  dealt  with  on  evidence  of  the  facts  as  they  were.  It  would 
be  inelegant,  if  not  worse,  to  allow  the  jury  to  find  that  the  defendant 
made  an  actual  contract  different  from  that  which  he  really  made,  by 
confining  them  to  evidence  of  only  a  part  of  the  facts  and  excluding 
the  rest.^ 

If  the  plaintiff  were  to  be  allowed  to  recover,  the  ground  would  be 
that,  if  the  defendant  saw  fit  to  repudiate  the  contract  actually  made, 
the  law  would  make  him  pay  the  reasonable  value  of  the  services  law- 
fully rendered  and  accepted,  and  that  therefore,  under  the  forms  of 
action  in  use,  he  would  be  liable  on  a  fictitious  contract  implied  by 
law.  Such  would  be  the  law  of  this  State  if  the  only  trouble  with  the 
contract  was  the  statute  of  frauds.  Bacon  v.  Parker,  137  Mass,  309, 
311,  See  Clark  v.  United  States,  95  U.  S.  539,  542,  546.  But  such 
is  not  the  law  when  the  contract  is  unlawful,  and  the  parties  making  it 
stood  on  an  equal  footing.  The  plaintiff,  having  rendered  his  services 
in  pursuance  of  an  illegal  scheme,  is  not  in  a  position  to  ask  the  law  to 
help  him  by  substituting  a  fiction  for  a  fact.  His  inability  to  recover 
depends  upon  different  reasons  from  the  inability  to  recover  upon  a 
harmless  or  laudable  contract  not  evidenced  by  writing.     It  may  be 

1  In  Collins  v.  Blantern,  2  Wilson,  341,  1  Sm.  L.  C.  (10th  ed.)  355  (9th  Am.  ed.), 
646,  it  was  decided  that  even  in  an  action  upon  a  specialty,  valid  upon  its  face,  facts 
might  be  pleaded  and  proved  showing  that  the  specialty  was  given  as  part  of  an 
illegal  transaction.  This  has  been  regarded  as  settled  law  since  that  time.  See 
Greenhood  on  Public  Policy,  113  ef  seq.  and  cases  cited.  Indeed,  if  illegality  is  of  a 
serious  character  a  court  will  of  its  own  motion  take  notice  of  it  and  will  not  allow  the 
defence  to  be  waived.  Metz  Co.  v.  Boston  &  Maine  R.,  227  Mass.  307.  While  if  the 
illegality  is  technical  or  trivial  advantage  can  be  taken  of  it  only  if  pleaded.  3  Willia- 
ton,  Contracts,   §  1630a. 


918  NOICE    V.    BROWN  [CHAP.   VI 

regarded  as  a  punishment  which  he  is  not  to  be  allowed  to  evade  sim- 
ply by  changing  the  form  of  his  count.  It  is  true  that  the  defendant 
is  as  bad  as  the  plaintiff  but  he  is  no  worse.  It  would  be  treating  him 
as  worse  if  he  were  compelled  to  pay  according  to  a  fiction  because  the 
plaintiff  would  not  be  allowed  to  recover  according  to  the  fact.  De- 
fendants are  not  estopped  to  show  that  the  transactions  on  which 
they  are  sought  to  be  held  were  illegal,  in  favor  of  the  plaintiffs  who 
cannot  invoke  the  estoppel  without  showing  that  they  were  equally  in 
the  wrong. 

In  Bradley  v.  Eea,  102  Mass.  188,  language  is  used  which  is  some- 
what opposed  to  our  decision  if  taken  literally,  but  we  doubt  if  the 
court  intended  to  decide  anything  which  we  are  called  on  to  overrule. 
The  earlier  decision  of  Ladd  v.  Eogers,  11  Allen,  209,  sustains  our 
view;  and  in  Cranson  v.  Goss,  107  Mass.  439,  441,  Gray,  J.,  says: 
"If  a  chattel  has  been  sold  and  delivered  on  the  Lord's  day  without 
payment  of  the  price,  the  seller  cannot  recover  either  the  price  or  the 
value;  not  the  price  agreed  on  that  day,  because  the  agreement  is 
illegal ;  not  the  value,  because,  whether  the  property  is  deemed  to  have 
passed  to  the  defendant,  or  to  be  held  by  him  without  right,  there  is 
no  ground  upon  which  a  promise  to  pay  for  it  can  be  implied."  See 
also  Dodson  v.  Harris,  10  Ala.  566,  569 ;  Troewert  v.  Decker,  51  Wis. 
46;  Simpson  v.  Nicholls,  3  M.  &  W.  240,  and  5  M.  &  W.  702,  n.; 
Thompson  v.  Williams,  58  N.  H.  248.  If  this  is  true  as  to  property 
received  under  an  illegal  contract  and  kept  when  it  might  be  returned, 
a  fortiori  it  is  true  as  to  services  accepted  which  cannot  be  returned, 
See  Keener,  Quasi-Contracts,  265. 

Exceptions  overruled.^ 


ALICE  NOICE  V.  A.  D.  BKOWI^ 

'New  Jersey  Supreme  Court,  February  Term,  1876 
[Reported  in  38  New  Jersey  Law,  228] 

Beasley,  C.  J.  The  declaration,  to  which  a  demurrer  has  been 
filed,  complains  in  all  its  counts  of  a  breach  of  a  promise  of  marriage. 
These  counts  are  special,  and  all  contain  the  same  facts.  The  case 
thus  presented  is,  that  the  defendant,  being  a  married  man,  and  living 
apart  from  his  wife,  and  in  expectation  of  a  divorce  from  her  by 
force  of  a  bill  then  pending,  promised  the  plaintiff  to  marry  her  in  a 
reasonable  time  after  such  divorce  should  have  been  obtained. 

I  cannot  see  the  faintest  semblance  of  legality  in  the  promise  here 
laid.  It  is  wholly  fallacious  to  suppose  that  a  contract  is  not  illegiti- 
mate if  tlif  act  agreed  to  be  done  should  not  be  illegal  at  time  of 
its  contemplated  performance.     Such  is  not  the  law.     A  contract  is 

'  See  also  aa  to  the  effect  of  illegality  of  part  of  the  consideration  for  a  promise, 
3  Williston.  Contracts,  5  1779  el  aeq. 


SECT.    V]  NOICE    V.    BROWN  919 

totally  void,  if  when  it  is  made,  it  is  opposed  to  morality  or  public 
policy.  The  institution  of  marriage  is  the  first  act  of  civilization,  and 
the  protection  of  the  married  state  against  all  molestation  or  disturb- 
ance is  a  part  of  the  policy  of  every  people  possessed  of  morals  and 
laws.  But  this  relationship,  in  order  to  execute  the  purpose  for  which 
it  is  established,  requires  the  undivided  devotion  of  each  of  the  parties 
to  it  to  the  other,  and  the  consequence  is  that  it  is  invaded  and  im- 
paired by  anything  which  has  a  tendency  to  alienate  such  devotion. 
But  this  plaintiff  claims  the  right  to  take  to  herself  that  affection  of 
this  husband,  which,  in  legal  theory  at  least,  belongs  to  the  wife;  but 
such  a  transfer  the  law  will  not  sanction.  Such  conduct  is  a  gross  vio- 
lation of  the  rights  of  the  wife.  Nor,  in  a  legal  point  of  view,  does  it 
at  all  strengthen  the  argument  to  suggest  that  the  defendant,  at  the 
time  of  making  this  promise,  was  living  separated  from  his  wife,  and 
was  looking  forward  to  a  divorce.  While  the  marriage  exists  the 
duties  inherent  in  such  marriage  likewise  exist,  and  they  cannot  be 
thrown  off  at  the  will  of  either  party.  By  voluntarily  withdrawing 
from  the  society  of  his  wife  a  man  cannot  free  himself  from  his 
matrimonal  obligations.  Nor  can  he  do  so  in  the  hope  of  divorce.  If 
a  husband  can  bind  himself  to  a  future  marriage  conditioned  on  the 
getting  of  a  divorce,  so  he  can  incur  a  similar  obligation  to  be  put  in 
effect  on  the  dissolution  of  his  marriage  by  the  death  of  his  wife. 
Such  contracts  are  highly  impolitic  and  highly  scandalous,  and  are, 
therefore,  illegal. 

The  demurrer  must  he  sustained} 

^  The  decision  was  affirmed  by  the  Court  of  Errors  and  Appeals,  39  N.  J.  L.  133. 
From  that  report  the  additional  fact  appears  that  the  pending  proceedings  for  divorce 
were  instituted  by  the  defendant's  wife. 

See  also  Paddock  v.  Robinson,  63  111.  99;  Leupart  v.  Shields,  60  Pac.  Rep.  (Col. 
App.)  193.     Compare  Brown  v.  OdHl,  104  Tenn.  250. 

In  Graham  v.  Chicago,  &c.  Ry.  Co.,  53  Wis.  473,  484,  the  court  said:  "The  law- 
fulness of  an  act  done  depends  upon  the  laws  in  force  at  the  time  it  is  done;  and,  if 
unlawful  when  done,  it  does  not  become  lawful  by  a  subsequent  change  of  the  law 
which  renders  such  act  lawful  thereafter.  Bailey  v.  Mogg,  4  Denio,  60;  Roby,  v. 
West,  4  N.  H.  285;  Jaques  v.  Withy,  1  H.  Bl.  65;  Fletcher  v.  Peck,  6  Cranch,  87; 
Conley  v.  Palmer,  2  Comst.  182. 

"This  court  has  enforced  this  rule  to  its  full  extent  in  cases  of  contracts  void  at 
the  time  they  were  made,  under  the  usury  law  and  the  law  prohibiting  a  party  from 
recovering  for  liquor  bills.  Gorsuth  v.  Butterfield,  2  Wis.  237;  Root  v.  Pinney,  11 
Wis.  84;  Wood  v.  Lake,  13  Wis.  84;  Lee  v.  Peckham,  17  Wis.  383;  Morton  v.  Ruther- 
ford, 18  Wis.  298;    Meiswinkle  v.  Jung.  30  Wis.  361;   Austin  v.  Burgess,  36  Wis.  186." 

The  same  doctrine  was  applied  in  Fulton  v.  Day,  63  Wis.  112,  to  the  case  of  a  note 
given  after  the  repeal  of  the  United  States  Bankruptcy  Law  of  1867  in  renewal  of  a 
note  made  void  by  that  statute. 

Compare  Hartford  Fii-e  Ins.  Co.  v.  Chicago,  &c.  Ry.  Co.,  62  Fed.  Rep.  904;  and  see 
3  Williston,  Contracts,  §  1683. 


920  MERRILL    V.    PEASLEE  [CHAP.   VI 


GYLES  MERRILL  v.  BYROIvT  L.  PEASLEE 

Supreme  Judicial  Court  of  Massachusetts^  November  5,   1887- 

March  30,  1888 

Contract  upon  a  note  for  $5,000,  payable  to  the  plaintiff  and  made 
by  the  defendant's  testator. 

The  testator  made  the  note,  and  simultaneously  the  plaintiff  exe- 
cuted a  declaration  of  trust,  declaring  that  he  would  collect  the  note 
after  the  death  of  the  testator,  and  pay  the  proceeds  to  Abby  D. 
Peaslee,  the  testator's  wife,  provided  she  had  lived  with  the  testator 
as  his  wife  until  his  death. 

The  evidence  further  showed  that  the  note  was  given  by  the  testator 
in  consideration  that  his  wife  would  return  to  him  and  live  with  him 
as  his  wife,  and  that  he  should  not  institute  the  proceedings  for  a 
divorce.^ 

H.  H.  Carter  and  B.  B.  Jones,  for  the  plaintiff. 

W.  H.  Moody,  for  the  defendants. 

W.  Allen,  J.  The  note  was  given  to  carry  out  a  contract  between 
husband  and  wife,  by  which,  in  consideration  that  she  should  live 
with  him  as  his  wife  during  their  joint  lives,  he  was  to  cause  to  be 
paid  to  her  five  thousand  dollars  after  his  decease,  if  she  survived. 
The  consideration  of  the  note  was  the  agreement,  or  the  performance 
of  the  agreement,  of  the  wife  to  live  in  marital  relations  with  her 
husband.  It  was  not  to  perform  some  service  for  him  which  could 
be  hired,  as  to  keep  his  house,  or  to  nurse  him  in  sickness,  but  to 
give  him  the  fellowship  and  communion  of  a  wife.  This  is  not  a 
service  which  the  wife  can  sell  or  the  husband  buy.  Perhaps  a 
husband  can  hire  his  wife  to  do  anything  for  him  which  a  servant 
can  be  hired  to  do,  or  can  buy  of  her  anything  that  is  the  subject  of 
barter;  but  a  servant  cannot  be  hired  to  fulfil  the  marital  relation, 
and  the  fellowship  of  the  wife  is  not  an  article  of  trade  between 
husband  and  wife.  Like  paternal  authority  and  filial  obedience, 
conjugal  consortium  is  without  the  range  of  pecuniary  considerations. 
The  law  fixes  and  regulates  it  on  public  considerations,  and  will  not 
allow  the  parties  to  discard  and  resume  it  for  money. 

It  is  the  same  when  the  misconduct  of  one  party  has  given  to  the 
other  the  option  to  withdraw  conjugal  fellowship.  It  is  not  a  mere 
personal  right  affecting  only  the  parties  to  the  marriage,  but  a  right 
which  is  an  incident  of  the  status  of  marriage,  and  Avhich  affects 
children,  the  family,  and  society,  and  which  must  be  exercised  upon 
considerations  arising  from  the  nature  of  the  right.  It  is  given  to  the 
injured  party  to  be  used  in  the  interests  of  justice  and  of  society.  It 
is  as  mncb  against  pnblic  policy  to  restore  interrupted  conjugal  rela- 
tions for  money,  as  it   is  to  coiitinnc  tliciii   witliout  interruption  for 

'  TTic  Hf.'itcment  of  factH  h;iH  hccn  ahhroviatod. 


SECT.    V]  MERRILL    V.    PEASLEE  921 

the  same  consideration.  The  right  of  condonation  is  not  exercised 
for  the  sake  of  justice  to  the  injured  party,  or  with  regard  to  the 
rights  of  others  or  the  interests  of  the  public,  when  it  is  sold  for 
money,  and  the  law  cannot  recognize  such  a  consideration  for  it;  it 
implies  forgiveness  founded  on  the  supposed  penitence  of  the  wrong 
doer  and  the  hope  that  he  will  not  again  oifend.  The  resumption  of 
marital  intercourse  after  a  justifiable  separation  without  forgiveness, 
and  only  for  money,  shows  connivance  rather  than  condonation. 
See  Copeland  v.  Boaz,  9  Baxter,  223 ;  Van  Order  v.  Van  Order,  8 
Hun,  315;  Koberts  v.  Frisby,  38  Tex.  219;  Miller  v.  Miller  (Iowa), 
35  N".  W.  Rep.  464;  Adams  v.  Adams,  91  K  Y.  381;  Garth  v.  Earn- 
shaw,  3  Y.  &  C.  584;  Gipps  v.  Hume,  2  Johns.  &  Hem.  517;  Brown 
V.  Brine,  1  Ex.  D.  5. 

In  the  present  case  the  wife  had  left  her  husband,  and  had  a  good 
cause  of  divorce  from  him  on  account  of  extreme  cruelty.  But  the 
agreement  did  not  look  to  a  provision  for  a  separate  support  of  the 
wife,  nor  did  it  bar  against  proceedings  by  her  for  a  divorce,  except 
as  that  was  involved  in  the  resumption  by  her  of  marital  relations. 
Had  the  consideration  of  the  note  been  an  agreement  not  to  prose- 
cute proceedings  for  a  divorce,  a  different  question  would  have  been 
I^resented,  upon  which  we  express  no  opinion.  See  Newsome  v.  New- 
some,  L.  R.  2  P.  &  D.  When  the  wife,  who  was  living  separate  from 
her  husband  for  justifiable  cause,  voluntarily  returned  to  him,  the 
law  conclusively  presumed  that  she  had  returned  because  she  had 
condoned  the  offence,  and  not  because  she  was  paid  to  live  with  him ; 
and  it  will  not  enforce  or  recognize  as  valid  a  promise  of  the  husband 
to  pay  money  to  the  wife  to  induce  her  to  return  to  him,  or  to  condone 
the  offence.  In  the  opinion  of  a  majority  of  the  court  the  entry  must 
be,  Exceptions  overruled. 

Holmes,  J.  We  must  assume,  and  the  majority  of  the  court  do 
assume,  that  a  consideration  furnished  by  a  married  woman  who  is 
a  cestui  que  trust  will  sustain  a  promise  by  her  husband  to  her  trustee. 
Whatever  might  be  thought  upon  this  point  as  a  new  question,  it  has 
been  settled,  not  without  discussion,  and  we  are  bound  by  the  deci- 
sions. Butler  V.  Ives,  139  Mass.  202.  See  Nichols  v.  Nichols,  136 
Mass.  256. 

In  the  case  at  bar  the  evidence  tended  to  show  that  the  defendant's 
testator  had  been  guilty  of  extreme  cruelty  to  his  wife,  entitling  her  to 
a  divorce,  and  that  she  had  separated  from  him,  and  had  consulted 
counsel  with  a  view  to  obtaining  a  divorce  and  alimony.  The  consid- 
eration for  the  note  in  suit  was,  that  "she  would  not  proceed  against 
him  for  a  divorce  or  alimony,  and  would  return  to  him  and  live  with 
him  as  his  wife."  This  consideration,  however  construed,  was  fully 
furnished.  She  did  not  proceed  against  him,  and  she  did  return  and 
did  live  Avith  him  as  his  Avife  until  his  death. 

I  do  not  understand  it  to  be  denied  that  this  conduct  on  the  Avife's 


922  MERRILL    V.    PEASLEE  [CHAP.   VI 

part  was  such  a  change  of  position,  or  detriment  in  the  legal  sense  of 
that  word,  as  to  be  sufficient  consideration  for  a  promise,  if  not  an 
illegal  one.  We  must  take  it  that  the  wife  had  a  right  to  refuse  to 
return  to  cohabitation,  and  it  seems  to  follow  that,  apart  from  illegal- 
ity, the  return  itself  was  sufficient  consideration  for  the  note.  Burk- 
holder's  Appeal,  105  Penn.  St.  31,  37.  The  case  is  not  like  those 
where  the  wife  was  only  doing  what  she  was  legally  bound  to  do. 
This  was  the  ground  of  decision  in  Miller  v.  Miller  (Iowa,  Dec,  13 
1887),  35  N".  "W.  Kep.  464,  and,  so  far  as  appears,  was  the  fact  in 
Copeland  v.  Boaz,  9  Baxter,  223;  Eoberts  v.  Frisby,  38  Tex.  219. 
The  last  two  cases  seem  to  go  in  part  also  upon  the  ground  that  a 
contract  by  a  husband  upon  a  consideration  moving  from  the  wife 
is  void,  notwithstanding  the  intervention  of  a  trustee,  which  cannot 
be  taken  here  in  view  of  the  cases  first  cited. 

At  all  events,  the  giving  up  or  refraining  from  proceedings  for  a 
divorce  and  alimony,  which  the  wife  is  entitled  to  maintain,  is  both  a 
sufficient  and  a  legal  consideration.  Wilson  v.  Wilson,  1  H.  L.  Cas. 
538,  574;  s.c.  14  Sim.  405,  5  H.  L.  Cas.  40;  Hart  v.  Hart,  18  Ch.  D. 
670,  685;  Sterling  v.  Sterling,  12  Ga,  201,  204.  So  that  I  understand 
the  precise  reason  on  which  the  decision  of  the  majority  goes  to  be  that 
coupling  the  wife's  return  to  cohabitation  with  the  legal  consideration 
of  giving  up  her  divorce  suit  made  the  contract  illegal. 

I  find  no  decision  or  dictum  in  favor  of  this  proposition.  On  the 
other  hand,  the  Court  of  Errors  and  Appeals  of  New  York  has  unani- 
mously sustained  the  validity  of  a  note  given  by  a  husband  to  a  trustee 
for  his  wife  upon  substantially  the  same  consideration  as  in  the 
case  at  bar,  and  has  declared  itself  unable  to  see  anything  against 
public  policy  in  the  transaction.  It  seems  probable  that  the  Supreme 
Court  of  Pennsylvania  would  decide  in  the  same  way,  and  it  is 
hardly  open  to  doubt  that  the  same  view  would  be  taken  in  England. 
Adams  v.  Adams,  91  N.  Y.  381;  Burkholder's  Appeal,  105  Penn. 
St.  31,  37;  Newsome  v.  Newsome,  L.  E.  2  P.  &  D.  306;  Jodrell  v. 
Jodrell,  9  Beav.  45,  56,  59,  and  cases  supra;  Symons  v.  Burton, 
Monro,  Acta  Cancellariae,  266. 

It  seems  to  me  that  reason  as  well  as  authority  is  opposed  to 
the  decision.  The  actual  return  to  cobabitation  was  perfectly  law- 
ful, whatever  the  motive  which  induced  it.  I  cannot  think  that  it 
is  unlawful  to  make  a  lawful  net,  which  the  wife  may  do  or  not 
do  as  she  chooses,  the  consideration  of  a  promise,  merely  because, 
by  reaction,  the  making  of  the  promise  tends  to  mingle  a  worldly 
motive  with  whatever  other  motives  the  wife  may  have  for  renewing 
cohabitation.  No  one  doubts  that  marriage  is  a  sufficient  considera- 
tion for  a  promise  to  pay  money.  Pub.  Sts.  c.  78,  ^  1,  cl,  3.  I  do 
not  quite  understand  why  it  should  be  more  illegal  to  make  such 
a  promise  for  the  resumption  than  for  the  assumption  of  conjugal 
relations, 

I  agree  too  to  wbat  is  said  in  Adams  v.  Adams,  ubi  supra.     The 


SECT.   VI  ]  BLACK    V.    SECURITY   LIFE   ASSOC.  923 

arrangements  "tended  to  restore  peace  and  harmony  between  hus- 
band and  wife,  and  renew  their  conjugal  relations.  Agreements 
to  separate  have  been  regarded  as  against  public  policy,  but  it  would 
be  strangely  inconsistent  if  the  same  policy  should  condemn  agree- 
ments to  restore  marital  relations  after  a  temporary  separation 
had  taken  place.  While  the  law  favors  the  settlement  of  contro- 
versies between  all  other  persons,  it  would  be  a  curious  policy  which 
should  forbid  husband  and  wife  to  compromise  their  differences, 
or  preclude  either  from  forgiving  a  wrong  committed  by  the  other." 
I  am  authorized  to  say  that  Mr.  Justice  Chakles  Allen  and  Mr. 
Justice  Knowlton  concur  in  this  opinion.^ 


SECTION    VI 
EFFECT  OF  ILLEGALITY 


atjsti]^  black  v.  security  mutual  life 
association- 
Supreme  JuDiCLA.L   Court  of  Maine,   January  31,   1901 
[Reported  in  95  Maine,  35] 

WiswELL,  C.  J.  Action  of  assumpsit  upon  an  account  annexed 
to  the  writ  to  recover  commissions  upon  premiums  paid  by  various 
persons  to  the  defendant  on  policies  of  life  insurance  issued  by  it, 
the  applications  for  which  were  solicited,  received  and  forwarded 
to  the  defendant  by  the  plaintiff,  under  a  written  contract  between 
the  plaintiff  and  the  defendant,  wherein  the  plaintiff  was  appointed 
an  agent  of  the  defendant  "for  the  purpose  of  procuring  and  effect- 
ing applications  for  insurance,"  and  M^hich  provided  for  the  compen- 
sation that  was  to  be  received  by  the  plaintiff. 

At  the  trial,  the  defendant,  among  other  defenses,  contended  that 
some  or  all  of  the  applications  of  these  persons  for  insurance  were 
solicited,  received  and  forwarded  to  the  defendant  at  a  time  Avhen 
the  plaintiff  had   no  license   from   the   insurance   commissioner   of 

^  In  Poison  V.  Stewart,  167  Mass.  211,  a  covenant  given  in  consideration  of  the 
forbearance  to  bring  a  well-founded  suit  for  divorce  was  enforced.  In  Barbour  v. 
Barbour, '49  N.  J.  Eq.  429,  a  promise  in  consideration  of  such  forbearance  and  the 
resumption  of  conjugal  relations  was  enforced.  The  decision  was  reversed  in  51 
N.  J.  Eq.  267,  but  not  on  the  ground  of  illegality  of  the  contract. 

Agreements  to  facilitate  divorce  or  separation  are  contrary  to  public  policy.  Willis- 
ton  on  Contracts,  §  1742  et  seq.  and  cases  cited.  Even  a  contract  to  prevent  a  con- 
templated marriage  of  a  relative  with  a  woman  of  bad  character  has  been  held  invahd. 
Sheppy  V.  Stevens,  177  Fed.  484. 

Contracts  of  marriage  brokage  are  also  illegal.  Greenhood,  478  ef  seq.;  Morrison 
V.  Rogers,  115  Cal.  252;  Hellen  v.  Anderson,  83  111.  App.  506;  .Johnson  v.  Hunt,  81 
Ky.  321;  AnclifF  v.  June,  81  Mich.  477;  Duval  v.  Wellman,  124  N.  Y.  156.  See  also 
61  L.  R.  A.  641  n 


924  BLACK    V.    SECURITY    LIFE   ASSOC.  [CHAP.    VI 

this  state,  as  provided  by  R.  S.,  c.  49,  §  73,  and  subsequent  amend- 
ments, and  tbat  consequently  the  plaintiff  could  not  recover.  The 
case  shows  that  the  plaintiff  had  no  such  license  between  July  1 
and  October  18,   1897. 

Thereupon  the  defendant's  counsel  requested  the  presiding  justice 
to  instruct  the  jury  that  the  plaintiff  could  not  recover  any  commis- 
sion upon  the  premiums  paid  to  the  company  in  cases  where  the 
applications  for  such  insurance  were  solicited  by  the  plaintiff  during 
the  period  that  he  was  without  such  a  license.  The  requested  in- 
struction was  applicable  to  the  state  of  facts  involved,  because  al- 
though the  policies  may  have  been  in  fact  issued  after  October  18, 
1897,  and  during  a  period  when  the  plaintiff  had  a  license,  it  is 
clear  that  in  more  or  less  instances  the  plaintiff's  work  in  soliciting 
and  receiving  applications  for  the  policies  was  performed  during 
the  period  that  he  was  without  a  license. 

In  order  to  give  progress  to  the  case,  the  presiding  justice  de- 
clined to  give  the  requested  instruction  —  but  did  instruct  the  jury, 
"that  for  any  policy  bearing  date  subsequent  to  the  18th  of  October, 
the  plaintiff  is  entitled  to  his  commission  from  the  company  upon 
that  risk,  although  he  may  have  solicited  the  insurance  before  that 
time  and  made  himself  liable  to  the  penalty."  To  this  refusal  to 
instruct,  and  to  the  instruction  given,  the  defendant,  the  verdict 
being  for  the  plaintiff,  took  exception. 

The  statute  above  referred  to,  as  last  amended  by  c.  95  Public 
Laws  of  1895,  after  providing  that  the  commissioner  may  issue  a 
license  to  any  person  to  act  as  an  agent  of  a  domestic  insurance 
company,  and  to  any  resident  of  the  state  to  act  as  agent  of  any 
foreign  insurance  company,  which  has  received  a  license  as  pro- 
vided by  another  section,  and  after  fixing  the  fee  that  shall  be  re- 
ceived by  the  commissioner  for  each  license,  contains  this  language, 
"and  if  any  person  solicits,  receives  or  forwards  any  risk  or  appli- 
cation for  insurance  to  any  company,  without  first  receiving  such 
license,  or  fraudulently  assumes  to  be  an  agent  and  thus  procures 
risks  and  receives  money  for  premiums,  he  forfeits  not  more  than 
fifty  dollars  for  each  offense;  but  any  policy  issued  on  such  applica- 
tion binds  the  company  if  otherwise  valid." 

Although  this  statute  contains  no  express  provision  preventing 
a  recovery  for  his  services  by  one  who  acts  as  an  agent  of  an  insur- 
ance company  without  such  license,  and  does  not  expressly  provide 
that  contracts  for  such  services  shall  be  void,  it  prohibits  the  per- 
formance of  such  services  witbout  the  license  referred  to  under  the 
penalty  therein  provided.  In  Harding  ?>.  Hagar,  60  Maine,  340, 
a  very  similar  case  in  principle,  this  court  said  in  its  opinion :  "It 
is  too  well  settled  to  require  the  citation  of  authorities,  that  no 
party  can  recover  for  acts  or  services  done  in  direct  contravention 
of  an  express  stntute,  or  for  property  so  sold  and  delivered."  In 
Randall  v.   Tuell,   89   Maine,  443,  whc^re  the  authorities  are   fully 


SECT.    VI  ]  BISBEE    V.    McALLEN  925 

collected,  the  principle  is  thus  stated :  "It  is  the  general  doctrine  now 
settled  by  the  great  weight  of  legal  authority,  that  where  a  license 
is  required  for  the  protection  of  the  public  and  to  prevent  improper 
persons  from  engaging  in  a  particular  business,  and  the  license 
is  not  for  revenue  merely,  a  contract  made  by  an  unlicensed  person 
in  violation  of  the  act  is  void." 

In  accordance  with  these  authorities,  and  many  others  that  might 
be  referred  to,  it  must  be  held  that  the  plaintiff  cannot  recover  for 
the  services  performed  by  him  in  direct  contravention  of  the  statute. 
The  purpose  of  the  statute  is  undoubtedly  for  the  protection  of  the 
public.  It  is  clearly  not  for  revenue.^  The  license  fee  required  was 
only  the  sum  of  two  dollars.  True,  the  statute  referred  to  provides 
that  a  policy  issued  in  such  a  case  shall  not  thereby  be  void,  but 
the  contract  of  insurance  is  not  the  one  under  consideration  here;  it 
is  the  contract  between  the  company  and  the  plaintiff  by  virtue  of 
which  the  latter  performs  services  in  obtaining  applications  for  in- 
surance, which  the  statute  prohibits,  unless  the  person  performing 
such  service  has  a  license  therefor. 

The  evidence  as  to  when  these  applications  for  insurance  were 
solicited  and  obtained  by  the  plaintiff,  is  somewhat  indefinite,  but 
some  of  them  were  unquestionably  received  when  the  plaintiff  had  no 
license  and  the  burden  is  upon  him  to  show  that  he  had  a  license 
when  the  services  were  performed.     Harding  v.  Hagar,  supra. 

Exceptions  sustained. 


JOHN  BISBEE   V.   MAKY  McALLElST 

Minnesota  Supreme  Court^  August  28,  1888 

{Reported  in  39  Minnesota,  143] 

Vanderburgh^  J.  The  question  presented  for  consideration  in 
this  case  is  raised  upon  the  sufficiency  of  the  second  defence  set  up 
in  the  answer,  where  it  appears  that  the  goods  alleged  to  have  been 
sold  to  the  defendant,  and  for  the  price  of  which  this  action  is 
brought,  were  sold  by  weight  and  measurement,  and  that  such  weight 

^  In  the  following  cases  it  was  held  to  afford  no  defence  to  a  contract  that  it  was 
made  in  violation  of  a  revenue  law. 

Johnson  v.  Hudson,  11  East,  180;  Brown  v.  Duncan,  10  B.  &  C.  93;  Smith  v.  Maw- 
hood,  14  M.  &  W.  452;  Harris  v.  Runnels,  12  How.  79;  Banks  v.  McCosker,  82  Md. 
518;  Coates  v.  Locust,  102  Md.  291;  Goldsmith  v.  Manufacturers'  Liability  Ins.  Co., 
132  Md.  283;  Larned  v.  Andrews.  106  Mass.  435;  Mandlebaum  v.  Gregovitch,  17 
Nev.  87;  Corning  v.  Abbott,  54  N.  H.  469;  Ruckman  v.  Bergholz.  37  N.  J.  L.  4.37; 
Woodward  v.  Steams,  10  Abb.  Pr.  n.  s.  395  (see  also  Griffith  v.  Wells,  3  Denio,  226) ; 
Rahter  v.  First  Nat.  Bank,  92  Pa.  393  (see  also  Hertzley  v.  Geigley,  196  Pa.  419); 
Aiken  v.  Blaisdell,  41  Vt.  655.  But  see  contra  Creekmore  v.  Chitwood,  7  Bush,  317; 
Harding  v.  Hagar,  60  Me.  340,  63  Me.  515  (but  see  Randall  v.  Tuell,  89  Me.  442, 
448);  Curran  v.  Downs,  3  Mo.  App.  468;  Hall  v.  Bishop,  3  Daly,  109;  Best  v.  Bauder, 
29  How.  Pr.  489;  Condon  v.  Walker,  1  Yeates,  483;  Sewell  v.  Richmond,  Taylor 
(U.  C.  K.  B.)  423;    MuUen  v.  Kerr,  6  U.  C.  Q.  B.  (o.  s.)  171. 


926  BISBEE    V.    MOALLEN  [CHAP.    VI 

and  measurement  were  unlawfully  ascertained  and  fixed  by  certain 
unsealed  measures,  scales,  and  weights,  which  had  never  been  proved, 
tested,  or  sealed,  as  required  by  the  statute.  Under  Gen.  St.  1878, 
c.  21,  §  11,  a  sale  of  goods,  wares,  and  merchandise  by  any  scale- 
beam,  steelyard,  weight,  or  measure,  not  proved  and  sealed  in  accord- 
ance with  the  provisions  of  that  chapter,  is  made  a  misdemeanor, 
and  subjects  the  person  making  such  sale  to  a  penalty  of  not  less 
than  five  nor  more  than  one  hundred  dollars.  The  provision  for 
a  penalty  in  this  section  implies  a  prohibition  of  such  sales.  That 
is  to  say,  if  goods  are  sold  by  weight  or  measure,  the  law  absolutely 
requires  that  the  scales  or  measures  used  should  be  approved  by 
the  sealer  of  weights  and  measures  for  the  county,  as  the  statute 
provides. 

It  stands  admitted  upon  the  record,  then,  in  this  case,  that  the 
sale  in  question  here,  as  made,  was  prohibited,  and  in  violation 
of  the  statute.  The  weighing  or  measuring  is  not  a  collateral  matter, 
but  is  directly  involved  in  the  act  of  selling  and  the  contract  of 
sale.  It  regulates  the  quantity  to  be  delivered  and  the  amount  to 
be  paid.  And  where  the  statute  has  in  view  the  prevention  of  fraud 
by  the  seller,  then,  though  there  be  nothing  but  a  penalty,  a  contract 
which  infringes  the  statute  cannot  be  upheld.  Griffith  v.  Wells, 
3  Denio,  226,  and  cases;  Lewis  v.  Welch,  14  IST.  H.  294.  Here  the 
intent  of  the  statute  is  clearly  to  prevent  sales  by  unproved  and  un- 
sealed scales  or  measures,  and  its  object  is  undoubtedly  to  protect 
the  public  from  fraud  or  imposition  by  the  use  of  false  or  inaccurate 
balances  and  measurements.  It  covers  all  cases  of  sales  by  weight 
or  measure,  and  this  case  is  clearly  within  it.  The  doctrine  appears 
to  be  too  well  settled  to  require  extended  discussion.  Brackett  v. 
Hoyt,  29  N.  H.  264;  Smith  v.  Arnold,  106  Mass.  269;  Woods  v. 
Armstrong,  54  Ala.  150  (25  Am.  Eep.  671,  notes  and  cases)  ;  Inger- 
soll  V.  Randall,  14  Minn.  304  (400).  In  some  cases  a  remedy  has 
been  suggested  and  recognized  outside  the  prohibited  contract.  Pratt 
V.  Short,  79  N".  Y.  437,  445.  But  no  such  question  is  involved  in 
this  case.  In  respect  to  defences  of  this  kind,  we  adopt  the  language 
of  the  court  in  Lewis  v.  Welch,  supra:  "The  objection  that  the 
contract  is  illegal  as  between  the  parties  is  never  very  creditable  to 
him  who  makes  it.  But  it  is  not  out  of  favor  to  him  that  the  ob- 
jection is  sustained,  but  from  regard  to  the  law.  The  advantage 
he  derives  from  it  is  altogether  accidental."  The  supposed  hard- 
ships of  particular  cases  must  yield  to  the  general  purposes  of  the 
act,  and  the  modification  of  the  law,  if  any  shall  be  found  necessary, 
must  be  by  the  legislature.  Order  affirmed.^ 

>  Law  V.  Hodson.  11  East,  300;  Littlo  ?).  Poolf,  0  B.  &  Co.  192:  Forster  v.  Taylor, 
5  B.  &  Afl.  .SS7:  Millor  v.  Ammon,  145  U.  S.  421;  Hawkins  v.  Smith,  2  Cr.  C.  C.  173; 
Thompwin  v.  Millinan,  2  Cr.  C.  C.  173;  LanR  v.  Lynch,  38  Fed.  Rop.  489;  Gunter  v. 
Lfckoy,  30  Ala.  .Wl;  Pacific  Guano  Co.  v.  Mullen,  GO  Alii.  582;  Merriman  v.  Knox, 
99  Ala.  93;  Gardner  v.  Tatum,  81  Cal.  370;  Klcckloy  v.  Leydcn,  63  Ga.  215;  .lohn- 
Bton  V.  McConncU.  05  Ga    129;    Lorcntz  v.  Conner,  69  Ga.  761;    Tedrick  ?;.  Hiner,  61 


SECT.    Vl]  LEUTHOLD    V.    STICKNEY  927 


JOHN  LEUTHOLD  v.   CHARLES  A.   STICKNEY 

Minnesota  Supreme  Court^  December  22,  1911 
[Reported  in  116  Minnesota,  229] 

Simpson,  J.  This  is  an  action  brought  by  the  plaintiff  to  recover 
rent  claimed  to  be  due  from  the  defendant.  The  plaintiff  leased  to 
the  defendant,  by  written  lease,  a  seven-room  flat  on  the  fourth 
floor  of  an  apartment  building  in  the  city  of  St.  Paul  for  one  year 
from  September  1,  1909.  The  building  is  four  stories  in  height 
above  the  basement,  and  covers  an  area  of  about  seventy-five  hundred 
square  feet.  There  are  four  flats  on  each  floor,  making  sixteen  flats 
in  all.  Each  flat  accommodated  four  or  more  people,  and  was  usually 
occupied  by  from  two  to  four  people.  During  the  term  covered 
by  the  lease  to  defendant  there  was  not,  either  within  or  without 
said  building,  or  in  any  way  connected  therewith,  any  noncom- 
bustible  ladder  or  stairway  or  standpipe.  Plaintiff,  with  his  family 
of  seven,  occupied  and  leased  premises  until  the  latter  part  of 
February,  1910,  when  he  moved  and  permanently  vacated  thorn. 
He  paid  the  stipulated  rent  for  the  full  time  of  his  occupancy.  This 
action  is  brought  to  recover  rent  for  the  remainder  of  the  term. 
About  a  month  before  the  defendant  vacated  the  premises  he  asked 
the  plaintiff  to  put  fire  escapes  on  the  building,  and  when  he  moved 
out  he  assigned  the  absence  of  fire  escapes  as  his  reason  for  so  doing. 

The  case  was  tried  by  a  court  without  a  jury.  The  court  found 
to  be  true  the  facts  already  stated,  and,  in  addition,  that  the  apart- 
ment building  was  within  Class  III  as  defined  by  Section  2365, 
c.  36,  R.  L.  1905,  relating  to  protection  against  fire,  and  that  the 
plaintiff  had  failed  to  maintain  the  tenement  building  in  the  con- 
dition as  to  fire  escapes  required  by  the  statute,  and  found,  as   a 


Hi.  189;  East  St.  Louis  v.  Freels,  17  111.  App.  338;  Hustis  v.  Picklands,  27  111.  App. 
270;  Richardson  v.  Brix,  94  la.  626;  Dolson  v.  Hope,  7  Kan.  161;  Vannoy  v.  Patton, 
5  B.  Mon.  248;  Mabry  v.  Bullock,  7  Dana,  337;  Bull  v.  Harragan,  17  B.  Mon.  349; 
Buxton  V.  Hamblen,  32  Me.  448;  Durgin  v.  Dyer,  68  Me.  143;  Richmond  v.  Foss,  77 
Me.  590;  Black  v.  Security  Mut.  Assoc,  95  Me.  35;  Miller  v.  Post,  1  Allen,  434; 
Libby  v.  Downey,  5  Allen,  299;  Wheeler  v.  Russell,  17  Mass.  257;  Hewes  v.  Platts, 
12  Gray,  143;  Smith  v.  Arnold,  106  Mass.  269;  Sawyer  v.  Smith,  109  Mass.  220; 
Eaton  V.  Kegan,  114  Mass.  433;  Prescott  v.  Battersby,  119  Mass.  285;  Loranger  v. 
Jardine,  56  Mich.  518;  Solomon  v.  Dreschler,  4  Minn.  278;  Buckley  v.  Humason, 
50  Minn.  195;  Pray  v.  Burbank,  10  N.  H.  377;  Lewis  v.  Welch,  14  N.  H.  294;  Cald- 
well V.  Wentworth,  14  N.  H.  431;  Doe  v.  Burnham,  31  N.  H.  426;  Griffith  v.  Wells, 
3  Denio,  226;  Covington  v.  Threadgill,  88  N.  C.  186;  Holt  v.  Green,  73  Pa.  198; 
Johnson  v.  Hulings,  103  Pa.  498;  Swing  v.  Munson,  191  Pa.  582;  McConnell  v.  Kitchens,' 
20  S.  C.  430;  Stephenson  v.  Ewing,  87  Tenn.  46;  Bancroft  v.  Dumas,  21  Vt.  456; 
Gorsuth  V.  Butterfield,  2  Wis.  237,  ace.  See  also  Singer  Mfg.  Co.  v.  Draper,  103 
Tenn.  262. 

Compare  Harris  v.  Runnels,  12  How.  79;  The  Manistee,  5  Biss.  381;  The  Charles 
E.  Wisewall,  74  Fed.  Rep.  802;  Pangborn  v.  Westlake,  36  la.  547;  Coombs  v.  Emery, 
14  Me.  404;  Ritchie  v.  Boynton,  114  Mass.  431;  Houck  v.  Wright,  77  Miss.  476, 
Drake  v.  Siebold,  81  Hun.  178;  Strong  v.  Darling,  9  Ohio,  201;  Niemeyer  v.  Wright,' 
75  Va.  239;   National  Distilling  Co.  v.  Cream  City  Importing  Co.,  86  Wis.  352. 


928  LEUTHOLD    V.    STICKNEY  [CHAP.    VI 

conclusion  of  law,  that  the  defendant  was  entitled  to  judgment  in 
his  favor  in  said  action.  The  plaintiff  appeals  from  an  order  of 
the  court  denying  his  motion  for  a  new  trial. 

1.  The  plaintiff  questions  the  sufficiency  of  the  evidence  to  sus- 
tain the  finding  of  the  trial  court  that  the  apartment  building  here 
involved  is  within  Class  III  of  the  statute  relating  to  fire  protection. 

Section  2365,  R.  L.  1905,  defines  buildings  of  Class  III  as  fol- 
lows: "Tenements,  flat  buildings,  and  boarding  houses,  more  than 
two  stories  high,  accommodating  more  than  twenty  persons,  whether 
in  one  family  or  more.    Other  related  sections  are  as  follows : 

"2368.  For  each  five  thousand  feet  of  area,  or  fraction  thereof, 
covered  by  a  building  in  Class  III  there  shall  be  provided  one 
outside  standpipe,  as  described  in  section  2367,  and  one  noncombusti- 
ble  ladder  or  stairway  for  each  twenty  persons,  or  fraction  thereof, 
that  such  building  accommodates  above  the  first  story." 

"2372.  The  proprietor  and  lessee  of  every  building  in  any  of 
the  classes  herein  before  mentioned,  shall  equip  the  same  in  the 
manner  prescribed,  and  every  failure  to  do  so  shall  constitute  a 
misdemeanor." 

Penalties  are  prescribed  for  the  commission  of  misdemeanors  un- 
der the  statute. 

While  the  evidence  does  not  show  the  exact  number  of  persons 
occupying  the  apartment  building  here  involved  at  any  given  time, 
it  does  appear  that  it  was  built  to  accommodate  more  than  sixty- 
four  persons,  that  during  the  term  of  the  defendant's  lease  it  was 
continually  occupied  for  residence  purposes,  and  that  the  number  of 
persons  usually  residing  therein  was  a  much  greater  number  than 
the  minimum  fixed  by  the  statute.  The  building  was  divided  by 
a  fire  wall  into  two  parts,  with  eight  flats  in  each  part.  It  is 
suggested  that  this  division  made  two  tenements  of  the  building, 
within  the  meaning  of  the  statute  relating  to  fire  protection.  But, 
so  considered,  each  part  accommodated  more  than  twenty  persons 
and  Avas  within  Class  III  of  the  statute.  It  fairly  appears  from  the 
evidence  that  more  than  twenty  persons  actually  resided  in  the 
part  of  the  building  in  which  the  flat  leased  to  the  defendant  was 
located  during  the  time  of  defendant's  occupancy. 

2.  A  more  important  point  urged  by  the  plaintiff  is  that  the 
conclusion  reached  by  the  trial  court  is  not  sustained  by  the  findings 
of  fact;  plaintiff's  claim  being  that,  notwithstanding  the  statute, 
the  lease  between  the  plaintiff  and  the  defendant  was  valid,  and 
the  i)laiiififF  was  entitled  to  judgment  for  the  agreed  rent  thereunder. 
Such  chiini  cannot  be  sustained. 

At  tlie  time  of  the  making  of  the  lease,  and  during  the  entire 
term  covered  thereby,  the  leased  premises  were  not  in  the  condition 
])rcsc'rib('(l  by  tlie  law  of  this  state  rchitiiig  to  fire  protection.  The 
])hiintifT  by  bis  failure  to  equip  the  building  in  the  prescribed  man- 
ner,   fommitted    a   misdemeanor.      Tbis   violation    of    the   law    was 


SECT.    Vl]  LEUTHOLD    V.    STICKNEY  929 

a  continuing  one  during  the  entire  term  of  the  lease,  and  affected 
directly  and  materially  the  premises  leased.  The  absence  of  a 
fire  escape,  in  the  view  of  the  law,  made  the  leased  premises 
dangerous  and  their  occupancy  opposed  to  the  public  policy  ex- 
pressed in  the  law.  The  permitted  occupancy  of  the  premises  is 
the  sole  consideration  for  the  promise  to  pay  rent  here  sought  to 
be  enforced.  Plaintiff's  claim  for  rent  cannot  be  separated  from 
his  unlawful  act  in  failing  to  provide  the  premises  with  the  pre- 
scribed fire  escape. 

The  instant  case  clearly  falls  with  the  rule  established  in  this 
state  in  the  case  of  Ingersoll  v.  Randall,  14  Minn.  304  (400).  In 
that  action,  brought  to  recover  for  plaintiff's  ser^dces  in  threshing 
for  the  defendant,  the  defense  was  interposed  that  on  the  machine 
used  by  the  plaintiff  the  knuckles  and  rods  were  not  covered  as  re- 
quired by  law.  The  court,  in  holding  that  the  plaintiff  could  not 
recover,  stated :  "The  statute  before  cited  not  only  makes  it  a  duty 
to  cover  the  knuckles  and  rods,  but  it  makes  neglect  or  refusal  so 
to  do  a  misdemeanor  to  which  a  penalty  is  affixed.  The  plaintiff, 
then,  in  operating  his  threshing  machine  in  threshing  for  the  de- 
fendant without  covering  the  knuckles  and  rods,  was  doing  that 
which  is  prohibited  by  law.  The  threshing,  which  was  the  considera- 
tion of  the  defendant's  promise,  was  unlawful,  and  therefore  will 
not  support  the  promise.  Bensley  v.  Bignold,  5  Barn.  &  Adol,  335 ; 
Cunard  v.  Hyde,  105  E.  C.  L.  1;  Chit.  Cont.  658,  and  note  "h," 
Armstrong  v.  Toler,  11  Wheat,  272  [6  L.  Ed.  468]  and  cases  supra; 
Emery  v.  Kempton,  2  Gray,  257."  The  rule  so  laid  down  has  never 
been  departed  from  in  this  state,  and  has  been  applied  in  numerous 
cases:  Bisbee  v.  McAllen,  39  Minn.  143,  39  K  W.  299;  Handy  v. 
St.  Paul  Globe  Pub.  Co.  41  Minn.  188,  42  N.  W.  872,  4  L.  R.  A. 
466,  16  Am.  St.  695;  Stolz  v.  Thompson,  44  Minn.  271,  46  K  W. 
410;  G.  Heileman  Brewing  Co.  v.  Peimeisl,  85  Minn.  121,  88  N.  W. 
441;  Thomas  Mnfg.  Co.  v.  Knapp,  101  Minn.  432,  112  N".  W.  989. 

It  is  urged  by  counsel  for  the  plaintiff  that  chapter  301  of  the 
Laws  of  1903  provided,  as  an  additional  penalty  for  failure  on  the 
part  of  the  owner  of  a  hotel  to  equip  it  with  required  fire  escapes, 
that  no  action  should  be  maintained  for  board,  lodging,  or  accommo- 
dations therein,  and  that  by  the  omission  of  such  permission  in 
reference  to  tenements  the  legislative  intent  is  shown  not  to  make 
a  failure  to  comply  with  the  statute  a  defense  to  an  action  for  rent 
of  flats  in  tenement  buildings.  Chapter  301  of  the  Laws  of  1903 
was  amended  by  chapter  343  of  the  General  Laws  of  1905,  and  the 
special  provision  referred  to  concerning  hotels  was  omitted  from 
the  amending  act.  Therefore  the  basis  of  the  construction  con- 
tended for  by  plaintiff's  counsel  no  longer  exists. 

The  unlawful  act  of  the  plaintiff  in  failing  to  equip  the  leased 
premises  with  a  fire  escape  taints  the  entire  consideration  of  the 
promise  he  here  seeks  to  enforce.     To  permit  a  recovery  upon  such 

30 


930  BROOKS    V.    MASTERS,    MATES,   PILOTS  [CHAP.   VI 

promise  would  tend  to  defeat  the  purpose  of  tlie  statute.  The  stat- 
ute is  designed  to  protect  persons  permanently  or  temporarily  in 
buildings  of  the  enumerated  classes  to  some  extent  from  the  dangers 
incident  to  conflagrations.  The  defendant  cannot  be  required  by 
the  plaintiff  to  occupy  or  pay  rent  for  premises  maintained  in  a 
dangerous  condition  through  the  plaintiff's  continuing  unlawful  act. 

Affirmed. 


GERKY  L.  BEOOKS  v.  VOLUNTEEE  HARBOR  NO.  4, 

AMERICAN  ASSOCIATION  OF  MASTERS,  MATES 

AND  PILOTS 

Supreme  Judicial  Coubt  of  Massachusetts,  March  2-June  18,  1919 
[Reported  in  233  Massachusetts,  168] 

Cabeoll,  J,  The  plaintiff,  a  member  of  the  bar  of  the  State  of 
Maine  but  not  admitted  to  practice  in  the  courts  of  this  Common- 
wealth, sued  to  recover  for  legal  services  rendered  to  the  defendant. 
There  was  evidence  that  he  had  acted,  to  a  limited  extent,  as  attorney 
of  the  National  Association  of  Masters,  Mates  and  Pilots,  and  while 
so  acting  had  business  relations  with  the  defendant,  a  local  harbor 
or  chapter  of  the  National  Association. 

The  plaintiff  testified  that,  at  the  request  of  the  defendant's 
secretary,  he  came  to  Boston  and  met  some  of  its  officers,  who  sought 
his  advice  respecting  a  suit  brought  against  the  defendant  and  some 
of  its  members,  pending  in  the  Superior  Court  for  the  county  of 
Suffolk;  that  he  informed  the  defendant  he  was  not  admitted  to 
practice  in  the  courts  of  this  State  and  it  would  be  necessary  to 
employ  local  counsel;  and  that  on  being  authorized  to  do  so,  he 
secured  the  services  of  a  Massachusetts  firm  of  attorneys,  who  ap- 
peared of  record  in  the  case  and  conducted  the  defence.  The  de- 
fendant's answer  alleges  that  the  plaintiff  was  not  admitted  to  prac- 
tice law  in  this  Commonwealth.  There  was  evidence  that  the  plain- 
tiff was  regularly  employed  by  the  defendant  and  performed  ser- 
vices.   The  jury  found  for  the  plaintiff. 

The  only  question  open  on  this  record  is  whether  the  plaintiff 
is  prevented  from  recovering  because  not  admitted  to  practice  law 
in  the  courts  of  this  Commonwealth.  R.  L.  c.  165,  §  45,  as  amended 
by  St.  1914,  c.  432,  provides:  "Whoever,  not  having  been  admitted 
to  practice  as  an  attorney  at  law  in  accordance  with  the  provisions 
of  this  chapter,  represents  himself  to  be  an  attorney  or  counsellor 
at  law,  or  to  be  lawfully  qualified  to  practice  in  the  courts  of  this 
Commonwealth,  by  means  of  a  sign,  business  card,  letter  head  or 
otherwise,"  shall  be  punished  as  provided  in  this  section. 

There   was  evidence   that   the   plaintiff  in   no  way  held   himself 


SECT.   Vl]  PELOSI    V.    BUGBEE  931 

out  as  lawfully  qualified  to  practice  iu  the  courts  of  Massachusetts, 
that  he  informed  the  defendant  he  "was  not  admitted  in  the  State 
court,"  and  it  would  be  necessary  for  it  to  have  local  counsel.  The 
jury  were  carefully  instructed  on  this  point.  They  were  told  that 
it  was  for  them  to  decide  upon  the  evidence  whether  the  plaintiff 
pretended  that  he  had  a  right  to  appear  for  the  defendant  in  the 
Superior  Court.  By  their  finding  the  jury  decided  that  the  plaintiff 
did  not  violate  this  statute. 

The  cases  of  Browne  v.  Phelps,  211  Mass.  376,  and  Ames  v.  Gil- 
man,  10  Met.  239,  are  not  applicable.  In  the  first  case  the  plaintiffs 
were  partners;  one  member  of  the  firm,  who  was  not  admitted  to 
practice  law  in  this  Commonwealth,  represented  that  he  was  an 
attorney  and  counsellor  at  law  lawfully  qualified  to  practice.  In 
Ames  V.  Gilman,  the  plaintiff  held  himself  out  as  an  attorney  at 
law,  although  not  authorized  to  practice  in  this  Commonwealth.  In 
the  case  at  bar,  the  plaintiff  performed  legal  services  for  the  defend- 
ant at  its  request,  although  a  member  of  the  bar  of  another  State; 
we  see  nothing  in  the  evidence  to  prevent  him  from  recovering  a 
reasonable  compensation  for  the  services  so  rendered. 

There  was  no  error  in  the  charge  of  the  presiding  judge.  The  jury 
were  told  the  plaintiff  could  not  recover  if  he  pretended  to  be  an 
attorney  or  attempted  to  practice  law  while  falsely  representing  he 
was  authorized  to  practice;  but  that  it  was  not  a  violation  of  law 
for  a  member  of  the  bar  of  another  State  to  consult  with  clients  in 
Massachusetts  or  to  perform  legal  services  for  them.  The  defend- 
ant's requests  were  properly  refused.  Exceptions  overruled. 


ANGELO  PELOSI  v.  GILBEET  D.  BUGBEE 

Supreme  Judicial  Court  or  Massachusetts,  March   16- 
May  21,  1914 

[Reported  in  217  Massachusetts,  579] 

Crosby,  J.  This  was  an  action  of  tort  for  the  conversion  of  a 
diamond  ring.  The  ring  was  sold  by  the  plaintiff  to  one  Tedesco 
under  a  conditional  contract  or  lease  so  called,  a  copy  of  which  is 
annexed  to  the  bill  of  exceptions.  By  the  terms  of  this  contract  or 
lease  it  appears  that  Tedesco,  "who  paid  a  small  sum  upon  delivery, 
agreed  to  pay  the  balance  upon  weekly  instalments,  and  .  .  .  ex- 
ecuted at  the  same  time  a  written  agreement  ...  by  the  terms 
of  which  the  plaintiff  was  to  retain  title  to  the  ring  until  paid  for. 
Upon  failure  to  pay  any  instalment  when  due,  or  for  any  other 
breach  of  the  lease,  the  plaintiff  could  demand,  or  retake  the  ring 
without  legal  process."  From  the  agreed  facts  it  further  appears 
that  "before  the  amount  stipulated  was  paid  to  the  plaintiff  the 


932  PELOSI    V.    BUGBEE  [CHAP.    VI 

vendee  pawned  the  ring  with  the  defendant,  who  is  a  licensed 
pawnbroker,  .  .  .  who  took  the  pledge  in  good  faith  and  with  no 
knowledge  that  Tedesco,  the  pawnor,  held  the  ring  under  a  condi- 
tional sale  agreement."  From  the  agreed  facts  it  also  appears  that 
the  plaintiff  had  no  store  or  other  regular  place  of  business,  but 
sold  jewelry,  going  from  town  to  town  and  from  place  to  place  in 
the  same  town,  carrying  the  jewelry  for  sale  and  exposing  it  for  sale. 
He  sold  for  cash  or  upon  the  instalment  plan,  and  upon  arranging 
terms  would  immediately  deliver  the  article  of  jewelry  to  the  pur- 
chaser, but  "was  not  a  selling  agent  to  dealers  in  the  usual  course  of 
business,  nor  did  he  sell  his  jewelry  by  sample  for  future  delivery." 

From  these  undisputed  facts  it  is  clear  that  the  plaintiff  was  a 
pedler  within  the  meaning  of  R.  L.  c.  65,  §  13,  and  that  the  sale 
was  in  violation  of  §  14  of  the  same  chapter,  and  the  trial  judge 
correctly  so  ruled. 

The  defendant  contends  that  the  plaintiff,  having  sold  the  ring 
in  violation  of  the  provisions  of  the  statute,  is  barred  from  recovery. 
It  is  well  settled  that,  as  a  general  rule,  contracts  made  in  violation 
of  a  statute  cannot  be  enforced.  For  this  reason,  the  law  gives  no 
remedy  for  a  breach  of  contract  made  upon  Sunday,  or  upon  a 
gaming  or  wagering  contract.  In  certain  cases  it  has  been  held  that 
contracts  made  in  violation  of  the  provisions  of  statutes  are  not  void 
on  the  ground  that  the  provisions  of  the  statutes  are  intended  to  be 
only  directory,  and  not  conditions  precedent  to  the  validity  of  con- 
tracts made  with  reference  to  them.  Bowditch  v.  New  England 
Mutual  Life  Ins.  Co.  141  Mass,  292.  As  was  said  by  Gray,  J.,  in 
Hall  V.  Corcoran,  107  Mass.  251,  253,  "The  general  principle  is  un- 
doubted, that  courts  of  justice  will  not  assist  a  person  who  has  par- 
ticipated in  a  transaction  forbidden  by  statute  to  assert  rights  grow- 
ing out  of  it,  or  to  relieve  himself  from  the  consequence  of  his  own 
illegal  act."  Jones  v.  Andover,  10  Allen,  18.  Welch  v.  Wesson,  6 
Gray,  505.  Stanton  v.  Metropolitan  Railroad,  14  Allen,  485.  Towne 
V.  Wiley,  23  Vt.  355.  Lewis  v.  Littlefield,  15  Maine,  233.  It  is 
also  well  settled,  however,  that  after  such  a  contract  has  been 
executed  and  completed,  the  law  will  not  allow  either  party  to  avoid 
its  effect  or  to  recover  back  what  he  may  have  paid  or  parted  with 
under  the  contract.  Horton  v.  Buffinton,  105  Mass.  399.  Upon 
grounds  of  public  policy  the  law  leaves  the  parties  in  such  cases 
where  they  have  placed  themselves  and  without  remedy  against 
each  other,  but  the  fact  that  the  owner  of  property  has  violated  the 
law  with  reference  to  it  is  not  a  bar  to  an  action  by  him  against 
a  wrongdoer  to  whoso  wrongful  act  the  plaintiff's  illegal  conduct  has 
not  contributed.  The  contract  between  the  plaintiff  and  Tedesco 
being  illegal,  neither  party  will  be  allowed  to  maintain  an  action 
to  enforce  any  claim  under  it.  The  phn'ntiff  in  the  case  at  bar,  how- 
ever, is  not  seeking  to  enforce  any  rights  under  the  illegal  contract 
made  with  Tedesco,  but  seeks  to  recover  the  value  of  the  ring,  to 


SECT.    VI  ]  PELOSI    V.   BUGBEB  933 

which  he  claims  title  and  which  has  been  converted  by  the  defendant. 
The  agreement  between  the  plaintiff  and  Tedesco  provided  that  the 
title  to  the  ring  should  remain  in  the  plaintiff  until  paid  for,  and 
while  this  agreement  was  void  and  could  not  be  enforced  by  either 
party  to  it  because  of  its  illegality,  yet  the  title  to  the  ring  was  not 
changed  thereby.  It  still  remained  in  the  plaintiff,  whose  title  was 
not  affected  by  the  delivery  of  possession  of  the  ring  to  Tedesco. 
The  plaintiff's  general  property  in  the  ring  did  not  arise  from  the 
illegal  contract,  nor  was  it  determined  by  it.  This  action  is  based 
upon  the  conversion  by  the  defendant  of  the  plaintiff's  property  and 
is  wholly  independent  of  the  contract  between  the  plaintiff  and 
Tedesco.  It  is  true  that  the  delivery  of  possession  of  the  ring  to 
Tedesco  was  under  an  unlawful  agreement  which  could  not  be  en- 
forced, yet  that  fact  does  not  affect  the  liability  of  the  defendant  for 
his  wrongful  act  in  converting  to  his  use  the  plaintiff's  property. 
This  distinction  is  recognized  in  Hall  v.  Corcoran,  107  Mass.  251. 
It  is  clear  upon  principle  and  authority  that  while  the  plaintiff  can- 
not enforce  the  illegal  contract,  he  may  maintain  an  action  for  con- 
version. That  rule  is  stated  by  Parker,  C  J.,  in  Dwight  v.  Brewster, 
1  Pick.  50,  55 :  "The  principle  settled  is,  that  a  party  to  an  unlawful 
contract  shall  not  receive  the  aid  of  the  law  to  enforce  that  con- 
tract, or  to  compensate  him  for  the  breach  of  it.  It  is  not  easy, 
however,  to  discern  how  a  party  to  such  contract,  who  becomes 
possessed  of  the  property  of  the  other  party,  with  which  he  is'  to 
do  something  which  the  law  prohibits,  can  acquire  a  right  to  that 
property.  The  contract  being  void,  the  property  is  not  changed,  if 
it  remains  in  the  hands  of  him  to  whom  it  is  committed.  If  he  has 
executed  the  contract  with  it,  or  it  has  become  forfeited  by  judicial 
process,  or  if  stolen  or  lost  without  his  fault,  he  may  defend  himself 
against  any  demand  of  the  owner  in  ordinary  cases;  but  if  he  has 
it  in  his  possession,  he  must  be  liable  for  the  value  of  it;  so  that  in 
an  action  of  trover,  with  proper  evidence  of  a  conversion,  the  plain- 
tiff would  undoubtedly  prevail."  The  defendant  as  the  pledgee  of 
the  ring  acquired  no  greater  rights  in  the  property  as  against  the 
plaintiff  than  Tedesco,  the  pledgor.  In  Ladd  v.  Rogers,  11  Allen, 
209,  the  action  was  in  contract  for  the  price  of  a  horse  which  the 
plaintiff  had  sold  to  the  defendant  on  Sunday  and  which  had  been 
kept  by  the  purchaser.  It  was  decided  that  the  action  could  not 
be  maintained  as  the  contract  was  illegal,  but,  if  the  defendant 
subsequently  converted  the  horse  to  his  own  use,  the  plaintiff  to 
recover  must  adopt  the  form  of  action  suited  to  such  an  injury. 
Myers  v.  Meinrath,  101  Mass.  366.  Hall  v.  Corcoran,  107  Mass.  251. 
Cranson  v.  Goss,  107  Mass.  439. 

In  the  case  at  bar  the  defendant  was  not  a  party  to  the  illegal 
contract,  but  was  an  independent  wrongdoer,  who  has  refused  to  re- 
turn the  ring  after  demand  made  by  the  plaintiff.  We  are  of  the 
opinion  that  the  judge  rightly  refused  to  give  the  plaintiff's  first. 


934  MILLWARD    V.    LITTLEWOOD  [CHAP.    VI 

fourth,  fifth  and  sixth  requests.  The  exceptions  must  be  overruled; 
and;  under  the  agreement  of  parties  stated  in  the  exceptions,  judg- 
ment is  to  be  entered  for  the  plaintiif  upon  the  finding  in  the  sum 
of  $150.  So  ordered. 


MILLWARD  V.  LITTLEWOOD 

In  the  Exchequer,  November  6,  1850 
[Reported  in  5  Exchequer,  775] 

Assumpsit.  The  declaration  stated,  that  on,  &c.,  in  consideration 
that  the  plaintiff,  being  sole  and  unmarried,  had,  at  the  defendant's 
request,  promised  the  defendant  to  marry  him,  the  defendant 
promised  the  plaintiff  to  marry  her.  Averment,  that  the  plaintiff 
hath  always,  from  the  time  of  the  making  of  the  defendant's  promise, 
for  a  reasonable  time,  to  wit,  until,  &c.,  continued  and  still  is  un- 
married, and  was,  from  the  time  of  the  defendant's  promise  until 
the  discovery  hereinafter  mentioned,  ready  and  willing  to  marry  the 
defendant.  That  after  the  making  of  the  defendant's  promise,  and 
before  the  commencement  of  this  suit,  to  wit,  on  &c.,  the  plaintiff 
discovered  that  the  defendant  was  then  married,  to  wit,  to  one  Han- 
nah Littlewood;  and  that  the  defendant,  at  the  time  of  making 
his  promise,  and  from  thence  hitherto,  hath  been  and  still  is  married 
and  that  the  plaintiff  had  not,  at  the  time  of  the  defendant's  then 
promise,  any  notice  of  the  defendant's  then  marriage. 

Pleas,  first,  non-assumpsit;  secondly,  that  the  plaintiff  had  notice 
of  the  defendant's  marriage. 

At  the  trial,  before  Parke,  B.,  at  the  last  Chester  Summer  Assizes, 
the  jury  found  a  verdict  for  the  plaimiff,  damages  £200. 

Herbert  Jones,  Serjt.,  now  moved  to  arrest  the  judgment.  It  is 
conceded  that  this  case  is  similar  to  Wild  v.  Harris,  7  C.  B.  999, 
where  the  declaration  alleged  that,  in  consideration  that  the  plain- 
tiff, being  unmarried,  had  promised  the  defendant  to  marry  him 
within  a  reasonable  time,  the  defendant  promised  the  plaintiff  to 
marry  her  within  a  reasonable  time;  that  the  plaintiff  remained  un- 
married, and  had  always,  until  she  had  notice  that  the  defendant 
was  married,  been  ready  and  willing  to  marry  him;  that,  although  a 
i-easonable  time  had  elapsed,  the  defendant  had  not  married  the 
plaintiff,  but,  on  the  contrary,  the  defendant,  at  the  time  of  his 
promise,  was  and  still  is  married  to  another  woman;  and  on  the 
motion  in  arrest  of  judgment,  the  Court  of  Common  Pleas  held  that 
the  declaration  disclosed  a  sufficient  consideration  for  the  defendant's 
promise;  at  the  same  time  observing  that  it  was  not  absolutely 
impossible  of  performance,  for  the  defendant's  wife  might  have  died 
within  a  reasonable  time.  The  only  difference  between  that  case 
and  the  present  is  that  there  the  promise  alleged  was  to  marry  within 
a  reason.'iblc  (imc,  licrc;  it  is  to  marry  generally.     It  is  submitted, 


SECT.   VI  ]  MILLWARD    V.    LITTLEWOOD  935 

however,  that  the  case  of  Wild  v.  Harris  cannot  be  supported.  A 
contract  of  this  kind  is  contra  bonos  mores,  and  against  public 
policy.  The  language  of  Lord  Mansfield,  in  Holman  v.  Johnson, 
Cowp.  343,  with  reference  to  immoral  and  illegal  contracts,  applies 
here.  Besides,  at  the  time  of  the  promise,  the  defendant  could  not 
perform  it,  and  therefore  the  promise  is  void.  The  Court  of  Com- 
mon Pleas  founded  their  judgment  on  the  authority  of  Brooke's 
i^bridgment,  tit.  "Conditions,"  fol.  152  b,  pi.  119.  That,  however, 
professes  to  be  an  abridgment  of  the  case  in  40  Ass.  13,  where  the 
reporter  adds,  "quoere  de  isto  judicio;  for  it  seems  that  the  condi- 
tion was  void,  because  the  foeffee  had  a  wife  at  the  time."  [Parke, 
B.  —  In  Fitz.  Nat.  Brev.  p.  205,  H.,  it  is  said,  "A  woman  enffeoffed 
a  man  upon  condition  that  he  should  take  her  to  wife,  and  he  had  a 
wife  at  the  time  of  the  feoffment,  and  afterwards,  the  woman,  for 
not  performing  the  condition,  entered  again  into  the  land  upon  the 
second  feoffee,  and  her  entry  was  adjudged  lawful,  and  the  condition 
good."    Ann.  40  Ed.  3,  Lib.  Ass.] 

Pollock,  C.  B.  There  ought  to  be  no  rule.  The  case  of  Wild  v. 
Harris  does  not  in  substance  differ  from  this.  Therefore,  as  there 
is  the  judgment  of  a  court  of  co-ordinate  jurisdiction  upon  the 
express  point,  I  feel  myself  bound  by  it,  and  must  leave  the  parties 
to  question  that  decision  in  a  Court  of  Error.  I  own,  however, 
that  I  am  disposed  to  differ  from  the  authorities  which  have  been 
referred  to.  I  think  it  is  inconsistent  with  that  affection  which  ought 
to  subsist  between  married  persons  that  a  man  should,  while  his 
wife  is  alive,  promise  to  marry  another  woman  after  his  wife's 
death.  Nothing  but  the  judgment  of  the  highest  tribunal  will  com- 
pel me  to  think  that,  by  the  law  of  the  land,  such  a  promise  is  good. 

Aldeeson,  B.  It  is  unnecessary  to  decide  whether  a  promise  by 
a  man  to  marry  a  woman  after  his  wife's  death  is  good,  because 
here  it  is  found  as  a  fact  that  the  plaintiff  had  no  knowledge  that 
the  defendant  was  married.  In  my  opinion  the  difficulty  arises  in 
respect  of  the  promise  alleged  being  a  promise  to  marry  within  an 
indefinite  time.  What  was  decided  by  the  recent  case  in  the  Court  of 
Common  Pleas,  I  think,  was  rightly  decided. 

Pakke,  B.  I  entirely  concur  in  what  has  been  said  by  the  Court 
of  Common  Pleas  in  Wild  v.  Harris.  The  promise  by  the  defendant 
to  marry  the  plaintiff  implies,  on  his  part,  that  he  is  then  capable 
of  marrying,  and  he  has  broken  that  promise  at  the  time  of  making 
it.  The  consideration  to  support  the  promise  is,  that  the  plain- 
tiff, at  the  request  of  the  defendant,  engaged  to  marry  him  within 
a  reasonable  time,  and  therefore  she  remained  unmarried;  and  that 
is  a  sufficient  consideration  to  bind  the  defendant.  It  is  unnecessary 
to  express  any  opinion  whether  a  promise  by  a  married  man  to 
marry  a  woman  after  his  wife's  death  is  valid  or  not.  The  passage 
in  Fitzherbert's  Abridgment  tends  to  show  that  it  is  a  good  promise. 
Here,  however,  it  is  enough  to  say  that  there  is  a  sufficient  considera- 


936  WAUGH    V.    MORRIS  [CHAP.   VI 

tion  for  the  defendant's  promise,  namely,  tliat  the  plaintiff  remained 
unmarried;  and  if  she  discovered,  on  the  day  after  the  defendant's 
promise,  that  he  was  a  married  man,  I  should  nevertheless  say  that 
the  consideration  would  be  sufficient.  Rule  refused.^ 


WAUGH  V.  MORRIS 

In  the  Queen's  Bench,  January  24,  1873 
[Reported  in  Law  Reports,  8   Queens  Bench,  202] 

Blackburn^  J.  This  is  an  action  brought  by  the  owner  of  a  ship 
against  the  charterer  for  detaining  the  ship,  in  which  the  plaintiff 
has  obtained  a  verdict,  subject  to  leave  to  move  to  enter  the  ver- 
dict for  the  defendant,  if  the  facts  proved  establish  a  plea  of 
illegality. 

On  the  trial  before  the  Lord  Chief  Justice  the  material  facts 
appeared  to  be,  that  the  charter-party  was  made  in  Trance  on  the 
7th  of  October,  1871,  between  the  agent  of  the  defendant  and  the 
master  of  the  ship. 

By  the  charter-party  it  was  stipulated  that  the  ship,  then  at  Trou- 
ville,  a  port  in  France,  should  there  load  a  cargo  of  pressed  hay 
and  proceed  therewith  direct  to  London;  and  a  term  in  the  charter- 
party  was  to  the  effect  that  all  cargo  should  be  brought  and  taken 
from  the  ship  alongside. 

The  defendant's  agent  verbally  told  the  master  that  the  consignees 
would  require  the  hay  to  be  delivered  to  them  at  a  particular  wharf 
in  Deptford  Creek,  and  that  he  should  proceed  there  on  his  arrival 
in  London,  and  this  the  master  promised  to  do. 

On  arriving  in  the  Thames  the  master  proposed  to  proceed  to  the 
wharf,  but  then  for  the  first  time  learned  that  by  an  Order  in 
Council,  made  under  the  authority  of  the  Cattle  Diseases  Act,  France 
was  declared  to  be  an  infected  country,  and  it  was  made  illegal  to 
land  in  Great  Britiaii  any  hay  brought  from  that  country.  He  could 
not  therefore  proceed  to  the  wharf  and  there  deliver  the  cargo,  for 
that  would  have  been  landing  the  hay,  and  illegal.  After  some 
delay  the  defendant  received  the  cargo  from  alongside  the  ship  in 
the  river  into  another  vessel  and  exported  it.  There  was  no  legal 
objection  to  this  being  done,  but  during  the  interval  eighteen  days 
beyond  the  lay-days  elapsed,  and  it  was  for  this  detention  that  the 
plaintiff  recovered. 

It  appeared  that  the  Order  in  Council  had  been  made  and  pub- 
lished  bf'fore  the  chart(!r-party  was  entered  into,  and  that  in  fact 

>  Wild  V.  Harris,  7  C.  B.  999;  Daniel  v.  Bowles,  2  C.  &  P.  553;  Paddock  v.  Robin- 
HOfi,  0.-',  111.  99,  HK);  Davis  v.  Pryor.  :i  Ind.  Ty.  396;  Kellcy  v.  Riley,  106  Mass.  339; 
Hteveri.son  v.  I'ctti.s,  12  I'liiia.  468;  (",(»>] x'S  v.  Davenport,  1  Hcisk.  368,  ace.  In  Blatt- 
macher  v.  Saul,  J'.i  Unr\>.  22,  and  Pollock  v.  Sullivan,  53  Vt.  507,  it  was  held  that  an 
action  of  tort  for  d(;C(it   would  lie,   but  not  an  action  for  breach  of  contract. 


SECT.   VI  ]  WAUGH    V.    MORRIS  93-7 

neither  the  master  of  the  ship  nor  the  defendant's  agent  was  aware 
that  it  had  been  made. 

A  rule  was  obtained,  which  was  argued  in  Michaelmas  Term  be- 
fore my  Lord  Chief  Justice,  my  brother  Mellor,  and  myself,  when 
the  court  took  time  to  consider. 

We  are  of  opinion  that  the  rule  should  be  discharged.  The  charter- 
party  provides  that  the  cargo  was  to  be  taken  from  alongside; 
and  that  being  so,  the  consignee  might  select  any  legal  and  reason- 
able place  within  the  port  at  which  to  take  it  from  alongside.  He, 
by  his  agent  in  France,  named  the  wharf,  which  he  supposed,  erro- 
neously, to  be  a  legal  place,  and  the  master,  under  the  same  mistake, 
assented  to  this,  as  indeed  he  would  have  had  no  right  to  refuse  it, 
if  it  had  really  been  a  legal  place.  But  when  it  turned  out  that  the 
defendant  had  named  a  place  for  the  performance  of  the  contract 
where  the  performance  was  impossible,  because  illegal,  that  did  not 
put  an  end  to  the  contract,  if  the  performance  in  any  other  way 
was  legal  and  practicable.  In  the  present  case  the  performance 
by  receiving  the  cargo  alongside  in  the  river  without  landing  it  at 
all  was  both  legal  and  practicable.  See  "The  Teutonia,"  L.  R. 
4  P.  C.  171,  a  case  which  would  have  been  precisely  in  point,  if 
the  Order  in  Council  rendering  the  landing  illegal  had  come  into 
operation  after  the  contract  was  made  instead  of  before. 

It  was  on  the  fact  that  the  Order  in  Council  existed  at  the  time 
the  contract  was  made  that  the  argument  for  the  defendant  was 
mainly  grounded. 

It  was  said  that  the  intention  of  both  parties  was,  that  the  hay 
was  to  be  landed,  that  therefore  they  intended  to  violate  the  law, 
and  that  it  may  be  shown  by  extraneous  evidence  that  a  contract, 
on  the  face  of  it  perfectly  legal,  is  void  because  made  with  intent 
to  violate  the  law,  and  that  ignorance  of  the  law  makes  no  difference. 
But  we  think,  in  the  first  place,  that  it  is  a  mistake  to  say  that  the 
plaintiff  intended  that  the  hay  should  be  landed.  He  no  doubt  con- 
templated and  expected  that  the  hay  would  be  landed,  for,  except 
under  very  unusual  circumstances,  hay  is  not  brought  into  the 
Thames  for  any  other  object;  but  all  that  the  ship-owner  bargained 
for,  and  all  that  he  can  properly  be  said  to  have  intended  was  that, 
on  the  arrival  of  the  ship  in  London,  his  freight  should  be  paid,  and 
the  hay  taken  out  of  his  ship.  If,  unexpectedly,  there  had  arisen 
a  great  demand  for  hay  abroad,  like  that  which  existed  when  our 
army  was  in  the  Crimea,  the  consignee  might  have  transshipped  the 
hay  and  exported  it  without  the  shipowner  having  the  slightest 
ground  for  complaining  that  his  intention  was  frustrated.  We  agree 
that  a  contract,  lawful  in  itself,  is  illegal  if  it  be  entered  into  with 
the  object  that  the  law  should  be  violated;  if,  as  it  is  expressed  in 
Pearce  v.  Brooks,  L.  E,  1  Ex.  213,  it  is  done  for  the  very  object 
of  satisfying  an  illegal  purpose,  or,  as  it  is  expressed  in  McKinnell  v. 
Robinson,  3  M.  &  W.  at  p.  442,  "for  the  express  purpose  of  a  viola- 


938  ROSENBAUM    V.    U.    S.    CREDIT   CO.  [CHAP.    VI 

tion  of  the  law."  But  in  the  present  case  the  ship-owner  never  did 
even  contemplate  or  believe  that  the  defendant  would  violate  the 
law.  He  contemplated  that  the  defendant  would  land  the  goods, 
which  he  thought  was  lawful;  but  if  he  had  thought  at  all  of  the 
possibility  of  landing  being  prohibited,  he  would  probably  have  ex- 
pected that  the  defendant  would  in  that  case  not  violate  the  law. 
And  he  would  have  been  right  in  fact  in  that  expectation,  for  the 
defendant  did  not  attempt  to  land  the  goods. 

We  quite  agree  that,  where  a  contract  is  to  do  a  thing  which  can- 
not be  performed  without  a  violation  of  the  law,  it  is  void,  whether 
the  parties  knew  the  law  or  not.  But  we  think  that,  in  order  to 
avoid  a  contract  which  can  be  legally  performed,  on  the  ground  that 
there  was  an  intention  to  perform  it  in  an  illegal  manner,  it  is 
necessary  to  show  that  there  was  the  wicked  intention  to  break  the 
law;  and,  if  this  be  so,  the  knowledge  of  what  the  law  is  becomes 
of  great  importance. 

No  one  could  for  a  moment  contend  that,  if  everything  which  hap- 
pened in  France  had  happened  within  the  jurisdiction  of  our  coun- 
try, the  plaintiff  and  defendant's  agent  could  have  been  success- 
fully indicted  for  a  conspiracy  to  violate  the  law  by  landing  these 
goods;  for  there  would  have  been  a  want  of  mens  rea.  And  it  seems 
to  us  that  the  mens  rea  is  as  necessary  to  avoid  a  contract  which  can 
be  legally  performed,  because  when  it  was  made  it  was  with  the 
object  of  satisfying  an  illegal  purpose,  as  it  is  to  render  the  parties 
criminally   responsible.  Rule    discharged. 


MAETIN    EOSEKBAUM,    Plaintiff    in    Eeror,    v.    UNITED 
STATES   CEEDIT   SYSTEM  COMPANY,  Defendant 

IN  Error 

New  Jersey  Court  of  Errors  and  Appeals,  June  28,  1900- 
January  25,  1901 

[Reported  in  65  New  Jersey  Law,  255] 

Collins,  J.^  On  December  1,  1892,  the  defendant,  a  'New  Jersey 
corporation  engaged  in  the  business  of  indemnifying  against  losses 
on  credits,  made  a  written  contract  with  the  plaintiff  appointing 
him  its  agent  in  and  for  the  State  of  Massachusetts  for  the  term 
of  five  years,  for  a  percentage  on  the  amount  of  business  secured  as 
his  compensation.  The  plaintiff,  on  his  part  in  said  written  con- 
tract, agreed  to  act  as  such  agent  for  the  term  named  and  to  pro- 
cure business  to  an  extent  stated  each  quarter  —  failing  which  the 

'  Portions  of  this  opinion  are  omitted  in  which  it  was  held  that  the  plaintiff's  agree- 
ment not  to  onmu'f  in  mrnilar  iMisinoss  for  thn^o  yoars,  oven  if  unenforceable,  did  not 
invalidatf!  the;  rcHt  of  tlu-  contract,  and  in  wliich  the  provisions  of  the  Massachusetts 
statute  referrefl  to  arc  stated. 


SECT.   VI ]  ROSENBAUM    V.    U.    S.    CREDIT   CO.  939 

defendant  might,  at  its  option,  terminate  the  contract;  and  further 
agreed  that  should  he  cease  to  be  the  defendant's  agent,  he  would 
not  engage  in  like  business  for  three  years  thereafter.  On  September 
4,  1894,  the  defendant  was  adjudged  insolvent  and  a  receiver  was 
appointed  for  its  creditors  and  stockholders.  On  October  2,  1894, 
its  charter  was  forfeited,  except  for  the  purpose  of  collecting  and 
distributing  its  assets.  The  plaintiff  presented  to  the  receiver  a 
claim  for  damages  for  breach  of  said  contract.  The  claim  being 
disputed,  the  Chancellor  authorized  an  issue  or  issues  at  law  to 
determine  its  validity.  The  Supreme  Court  overruled  a  demurrer 
by  the  plaintiff  to  a  plea  of  such  insolvency  and  forfeiture,  but  on 
writ  of  error  it  was  adjudged,  by  this  court,  that  there  was  a  breach 
of  the  contract,  and  that  the  forfeiture  of  the  defendant's  charter 
would  not  bar  recovery  of  damages  for  such  breach.  Rosen- 
baum  V.  United  States  Credit  System  Co.,  23  Vroom,  543,  reversing 
31  id.  294. 

The  Supreme  Court  had  also  decided  to  overrule  the  plaintiff's 
demurrer  to  a  plea  that  the  business  of  the  defendant  was  unlaw- 
ful in  Massachusetts;  but  after  the  announcement  of  the  decision 
that  plea  was  withdrawn,  as  were  certain  other  pleas  held  to  be 
faulty,  so  that  the  judgment  reviewed  went  only  on  the  plea  of  in- 
solvency and  forfeiture.  After  the  reversal  the  pleadings  were  re- 
cast and  the  cause  proceeded  to  issue  of  fact.  Trial  was  had  in  the 
Essex  Circuit,  resulting  in  a  verdict  for  the  plaintiff,  which  was  set 
aside  and  a  new  trial  ordered  by  the  Supreme  Court  in  hanc.  The 
report  of  the  decision  is  in  35  Vroom,  35.  Legal  questions  only 
were  discussed  —  first,  whether  the  plaintiff's  agreement  not  to  en- 
gage in  business  like  that  of  the  defendant  for  three  years  after 
he  should  cease  to  be  its  agent  invalidated  the  entire  contract,  and 
second,  the  effect  of  alleged  unlawfulness  in  Massachusetts  of  such 
business,  a  plea  of  that  purport  having  been  renewed.  The  first 
question  was  decided  in  favor  of  the  plaintiff  on  the  authority  of 
Fishell  V.  Gray,  31  Vroom,  5.  The  second  question  was  decided  in 
favor  of  the  defendant.  Under  the  pleadings,  as  recited  in  the 
opinion  read  by  Mr.  Justice  Van  Syckel,  the  unlawfulness  alleged 
was  not  disputed.  The  court's  decision  was  merely  that  the  plain- 
tiff's ignorance  of  it  gave  him  no  right  of  action  for  breach  of  the 
contract,  but  that  concealment  from  him  by  the  defendant  of  its 
knowledge  of  it  would  entitle  him  to  damages,  in  tort,  under  plead- 
ings to  be  moulded   accordingly.^     Before  the   new  trial,   now   the 

*  The  conclusion  of  the  opinion  is  as  follows: 

"We  are  therefore  of  the  opinion  that  it  was  correctly  ruled  in  Rosenbaum  v.  Credit 
System  Co.,  31  Vroom,  294,  that  no  action  can  be  maintained  for  failure  to  employ  the 
plaintiff  to  do  an  act  for  which  he  was  punishable  by  the  Massachusetts  law. 

"Rosenbaum's  compensation  was  to  be  a  percentage  upon  the  amount  of  business 
he  transacted.  He  could  not  be  compelled  to  do  acts  forbidden  by  law,  nor  can  he 
require  the  company  to  pay  him  for  lervices  which  he  cannot  render  because  the  law 
forbids  under  a  penalty. 

"But,  assuming  that  the  plaintiff  did  not  know  of  the  existence  of  the  Massachusetts 


940  ROSENBAUM    V.    U.    S.    CREDIT   CO.  [CHAP.    VI 

subject  of  review,  I  judge  that  new  replications  and  subsequent 
pleadings  were  filed.  In  the  present  record  the  first  plea  is  non  est 
factum,  on  which  issue  is  joined.  The  second  plea  is  that  the  con- 
tract is  void  because  a  part  of  the  consideration  for  the  defendant's 
agreement  was  an  agreement,  by  the  plaintiff,  not  to  engage,  for 
three  years  after  he  should  cease  to  be  agent  for  the  defendant,  in 
any  business  like  that  of  the  defendant,  which  restriction  is  alleged 
to  be  unreasonable.  The  replication  is  that  the  restriction  was 
reasonable,  and  on  this  issue  is  joined.  The  third  plea  sets  out, 
in  extenso,  the  statute  of  Massachusetts,  hereinafter  referred  to, 
and  avers  that  the  business  of  the  defendant,  for  which  the  plaintiff 
was  agent,  was,  at  the  time  of  the  contract,  unlawful  in  that  State. 
To  this  plea  there  are  four  replications.  The  first  avers  that,  at  the 
time  of  the  contract,  the  plaintiff  was  a  resident  of  Illinois,  and 
ignorant  of  the  laws  of  Massachusetts;  the  second  avers  to  the  same 
effect,  and  also  that  the  defendant  was  cognizant  of- those  laws,  and 
liad  been  refused  a  license  to  transact  its  business  in  Massachusetts, 
which  matters  it  fraudulently  concealed  from  the  plaintiff;  the  third 
avers  that  the  defendant  knew  and  the  plaintiff  was  ignorant  of  the 
laws  of  Massachusetts,  and  the  fourth  avers  that  defendant's  busi- 
ness was  not  unlawful  in  that  State.  Issue  is  tendered  on  these 
several  replications,  by  divers  rejoinders  concluding  to  the  country, 
and  accepting  by  formal  similiter. 

At  the  new  trial  the  evidence  at  the  former  trial  was  used  by 
consent.  The  plaintiff  moved  to  mould  the  pleadings  so  as  to 
present  an  issue  of  tort,  but  the  learned  trial  judge  refused  to  make 
order  to  that  effect,  and  his  ruling,  being  discretionary,  is  not  reversi- 
ble. Verdict  in  favor  of  the  defendant  was  directed  on  the  third 
plea,  and  the  bill  of  exceptions  of  the  plaintiff  presents  this  direction, 
for  our  review,  under  the  present  writ  of  error  brought  on  the  conse- 
quent judgment  against  him. 

On  the  first  plea  a  case  was  made  by  the  plaintiff  that  the  de- 
fendant did  not  attempt  to  confute,  and  no  support  for  the  direction 
of  a  verdict  is  claimed  under  that  plea.  .  .  . 

Nor  do  I  think  such  direction  can  stand  on  the  case  made  under 
the  third  plea,  which  alone  moved  the  learned  trial  judge  to  give  it. 

The  covenant  of  the  defendant  was  not  broken  because  of  any 
supposed  unlawfulness  of  the  business  contracted  for,  but  because  of 
the  defendant's  insolvency.  Nor  was  it  proved  that  the  business 
was  in  fact  unlawful.    Of  course  it  was  not  immoral,  or,  in  the  broad 

law,  and  that  tho  rloff^ndant  company  did  have  knowledge  of  it  when  the  contract  waa 
entered  into,  a  difffirr^nt  question  in  presented.  In  that  case  it  was  clearly  a  fraudulent 
act  on  the  part  of  the  defendant  company  to  engage  the  defendant  in  a  five  years' 
contract,  from  wViicli  the  nomt)anv  knew  he  could  derive  no  advantage,  and  the  fraud 
was  more  pronouncr^d  in  the  fjtct  that  the  plaintiff,  in  ignorance  of  the  situation,  waa 
indiieefl  to  enter  into  a  eoiitraet  to  etiiraire  for  a  long  period  in  the  transaction  of  a 
buKinr^HH  whieli  would  subject  him  to  heavy  ijenalties. 

"  I'\ir  damages  flowing  from  the  alleged  fraud,  if  proven,  the  plaintiff  may  maintain 
bia  suit." 


SECT.   Vl]  ROSENBAUM    V.    U.    S.    CREDIT   CO.  941 

sense,  illegal,  but  it  is  claimed  tliat  in  Massachusetts  it  was  pro- 
hibited by  the  statute  pleaded.  .  .  .  The  proof  at  the  trial  was  that 
before  the  defendant  began  its  operations  in  Massachusetts,  the 
Insurance  Commissioner  had  ruled  that  its  business  was  not  in- 
surance within  the  definition  of  the  statute,  and  that  no  certificate 
of  authority  to  transact  it  was  necessary;  and  that  the  plaintiff 
entered  upon  his  agency  as  soon  as  appointed,  and  without  in- 
terference on  the  part  of  the  Massachusetts  authorities,  transacted 
a  business  of  large  volume  for  the  defendant,  down  to  the  time  of 
its  becoming  insolvent.  I  think,  therefore,  that  the  plaintiff  was 
entitled  to  have  a  jury  say  whether,  if  the  defendant  had  not  be- 
come insolvent  and  ceased  to  do  business,  he  would  not  have  been 
permitted  to  continue  in  his  agency,  and  on  that  ground,  award 
him  damages.  Suppose  the  term  of  the  contract  had  expired  and 
the  suit  brought  was  for  the  agreed  compensation.  Surely  an  un- 
lawfulness merely  theoretical  would  afford  no  defence  to  the  action. 
I  see  no  reason  why  it  should  do  so  when  the  breach  of  contract 
arises  only  from  insolvency. 

For  all  practical  purposes  the  defendant's  business  was  lawful  in 
Massachusetts.  ISTor  can  I  see  that  it  was  theoretically  unlawful. 
One  of  the  purposes  for  which  the  formation  of  insurance  companies 
is  authorized  by  the  statute  pleaded  is  "to  guarantee  the  fidelity  of 
persons  in  positions  of  trust,  private  or  public,  and  to  act  as  surety 
on  official  bonds,  and  for  the  performance  of  other  obligations." 
It  seems  to  me  that  the  acting  as  surety  for  the  performance  of  obli- 
gations is  exactly  the  defendant's  business  which  is  therefore  within 
both  the  definition  and  the  permission  of  the  statute.  If  this  view 
be  correct,  certificates  of  authority  for  the  company  and  its  agent 
to  transact  it  were  necessary.  Those  it  behooved  the  defendant  to 
procure,  and  it  cannot  set  up  its  failure  to  do  so  as  an  excuse  for 
the  breach  of  its  contract  with  the  plaintiff.  But  we  are  referred 
to  the  reported  case  of  Claflin  v.  United  States  Credit  System  Co., 
165  Mass.  501,  decided  April  1,  1896,  in  which,  it  is  alleged,  the 
Supreme  Court  of  Massachusetts  has  interpreted  the  statute  in 
question,  and  has  held  that  the  business  of  defendant  is  in  that 
State  unlawful.  If  this  be  so,  the  plaintiff's  suit  is  not  thereby  de- 
feated. No  doubt,  after  such  a  decision,  the  business  could  no  longer 
be  transacted  in  Massachusetts,  and  the  plaintiff's  profits  would 
cease,  but  the  only  effect  in  the  present  suit  would  be  on  the  extent 
of  his  recovery. 

It  is  not  needful  to  go  further  for  the  purposes  of  this  writ  of 
error,  but  it  should  be  pointed  out  that  the  decision  cited  is  not 
authoritative  beyond  the  point  that  the  business  of  the  defendant 
was  insurance  within  the  definition  of  the  Massachusetts  statute. 
In  its  application  of  that  adjudication  to  the  case  then  in  hand, 
the  opinion  read  for  the  court  is  ambiguous.  The  suit  was  brought 
upon  one  of  the  defendant's  contracts  of  indemnity,  and  recovery 


942  ROSENBAUM    V.    U.    S.    CREDIT    CO.  [CHAP.    VI 

was  contested  on  grounds  not  stated  in  the  report  of  the  case.  The 
court  ex  mero  motu  avoided  the  contract,  saying:  ''The  contract 
sued  on  seems  to  be  made  unlawful  by  the  provisions  of  Stat.  1887, 
ch.  214,  §  3,  both  for  the  reason  that  the  defendant  had  not  been  ad- 
mitted to  transact  insurance  here  and  because  insurance  of  credits 
or  accounts  is  not  authorized  by  the  statute."  One  of  these  reasons 
might  be  good,  but  both  could  not  be.  If  credit  insurance  was  un- 
lawful, the  defendant  could  not  have  been  admitted  to  transact  it. 
If  the  fact  that  defendant  was  not  so  admitted  influenced  the  de- 
cision, the  other  reason  assigned  for  it  was  mere  dictum. 

Of  course,  a  plain  decision  of  the  Supreme  Court  of  a  State, 
interpreting  one  of  its  statutes,  should,  after  its  rendition,  control 
judicial  interpretation  elsewhere,  but  I  think  the  decision  cited 
leaves  the  matter  in  hand  still  unsettled.  The  question  involved  was 
not  argued,  and  no  reference  is  made  in  the  opinion  to  the  authority 
to  form  an  insurance  company  to  act  as  surety  for  the  performance 
of  obligations.  It  is  possible  that  that  provision  of  the  statute, 
blended  as  it  is  with  another  subject,  was  overlooked. 

If,  before  the  retrial  of  this  action,  an  authoritative  judgment  of 
the  Supreme  Court  of  Massachusetts  that  credit  insurance  is  in  that 
State  unlawful  shall  be  pronounced,  its  effect  on  the  plaintiff's  re- 
covery must  then  be  considered. 

I  shall  vote  to  reverse  the  present  judgment,  and  award  a  venire 
de  novo} 

Magie,  Chancellor  (dissenting).  I  am  constrained  to  dissent 
from  the  opinion  of  the  majority  of  the  court  in  this  case. 

The  ground  of  my  dissent  is  this :  Eosenbaum,  by  this  action, 
seeks  to  liquidate  and  fix  the  damages  which  the  defendant  company 
(an  insolvent  corporation)  should  be  charged  with,  for  the  non-per- 
formance of  a  contract  made  by  it  with  him.  The  contract  con- 
templated the  procurement  by  Rosenbaum  of  contracts  in  the  State 
of  Massachusetts  for  the  insurance  by  the  company  of  accounts  and 
credits.  Such  contracts  have  been  judicially  declared  by  the  courts 
of  that  State  to  be  unauthorized  and  unenforceable.  In  my  judg- 
ment, it  is  immaterial  whether  the  lack  of  authority  to  make  such 
contracts  was  properly  predicted  upon  the  omission  of  a  legislative 
grant  or  not.  For  it  was  directly  decided  that  if  such  authority  has 
been  given,  its  exercise  in  that  State  was  unlawful,  unless  the  con- 
tracting company  had  been  admitted  to  transact  such  business  within 
that  State  in  the  manner  required  by  its  laws.  Claflin  v.  United 
States  Credit   Sytem  Co.,   165   Mass.    ,501. 

As  it  appears  that  the  defendant  company  was  not  thus  admitted 
to  transact  business  in  that  State,  its  contracts  were  properly  held 
to  be  unlawful.  Damages  for  being  prevented  by  the  insolvency  of 
the  company  from  procuring  contracts,  which  the  company  had  no 
lawful  authority  to  make,  cannot,  in  my  judgment,  be  recoverable. 
*  Rocco  V.  Frapoli,  60  Neb.  665,  contra. 


SECT.    VI  ]      BOWDITCH    V.    NEW   ENGLAND   LIFE    INS.    CO.  943 

It  is  proper  to  add  that  the  question  before  us  was  not  involved 
in  the  previous  decisions  reported  in  31  Vroom,  294,  or  32  Id.  543. 
I  therefore  vote  to  affirm  the  judgment.^ 


CHAELES  P.  BOWDITCH  and  another.   Trustees,  v.   N'EW 
ENGLAND  MUTUAL  LIFE  INSUKAJSTCE  COMPANY 

In  the  Supreme  Judicial  Court  of  Massachusetts,  January  12- 

March  1,  1886 

[Reported  in  141  Massachusetts,  292] 

Morton,  C.  J.  This  is  an  action  of  tort  in  the  nature  of  trover, 
to  recover  the  value  of  certain  negotiable  coupon  bonds  held  by  the 
defendant  as  collateral  security  for  several  promissory  notes  signed 
by  Sidney  W.  Burgess. 

Benjamin  F.  Burgess  held  the  bonds  in  dispute  as  trustee  under 
the  will  of  Lysander  A.  Ellis,  deceased.  At  several  times  he  applied 
to  the  defendant  for  loans  of  money  upon  the  notes  of  his  son  Sidney, 
offering  these  bonds  as  collateral  security.  These  applications  were 
submitted  to  the  finance  committee,  a  committee  charged  with  the 
duty  of  investing  the  funds  of  the  defendant  company,  which  passed 
votes  authorizing  the  several  loans,  and  these  votes  were  after- 
wards approved  by  the  directors.  Thereupon  Benjamin  F.  Burgess 
delivered  the  bonds  to  the  defendant,  and  received  the  amounts  of 
the  loans. 

Benjamin  F.  Burgess  was  a  member  of  the  finance  committee, 
and  was  present  at  all  the  meetings,  but  neither  spoke  nor  voted 
upon  the  question  of  allowing  said  application.  The  other  members 
of  the  committee  knew  that  the  loans,  though  in  the  name  of  Sidney 
W.  Burgess,  were  for  the  benefit  of  said  Benjamin  F.  Burgess,  or  of 
his  firm,  composed  of  himself  and  Walter  Burgess,  another  son. 

At  the  time  said  loans  were  made  and  said  bonds  received,  Benja- 
min F.  Burgess  and  his  firm  were  in  good  financial  standing,  and 
the  members  of  the  finance  security  committee,  except  said  Burgess, 
made  the  loans  and  took  the  security  without  any  knowledge  or 
suspicion  that  said  securities  were  not  the  property  of  said  Benjamin 
F.  Burgess,  or  of  said  firm,  and  in  the  belief  that  said  loans  were 

*  Where  the  illegality  of  a  contract  resulted  from  facts  unknown  to  the  plaintiff,  he 
was  allowed  relief  in  Hotchkiss  v.  Dickson.  2  Bligh,  348;  Congress  Spring  Co.  v. 
Knowlton,  103  U.  S.  49;  Pullman  Palace  Car  Co.  v.  Central  Transportation  Co.,  65 
Fed.  Rep.  158;  Mobile,  &c.  R.  R.  Co.  r.  Dismukes,  94  Ala.  131  (but  see  Gulf,  &c.  Ry. 
Co.  V.  Hefley,  158  U.  S.  98;  Southern  Ry.  Co.  v.  Harrison,  119  Ala.  539;  Gerber  v. 
Wabash  R.  R.  Co..  63  Mo.  App.  145:  Wyrick  v.  Missouri,  &c.  Ry.  Co.,  74  Mo.  App. 
406):  Musson  v.  Fales,  16  Mass.  332;  Emery  v.  Kempton,  2  Gray,  257;  Beram  v. 
Kruscal,  18  N.  Y.  Misc.  479;  Burkholder  v.  Beetem's  Adm.,  65  Pa.  496.  See  also 
Harse  v.  Peari  Life  Ass.  Co.,  [1903]  2  K.  B.  92;  Cranson  v.  Goss,  107  Mass.  439; 
Miller  v.  Hirschberg,  27  Oreg.  522;  Millward  v.  Littlewood  and  note,  ante,  p.  934  and 
3  Wiliiaton,  Contracts,   §  1631. 


944  BOWDITCH    V.    NEW   ENGLAND    LIFE   INS.    CO.     [CHAP.   VI 

abundantly  secured,  and  were  wise  and  prudent  investments  of  the 
funds  of  the  company.  The  presiding  justice  of  the  Superior  Court, 
who  heard  the  case  without  a  jury,  has  found  that,  although  the 
loans  were  in  form  loans  upon  the  notes  of  Sidney  W.  Burgess, 
Benjamin  F.  Burgess  was  in  fact  the  borrower  of  the  funds  of  the 
corporation;  and  that  said  Benjamin  F.  Burgess  took  no  part,  on 
behalf  of  the  corporation,  in  the  transactions  in  which  said  loans 
were  made. 

For  the  purposes  of  this  discussion,  we  treat  the  case  as  if  the 
loans  had  been  made  in  form  and  directly  to  Benjamin  F.  Burgess. 
"We  do  not  understand  the  plaintiffs  to  contend  that  the  defendant 
is  affected  with  the  knowledge  of  Burgess  of  the  fraud  in  the  transfer 
of  the  bonds  in  dispute.  Upon  this  point  the  case  of  Innerarity  v. 
Merchant's  ISTational  Bank,  139  Mass.  322,  is  conclusive  against 
them.  But  they  contend  that  the  contract  between  Burgess  and  the 
defendant  was  illegal  and  void;  and  that  the  defendant  cannot  re- 
tain the  bonds  which  were  given  as  security  for  the  void  contract. 

This  is  the  vital  question  in  the  case.  The  statute  provides  that 
"no  member  of  a  committee  or  officer  of  a  domestic  insurance  com- 
pany, who  is  charged  with  the  duty  of  investing  its  funds,  shall 
borrow  the  same,  or  be  surety  for  such  loans  to  others,  or  directly 
or  indirectly  be  liable  for  money  borrowed  of  the  company."  Pub. 
Sts.  c.  119  §  47. 

It  is  a  rule  universally  accepted  that,  if  a  statute  prohibits  a 
contract  in  the  sense  of  making  it  unlawful  for  any  one  to  enter  into 
it,  such  a  contract,  if  made,  is  wholly  void,  and  cannot  be  enforced. 
But  it  is  often  a  difficult  question  to  determine  whether  a  statute 
forbidding  an  act  to  be  done,  or  enjoining  the  mode  of  doing  it, 
is  prohibitory,  so  as  to  make  any  contract  in  violation  of  it  absolutely 
void,  or  whether  it  is  directory  in  its  purpose,  and  does  not  neces- 
sarily invalidate  the  contract.  Though  it  may  be  impossible  to 
foniiulate  a  rule  which  will  reconcile  all  the  adjudications,  yet  the 
decisions  recognize  a  clear  distinction  between  these  two  classes  of 
cases.  There  is  a  large  class  of  cases,  both  in  this  country  and  in 
England,  in  which  statutes  have  enacted,  in  substance,  that  goods 
should  only  be  sold  in  certain  measures,  or  in  a  certain  manner,  or 
after  being  inspected  and  branded  by  public  officers;  and  it  has 
been  held  that  contracts  of  sale  which  do  not  meet  the  requirements 
of  such  statutes  are  absolutely  void.  The  purpose  of  such  statutes 
is  to  protect  the  buyer  from  the  imposition  of  the  seller,  a  purpose 
which  would  be  wholly  thwarted  uidess  the  contracts  are  held  void, 
and  therefore  the  intention  of  the  legislature  to  make  them  void 
is  inferred.  Miller  v.  Post,  1  Allen,  434,  and  cases  cited;  Libby  v. 
Downey,  5  Allen,  299;  Sawyer  v.  Smith,  109  Mass.  220,  and  cases 
cited;  Benjamin  on  Sales,  §  §  530  et  seq. 

So  statutes  prohibiting  any  work  on  the  Lord's  day,  except  work 
of  necessity  or  charity,  have  been  construed  to  make  entirely  void 


SECT.    VI ]      BOWDITCH    V.    NEW   ENGLAND    LIFE    INS.    CO.  945 

any  contract  made  in  violation  of  their  provisions.  On  the  other 
hand,  there  are  numerous  cases  where  statutes  forbid  certain  acts 
to  be  done,  and  in  a  sense  forbid  certain  contracts  to  be  made,  and 
yet  it  is  held  that  contracts  made  in  contravention  of  the  statutes 
are  not  void.  When  usurious  contracts  were  forbidden  by  our  laws, 
under  a  penalty  of  forfeiting  threefold  the  amount  of  interest  re- 
served or  taken,  the  act  of  making  such  a  contract  was  illegal,  but 
the  contract  was  not  void.  The  imposition  of  the  defined  penalty 
showed  that  the  legislature  did  not  intend  that  the  contract  should 
be  wholly  void,  as  this  would  be  imposing  an  added  penalty.  Merrill 
V.  Mclntire,  13  Gray,  157. 

In  Larned  v.  Andrews,  106  Mass.  435,  it  was  held  that  the  pro- 
visions of  the  internal  revenue  laws  of  the  United  States,  pro- 
hibiting any  persons  from  carrying  on  the  business  of  wholesale 
dealers  in  merchandise  until  they  should  have  paid  the  special  tax 
therein  provided  for,  did  not  invalidate  sales  made  by  persons  who 
failed  to  comply  with  the  statute,  or  prevent  them  from  recovering 
the  price  of  the  goods  sold.  The  same  point  was  decided  in  Aiken  v. 
Blaisdell,  41  Vt.  55. 

The  Revised  Statutes  of  the  United  States  respecting  national 
banks  provide  that  a  bank  shall  not  lend  to  any  one  person,  corpora- 
tion, or  firm  a  sum  exceeding  one  tenth  part  of  the  capital  stock 
actually  paid  in,  and  that  national  banks  shall  not  take  real  estate 
as  collateral  security  except  for  debts  previously  contracted;  and  it 
has  been  repeatedly  held  that  contracts  made  in  contravention  of 
the  statute  are  not  void.  Gold-Mining  Co.  v.  National  Bank,  96 
U.  S.  640;  N'ational  Bank  v.  Matthews,  98  U.  S.  621;  National  Bank 
V.  Whitney,  103  U.  S.  99;  Reynolds  v.  Crawfordsville  National 
Bank,  112  U.  S.  405. 

Where  the  officers  of  a  savings  bank  invest  its  funds  in  a  manner 
forbidden  by  statute,  such  illegal  action  of  the  officers  does  not 
impair  the  validity  of  the  investment.  Holden  v.  Upton,  134  Mass. 
177.1 

Many  other  cases  might  be  cited,  in  which  it  has  been  held  that 
contracts  made  in  violation  of  the  provisions  of  statutes  are  not 
void,  upon  the  ground  that  the  statutes  are  intended  merely  to  be 
directory  to  the  officers  or  persons  to  whom  they  are  addressed,  and 
not  to  be  conditions  precedent  to  the  validity  of  contracts  made  in 
reference  to  them.  Each  statute  must  be  judged  by  itself  as  a  whole, 
regard  being  had,  not  only  to  its  language,  but  to  the  objects  and 
purposes  for  which  it  was  enacted.  If  the  statute  does  not  declare 
a  contract  made  in  violation  of  it  to  be  void,  and  if  it  is  not  necessary 
to  hold  the  contract  void  in  order  to  accomplish  the  purposes  of  the 

^  Similar  decisions  under  various  banking  laws  are:  Savings  Bank  v.  Burns,  104 
Cal.  473;  Union  Mining  Co.  v.  Rocky  Mountain  Nat.  Bank,  1  Col.  531;  Boltz  v. 
National  Bank,  158  Bl.  532;  Benton  County  Bank  v.  Boddicker,  105  la.  548;  Lester 
V.  Howard  Bank,  33  Md.  556;  Allen  v.  First  Nat.  Bank,  23  Ohio  St.  97;  First  Nat. 
Bank  v.  Smith,  8  S.  Dak.  7;    Wroten's  Assignee  v.  Armat,  31  Gratt.  228. 


946  BOWDITCH    V.    NEW   ENGLAND   LIFE   INS.    CO.     [CHAP.   VI 

statute,  the  inference  is  that  it  was  intended  to  be  directory,  and 
not  prohibitory  of  the  contract. 

The  statute  we  are  considering  does  not  in  terms  prohibit  the 
corporation  from  lending  money  to  its  officers,  or  declare  that  such 
contracts  shall  be  void.  It  is  directed  to  the  officers,  and,  by  its 
terms,  seems  intended  to  prescribe  rules  to  regulate  the  duty  of  the 
officers  to  the  corporation  and  its  members.  It  does  not  say  that  the 
corporation  shall  not  lend,  but  that  the  officers  shall  not  borrow.  In 
the  words  of  Lord  Mansfield,  in  Browning  v.  Morris,  2  CoM^p,  790, 
793,  the  statute  itself  "has  marked  the  criminal."  It  is  designed 
to  forbid  officers,  who  are  charged  with  the  duty  of  investing  the 
funds  of  the  corporation,  borrowing  of  themselves,  and  thus  to  pre- 
vent the  risk  of  the  funds  being  invested  by  them,  under  the  prompt- 
ings of  self-interest,  upon  insufficient  security.  In  other  words, 
the  purpose  is  to  protect  the  corporation  and  the  policy-holders 
from  the  dishonesty  or  self-interest  of  the  officers.  It  is  intended 
as  a  shield  to  the  corporation.  To  construe  it  as  making  the  promises 
of  the  officers  who  borrow  money  in  violation  of  its  provisions  void 
would  defeat  the  main  purpose  of  its  enactment,  and  would  visit  the 
consequences  of  the  unlawful  act  of  the  officers,  not  upon  themselves, 
but  upon  the  corporation  for  whose  protection  the  statute  was  made. 
It  would  require  a  plain  expression  of  legislative  intention  to  lead 
us  to  such  a  construction. 

The  plaintiffs  contend  that,  unless  the  contract  is  held  void, 
the  statute  is  rendered  nugatory.  But  this  is  not  so.  If  the  in- 
vesting committee  loans  to  an  officer  in  violation  of  the  duty  im- 
posed by  the  statute  upon  it,  all  who  participate  in  the  act  would  be 
liable  for  all  losses  occasioned  thereby,  and  thus  the  main  purpose 
of  protecting  the  policy-holders  would  be  subserved.  The  plaintiffs 
rely  much  upon  the  case  of  Albert  v.  Savings  Bank,  2  Md.  159.  But 
that  case,  if  not  overruled,  is  very  much  shaken  as  an  authority  by 
the  more  recent  case  of  Lester  v.  Howard  Bank,  33  Md.  558,  which 
supports  the  views  of  the  defendant. 

For  the  reasons  stated,  we  are  of  opinion  that  the  notes  signed 
by  Sidney  W.  Burgess  are  valid  contracts,  which  can  be  enforced 
by  the  corporation.  This  being  so,  we  see  no  ground  upon  which  it 
can  be  held  that  the  defendant  is  not  entitled  to  hold  the  bonds 
which  it  received  in  good  faith  as  collateral  security  for  the  notes. 
The  bonds  were  negotiable  or  transferable  by  delivery,  and  the  de- 
fendant took  them  for  a  valuable  consideration,  and  without  fraud. 
The  plaintiffs  contend  that  they  were  not  taken  "in  the  usual 
course  of  business,"  because  the  contract  of  borrowing  by  Burgess 
was  illegal.  The  rule  is  often  stated  to  be  that,  in  order  to  hold 
such  property  against  the  true  owner,  the  transferee  must  have  taken 
it  for  a  vnlufible  consideration,  in  good  faith,  in  the  usual  course  of 
hnsiru'ss,  witliout  notice  of  any  want  of  title  on  the  part  of  the  party 
negotiating  it.     It  is  quite  as  often  stated  to  be  that  the  transferee 


SECT.   VI ]  BANK   AND   LOAN    CO.    V.    PETRIE  947 

must  have  taken  it  hona  fide  and  for  value.  Both  have  the  same 
meaning,  and  the  defendant  is  within  either  statement  of  the  rule 
It  gave  value  for  the  bonds;  it  took  them  in  good  faith,  in  the  ordi- 
nary and  usual  course  of  a  transaction  of  loaning  money  and  taking 
collateral  security,  and  without  any  notice,  actual  or  constructive, 
that  Burgess  was  not  the  owner,  with  full  power  to  transfer  them. 
As  to  the  defendant,  the  loan  was  legal;  and  the  fact  that  Burgess 
was  violating  his  duty  in  borrowing  the  money  does  not  take  the 
transaction  of  pledging  the  bonds  as  collateral  security  out  of  the 
usual  course  of  business,  or  tend  to  excite  any  suspicion  in  the 
defendant  that  the  bonds  were  not  his  property. 

We  do  not  consider  the  fact  of  any  consequence  that  the  loans  to 
Burgess  were  made  in  violation  of  the  rule  of  the  directors.  This 
could  not  have  more  effect  than  a  violation  of  the  statute.  Such  a 
rule  is  a  private  regulation  of  the  directors,  and  its  violation  or 
evasion  could  not  affect  the  validity  of  the  loans. 

Judgment  for  the  defendants 


NATIONAL  BANK  AND  LOAN  COMPANY  v.  PETRIE 

United  States  Supreme  Court^  February  24r-March  9,  1903 

[Reported  in  189  United  States,  423] 

Holmes^  J.  This  is  an  action  to  recover  money  paid  to  the  plain- 
tiff in  error  for  certain  bonds.  One  defence  set  up  in  the  answer 
was  that  the  bank  was  a  national  bank,  and  that  the  sale  of  the 
bonds  was  without  the  authority  of  the  bank,  and  was  illeglal 
and  void.  Judgment  went  against  the  bardi;  it  was  affirmed  by 
the  appellate  division  of  the  Supreme  Court,  46  App.  Div.  634,  and 
by  the  Court  of  Appeals,  167  N.  Y.  589,  and  the  case  now  comes 
here  by  writ  of  error.  The  ground  of  the  action  is  that  the  sale 
was  induced  by  false  representations  of  the  president  of  the  bank. 
We  do  not  state  these  particularly,  because  the  findings  and  rulings 
of  the  State  court  with  regard  to  them  are  not  open.  We  have  to 
deal  with  no  question  except  the  defence  attempted  under  the  United 
States  statute,  and  therefore  need  not  inquire  whether  they  contained 
a  stronger  infusion  of  fraud  than  is  allowed  to  vendors  in  the  way 
of  praising  their  wares. 

As  we  are  of  opinion  that  the  defendant  in  error  is  entitled  to 
keep  his  judgment,  it  does  not  matter  so  much  as  otherwise  it  would 
whether  the  result  is  reached  by  a  dismissal  of  the  writ,  on  the  in- 
timation of  Walworth  v.  Kneeland,  15  How.  348,  353;  see  Conde  v. 

*  Ohio  Life  Ins.  &  Trust  Co.  v.  Merchants'  Ins.  &  Trust  Co.,  11  Humph.  1,  ace. 
See  further,  3  Williston,   Contracts,    §  1632. 

In  this  connection  may  well  be  considered  many  decisions  in  regard  to  contracts  of 
foreign  corporations  forbidden  by  law  to  enter  into  such  contracts.  Ibid.,  §  1771 
et  seq. 


948  BANK   AND   LOAN    CO.    V.    PETRIE  [CHAP.   VI 

York,  168  U.  S.  642,  649,  or  by  an  affirmance  of  the  judgment.  We 
shall  assume  that  the  defence  under  the  statute  was  such  a  claim  of 
immunity  as  to  entitle  the  plaintiff  in  error  to  come  here.  Logan 
County  ]^ational  Bank  v.  Townsend,  139  U.  S.  67,  72;  McCormick 
V.  Market  Bank,  165  U.  S.  538,  546.  On  that  assumption,  however, 
we  do  not  perceive  how  the  defence  is  made  out  on  the  record.  The 
complaint,  to  be  sure,  alleges  that  the  bank  was  acting  unlawfully 
in  selling  the  bond,  but  it  does  not  appear  that  Petrie  knew  the  fact, 
and  it  would  be  a  strong  thing  to  charge  him  with  notice  or  a  duty 
to  make  inquiries  as  to  how  the  bank  was  conducting  its  business, 
or  to  make  the  validity  of  the  sale  depend  upon  the  fact  alone, 
irrespective  of  the  purchaser's  knowledge.  See  Miners'  Ditch  Co.  v. 
Zellerbach,  37  Cal.  543,  578,  579;  N'ew  York  &  New  Haven  Rail- 
road V.  Schuyler,  34  N.  Y.  30,  73;  Madison  &  Indianapolis  Rail- 
road V.  Norwich  Saving  Society,  24  Ind.  457,  462.  The  sale  might 
have  been  lawful.  It  was  not  necessarily  wrong.  First  National  Bank 
of  Charlotte  v.  National  Exchange  Bank  of  Baltimore,  92  U.  S. 
122,  128.  However,  we  need  not  stop  at  this  preliminary  difficulty 
or  another  suggested  by  the  answer,  on  which  no  point  was  made. 
The  answer  alleges  that  the  sale  was  without  the  authority  or  con- 
sent of  the  bank,  and  was  not  within  the  course  of  its  regular  busi- 
ness, which  looks  a  good  deal  like  an  attempt  to  deny  that  there  ever 
was  an  effective  sale  and  yet  to  keep  the  price. 

The  declaration  goes  upon  a  recission  of  the  contract.  It  con- 
tains ambiguous  language,  but  the  allegations  of  tender  of  the 
bond  and  that  the  tender  still  is  kept  good  make  the  ground  suffi- 
ciently clear.  The  question  then  is,  leaving  on  one  side  the  aver- 
ment just  quoted  from  the  answer,  and  assuming  that  the  parties 
were  attempting  a  transaction  forbidden  by  the  law,  whether  the 
nature  of  the  attempt  prevents  one  of  them  from  withdrawing  from 
the  bargain  on  the  ground  of  preliminary  fraud.  If  the  withdrawal 
were  on  the  ground  of  repentance  alone  the  law  might,  or  might  not, 
leave  the  parties  where  it  found  them.  See  Central  Transporta- 
tion Co,  V.  Pullman's  Palace  Car  Co.,  139  U.  S.  24,  60,  61;  Pull- 
man's Palace  Car  Co.  v.  Central  Transportation  Co.,  171  U.  S.  138, 
150.  But  a  person  does  not  become  an  outlaw  and  lose  all  rights 
by  doing  an  illegal  act.  See  Connolly  v.  Union  Sewer  Pipe  Co., 
184  U.  S.  540.  The  right  not  to  be  led  by  fraud  to  change  one's 
situation  is  anterior  to  and  independent  of  the  contract.  The  fraud 
is  a  tort.  Its  usual  consequence  is  that  as  between  the  parties  the 
one  who  is  defrauded  has  a  right,  if  possible,  to  be  restored  to  his 
former  position.  That  right  is  not  taken  away  because  the  conse- 
quence of  its  exercise  will  be  the  undoing  of  a  forbidden  deed.  That 
is  a  consequence  to  which  the  law  can  have  no  objection,  and  the 
fraudulent  party,  who  otherwise  might  have  been  allowed  to  disclaim 
any  different  obligation  from  that  which  the  other  had  been  con- 
tent, has  lost  his  right  to  object  because  he  brought  about  the  other's 


SECT.    VI ]  KING    V.    KING  949 

consent  by  wrong.  See  Pullman's  Palace  Car  Co.  v.  Central  Trans- 
portation Co.,  171  U.  S.  138,  151.  It  is  true  that  the  fraud  was 
perpetrated  by  an  agent,  and  it  is  argued  that  he  did  not  represent 
the  bank  for  an  illegal  act.  But  unless  this  means  that  there  was  no 
sale,  as  the  answer  and  a  part  of  the  argument  seem  to  suggest,  in 
which  case,  of  course,  Petrie  must  have  his  money  back,  the  answer 
is  that  if  the  bank  relies  upon  the  sale  it  must  take  it  with  the 
burden  of  the  fraud.  It  must  adopt  the  whole  transaction  or  no 
part  of  it.  It  cannot  affirm  what  is  for  its  advantage  and  repudiate 
the  rest.  Cases  Avhere  the  action  is  on  the  illegal  contract  do  not 
apply.  Such  was  First  National  Bank  of  Allentown  v.  Hoch,  89 
Penn.  St.  324.  Here  the  attempt  is  to  recover  outside  of  it,  treating 
it  as  set  aside.  An  action  for  damages  caused  by  fraudulent  repre- 
sentations which  induced  a  contract,  affirms  the  contract  and  relies 
upon  it,  Whiteside  v.  Brawley,  152  Massachusetts,  133,  134,  and 
therefore  may  be  subject  to  the  same  defences  as  an  action  brought 
directly  upon  the  contract.  "Weckler  v.  First  ISTational  Bank  of 
Hagerstown,  42  Maryland,  581,  595,  597,  seems  to  have  been  an 
action  of  this  character  in  rsepect  of  a  sale  on  commission  by  the 
bank.  We  express  no  opinion  as  to  an  action  of  that  kind.  See 
Thompson  v.  Saint  Nicholas  National  Bank,  146  U.  S.  240,  251; 
Concord  First  National  Bank  v.  Hawkins,  174  U.  S.  364.  But  when 
a  right  is  claimed  to  repudiate  it,  the  party  who  denies  the  right 
is  the  one  who  relies  upon  the  contract,  and  that  party  must  take 
it  as  it  was  made.    The  record  discloses  no  error  re-examinable  here. 

Judgment  affirmed. 


KING  V.  KING,  Executor,  et  al. 

Ohio  Supreme  Court,  November  27,  1900 

[Reported  in  63  Ohio  State,  363] 

Error  to  the  Circuit  Court  of  Cuyahoga  County. 

The  plaintiff  in  error  was  the  plaintiff  below.  Her  action  was 
to  recover  for  personal  services  rendered  in  the  performance  of  a 
contract  made  with  James  Howland  in  1881,  whereby  she  agreed  to 
live  with  him  and  take  care  of  him  during  his  life.  He  was  a  man 
of  means,  well  advanced  in  years,  without  family,  living  on  Euclid 
Avenue  in  Cleveland,  and  much  of  the  time  in  ill  health.  The  plain- 
tiff was  a  daughter  of  his  niece.  She  performed  the  contract  on 
her  part,  the  service  extending  from  the  year  1881  to  1896,  when 
Howland  died.  The  contract,  as  stated  in  the  petition,  was  that 
"this  plaintiff  agreed  with  the  said  James  Howland  that  she  would 
refrain  from  marriage  while  he  should  live,  and  that  she  would  live 
with  him  and  take  care  of  him  while  he  lived;  and  he,  in  considera- 
tion thereof,  agreed  that  he  would  provide  for  her  amply  sufficient 


950  KING    V.    KING  [chap.    VI 

to  make  her  comfortable  and  well  off."  Howland  in  his  will  left 
to  plaintiff  a  legacy  of  five  hundred  dollars,  but,  save  small  amounts 
of  money  given  her  from  time  to  time,  did  not  perform  the  contract. 
A  recovery  was  had  in  the  common  pleas.  The  judgment  was  re- 
versed by  the  circuit  court  because  of  error  in  the  charge  in  in- 
structing the  jury  that  the  contract  was  a  legal  one,  and  if  proven 
to  have  been  made  as  alleged,  and  duly  performed  by  plaintiff,  there 
might  be  a  recovery.  To  reverse  this  judgment  of  reversal  this 
proceeding  is  prosecuted. 

John  F.  Clark  and  Geo.  L.  Phillips,  for  plaintiff  in  error. 

Smith  &  Blake  and  Marvin  &  Sharpe,  for  defendants  in  error. 

Spear,  J.  The  sole  ground  of  reversal  is  that  the  contract  is 
void,  because  against  public  policy,  being  in  restraint  of  marriage. 
Hence  there  could  be  no  recovery.  That  contracts  in  restraint  of 
marriage  are  void,  as  being  contrary  to  the  public  policy  of  the  law, 
is  conceded.  But  the  question  here  is  whether  the  contract  to  render 
service,  fully  performed  by  the  one  party,  so  rests  upon  the  promise 
not  to  marry,  or  is  so  tainted  by  that  part  of  the  agreement,  as  to 
be  incapable  of  enforcement.  The  consideration  moving  to  the  agree- 
ment on  the  part  of  Howland  to  make  ample  provision  for  his  niece 
was,  on  its  face,  twofold:  one,  the  promise  to  perform  the  service 
agreed  upon;  the  other,  not  to  marry  during  the  continuance  of 
such  service.  The  first  was  a  valid  promise  and  of  itself  sufficient 
to  support  the  promise  of  the  other  party;  the  second  was  a  void 
promise,  not  affording  any  consideration  whatever.  As  given  in 
text-books  and  numerous  decisions,  the  general  rule  is  that  if  one 
of  two  considerations  for  a  promise  be  merely  void,  the  other  will 
support  the  promise,  although  if  one  of  two  considerations  be  un- 
lawful, the  promise  of  the  other  party  is  void;  and  yet  this  rule  has 
many  exceptions,  as  will  be  shown  later  on.  That  is,  if  one  of  two 
considerations  is  void  merely  for  insufficiency,  and  not  for  illegality, 
the  other  will  support  the  contract.  Widoe  v.  Webb,  20  Ohio  St. 
435;  Mete,  on  Con.  246;  Chitty  on  Con.,  988;  1  Parsons  on  Con., 
456;  Comst.  on  Con.,  24;  Pikard  v.  Cottels,  Yelv.  56;  Bliss  v.  Negus, 
8  Mass.  51;  Carleton  v.  Woods,  28  N".  H.  290;  Woodruff  v.  Hinman, 
11  Vt.  592;  King  v.  Sears,  2  C.  M.  &  K.  48;  Erie  Eailway  Co.  v. 
U.  L.  &  E.  Co.,  35  N".  J.  L.  240 ;  Bradburne  v.  Bradburne,  Croke  El. 
149.  This  distinction  between  a  contract  merely  void  and  an  illegal 
contract  would  seem  to  be  an  important  one.  Courts,  as  a  general 
proposition,  are  open  for  the  enforcement  of  contracts,  not  for  their 
destruction.  So  that,  where  parties  have  deliberately  entered  into 
a  contract,  valuable  to  them,  and  one  has  received  the  full  advantage 
of  it,  thf  general  policy  of  the  laAV  is  to  exact  proper  performance 
by  him  who  has  thus  obtained  the  advantage,  and  'some  substantial 
defect  should  be  shown  before  a  court  will  refuse  enforcement;  a 
mere  technical  objection  should  not  prevail.  'N'ow  a  void  contract 
is  one  which  has  no  legal  force,  and  which,  for  that  reason,  cannot 


SECT.    VI ]  KING    V.    KING  951 

be  enforced;  an  unlawful  contract  is  one  to  do  an  act  which  the 
law  forbids,  or  to  omit  an  act  which  the  law  enjoins,  and  for  that 
reason  is  non-enforceable.  There  is  no  provision,  either  by  statute 
or  at  common  law,  which  enjoins  upon  any  particular  person  the 
duty  to  marry,  nor  can  any  one  be  punished  for  not  marrying.  To 
marry,  or  not  to  marry,  is  left  to  the  free  choice  of  all  who  are 
eligible  to  marriage.  Hence  to  omit  to  marry  is  not  illegal,  though 
the  promise  to  omit  is  one  which  the  law  will  not  enforce.  It  would 
appear  naturally  to  follow  that  the  only  result  of  making  such  a 
promise  would  simply  be  that  no  legal  right  could  be  founded  on 
the  promise  and  no  remedy  afforded  for  its  breach.  It  is  difficult 
to  see  any  good  reason  for  denouncing  such  contract  as  illegal  in  the 
sense  of  violating  any  law,  or  of  placing  parties  who  may  have 
entered  into  it  outside  the  pale  of  the  law. 

But,  aside  from  this,  in  the  present  case  the  promise  on  the  part 
of  the  woman  which  was  of  value  to  the  man  was  the  promise  to 
care  for  him.  The  promise  not  to  marry  was  a  mere  incident  to  the 
main  purpose,  entered  into  simply  because  it  was  supposed  that,  by 
remaining  single,  the  woman  could  the  better  perform  her  contract. 
It  was  immaterial  to  the  man  whether  she  married  or  not  so  long 
as  she  fulfilled  her  promise  as  to  care.  In  other  words,  the  promise 
to  remain  unmarried  did  not  enter  into  or  become  part  of  the  sub- 
stance of  the  general  agreement;  that  agreement  was  for  the  per- 
formance of  services.  If  the  performance  was  adequate,  and  the 
services  rendered  in  a  satisfactory  manner,  their  value  could  neither 
be  enhanced  nor  diminished  by  the  fact  that  they  had  been  rendered 
by  a  single  woman  rather  a  married  one;  so  that,  had  the  plaintiff 
married,  yet,  if  she  satisfactorily  performed  her  contract,  the  re- 
cipient of  the  services  would  lose  nothing  by  the  fact  of  marriage. 
As  matter  of  fact  she  did  not  marry,  whether  because  of  the  con- 
tract, or  for  reasons  wholly  apart  from  it,  is  not  material,  for  she 
was  under  no  obligation  to  marry  nor  to  refrain  from  so  doing. 
She  did  perform  the  service;  that  the  verdict  and  judgment  of  the 
common  pleas  settles  to  all  intents  and  purposes  for  the  present 
inquiry.  As  above  stated,  the  promise  not  to  marry,  although  void 
because  against  public  policy,  was  not  illegal  as  against  positive 
law,  and  it  is  not  easy  to  perceive  how  its  presence  in  the  contract, 
or  its  performance  by  her,  or  both  facts,  could  place  the  parties 
in  what  is  termed  in  pari  delicto,  i.  e.,  in  a  position  where  the  law 
should  adjudge  them  guilty  of  its  violation,  and  hence  refuse  relief 
for  that  reason  in  the  face  of  the  fact  that  the  claimant  had  fully 
performed.^    In  such  case  the  maxim  in  pari  delicto  melior  est  con- 

*  The  English  courts  formerly  adopted  a  similar  rule  concerning  contracts  in 
restraint  of  trade,  which  has  been  thus  summarised:  "Although  a  person  cannot 
bind  himself  to  an  unreasonable  restraint  of  trade,  yet  if  he  submits  to  the  restraint 
stipulated  for  as  the  consideration  for  a  promise  to  pay  an  annuity,  he  may  claim 
the  payment  whether  the  restraint  be  reasonable  or  unreasonable."  Leake  on  Con- 
tracts (4th  ed.)  516;  Bishop  v.  Kitchin,  38  L.  J.  Q.  B.  20.    The  same  ruling  was  made 


952  KING    V.    KING  [chap.    VI 

ditio  possidentis,  has,  in  reason,  no  application,  and  we  think  ought 
not  to  have  application  in  law. 

Courts  refuse  to  enforce  or  recognize  certain  classes  of  acts  be- 
cause against  public  policy  on  the  ground  that  they  have  a  mischiev- 
ous tendency,  and  are  thus  injurious  to  the  interests  of  the  State, 
apart  from  illegality  or  immorality.  A  contract  in  restraint  of 
marriage  is  of  this  nature.  But,  as  before  suggested,  it  does  not 
follow  that  all  contracts  which  may  have  an  element  of  insufficiency, 
and  may  be  void  as  to  one  feature,  are  incapable  of  enforcement, 
or  even  that  all  that  are  illegal  will  not  be  enforced.  Decisions  are 
abundant  in  support  of  the  proposition  that  even  where  the  acts  of 
the  parties  have  been  in  violation  of  positive  law  the  contract  may, 
under  some  circumstances,  be  enforced.  A  case  in  point  is  Lester  v. 
The  Bank,  33  Md.  558.  The  bank's  charter  forbade  a  director,  under 
penalty  of  fine  and  imprisonment,  to  borrow  money  from  the  bank. 
It  was  claimed  that  the  act  of  thus  lending  by  the  bank  was  null  and 
void;  that  no  rights  could  accrue  from  it,  and  hence  no  action  could 
be  had  by  either  party  based  upon  it.  The  Court  held,  however, 
that :  "Contracts  made  in  violation  of  statute,  are  not  necessarily 
incapable  of  enforcement  because  of  their  illegality.  Whether  the 
courts  will  enforce  them  or  not,  is  a  question  of  public  policy,  and 
they  will  be  enforced  when  it  may  be  adjudged  that  such  policy 
requires  their  enforcement."  Robinson,  J.,  in  the  opinion,  remarks 
that :  "Public  policy,  it  must  be  borne  in  mind,  lies  at  the  basis  of 
the  law  in  regard  to  illegal  contracts,  and  the  rule  is  adopted  not 
for  the  benefit  of  parties  but  of  the  public.  It  is  evident,  therefore, 
that  cases  may  arise,  even  under  contracts  of  this  character,  in  which 
the  public  interests  will  be  better  promoted  by  granting  than  by 
denying  relief,  and  in  such  the  general  rule  must  yield  to  this 
policy,"  and  cites  1  Story's  Eq.  Jur.,  sec.  298.  This  policy  of  the 
law  finds  expression  in  our  statutes  authorizing  the  recovery  back 
of  money  lost  at  gaming,  and  the  decisions  under  them.  See  also, 
Burkholder's  Appeal,  105  Penn.  St.  31.  To  justify  refusal  of  re- 
lief to  the  plaintiff,  on  the  ground  referred  to,  the  court  ought  to 
be  ready  to  liold  that  the  public  mischiefs  would  be  greater  by  per- 
mitting a  party  to  recover  who  had  made  and  performed  a  contract 
otherwise  well  founded  but  embracing  an  agreement  not  to  marry 
while  in  its  performance,  than  by  permitting  the  other  party  to 
have  the  full  benefit  of  meritorious  service  for  nothing,  thus  re- 
pudiating his  agreements,  all  of  which  were  legal  and  based  upon 
at  least  one  consideration  entirely  adequate  and  wholly  lawful.  We 
are  not  prepared  to  make  such  a  holding,  but  are  clearly  of  opinion 
tliat  (If)  rniscliiefs  to  th(\  public  would  result  from  sustaining  a  right 


in  Rosonbaum  v.  United  States  Credit  System  Co.,  05  N.  J.  L.  255;  but  it  would  not 
bo  KonfTfillv  ff)Ilow<'fl  ill  tho  United  Rtatoa.  Oliver  v.  Cilmore,  52  Fed.  Rep.  562; 
niHhor>  ".  Painicr,  140  MiiHs.  40^>;  Cluncey  v.  The  Onondawi  Salt  Co.,  02  Barb.  395; 
and  probably  is  no  longer  law  in  England,  Evans  v.  Heathcote,  [1918]  T.  K.  B.  418, 


SECT.    VI  ]  FOX    V.   ROGERS  953 

to  recover  in  a  case  like  the  present  comparable  to  those  which  would 
follow  a  contrary  holding,  one  which  would  encourage  the  violation 
of  contracts  and  the  repudiation  of  just  obligations  after  full  value 
had  been  received. 

Other  phases  of  the  case  are  argued  by  defendants  in  error.  The 
printed  record  presented  embraces  only  the  question  here  treated. 
It  is  not  the  duty  of  the  court  to  hunt  through  portions  of  the  record 
not  printed  in  the  quest  of  other  reasons  why  the  judgment  of  the 
common  pleas  should  have  been  reversed,  and  we  decline  to  do  so. 
The  judgment  of  the  circuit  will  he  reversed  and  that  of  the  common 
pleas  affirmed.^ 


CHAELES  A  FOX  v.  GEORGE  E.  ROGERS 

SuPBEME  Judicial  Court  of  Massachusetts,  March  14r- 
July  2,  1898 

[Reported  in  171  Massachusetts,  546] 

Holmes,  J.  This  is  an  action  of  contract  to  recover  for  laying 
a  drain  from  two  houses  of  the  defendant  to  a  private  sewer  in 
the  street  in  front,  for  the  purpose  of  draining  the  surface  water  of 
the  cellars,  and  for  no  other  purpose.  The  judge  before  whom  the 
case  was  tried  found  for  the  plaintiff,  and  it  is  conceded  that  the 
finding  was  warranted  unless  "the  maintenace  of  the  present  action 
is  contrary  to  the  policy  of  the  law."  The  principal  matter  relied 
on  is  that  the  pipes  within  and  outside  the  building  were  Akron 
earthenware  pipes,  and  not  cast-iron,  as  required  for  drain  pipes 
by  St.  1892,  c.  412,  §  125  (see  also  §  135,  and  Rev.  Ord.  Boston, 
1892,  c.  42,  §  18) ;  and  that  even  if,  as  the  plaintiff  understood  and 
still  contends,  these  provisions  do  not  refer  to  pipes  intended  only 
for  surface  drainage,  yet  the  plaintiff  took  up  and  relaid  a  part 
of  a  private  drain  outside  with  which  his  pipes  connected,  which  was 
a  drain  for  sewage,  and  was  within  the  statute  and  ordinance.  It 
also  is  argued,  with  less  confidence,  we  take  it,  that  the  plaintiff's 
work,  or  part  of  it,  was  plumbing  within  the  meaning  of  the  ordi- 
nances, and  required  a  permit  under  said  c.  42,  §  16,  and  also  could 
not  be  done  lawfully  except  by  a  registered  plumber.  Ibid.,  and  see 
c.  17.  And  finally  it  is  objected  that  whereas  the  plaintiff  only  had 
a  permit  to  occupy  a  portion  of  the  street,  not  exceeding  twenty-five 
feet  in  length  in  front  of  the  buildings,  he  did  in  fact  open  a  differ- 
ent part  of  the  street  for  fifty-eight  feet,  in  breach  of  Rev.  Ord. 
c.  43,  §  57. 

We  shall  not  trouble  ourselves  about  the  construction  of  the  statute 
and  ordinances,  because  it  does  not  follow  that  the  plaintiff  can- 
not recover  if  he  broke  them.  There  is  no  policy  of  the  law  against 
the  plaintiff's  recovery  unless  his  contract  was  illegal,  and  a  con- 
1  Fletcher  v.  Osbom,  282  111.  143,  ace. 


954  FOX    V.   ROGERS  [CHAP.   VI 

tract  is  not  necessarily  illegal  because  it  is  carried  out  in  an  illegal 
way.  Barry  v.  Capen,  151  Mass.  99,  100.  The  judge  was  warranted 
in  finding  that  the  defendant  employed  the  plaintiif  to  build  a  suit- 
able drain,  and  left  all  details  to  the  plaintiff's  discretion,  simply 
promising  to  pay  for  the  job  when  finished  in  consideration  of  the 
plaintiff's  promise  to  do  it,  —  a  contract  lawful  on  both  sides.  It 
is  true  that  the  plaintiff  declares  on  an  account  annexed,  setting 
out  every  item  of  labor  and  materials,  but  no  question  was  raised 
on  the  pleadings;  and  even  taking  the  case  according  to  the  plead- 
ings, many  of  the  items  would  be  good.  If  the  contract  was  what 
we  have  supposed,  it  was  good  as  a  whole.  The  supposed  illegal  acts 
entered  neither  into  the  promise  nor  into  the  consideration.  It 
was  not  necessary  to  prove  them  even  for  the  purpose  of  showing 
that  the  drain  was  finished,  and  that  the  time  for  payment  had 
arrived.  Probably  the  plaintiff's  acting  in  excess  of  his  license 
would  be  immaterial  after  the  work  was  done.  It  may  be  that  if 
the  pipes  are  not  of  the  material  required  by  law,  they  are  liable 
to  be  taken  up,  or  that  in  some  way  the  fact  might  affect  the  plain- 
tiff's recovery,  if  that  question  were  before  us.  But  the  only  question 
is  the  fundamental  one  whether  we  can  say,  as  matter  of  law,  that 
the  contract  was  illegal,  and  that  the  plaintiff  can  recover  nothing. 
That,  in  the  opinion  of  a  majority  of  the  court,  we  cannot  say.  It 
is  perfectly  plain  that  parties  did  not  intend  to  contract  for  any- 
thing illegal,  and  even  if  the  contract  had  contemplated  the  specific 
items  charged  for,  it  may  be  that  it  could  have  been  sustained,  but 
on  that  we  express  no  opinion.  Favor  v.  Philbrick,  7  IST.  H.  326, 
337  et  seq.    Waugh  v.  Morris,  L.  R.  8  Q.  B.  202. 

Exceptions   overruled. 


CHAPTER  VII 

DISCHARGE     OF    CONTRACTS 


SECTION"  I 
PAROL    AGREEMENT    TO    DISCHARGE 


CONIERS  AND  HOLLAND  CASE 

In  the   Kinc/s   Bench,   Trinity   Term,   1588 

[Reported  in  2  Leonard,  214] 

In  an  action  upon  the  case  upon  assumpsit  by  Coniers  against 
Holland  the  defendant  pleaded,  that  after  the  promise,  that  the  plain- 
tiff had  discharged  him  of  it.  And  by  Wray,  Chief  Justice,  It  is 
a  good  plea,  and  so  it  hath  been  often  ruled,  and  it  was  late  the 
case  of  the  Lord  Chief  Baron,  against  whom  in  such  an  action,  such 
a  plea  was  pleaded,  and  he  moved  us  to  declare  our  opinions  in 
Serjeant's  Inn;  and  there  by  the  greater  opinion  it  was  holden  to  be 
a  good  plea;  for  which  cause  the  Court  said  to  Buckley  who  moved 
the  case  that  the  plea  is  good,  and  judgment  was  entered  accord- 
ingly.^ 


FLOWER'S    CASE 

About  1597 

[Reported  in  Noy,  67] 

A.  borrowed  £100  of  F.  and  at  the  day  brought  it  in  a  bag  and 
cast  it  upon  the  table  before  F.  and  F.  said  to  A.,  being  his  nephew, 
"I  will  not  have  it,  take  it  you  and  carry  it  home  again  with  you." 
And  by  the  court  that  is  a  good  gift  by  parol,  being  cast  upon  the 
table.  For  then  it  was  in  the  possession  of  F.  and  A.  might  well 
wage  his  law.  By  the  Court,  otherwise  it  had  been,  if  A  had  only 
offered  it  to  F.  for  then  it  was  chose  in  action  only,  and  could  not 
be  given  without  a  writing. 

*  Equitable  grounds  for  rescission,  such  as  fraud  and  mistake,  are  not  within  the 
scope  of  this  book.    Nor  are  questions  of  quasi-contractual  recovery. 

955 


956  EDWARDS    V.    WEEKS  [CHAP.   VII 


LANGDEN"  V.   STOKES 

In  the  King's  Bench^  Michaelmas  Teem,   1634 

[Reported  in  CroTce  Charles,  383] 

Assumpsit.  Whereas  the  defendant  on  the  2d  April,  9  Car.  I. 
(for  such  a  valuable  consideration),  assumed  to  go  such  a  voyage  in 
such  a  ship,  before  the  August  following,  and  alleges  a  breach  in  the 
non-performance. 

The  defendant  pleaded  that  before  any  breach  the  plaintiff,  on 
the  fourth  of  April  at  such  a  place,  exoneravit  eum  of  the  said 
promise.     Hereupon  the  plaintiff  demurred. 

Rolle,  for  the  plaintiff,  now  alleged  that  this  pleading  a  discharge 
without  showing  how,  was  not  good;  and  he  cited  divers  books,  22 
Edw.  IV.  pi.  40,  that  indemnem  conservet,  or  exonerahit,  is  no  plea. 

Maynard,  for  the  defendant,  argued  to  the  contrary,  that  foras- 
much as  this  was  an  action  grounded  on  a  promise  by  words,  it 
may  be  discharged  by  words  before  the  breach  thereof;  and  there 
fore  exoneravit  generally  is  a  good  plea;  and  he  cited  for  this  The 
Year-Book,  3  Hen.  VL,  pi.  36. 

All  the  court  was  of  this  opinion  (ahsente  Berkley).  Richard- 
son, Chief  Justice,  said  that  he  knew  it  had  been  so  resolved  divers 
times;  and  the  rule  was  remembered,  eodem  modo  quo  oritur,  eodem 
modo  dissolvitur.  Wherefore  it  was  adjudged  for  the  defendant, 
quod  querens  nihil  capiat  per  hillam. 


EDWAEDS  V.  WEEKS 
In  the  Common  Pleas,  Trinity  Term,   1677 
[Reported  in  2  Modern  Reports,  259.^] 

Assumpsit.  The  plaintiff  declared  that  the  defendant,  in  con- 
sideration that  the  plaintiff  at  his  request  had  exchanged  horses 
with  him,  promised  to  pay  him  five  pounds;  and  he  alleged  a  breach 
in  the  non-performance.  The  defendant  pleads  that  the  plaintiff, 
before  any  action  brought,  discharged  him  of  his  promise. 

And  upon  a  demurrer  the  question  was,  whether  after  a  breach 
of  a  promise  a  parol  discharge  could  be  good.  The  case  of  Langden 
V.  Stokes,  Cro.  Car.  383,  ]  Sid.  293,  was  an  authority  that  such  a 
discharge  had  been  good  before  the  breach,  namely :  The  defendant 
promised  to  go  a  voyage;  the  broach  was  alleged  in  non-performance; 
and  the  defendant  pleaded  that  before  any  breach  the  plaintiff 
exoneravit  ev.m;  and  upon  demurrer  it  was  held  good  before  the 
breach.  But  here  was  no  time  agreed  for  the  payment  of  this  five 
*  Also  reported  in  1  Mod.  262. 


SECT.    l]  EDWARDS    V.    WEEKS  957 

pounds,  and  therefore  it  was  due  immediately  upon  request;  and  not 
being  paid,  the  promise  is  broken,  and  the  parol  discharge  cannot 
be  pleaded. 

And  of  that  opinion  was  all  the  Court,  and  judgment  for  the 
plaintiff,  nisi,  &c. 

Quaere,  If  he  had  pleaded  such  a  discharge  before  any  request  of 
payment,  whether  it  had  been  good  ?  ^ 

^  In  King  v.  Gillett,  7  M.  &  W.  55,  the  plea  to  an  action  for  breach  of  promise  of 
marriage  was  that  before  any  breach  the  plaintiff  "absolved,  exonerated,  and  dis- 
charged the  defendant."  On  special  demurrer  it  was  urged  that  the  plea  should  have 
alleged  rescission  by  mutual  assent.  The  plea  was  held  good,  however,  on  the  strength 
of  precedents  in  Rast.  Entries,  685;  Brown's  Entries,  67  (folio);  Hern's  Pleader,  31, 
and  early  decisions.  The  court,  however,  said  the  question  was  merely  as  to  a  matter 
of  form,  for  though  the  plea  was  good  "yet  we  think  the  defendant  will  not  be  able  to 
succeed  upon  it  at  nisi  prius,  in  case  issue  be  taken  upon  it,  unless  he  proves  a  propo- 
sition to  exonerate  on  the  part  of  the  plaintiff,  acceded  to  by  himself,  and  this  in  effect 
will  be  rescinding  of  the  contract  previously   made." 

Dobson  V.  Espie,  2  H.  &  N.  79,  was  an  action  for  the  breach  of  an  obligation  to  pay 
a  deposit  to  an  auctioneer  as  security  for  future  performance  of  a  contract  for  the  sale 
of  property;  the  defendant  pleaded  leave  and  license.  On  demurrer  the  court  held  the 
plea  bad  as  not  equivalent  to  "exonerated  and  discharged,"  but  the  implication  is 
clear  that  a  plea  in  the  latter  form  would  have  been  held  good,  and  one  member  of  the 
court,  Bramwell,  B.,  not  only  said  so,  but  expressed  the  opinion  that  even  in  its  actual 
form  the  plea  was  good.  On  the  authority  of  this  decision  it  is  stated  in  1  Smith's 
Leading  Cases  (11th  Eng.  ed.)  350,  (9th  Am.  ed.)  614,  "A  person  bound  by  a  contract 
not  under  seal  may,  before  breach,  be  exonerated  from  its  performance  by  word  of 
mouth,  without  any  value  or  consideration."  So  Byles  on  Bills  (16th  ed.)  311.  See 
also  May  v.  King,  12  Mod.  537,  538;  Martin  v.  Mowlin,  2  Burr.  969,  979;  Edwards 
V.  Walters,  [1896]  2  Ch.  157,  168. 

In  Foster  v.  Dawber,  6  Ex.  839,  851,  Parke,  B.  said,  however,  "It  is  competent  for 
both  parties  to  an  executory  contract,  by  mutual  agreement,  without  any  satisfaction, 
to  discharge  the  obligation  of  that  contract.  But  an  executed  contract  cannot  be  dis- 
charged except  by  release  under  seal,  or  by  performance  of  the  obligation,  as  by  pay- 
ment, where  the  obligation  is  to  be  performed  by  payment."  See  also  Anson  on 
Contracts  (10th  ed.)  291.  In  this  coutnrj'  it  is  not  probable  that  a  contract  right  can 
be  discharged  before  breach  by  parol  without  consideration.  CoQyer  v.  Moulton,  9 
R.  I.  90;  Clark  on  Contracts,  608;  Harriman  on  Contracts  (2d  ed.)  §  505;  24  Am.  & 
Eng.  Encyc.  of  Law  (2d  ed.)  287.  See  also  Purdy  v.  Rome,  &c.  R.  R.  Co.,  125  N.  Y. 
209,  and  cases  infra  in  regard  to  the  discharge  of  obhgations  on  negotiable  paper.  But 
see  Robinson  v.  McFaiil,  19  Mo.  549;  Seymour  v.  Mintum,  17  Johns.  169,  175;  Kelly 
V.  Bliss,  54  Wis.  187,  191. 

In  Foster  v.  Dawber,  it  was  held,  in  accordance  with  some  early  authorities,  that 
the  obligation  of  a  party  to  negotiable  paper  might  be  discharged  by  parol  without 
consideration,  even  after  breach.  (Compare  White  v.  Bluett,  23  L.  J.  Ex.  36.)  This 
doctrine  was  never  adopted  by  American  courts.  Maness  v.  Henry,  96  Ala.  454; 
Scharf  v.  Moore,  102  Ala.  468;  Upper  San  Joaquin  Co.  v.  Roach,  78  Cal.  552;  Rogers 
V.  KimbaU,  121  Cal.  247;  Heckman  v.  Manning,  4  Col.  543;  Adamson  v.  Lamb,  3 
Blackf.  446;  Denman  v.  McMahin,  37  Ind.  241;  Carter  v.  Zenblin.  68  Ind.  436;  Han- 
Ion  V.  Dohertv.  109  Ind.  39;  Franklin  Bank  v.  Severin,  124  Ind.  317;  Shaw  v.  Pratt, 
22  Pick.  305;  Smith  v.  Bartholomew,  1  Met.  276;  Bragg  v.  Danielson,  141  Mass.  195, 
Hale  V.  Dressen,  76  Minn.  183;  Henderson  v.  Henderson,  21  Mo.  379;  Irwin  v.  John- 
son, 36  N.  J.  Eq.  347;  Crawford  v.  Millspaugh,  13  Johns.  87;  Seymour  v.  Minturn, 
17  Johns.  169;  Campbell's  Est.  7  Pa.  St.  100,  101;  McGuire  v.  Adams,  8  Pa.  St.  286; 
Kidder  v.  Kidder,  33  Pa.  268;  Horner's  App.  2  Pennjijacker,  289;  Corbett  v.  Lucas 
4  McCord  L.  323.    See,  however,  Nolan  v.  Bank  of  New  York,  67  Barb.  24,  34. 

The  draftsman  of  the  American  Negotiable  Instruments  Law  copied  the  provision 
of  the  Endish  BUls  of  Exchange  Act,  45  &  46  Vict.  c.  16,  §  62  (see  also  Edwards  v. 
Walters  [1896]  2  Ch.  157),  which  enacted  that  a  renunciation  in  writing  either  before 
or  after  the  maturity  of  negotiable  paper  is  effectual  without  consideration.  Craw- 
ford, Negotiable  Inst.  Law,  §  203.  The  general  enactment  of  this  statute  now  makes 
the  previous  American  decisions  no  longer  applicable. 


958  TAYLOR    V.    HILARY  [CHAP.    VII 


TAYLOE  V.  HILAKY 

In  the  Exchequer,  Hilary  Term,  1835 
[Reported  in  1  Crompton,  Meeson  &  Roscoe,  741] 

Assumpsit.  The  declaration  stated  that  in  consideration  that  the 
plaintiff,  at  the  special  instance  and  request  of  the  defendant,  would 
allow  one  Henry  Holt  to  have  goods  as  he  might  want  them,  not 
exceeding  in  the  whole  £200,  the  defendant  undertook  and  promised 
the  plaintiff  to  guarantee  the  payment  of  such  goods;  and  the  plain- 
tiff averred  that  he,  confiding,  (Src,  did  afterwards,  to  wit,  &c.,  sell 
and  deliver  to  the  said  Henry  Holt  certain  goods  of  great  value, 
not  exceeding  in  the  whole  £200;  to  wit,  of  the  value  of  £190,  as  he 
the  said  Henry  Holt  did  want  them;  of  which  the  defendant  after- 
wards, to  wit,  on,  &c.,  had  notice.  Breach,  that  Henry  Holt  had  not 
paid  for  the  said  goods,  or  any  part  thereof,  nor  had  the  defendant, 
although  often  requested,  paid  for  the  same,  or  any  part  thereof. 
Plea,  that  after  the  making  of  the  promise  and  undertaking  in  that 
count  mentioned,  and  before  any  breach  thereof,  to  wit,  on  the  day 
and  year  aforesaid,  it  was,  at  the  special  instance  and  request  of  the 
plaintiff,  agreed  by  and  between  the  plaintiff  and  defendant  that 
the  plaintiff  should  supply  to  the  said  Henry  Holt  £200  worth  of 
goods  as  he  should  want  them,  and  that  such  goods  should  be  paid 
for  at  the  end  of  three  months,  by  a  joint  bill  at  four  months  accepted 
by  the  defendant;  which  agreement  of  the  defendant  he  the  plaintiff, 
before  any  breach  of  the  promise  and  undertaking  in  the  said  count 
mentioned  accepted,  in  full  discharge  of  that  promise  and  under- 
taking, and  thereby  then  wholly  released  and  discharged  the  de- 
fendant from  the  further  performances  of  that  promise  and  under- 
taking.    Verification. 

To  this  plea  the  plaintiff  demurred;  and  alleged,  as  cause  of  de- 
murrer, that  there  was  no  material  difference  between  the  agree- 
ment set  out  in  the  count  and  that  set  out  in  the  plea,  and  that  the 


A  contract  under  seal,  of  course,  cannot  be  discharged  by  parol  without  considera- 
tion. Irwin  V.  Johnson,  36  N.  J.  Eq.  347;  Traphagen  v.  Voorhees,  44  N.  J.  Eq.  21; 
Tulane  v,  Clifton,  47  N.  J.  Eq.  351;  Jackson  v.  Stackhouse,  1  Cow.  122;  Albert's  Ex. 
V.  Ziegler's  Ex.,  29  Pa.  50;  Horner's  App.  2  Pennypacker,  289;  Ewing  v.  Ewing,  2 
Leigh,  .337. 

After  breach,  a  simple  contract  obligation  cannot  be  discharged  b.v  parol  without 
consideration.  Edwards  v.  Walters,  [1S96]  2  Ch.  157,  168;  Westmoreland  ?;.  Porter, 
76  Ala.  452;  Florence  Cotton  Co.  v.  Field,  104  Ala.  471;  Mobile  &c.  R.  R.  Co.  v.  Owen, 
121  Ala.  505;  Swan  v.  Benson,  31  Ark.  72S;  Mendell  ?>.  Davies,  46  Ark.  420;  Met- 
calf  V.  Kent.  104  Iowa,  487;  Shaw  v.  Pratt,  22  Pick.  .305,  308;  Averill  v.  Wood,  78 
Mich.  .342,  354;  Young  v.  Power,  41  Miss.  197;  Northwestern  Nat.  Bank  v.  Great 
Falls'  Opera  House,  23  Mont.  1;  Landon  v.  Hutton,  50  N.  J.  Eq.  500;  Wliitehill  v. 
Wilson,  3  Pen.  <fe  Watts,  405,  413.     But  so(>  ronlra,  Gnnm  v.  Langdon,  28  Mich.  221. 

In  a  ffw  states,  by  statut(i  or  f)therwis(',  a  written  acknowledgment  by  a  creditor  of 
receipt  in  full  pavincut  will  <iiHeliargc  the  debtor,  though  given  without  consideration. 
StcRall  V.  Wright,  143  Ala.  204;  Uobson  v.  McDonald,  92  Cal.  33;  Drefus  v.  Roberts, 
75  Ark.  364;  Johnson  v.  Cooke,  85  Conn.  679;   Green  v.  Langdon,  28  Mich.  221. 


SECT.    l]  WEST   V.    BLAKEWAY  959 

only  difference  applied  to  the  time  of  credit  to  be  given;  and  that 
it  did  not  appear  by  the  said  plea,  but  that  the  agreement  therein 
mentioned  had  been  fully  carried  into  effect  by  the  plaintiff,  and 
the  time  of  credit  expired. 

Barstotu,  in  support  of  the  demurrer. 

Per  Curiam.  Before  the  breach  of  the  first  agreement  a  new 
agreement  is  entered  into,  varying  the  contract  in  an  essential  part, 
the  time  of  payment.  The  latter,  then,  is  a  substituted  contract, 
and  is  an  answer  to  an  action  upon  the  former.  The  plea  is  not  a 
plea  of  accord  and  satisfaction,  and  does  not,  therefore,  require  an 
averment  of  performance. 


FREDERICK  THOMAS  WEST,  Surviving  Executor  of  John 
West,  v.  JOHN^  BLAKEWAY 

In  the  Common  Pleas,  April  29,  May  4,  1841 

{Reported  in  2  Manning  &  Granger,  729] 

TiNDAL,  C.  J.^  This  is  an  action  of  covenant  brought  by  the 
surviving  executor  of  the  lessor,  who  was  himself  a  termor,  against 
the  lessee,  upon  a  covenant  in  the  lease  to  yield  up  the  demised 
premises  at  expiration  of  the  term,  together  with  all  erections  and 
improvements  which,  during  the  term  thereby  granted,  should  be 
erected,  made,  or  set  up,  in  or  upon  the  said  premises  or  any  part 
thereof.  The  defendant,  in  his  third  plea,  states  that  the  interest 
in  the  lease  vested  in  one  Hicks,  as  assignee  of  the  term,  and  that 
it  was  agreed  between  the  lesser  and  Hicks  that  if  Hicks  would  erect, 
make,  and  set  up  a  certain  erection  or  improvement,  to  wit,  a  green- 
house, in  and  upon  the  demised  premises,  during  the  continuance 
of  the  last-mentioned  term.  Hicks  should  be  at  liberty  to  pull  down 
and  remove  such  greenhouse  at  the  expiration  of  that  term,  pro- 
vided no  injury  was  done  to  the  demised  premises  in  and  about 
the  removal  of  the  greenhouse.  It  being  found  by  the  jury  that  the 
plea  is  true  in  fact,  the  question  now  arises  whether  it  is  good  in 
point  of  law;  and  it  appears  to  me,  upon  the  best  consideration  I 
can  bring  to  that  question,  that  the  plea  contains  no  legal  answer 
to  the  declaration.  If  the  lessor  had  occasioned  the  breach,  that 
would  have  been  the  answer  to  the  complaint  founded  on  that  breach, 
not  on  the  ground  of  an  agreement,  but  because  the  act  complained 
of  would  have  been  the  act  of  the  lessor  himself,  and  not,  as  charged, 
the  act  of  the  lessee.  The  lessee  might  have  said :  This  was  your 
own  act,  and  therefore  you  are  not  damnified.     But  this  plea  ap- 

^  BoaiNQTTET,  CoLTMAN,  and  Erskine,  JJ.,  delivered  concurring  opinions.  A 
portion  of  the  case  holding  the  greenhouse  in  question  an  "erection  or  improvement" 
within  the  meaning  of  the  lease  is  omitted. 


960  WEST    V.    BLAKEWAY  [CHAP,    VII 

pears  to  me  to  set  up  that  which  is  merely  a  parol  license.  Now  it 
is  a  well  known  rule  of  law  that  unumquodque  ligamen  dissolvitur 
eodem  ligamine  quo  ligatur.  This  is  so  well  established  that  it 
appears  to  me  unnecessary  to  refer  to  cases.  I  will  mention  only 
Eogers  v.  Payne,  2  Wils.  376,  which  was  an  action  of  covenant  for 
the  non-payment  of  money;  the  defendant  pleaded  a  parol  discharge 
in  satisfaction  of  all  demands.  It  was  held,  upon  demurrer,  that 
the  covenant  could  not  be  discharged  without  a  deed;  and  Blake's 
case,  6  Co.  Eep.  43  b,  was  cited.  Now  if  an  action  had  been  brought 
against  the  assignee,  to  have  set  up  this  defence  would  have  been  in 
direct  violation  of  the  rule  to  which  I  have  adverted.  How  can  it 
be  an  answer  for  the  lessee  if  not  for  the  assignee?  Cases  of  condi- 
tions which  have  been  waived,  or  the  performance  of  which  has 
become  impossible,  do  not,  I  think,  apply.  No  doubt  in  the  case  of 
a  bond,  if  the  breach  be  occasioned  by  the  obligee,  or  if  the  per- 
formance of  the  condition  be  rendered  impossible  by  his  act,  no  for- 
feiture is  incurred.  Though  the  bond,  however,  is  under  seal,  the 
condition  is  of  a  thing  resting  on  evidence  only.  It  may  be  com- 
pared to  a  matter  in  pais.  But  in  the  case  of  a  covenant  the  whole 
matter  is  under  the  seal  of  the  party;  and  the  contract  into  which 
he  has  entered  can  be  discharged  only  by  an  instrument  of  the  same 
nature  as  that  by  which  the  contract  was  created.  If  it  could  be 
maintained,  as  was  contended  on  the  part  of  the  defendant,  that  the 
third  plea  disclosed  an  act  which  the  lessor  had  done,  or  which 
he  had  compelled  to  be  done,  I  think  it  would  have  been  good.  It 
would  have  been  like  the  well-known  plea  of  "damnified  by  his  own 
default."  But  that  does  not  appear  to  me  to  be  the  true  construction 
of  this  plea;  and  I  think  that  the  rule  for  entering  up  judgment 
non  obstante  veridicto  must  be  made  absolute.^ 

'  In  Yockey  v.  Marion,  269  Illinois.  342,  348  the  court  said: 
"As  a  matter  of  law,  the  contract,  being  under  seal  and  not  being  cancelled,  des- 
stroyed  or  surrendered,  remained  in  force.  A  sealed  executory  contract  carmot  be 
altered,  modified  or  changed  by  paril  agreement,  although  it  may  be  sturendered 
and  canceled  by  an  executed  parol  agreement.  (Alschuler  v.  Schiff,  164  111.  298; 
Brcttmann  v.  Fischer,  216  id.  142.)  An  executed  parol  agreement  may  be  shown  to 
defeat  recovery  upon  an  instrument  imd'^r  seal,  and  although  the  parol  agreement 
may  have  been  without  consideration  it  may  become  a  basis  for  an  equitable  estoppel, 
if  by  means  of  it  one  of  the  parties  has  l)een  led  into  a  line  of  conduct  prejudicial  to 
his  interests  if  the  contract  should  bo  enforced.  The  rule  in  equity  also  is  that  a 
party  asking  the  court  to  enforce  the  specific  performance  of  a  contract  will  fail  in 
his  suit  if  a  rcscision  or  abandonment  may  be  deduced  from  circumstances  or  a 
course  of  conduct.     (Lasher  v.  Loefler,  190  111.  150)" 


SECT.    l]  WILLIAMS    V.    STERN  961 


WILLIAMS    V.    STERN. 

In  the  Queen's  Bench  Division,  Court  of  Appeal, 
December  19,  1879 

[Reported  in  5  Queens  Bench  Division,  409] 

Action  in  the  Court  of  Passage  at  Liverpool  to  recover  damages 
for  the  seizure  and  sale  of  the  plaintiff's  goods. 

By  an  indenture,  being  a  bill  of  sale,  and  dated  the  9th  of  July, 
1878,  and  made  between  the  plaintiff  (thereinafter  called  the  mort- 
gagor) of  the  one  part,  and  the  defendant  (thereinafter  called  the 
mortgagee)  of  the  other  part,  after  reciting  that  the  mortgagor  had 
applied  to  the  mortgagee  for  an  advance  of  £30  and  had  agreed  to 
pay  the  sum  of  £12  as  a  consideration  for  the  same,  and  that  the 
mortgagee  had  consented  to  make  the  advance  upon  having  those 
sums  secured  in  manner  thereinafter  appearing,  it  was  witnessed 
that  in  consideration  of  £30  by  the  mortgagee  paid  to  the  mort- 
gagor on  the  execution  of  the  indenture,  the  mortgagor  assigned  to 
the  mortgagee  all  the  stock-in-trade,  shop-fixtures,  furniture,  goods 
chattels,  and  effects  of  the  mortgagor  then  being  in  the  shop,  dwell- 
ing-houses, and  premises  of  the  mortgagor,  situate  in  Liverpool,  to 
hold  the  said  property  unto  the  mortgagee  to  and  for  his  own  use 
and  benefit,  subject  to  a  proviso  for  redemption  in  case  the  mort- 
gagor should  pay  to  the  mortgagee  the  sum  of  £42  by  twenty-five 
consecutive  weekly  payments  of  £1  5s.  each  on  every  Monday  be- 
fore noon,  the  first  payment  to  be  made  on  the  15th  day  of  July 
instant,  and  the  balance  of  £10  15s.  on  the  6th  day  of  January,  1879. 
The  indenture  contained  a  covenant  by  the  mortgagor  with  the 
mortgagee  for  the  repayment  of  £42,  and  then  contained  the  fol- 
lowing declaration:  "It  is  hereby  declared  and  agreed  that  notwith- 
standing the  aforesaid  proviso  for  redemption  it  shall  be  lawful  for 
the  mortgagee  at  any  time  after  the  execution  hereof  to  take  pos- 
session of  the  said  property  and  to  retain  such  possession  (either 
in  and  upon  the  said  shop,  dwelling-house,  and  premises,  or  in  any 
other  place  to  which  the  mortgagee  may  think  fit  to  remove  it) 
until  all  moneys  payable  under  these  presents,  together  with  all 
expenses  which  may  be  incurred  by  the  mortgagee  in  and  about  tak- 
ing possession,  removing,  and  retaining  possession  of  the  said 
property,  shall  be  fully  paid;  and,  further,  that  if  default  be  made 
by  the  mortgagor  in  payment  of  any  instalments  of  the  sum  of 
£42  ...  on  the  days  on  which  such  instalments  respectively  shall 
become  payable,  the  whole  amount  which  at  the  time  of  such  default 
shall  be  secured  by  these  presents  and  shall  be  remaining  unpaid 
shall  at  once  become  due  and  payable;  and  thereupon  it  shall  be  law- 
ful for  the  mortgagee  to  sell  the  said  property  by  public  or  private 
sale  and  receive  the  moneys  arising  therefrom,  and  retain  to  him- 
31 


962  WILLIAMS    V.    STERN  [CHAP.   VII 

self  thereout  all  moneys  remaining  due  on  the  security  of  these 
presents  and  all  expenses  which  he  may  have  incurred  in  taking  and 
holding  possession  and  removing  and  selling  the  said  property,  and 
all  costs  and  charges  which  he  may  have  incurred  in  defending  and 
maintaining  his  rights,  powers,  and  authorities  under  these  pres- 
ents; and  that  the  surplus  (if  any)  of  such  moneys  shall  be  paid 
to  the  mortgagor.  .  .  .  And  it  is  hereby  agreed  and  declared  that 
it  shall  be  lawful  for  the  mortgagee  and  his  agents  from  time  to 
time  during  the  continuance  of  this  security  to  enter  and  remain 
upon  the  said  shop,  dwelling-house,  and  premises,  or  any  other 
premises  upon  which  the  said  property  or  any  part  thereof  may  be, 
for  the  purpose  of  taking  and  holding  possession  of  the  said  property, 
or  of  there  selling  the  same  by  auction  or  of  removing  the  same,  or 
for  any  other  reasonable  purpose  in  connection  with  these  presents; 
and  in  case  the  mortgagee  or  his  agents  shall  be  unable  to  obtain 
admission  in  the  usual  manner,  it  shall  be  lawful  for  him  to  break 
open  the  outer  and  inner  doors  and  the  windows  in  order  to  obtain 
admission."  The  other  provisions  of  the  indenture  were  immaterial 
to  this  action.  The  plaintiff  paid  thirteen  weekly  instalments ;  but  on 
the  day  when  the  fourteenth  became  due,  he  had  to  attend  the 
Court  of  Passage  as  juryman;  he  called  upon  the  defendant  and 
asked  for  time ;  the  defendant  said  that  he  would  not  look  to  a  week. 
Relying  upon  this  statement  of  the  defendant,  the  plaintiff  served 
as  a  juryman  for  three  days,  but  on  the  third  day  the  defendant 
seized  the  plaintiff's  goods  and  sold  them  within  the  current  week 
and  before  any  fresh  default  had  been  committed  by  the  plaintiff. 
It  was  alleged  that  the  defendant  had  heard  that  the  plaintiff's  land- 
lord intended  to  distrain  upon  the  goods  for  rent  in  arrear.  The 
judge  asked  the  jury  whether  the  defendant  had  so  acted  as  to 
induce  the  plaintiff  to  believe  that  the  defendant  would  hold  his 
hand;  the  jury  answered  this  question  in  favor  of  the  plaintiff 
and  assessed  the  damages  at  £80.  The  judge  gave  leave  to  move  on 
the  ground  that  there  was  no  evidence  of  a  waiver  by  the  defendant. 
The  Queen's  Bench  Division  made  absolute  a  rule  for  a  new  trial, 
but  gave  the  plaintiff  leave  to  appeal. 

The  plaintiff   accordingly   appealed. 

F.  W.  Raihes,  for  the  plaintiff. 

D.  French,  for  the  defendant. 

BuAMWELL,  L.  J.  I  think  that  this  appeal  must  be  dismissed. 
The  plaintiff's  evidence  failed  to  show  that  the  defendant  had  no 
riglit  to  seize  his  goods.  When  the  plaintiff  allowed  the  appointed 
timo  to  elapse  without  paying  the  instalment,  he  was  in  default; 
whenever  there  is  an  omission  to  do  an  act  pursuant  to  the  terms 
of  a  contract,  there  is  a  default  in  the  performance  of  it.  It  has 
been  argued  for  the  plaintiff  that  after  the  defendant  had  promised 
to  wait  for  a  week,  he  could  not  lawfully  seize  the  plaintiff's  goods; 
but  1  do  not  think  that  his  promise  was  sufficient  to  prevent  him 


SECT.    l]  WILLIAMS    V.    STERN  963 

from  putting  in  force  the  powers  of  the  bill  of  sale;  it  was  not  an 
undertaking  which  bound  him;  the  promise  was  not  supported  by 
any  consideration.  The  plaintiff  was  not  induced  to  alter  his  posi- 
tion. A  promise  to  wait  founded  upon  a  good  consideration  would 
have  prevented  the  defendant  from  seizing  the  goods  comprised  in 
the  bill  of  sale,  even  though  a  distress  by  the  plaintiff's  landlord 
had  been  threatened.  For  the  plaintiff  reliance  has  been  placed  upon 
Albert  v.  Grosvenor  Investment  Co.,  L.  R.  3  Q.  R.  123 ;  but  I  cannot 
accede  to  the  decision  in  that  case,  because  I  entertain  great  doubts 
whether  it  was  correct.  That  was  a  seizure  upon  an  alleged  default, 
and  upon  the  facts  before  them  the  Court  of  Queen's  Bench  held  that 
there  had  been  no  default.  But  whether  that  decision  was  right 
or  wrong,  in  the  present  case  there  was  no  evidence  of  a  valid 
waiver  by  the  defendant ;  no  benefit  accrued  to  him  from  his  promise. 
The  appeal  must  be  dismissed. 

Brett,  L.  J.  I  agree  with  the  view  of  the  law  enunciated  by 
Bramwell,  L.  J.  I  think  that  upon  the  true  construction  of  the  in- 
denture the  defendant  was  entitled  at  any  time  to  take  possession 
of  the  goods  comprised  in  it.  If,  however,  a  default  was  necessary 
in  order  to  enable  the  defendant  to  seize,  I  think  that  such  a  de- 
fault had  occurred;  for  "default"  means  simply  the  non-payment  of 
money,  and  the  plaintiff  had  failed  to  pay  one  of  the  instalments 
at  the  time  when  it  became  due.  On  behalf  of  the  plaintiff  reliance 
was  placed  upon  the  circumstance  that  the  defendant  had  promised 
to  wait  for  a  week.  This  was  not  a  misstatement  as  to  existing 
facts;  it  was  a  mere  naked  promise,  not  binding  upon  the  defendant. 
Has  there  been  any  misconduct  on  the  part  of  the  defendant?  I 
think  not :  it  appears  that  a  distress  by  the  plaintiff's  landlord  had 
been  threatened;  and  under  these  circumstances  I  do  not  blame  the 
defendant  for  changing  his  mind.  In  my  opinion  the  decision  in 
Albert  v.  Grosvenor  Investment  Co.,  L.  R.  3  Q.  B.  123,  did  alter 
the  meaning  of  the  words  used  by  the  contracting  parties.  I  cannot 
agree  with  that  decision.  In  this  case  there  was  no  evidence  to 
show  that  the  defendant  had  waived  any  of  his  rights  under  the 
indenture,  and  the  case  ought  to  have  been  withdrawn  from  the  jury. 
There  must  be  a  new  trial. 

Cotton,  L.  J.  The  only  question  before  us  is  whether  the  in- 
denture conferred  upon  the  defendant  a  power  to  seize  and  sell  the 
plaintiff's  goods  under  the  circumstances  which  actually  happened. 
I  agree  that  the  plaintiff  was  in  default  when  he  failed  to  pay  the 
instalment;  for  "default"  simply  means  non-payment  of  a  sum  of 
money  which  is  due.  Did  the  alleged  promise  of  the  defendant 
prevent  him  from  seizing  and  selling  the  plaintiff's  goods?  It 
was  not  founded  upon  any  consideration.  It  seems  to  me  that  noth- 
ing rendered  the  seizure  and  sale  wrongful.  The  defendant  made  no 
representation  which  operated  to  the  plaintiff's  disadvantage;  he 
simply  uttered  his  own  private  intentions ;  he  gave  no  promise  which 


964  WEBER    V.    COUCH  [CHAP.   VII 

was  enforceable  in  law.  The  plaintiff  has  no  claim  for  relief  in 
equity;  before  the  Supreme  Court  of  Judicature  Acts,  1873,  1875, 
the  Court  of  Chancery  would  not  have  interfered  to  set  aside  the 
seizure.  Appeal  dismissed} 


ALBERT  WEBER,  JR.,  Administeator,  v.  EDWARD  F. 

COUCH    AND    ANOTHER      ■ 

Supreme  Judicial  Court  of  Massachusetts,  January  6-22,  1883 
[Reported  in  134  Massachusetts,  26] 

Holmes,  J.  This  is  an  action  on  a  judgment  for  $1154.71,  against 
Edward  F.  Couch  and  A.  C.  Couch,  copartners.  After  that  judg- 
ment was  recovered,  one  of  the  defendants  paid  $100  upon  it,  and 
the  following  agreement  was  indorsed  on  the  execution :  "In  con- 
sideration of  the  sum  of  one  hundred  dollars  paid  by  Edward  F. 
Couch,  one  of  the  within-named  judgment  debtors,  I  hereby  release 
said  Edward  F.  Couch  from  any  and  all  liability  on  the  said  judg- 
ment, and  acknowledge  satisfaction  of  the  within  judgment  so  far 
as  said  Edward  F.  Couch  is  concerned,  but  reserve  to  myself  the 
right  to  avail  myself  of  certain  securities,  to  wit,  notes  and  mortgages 
in  the  hands  of  one  A.  H.  G.  Lewis,  put  up  by  one  John  Snow,  of 
Providence,  R.  I.,  to  release  the  attachment. 

"Albert  Weber.     By  Buckland  &  White,  his  attorneys." 

The  defendant  E.  F.  Couch  has  died  pending  this  action,  but  the 
other  defendant  insists  that  the  above  transaction  discharged  E.  F. 
Couch,  and  therefore  discharged  him,  the  other  joint  debtor.  To 
make  out  that  E.  F.  Couch  was  discharged,  the  defendant  suggests 
that  the  consideration  of  the  dealing  with  him  consisted  of  the 
securities  mentioned  as  Well  as  the  money.  But  there  is  nothing  out- 
side of  the  instrument  to  countenance  this  suggestion,  and  the  instru- 
ment itself  expressly  contradicts  it.  It  states  the  consideration 
to  be  one  hundred  dollars  and  nothing  else.  It  does  not  disclose 
the  acquisition  of  any  new  rights  in  the  securities  by  the  plaintiff, 
or  any  change  of  position  on  the  part  of  the  defendant.  Indeed,  so 
far  as  appears,  the  defendant  was  a  stranger  to  the  securities,  which 
were  "put  up  by  one  John  Snow."  The  defendant's  argument  there- 
fore fails  A  parol  release  of  a  judgment  for  money,  in  consideration 
of  a  payment  of  a  smaller  sum,  is  invalid  at  common  law. 

The  defendant  does  not  argue  that  the  release  had  any  greater 
effect  because  written  on  the  execution,  than  it  would  have  had  if 
it  had  been  written  on  any  otluT  piece  of  paper.  It  is  still  a  parol 
release  addressing  itself  directly  to  the  judgment,  which   it  is  in- 

'  riompan!  Bacon  v.  Cobb,  45  HI.  47;  Walkins  v.  HodRos,  6  H.  &  J.  38;  Franklin 
F.  I.  Co.  V.  Uarnill,  5  Md.  170;  IinpiTator  Realty  Co.  v.  Tull,  (N.  Y.)  127  N.  E.  263; 
WilKiiH  i>.  Whit.licad,  Mi  F'a.  131. 


SECT.    Il]  ROE    V.    HAUGH  965 

competent  to  discharge  in  that  way.  Neither  can  it  have  a  greater 
indirect  operation  than  it  could  have  had  directly.  To  that  end  it 
would  be  necessary  first  to  read  the  release  as  purporting  to  discharge 
the  execution,  because  it  was  indorsed  on  the  writ,  and  because,  if 
it  had  been  effectual  to  discharge  the  judgment,  it  would  have  dis- 
charged the  execution,  and  then,  after  providing  this  substituted 
machinery,  to  hold  that  the  parol  release  of  the  execution  was  con- 
clusive, and  that  the  discharge  of  the  judgment  followed.  This 
is  impossible,  and  it  is  therfore  unnecessary  to  consider  what  the 
effect  of  the  indorsement  would  have  been  upon  the  liability  of  the 
other  defendant  if  it  had  been  valid;  whether  it  would  have  dis- 
charged him  apart  from  the  reservations,  and  whether  the  reserva- 
tions were  sufficient  to  cut  the  words  of  release  down  to  a  covenant 
not  to  sue.  Judgment  for  the  plaintiff.^ 


SECTION"   II 
NOVATION .  2 


ROE  V.  HAUGH 

In  the  Exchequer  Chamber^  Trinity  Term^  1697 
[Reported  in  12  Modern,  133.^] 

B.  WAS  indebted  to  A.  in  the  sum  of  forty-two  pounds,  and  C  in 
consideration  qudd  A.  accipere  vellet  ipsum  C.  fore  debitorem  ipsius 
A.  pro  qiuidraginta  duoh.  lib.  eidem  A.  per  B.  tunc  debit,  in  vice  et 
loco  ejusdem  B.  super  se  assumpsit,  et  eidem  A.  promisit  quod  ipse 
C  easdem  quudraginta  duas  lib.  eidem  A.  solvere  vellet.  A.  dies; 
his  executors,  on  this  promise,  bring  an  assumpsit  against  C.  averring 
in  their  count,  that  A.  the  testator  trusting  to  the  said  promise  of 
C.  accepit  prced.  C.  fore  debitorem  ipsius  A.  without  saying  anything 
that  he  discharged  B.  ISTon  assumpsit  pleaded ;  verdict  and  judgment 
for  the  plaintiff.     Writ  of  error  brought  in  the  exchequer  chamber. 

The  error  insisted  on  was,  that  this  is  a  void  assumpsit,  here  being 
no  good  consideration;  for  except  B.  was  discharged,  C.  could  not 
be  chargeable; 

For  which  reason  Blenoowe,  Powell,  and  Ward  were  of  opinion, 
judgment  should  be  reversed ;  but  Powis,  Nevill,  Lechmere,  and 
Treby,  that  this  being  after  verdict,  they  should  do  what  they  could 
to    help    it;    to    which    end    they    wouM    not    consider    it    only    as 

1  See  also  Bruce  v.  Anderson,  176  Mass.  161 :  Whitehill  v.  Wilson,  3  Pen.  &  Watts, 
405. 

2  See  the  discussion  of  the  subject  by  Professor  Ames  in  6  Harv.  L.  Rev.  184  and 
in  3  Williston,  Contracts,  §  1865  et  seq. 

3  Also  reported  in  1  Salk.  29  and  3  Salk.  14. 


966  TRUDEAU    V.    POUTRE  [CHAP.   VII 

a  promise  on  the  part  of  C.  for  as  such  it  would  not  bind  him,  ex- 
cept B.  was  discharged;  but  they  would  construe  it  to  be  a  mutual 
promise,  viz.  that  C.  promised  to  A.  to  pay  the  debt  of  B.  and  A. 
on  the  other  side  promised  to  discharge  B.  so  that  though  B.  be  not 
actually  discharged,  yet  if  A.  sues  him,  he  subjects  himself  to  an  ac- 
tion for  the  breach  of  his  promise.        The  judgment  was  affirmed. 


WILFRED  TRUDEAU  v.  LUCIEN  POUTRE 

SuPBEME  Judicial   Coukt   of  Massachusetts,   October  29,   1895- 

January   1,    1896 

[Reported  in  165  Massachusetts,  81] 

Contract.  The  plaintiff  owned  in  partnership  with  one  Picard 
the  stock  and  fixtures  in  a  drug  store.  The  plaintiff  sold  his  interest 
to  Picard  and  took  from  the  latter  a  note  secured  by  mortgage  on 
the  stock.  Later  Picard  sold  the  stock  and  fixtures  to  the  defendant, 
and  the  plaintiff,  as  part  of  the  transaction,  at  the  same  time,  dis- 
charged Picard  in  order  to  enable  Picard  to  transfer  a  clear  title. 
The  evidence  was  conflicting  as  to  the  promise,  if  any,  made  by  the 
defendant  to  the  plaintiff,  but  there  was  evidence  that  the  defendant 
agreed  to  give  two  mortgages  to  secure  part  of  the  plaintiff's  claim 
and  agreed  to  pay  the  balance  in  cash. 

The  presiding  judge  directed  a  verdict  for  the  defendant  and  the 
plaintiff  alleged  exceptions. 

L.  E.  Wood,  for  the  plaintiff. 

/.  W.  Cummings  (E.  Higginson  &  C.  R.  Cummings  with  him), 
for  the  defendant. 

Moeton,  J.  If  the  parties  mutually  agreed  that  the  defendant 
should  pay  the  plaintiff  what  Picard  owed  him,  and  the  plaintiff 
accepted  the  defendant  as  his  debtor  in  the  place  of  Picard,  and  re- 
leased Picard,  the  contract  thus  entered  into  would  be  valid  and 
binding.  Wood  v.  Corcoran,  1  Allen,  405.  Lord  v.  Davison,  3  Allen, 
131.  Caswell  v.  Fellows,  110  Mass.  52.  The  release  of  Picard 
would  constitute  a  sufficient  consideration  for  the  defendant's  promise 
to  the  plaintiff.  Caswell  ik  Fellows,  iihi  supra.  And  the  promise 
declared  on  being  an -original  undertaking  and  not  a  collateral  one, 
and  not  including  the  giving  of  a  mortgage  by  the  defendant  on  his 
real  estate,  would  not  be  within  the  Statute  of  Frauds.  Lord  v. 
Davison  and  Wood  v.  Corcoran,  uhi  supra.  If  there  was  no  doubt 
as  to  the  terms  of  the  agreement,  it  would  be  a  question  of  law  for 
the  court  whether  a  substitution  had  been  effected.  Sinclair  v. 
Richardson,  12  Vt.  33.  But  if  the  terms  of  the  agreement  were 
equivocal  or  uncertain,  then  it  would  be  a  question  of  fact  for  the 
jury,  under  suitable  instrnctions.  Sinclair  v.  Richardson,  uhi  supra. 
If  the  agreement  of  the  plaintiff  to  release  Picard  and  take  the  de- 


SECT.    II  ]  FAIRLEE    V.    DENTON    &    BARKER  967 

fendant  in  his  place  was  conditional  upon  the  defendant's  giving 
the  mortgages,  or  such  condition  formed  an  essential  part  of  it,  then 
it  is  clear  that  there  was  no  substitution,  for  the  mortgages  were  not 
given.  But  if  the  defendant  promised  to  pay  the  debt,  and  the  plain- 
tiff, relying  on  that,  released  Picard,  so  that  if  the  defendant  did  not 
perform  his  agreement  the  plaintiff's  only  remedy  would  b©  an  action 
against  him  for  the  breach  of  it,  then  the  submission  was  complete, 
and  Picard  became  entitled  to  a  discharge  of  the  mortgages  which  he 
and  his  wife  had  given  to  the  plaintiff,  the  debt  which  they  were 
given  to  secure  having  thus  been  cancelled  and  discharged.  And 
it  would  not  affect  the  plaintiff's  right  of  recovery  that  the  defendant 
also  orally  agreed  to  secure  the  plaintiff  by  a  mortgage  on  his  real 
estate.  Rand  v.  Mather,  11  Cush.  1.  Haynes  v.  Nice,  100  Mass, 
327. 

It  was  in  dispute  between  the  parties  which  of  the  two  construc- 
tions indicated  above  should  be  given  to  the  transaction;  the  de- 
fendant contending  in  substance  that  it  should  be  the  former,  and 
the  plaintiff  the  latter.  There  is  language  and  there  are  circum- 
stances and  considerations  consistent  with  either  view;  but  there  is 
nothing,  we  think,  so  clear  as  to  enable  us  to  say  how  the  case  should 
have  been  decided  as  matter  of  law. 

Exceptions   sustained.^ 


FAIRLEE  V.  DENTON  &  BARKER 
In  the  King's  Bench,  Trinity  Term,  1828 
[Reported  in  8  Barnewall  &  Cresswell,  395] 

Assumpsit  for  money  had  and  received.  Plea,  non  assumpsit.  At 
the  trial  the  following  facts  appeared.  The  defendants  had  con- 
tracted to  pay  S.  Crossland  and  J.  Stonehouse  £1,200  in  six  instal- 
ments at  specified  stages  in  the  progress  of  certain  buildings  under 
construction  by  Crossland  and  Stonehouse.  The  defendants  paid 
on  orders  from  Crossland  and  Stonehouse  £872  and  being  applied 
to  for  further  advances,  refused  on  the  ground  that  the  plaintiff 
had  lodged  in  their  hands  orders  signed  by  Crossland  and  Stone- 
house for  upwards  of  $200,  and  for  these,  they,  the  defendant,  were 
responsible. 

The  plaintiff  gave  no  evidence  that  at  the  time  of  this  conversa- 
tion the  buildings  were  in  such  a  state  of  forwardness  as  to  entitle 
Crossland  and  Stonehouse  to  more  than  the  £872  which  they  had 
already  received,  and  from  the  defendants'  evidence  the  contrary 
might  be  inferred. 

Lord    Tenterden    directed    a    verdict    for    the    plaintiff    if    they 

*  The  statement  of  facts  is  abbreviated,  and  a  portion  of  the  opinion  stating  some 
of  the  evidence  is  omitted. 


968  GLEASON    V.    FITZGERALD  [CHAP.    VII 

thought  the  defendant  had  ever  acknowledged  that  they  held  in  their 
hands  money  for  the  plaintiff.  The  jury  found  a  verdict  for  the 
plaintiff,  but  a  rule  nisi  for  entering  a  nonsuit  was  obtained  by  Sir 
James  Scarlett.^ 

F.  Pollock  and  R.  V.  Richards  now  showed  cause. 

Sir  J.  Scarlett,  and  Comyn,  contra,  were  stopped  by  the  court. 

Lord  Tenterden,  C.  J.  It  is  a  general  rule  of  law,  that  a  chose 
in  action  cannot  be  assigned.  There  is,  however,  an  exception  to 
that  rule.  It  has  been  held  that  where  it  has  been  admitted  and 
agreed  beyond  dispute  that  a  defined  and  ascertained  sum  is  due  from 
A.  to  B.,  and  that  a  larger  sum  is  due  from  C.  to  A.,  and  the  three 
agree  that  C.  shall  be  B's  debtor,  instead  of  A.,  and  C.  promises  to 
pay  B.  the  amount  owing  to  him  by  A.,  an  action  will  lie  by  B. 
against  C.  Here,  at  the  time  when  the  defendants  were  supposed 
to  have  admitted  that  they  Avere  responsible  to  the  plaintiff,  there 
was  not  any  defined  and  ascertained  sum  due  from  them  to  Crossland 
and  Stonehouse.  Crossland  then  asked  the  defendant  for  a  further 
advance,  which  they  refused,  because  they  held  orders  in  favor  of 
the  plaintiff  for  payment  of  more  than  £200.  But  non  constat  that 
that  sum  was  then  due  from  them  to  Crossland  and  Stonehouse.  It 
might  afterwards  have  been  to  become  due  in  the  progress  of  the 
work,  which  was  not  at  that  time  completed.  It  lay  upon  the  plain- 
tiff, in  order  to  bring  himself  within  the  cases  which  form  excep- 
tions to  the  general  rule,  to  show  that  at  the  time  when  the  de- 
fendants are  supposed  to  have  promised  to  pay  him  the  debt  owing 
to  him  by  Crossland  and  Stonehouse  there  was  a  debt  ascertained 
to  be  due  to  them  from  the  defendants.  Not  having  done  so,  he  has 
not  brought  himself  within  the  exception  to  the  general  rule,  and 
therefore,  the  rule  for  a  nonsuit  must  be  made  absolute. 

Rnle  absolute.^ 


MOTT  GLEASON  v.  DAVID  FITZGERALD,  Survivor,  etc. 

Michigan   Supreme   Court,  April   19-May  28,   1895 

[Reported  in  105  Michigan,  516] 

Grant,  J.  July  18,  1889,  the  defendants  made  a  contract  with 
the  Chicago  &  West  Michigan  Railroad  Company  by  which  they 
agreed  to  lay  and  ballast  the  track  between  Baldwin  and  Traverse 
City.  The  work  was  to  be  done  under  the  instruction  and  super- 
vision of  its  chief  engineer,  whose  decisions  were  to  be  final  and  con- 
clusive on  all  matters  of  dispute.     The  defendants  sublet  this  work 

'  The  statement  of  facts  has  been  abbreviated. 

2  niiirk  V.  BillinEB,  ."jO  Infi.  508,  fiO');  BriHtol  MillinR  &c.  Co.  v.  Probasco.  64  Ind. 
406.  4i:i;  Rov.  Civ.  Codo  L:i.  Art.  21H(i;  Liiiii(;riuui  v.  Moross,  98  Mich.  178;  Adams 
0.  Powor,  48  Miss.  4.'>0;  Miirphy  v.  Hanrahan,  .50  Wis.  485,  ace.  Compare  Cherry  v. 
Jones,  41  Oa.  .'»7f»;  Torrcy  v.  C.rant,  18  Miss.  89;  Courtois  v.  Perquicr,  1  Brev.  .314; 
E<]ward.s  v.  SiurvinK.  1  Brcv.  ■'>48. 


SECT.    II ]  GLEASON    V.    FITZGERALD  969 

to  the  firm  of  Lambert  &  Van  Norman.     The  contract  contained 
the  following  provision: 

"That  the  said  parties  of  the  second  part  reserve  the  right  to  pay 
off  the  laborers  who  work  for  said  first  party  under  this  contract, 
and  the  said  party  of  the  first  part,  for  and  in  consideration  of  the 
sum  of  one  dollar,  hereby  sells,  releases,  and  assigns  unto  the  party 
of  the  second  part  all  moneys  and  sums  of  money  due  to  laborers 
under  this  contract,  and  in  execution  of  the  same;  but  it  is  expressly 
agreed  that  the  party  of  the  second  part  assumes  no  liability  to  the 
laborers  who  do  work  in  execution  of  this  contract,  over  and  above 
the  amount  assigned  by  the  party  of  the  first  part  to  the  party  of  the 
second  part,  and  not  over  and  above  the  amount  due  and  payable  ta 
the  party  of  the  first  part." 

Lambert  &  Van  Norman  continued  for  some  time  to  work  under 
the  contract.  A  dispute  arose  between  them,  and  Lambert  &  Van 
Norman  finally  abandoned  it.  Lambert  &  Van  Norman,  through 
their  timekeeper,  gave  time  checks  to  their  workmen,  certifying  the 
number  of  days'  work  performed,  the  rate  per  day,  the  deductions, 
and  balance  due,  and  made  payable  at  Hannah,  Lay,  &  Co.'s  Bank, 
at  Traverse  City,  Mich.  Lambert  &  Van  Norman  had  no  money 
at  the  bank  with  which  to  pay  these  checks.  Plaintiff  insists  that 
he  purchased  these  time  checks,  and  made  an  arrangement  by  which 
the  defendants  agreed  to  pay  them;  that  he  released  Lambert  &  Van 
Norman  from  liability;  and  that  a  complete  novation  was  effected. 
It  is  insisted  on  the  part  of  the  defendants  that  a  novation  was  not 
proven,  and  that  before  a  novation  could  take  place  a  valid  indebted- 
ness must  be  shown  to  exist  between  Lambert  &  Van  Norman  and 
the  defendants. 

It  is  not  necessary,  under  the  facts  of  this  case,  to  determine 
whether  the  defendants  were  in  fact  indebted  to  Lambert  &  Van 
Norman.  They  had  assigned  to  the  defendants  all  moneys  due  from 
them  to  their  laborers.  If,  therefore,  the  defendants  had  agreed 
to  pay  the  plaintiff,  and  he  had  released  Lambert  &  Van  Norman,  it 
is  entirely  clear  that  they  could  not  defend  upon  the  ground  that 
they  had  in  fact  overpaid  Lambert  &  Van  Norman.  The  statute  of 
frauds  has  no  application  to  such  case.  The  evidence  on  the  part 
of  the  plaintiff  tended  to  show  that  he  made  the  agreement  with  de- 
fendants and  Lambert  &  Van  Norman,  that  defendants  made  the 
promise  to  pay  with  notice  that  Lambert  &  Van  Norman  were  to  be 
released,  and  that  these  time  checks  were  in  fact  charged  up  against 
Lambert  &  Van  Norman  in  an  account  rendered  by  the  defendants. 
It  is  unnecessary  to  review  the  evidence  at  length.  The  question 
was  fairly  left  to  the  jury,  under  proper  and  explicit  instructions, 
and  there  was  ample  evidence  to  support  their  verdict.  The  case.- 
is  controlled  by  Mulcrone  v.  Lumber  Co.,  55  Mich.  622. 

Judgment  affirmed.^ 
1  Edenfield  v.  Canady,  60  Ga.  456;  Bower  v.  Weber,  69  Iowa,  286,  ace. 


970  GIBBONS    V.    VOUILLON  [CHAP.    VII 


SECTION"   III 

RELEASE 


GIBBOISrS  V.  VOUILLON 

In  the  Common  Pleas,  N'ovember  16,  1849 

[Reported  in  8  Common  Bench,  483] 

Wilde,  C  J.  This  question  arises  upon  a  plea  which  sets  forth 
an  agreement  under  seal  between  the  defendant  of  the  first  part, 
three  individuals  named,  as  trustees,  of  the  second  part,  and  the 
plaintiff  and  certain  other  persons,  creditors  of  the  defendant,  of 
the  third  part;  and  the  plea,  which  is  pleaded  either  as  a  bar  to  the 
action  generally,  or  in  bar  of  the  further  maintenance  of  the  action, 
states  that  the  defendant  had  carried  on  the  business  of  a  silk-mercer ; 
that  the  several  debts  due  to  the  parties  of  the  second  and  third  parts, 
which  were  set  opposite  to  their  respective  names,  had  accrued;  that 
the  defendant  was  unable  immediately  to  satisfy  those  debts;  that, 
for  the  purpose  of  realizing  his  effects,  it  had  been  deemed  advan- 
tageous to  all  the  parties  interested  that  the  defendant  should,  for 
five  years,  be  permitted  to  carry  on  the  business,  under  the  inspection 
of  the  trustees;  and  that  it  was  agreed  that  the  business  should  be 
so  carried  on  for  the  said  term  of  five  years.  The  plea  then  goes 
on  to  state  that  in  pursuance  of  the  agreement  the  several  persons 
parties  thereto  of  the  second  and  third  parts  by  that  indenture  gave 
and  granted  unto  the  defendant  until  the  17th  of  May,  1848  (the 
indenture  bearing  date  the  17th  of  May,  1843),  full  and  free  license 
and  authority  to  pass  and  repass,  &c. ;  and  that  it  was  further  pro- 
vided that,  if  any  of  the  said  persons,  parties  thereto  of  the  second 
and  third  parts,  should,  at  any  time  thereafter  during  the  con- 
tinuance of  the  license  thereby  granted,  molest  or  interfere  with 
the  defendant,  contrary  to  the  true  intent  and  meaning  of  the  said 
indenture,  the  defendant  should  be  released,  exonerated,  acquitted, 
and  for  ever  discharged  of  and  from  all  debts  and  demands  what- 
soever which  were  then  due  unto,  or  then  could  be  made  by,  the 
creditor  or  creditors  respectively  by  whom  the  said  letter  of  license 
thereinbefore  contained  should  in  any  such  respect  be  contravened, 
and  of  and  from  all  manner  of  actions,  suits,  &c.,  by  reason,  on  ac- 
count, or  in  consequence  of  the  same  debts  or  demands  respectively, 
and  that  the  said  indenture  should  or  might  be  pleaded  in  bar  to 
such  respective  debts  or  demands  accordingly.  The  molestation  or 
interference  here  mentioned  must  be  intended  to  mean  such  sort 
of  molestation  and  interference  as  the  parties  lawfully  might  resort  1o, 
having  relation  to  their  sitntation  as  creditors  and  debtor.  The 
question  is,  whether  or  not  the  effect  may  be  given  to  this  agreement 


SECT,    III]  GIBBONS    V.    VOUILLON  971 

of  the  parties.  Now,  the  first  part  of  the  deed  operates  as  a  letter  of 
license,  with  a  covenant  on  the  part  of  the  creditors  not  to  sue 
within  a  limited  time.  This,  it  is  contended,  on  the  part  of  the 
plaintiff,  cannot  be  pleaded  in  bar;  but  it  is  said,  upon  the  supposed 
authority  of  Ford  v.  Beech,  that  the  only  remedy  of  the  covenantee 
is  by  a  cross  action  for  damages.^     Nothing,  however,  fell  from  the 

^  The  arguments  of  counsel  so  far  as  they  related  to  the  question  whether  the  release 
was  a  bar  to  the  action,  were  as  follows:  — 

WiUes,  in  support  of  the  demurrer.  .  .  .  The  proviso  in  question  being  contrary  to 
a  rule  of  law,  it  cannot  operate  as  a  release.  Assuming,  as,  indeed,  was  expressly 
held  in  Ford  v.  Beech,  11  Q.  B.  852,  that  a  covenant  not  to  sue  for  a  given  time  can- 
not be  pleaded  in  bar,  the  question  here  will  be,  whether,  the  general  intention  of  the 
parties  being  to  keep  alive  the  debt,  any  form  of  words  the  practical  effect  of  which 
will  be  to  prevent  the  creditor  from  suing  within  the  time  can  be  regarded.  The  foun- 
dation of  the  decision  in  Ford  v.  Beech  was  this,  that  if  the  deed  barred  or  suspended 
the  creditor's  remedy  for  any  period,  however  short,  the  effect  would  be  a  total  release 
of  the  debt;  and  therefore  the  court  construed  the  agreement  as  giving  the  defendant 
merely  a  right  of  action  for  breach  thereof  if  the  plaintiff  sued  while  the  payments 
were  continued.  [Maule,  J.  —  Is  there  anything  to  prevent  a  release  from  being 
made  to  operate  in  futuro,  if  the  parties  so  intended?  If  that  may  be  done,  can  more 
correct  words  be  framed  for  the  purpose  than  those  here  used?]  It  may  be  that  this 
is  good  as  a  defeasance.  [Maule,  J.  —  If  it  destroys  the  debt,  it  is  a  good  answer  to 
the  action,  by  whatever  name  it  may  be  called.  V.  Williams,  J.  —  Is  there  any  dif- 
ference between  a  defeasance  and  a  condition,  except  that  the  one  is  in  the  same,  and 
the  other  in  a  different  instrument?  Wilde,  C.  J.  —  A  covenant  not  to  sue  does  not 
operate  as  a  release.  But  here  you  have  agreed  that,  if  you  do  sue,  a  release  shall  come 
into  operation.  The  mere  addition  of  something  as  a  consequence  does  not  alter  the 
legal  operation  of  the  instrument.]  The  effect  of  this  deed,  if  it  operates  at  all  as  a 
release,  is  to  make  it  operate  as  an  immediate  release.  [Maule,  J.  —  May  there  not 
be  an  effective  stipulation  to  put  an  end  to  a  debt?]  That  would  be  a  defeasance, 
and  it  is  not  so  pleaded.  Either  this  must  be  taken  to  be  an  immediate  discharge  of 
the  debt,  or  the  court  must  say  that  the  parties  have  attempted  to  do  what  cannot  be 
done,  namely,  to  suspend  the  debt  for  five  years,  and  then  revive  it.  [Maule,  J.  — 
You  are  seeking  to  enforce  a  construction  of  the  deed  which  is  manifestly  contrary  to 
the  intention  of  the  parties.  Is  there  any  inconsistency  in  an  agreement  to  suspend 
a  present  debt  for  a  given  period?  Wilde,  C.  J.,  referred  to  Kearslake  v.  Morgan,  5 
T.  R.  513,  and  Stracey  v.  The  Bank  of  England,  6  Bingh.  754;  4  M.  &  P.  639.]  The 
case  of  a  negotiable  security  is  an  exceptional  case.  James  v.  WilHams,  13  M.  &  W. 
828,  833.  It  would  be  unjust  to  the  debtor  to  allow  his  creditor  to  sue  him  while  the 
bill  was  outstanding.  [Wilde,  C.  J.  —  Suppose  the  bill  is  not  negotiable?]  In  that 
case  it  clearly  operates  no  suspension.  [Maule,  J.  —  If  the  thing  which  the  parties 
agreed  to  do  here  maj'  be  done  for  one  consideration,  why  may  it  not  for  another?] 
The  principle  upon  which  the  cases  proceed,  is  referable  to  the  law-merchant.  [Maule, 
J.  —  The  case  of  a  bill  of  exchange  is  complicated  with  some  difficulties.  But  is  there 
anything  unlawful  in  giving  an  extended  credit  for  five  years?]  It  is  adding  a  new 
incident  to  a  chose  in  action.  A  creditor  cannot  bind  himself  not  to  sue  for  a  debt  for 
a  limited  period,  except  by  taking  a  negotiable  security.  In  Stracey  v.  The  Bank  of 
England  there  was  no  suspension  of  the  right  of  action.  When  once  a  right  of  action 
has  accrued  there  is  no  mode  by  which  the  creditor's  right  can  be  got  rid  of,  but  accord 
and  satisfaction,  and  release.  [V.  Williams,  J.  —  Is  it  inconsistent  with  the  character 
of  a  chose  in  action  that,  on  the  happening  of  a  given  event  five  years  hence,  the  debt 
shall  be  discharged?]  In  that  case  there  would  be  no  suspension  of  the  debt  until  the 
happening  of  the  event  contemplated.  [V.  Williams,  J.  —  A  legacy  is  in  the  nature 
of  a  chose  in  action.  Suppose  a  legacy,  with  a  condition  that  it  should  be  void  if  the 
legatee  filed  a  bill  for  it,  —  would  that  be  bad?]  Possibly  not.  [V.  Williams,  J.  — 
In  Cooke  v.  Turner,  15  M.  &  W.  727,  such  a  condition  in  a  devise  of  real  estate  was 
held  to  be  valid.]  A  prospective  right  of  action  may  be  waived;  as  in  King  v.  Gillett, 
7  M.  &  W.  55,  where,  to  a  declaration  in  assumpsit  founded  on  mutual  promises  to 
marry  within  a  reasonable  time,  it  was  held  to  be  a  good  plea  that,  after  the  promise, 
and  before  any  breach  thereof,  the  plaintiff  absolved,  exonerated,  and  discharged  the 
defendant  from  his  promise,  and  the  performance  thereof.  Stracey  v.  The  Bank  of 
England  is  expressly  overruled  by  Ford  v.  Beech.     [Wilde,  C.  J.  —  It  was  not  so 


972  GIBBONS    V.    VOUILLON  [CHAP.    VII 

court  in  Ford  v.  Beach  to  countenance  that  supposition.  Why  is  it 
that  a  covenant  not  to  sue  for  a  limited  time  cannot  be  pleaded  in 
bar? 

By  reason  of  the  rule  that  right  to  a  personal  action  once  vested, 
and  suspended  by  the  voluntary  act  of  the  party,  for  however  short  a 
time,  is  precluded  and  gone  forever.  It  could  only  be  pleaded  in  bar ; 
for  that  is  its  legal  operation.  To  have  allowed  the  agreement  in  Ford 
V.  Beach  to  be  pleaded  in  bar  as  a  release  would  have  been  obviously 
contrary  to  the  intention  of  the  parties;  and  no  injustice  followed 
from  holding  that  the  defendant's  remedy  for  a  breach  was  to  be 
found  in  a  cross  action.  But  how  does  that  apply  where  we  have 
to  deal  with  express  and  unequivocal  words,  and  in  a  case  where  there 
are  circumstances  to  warrant  our  concluding  that  the  parties  intended 
to  give  a  totally  different  effect  to  the  contract  from  what  is  before 
stated.  Here  we  have  to  deal  with  a  contract  entered  into  in  express 
terms  between  a  debtor  and  a  body  of  twenty  or  thirty  creditors, 

intended:  I  wrote  the  judgment  in  Ford  v.  Beech;  and  I  remember  I  had  a  very  long 
discussion  with  one  of  my  learned  brothers  upon  it.]  The  plaintiff  there  clearly  could 
have  no  right  of  action  until  he  called  for  a  transfer  of  the  stock.  In  Thimbleby  v. 
Barron,  3  M.  &  W.  210,  it  was  held  that  a  covenant  not  to  sue  upon  a  simple  contract 
debt  for  a  limited  time  is  not  pleadable  in  bar  of  an  action  for  such  debt,  the  learned 
counsel  who  there  sought  to  uphold  the  plea  being  told  by  the  court  that  the  books 
were  full  of  authorities  against  him.  [Talfoued,  J.  —  The  court  of  error,  in  Ford  v. 
Beech,  seem  expressly  to  contemplate  this  case.  Parke,  B.,  in  delivering  the  judg- 
ment, says:  "In  1  Roll.  Abr.  939,  tit.  Extinguishment  (L),  pi.  2,  it  is  said,  that,  'if 
the  obligee  grants  to  the  obUgor  that  he  shall  not  be  sued  or  vexed  upon  the  said  obli- 
gation before  such  a  day,  and,  if  he  is,  then  that  he  shall  plead  the  said  grant  as  an 
acquittance,  and  that  the  obligation  shall  be  void  and  of  none  effect,  this  is  a  suspen- 
sion of  the  debt,  and  by  consequence  a  release.'  It  must  be  observed  that  in  that 
case  it  was  expressly  covenanted  that  in  the  event  of  the  covenantor  suing  upon  the 
obligation,  contrary  to  his  covenant,  the  obhgation  should  be  void,  and  that  the  obligor 
or  covenantor  should  plead  the  covenant  as  an  acquittance,  which,  by  consequence,  was 
a  release;  the  covenant  in  that  case,  therefore,  went  much  beyond  a  mere  covenant 
not  to  sue."]  On  referring  to  the  passages  in  the  Year  Books,  upon  which  Rolle  founds 
himself,  it  will  be  found  that  the  debt  there  is  held  to  be  gone  at  once.  [Talfourd,  J. 
—  Ayloffe  V.  Scrimpshire,  Carth.  63,  is  an  authority  against  you.]  That  case  presents 
different  aspects,  according  to  the  book  in  which  it  is  reporteu.  In  the  reports  in  Holt 
and  in  Shower,  the  deed  is  stated  to  have  had  the  very  same  provision  that  is  found 
here.  [V.  Williams,  J.  —  Shower  states  as  the  principal  case  what  Comberbach 
states  as  an  illustration.]  In  Carthew  it  is  somewhat  differently  reported;  and  the 
note  at  the  end  of  the  case  —  upon  which,  no  doubt,  reliance  will  be  placed  on  the 
other  side,  —  is  evidently  a  mistake.  [Wilde,  C.  J.  —  Carthew  professes  to  be  setting 
out  the  terms  of  the  covenant,  which  the  other  reporters  do  not.  Maule,  J.  —  Little- 
ton, §  467,  and  the  commentary  thereon  (Co.  Litt.  274  a,  274  b),  show  that  a  man  may 
release  upon  condition,  though  not  for  a  limited  period.]  Littleton  and  Coke  are  there 
treating  of  rights  other  than  rights  of  action.  In  Carivil  v.  Edwards,  1  Show.  330,  it 
was  held  that  to  d(!ht  on  bond  by  an  executor,  the  defendant  cannot  plead  in  bar  that 
the  testator  and  other  creditors  of  the  defendant  entered  into  a  letter  of  license  with 
him,  in  which  they  covenanted  and  agreed  not  to  sue  him  within  such  a  time,  on  pain 
of  foricituro;    for  it  does  not  amount  to  a  release  of  their  debts. 

IfiidU  Hill,  contra.  ...  It  is  then  said  that  the  covenant  in  question  is  not  pleadable 
in  bar  to  an  action  for  one  of  the  debts  mcmtioned  in  the  deed;  but,  at  most,  only  gives 
ground  for  a  cross-action,  or  for  a  hill  in  ccinity.  Tlie  bringing  of  this  action  is  not 
merely  a  violatif)n  of  th(!  covenant  whieli  (lie  [)laiiitiff  has  entered  into  with  the  defend- 
ant; l)Ut  It  is  also  a  bn^acli  of  faith  with  cvcTy  oii(>  of  the  other  creditors  who  were 
parties  to  thr;  arrangement.  It  clearly,  tli(!refor(i,  cannot  be  the  subject  of  a  cross- 
action,  the  flamagr-s  in  wliieh  would  not  be  conmiensvirate  with  the  injury.  A  cove- 
nant between  A.  and  I'.,  not  to  sue  for  a  liiiiitiKl  time  is  not  the  proper  subject  of  a 


SECT.    Ill]  GIBBONS    V.    VOUILLON  973 

each  of  whom,  for  the  benefit  of  the  general  concern,  agrees  that  the 
debtor  shall  for  a  given  period  continue  to  carry  on  the  business 
without  molestation,  and  that,  if  that  contract  should  be  contravened 
by  any  creditor  molesting  or  interfering  with  the  debtor,  such  moles- 
tation or  interference  should  operate  as  an  extinguishment  of  the  debt, 
and  that  the  indenture  might  be  pleaded  in  bar  to  such  debt.  How 
would  it  be  possible  to  secure  the  object  the  parties  had  in  view,  if 
the  effect  could  not  be  given  to  the  agreement  in  the  terms  in  which 
they  have  framed  it?  The  intention  is  beyond  doubt.  A  covenant 
not  to  sue  for  a  given  time  enures  as  a  release,  not  by  the  mere  agree- 
ment of  the  parties,  but  by  operation  of  law. 

Then  it  is  said  that  that  which  has  occurred  here  is  not  a  molesta- 
tion within  the  meaning  of  the  deed.  Looking  at  all  the  circumstances 
it  is  impossible  to  doubt  that  suing  the  debtor  was  the  very  species 
of  molestation  which  the  parties  sought  to  guard  against,  and  no 
other.  They  clearly  could  not  have  had  anything  else  in  their  con- 
plea  in  bar;  but  if  the  deed  declares  the  debt  to  be  forfeited  if  sued  for  within  the 
time,  and  enables  the  debtor  to  plead  it,  it  does  operate  as  a  bar.  This  is  distinctly 
laid  down  in  1  Roll.  Abr.  939  tit.  Extinfodshment  (L),  pi.  1,  2:  "Si  I'oblige  covenant 
ove  I'obligor  que  est  lie  a  performer  covenants  nemy  a  luy  molester  ou  suer  luy  devant 
tiel  jour,  ceo  nest  ascun  suspension  del  dett,  car  le  proper  sense  del  paroU  est  d'aver 
covenant  sur  ceo  sil  luy  sue  devant  le  jour,  et  nemy  a  faire  ceo  un  reles.  Si  I'obligee 
grant  al  obligor  quU  ne  serra  sue  nee  vex  sur  le  dit  obUgation  devant  tiel  jour,  et  sil 
Boit,  que  don  que  U  pledera  le  dit  grant  come  un  acquittance,  et  que  le  dit  obligation 
Berra  void  et  de  nul  effect,  ceo  est  un  suspension  del  obligation,  et  issint  per  conse- 
quens  un  reles,  —  car  ceo  est  un  grant,  —  et  que  il  ceo  pledera  come  un  acquittance." 

There  is  a  singular  diversity  in  the  reports  of  Ayloffe  v.  Scrimpshire.  In  the  reports 
in  Carthew  and  in  Salkeldit  it  is  stated  simply  as  a  covenant  not  to  sue  for  a  limited 
time.  In  the  former,  the  very  case  now  before  the  court  is  put  in  the  most  pointed 
manner:  "  Nota.  In  the  argument  of  this  case  it  was  allowed  by  all  that  a  letter  of 
license  containing  the  words  following,  namely,  that  if  the  creditor  sue,  &c.,  within 
such  a  time,  that  his  debt  shall  be  forfeited,  such  Hcense  is  pleadable  in  bar;  therefore, 
in  the  principal  case,  the  covenant  being  temporary  and  limited  to  a  certain  time,  and 
there  being  no  words  in  the  deed  of  defeasance  to  make  the  debt  forfeited  upon  a  suit 
commenced,  &c.,  the  court  was  clear  in  opinion  it  was  not  pleadable  in  bar,  but  that 
an  action  of  covenant  was  his  proper  remedy."  In  Comberbach  the  report  runs  thus: 
The  defendant  pleaded  that  the  plaintiff,  after  the  money  was  due  on  the  bond,  cove- 
nanted and  granted  by  indenture  not  to  sue  the  defendant  in  ninety-nine  years;  to 
which  the  plaintiff  demurred.  And  Holt,  C.  J.,  said,  "that  the  suspension  of  this 
action  will  not  destroy  the  bond,  for  every  defeasance  is  quodamraodo  a  suspension; 
that  a  covenant  not  to  sue  at  aU  is  an  acquittance,  but  a  covenant  not  to  sue  a  bond 
within  such  a  time,  goes  only  in  covenant;  that  the  rule  that  a  personal  action  once 
suspended  is  forever  extinct  doth  not  hold  in  all  cases."  And  Dolben  agreed.  Shower, 
in  his  report  of  Carivil  v.  Edwards,  1  Show.  330,  concludes  with  an  adjournatur,  and  he 
does  not  in  his  argument  cite  Ayloffe  v.  Scrimpshire,  which  occurred  but  two  years  be- 
fore, and  which  as  reported  by  himself,  was,  if  correct,  a  distinct  authoritj'  in  his  favor. 
Tatlock  V.  Smith,  6  Bingh.  339,  3  M.  &  P.  676,  is  a  very  strong  authority  in  favor  of 
the  defendant.  There,  by  an  agreement  between  the  defendants  and  their  creditors, 
all  the  defendants'  stock  in  trade  was  placed  in  the  hands  of  trustees  for  the  benefit  of 
the  creditors,  and  the  defendants  were  to  execute  to  the  trustees  a  conveyance  of  all 
their  estates,  in  which  deed  were  to  be  inserted  all  other  usual  clauses.  The  trustees 
carried  on  the  defendants'  business,  and  paid  the  creditors  10s.  in  the  pound;  they 
then  tendered  for  execution  by  the  defendants  a  conveyance  of  all  their  estate,  con- 
taining a  clause  of  release  which  the  defendants  objected  to  as  insufficient,  and  refused 
to  execute  the  conveyance;  the  instrument  not  having  been  executed  by  all  the  credi- 
tors, a  meeting  at  which  the  defendants  were  called  on  to  execute  was  adjourned  in 
order  that  the  signature  of  every  creditor  might  be  obtained;  and  it  was  held  that 
the  plaintiffs,  who,  as  creditors,  were  parties  to  the  above  agreement,  could  not  sue, 


974  GIBBONS    V.    VOUILLON  [CHAP,    VII 

templation.  When,  therefore,  this  action — which  in  the  ordinary 
course  would  go  on  to  judgment  and  execution — was  brought,  the 
defendant  had  a  right  to  assume  that  it  was  brought  for  the  purpose 
of  molesting  or  interfering  with  him^  and  so  preventing  him  from 
carrying  into  effect  the  contract  he  had  entered  into.  In  the  absence, 
therefore,  of  anything  to  control  it,  it  seems  to  me  that  the  parties 
contemplated,  a  molestation  by  suing  out  a  writ. 

The  cases  referred  to  in  Rolle's  Abridgment  appear  to  me  to  afford 
distinct  authority  on  the  present  occasion.  We  are  to  consider  what 
is  the  effect  of  this  deed,  taking  the  whole  of  it  together.  On  the  part 
of  the  defendant,  it  is  contended  that  the  deed,  taken  altogether,  oper- 
ates as  a  release ;  and  accordingly  he  pleads  it  in  bar.  The  plaintiff's 
counsel,  on  the  other  hand,  argues  with  much  ingenuity  that,  if  we 
hold  it  to  be  a  release,  we  must  hold  it  to  be  a  release  from  the  moment 
of  its  execution;  and  that  is  manifestly  contrary  to  the  intention  of 

for  their  original  debt,  at  least  until  the  conveyance,  such  as  it  was,  had  been  executed 
by  all  the  creditors,  and  refused  by  the  defendants.  Richardson  v.  Rickman,  B.  R. 
M.  16  G.  3,  is  cited  in  Kearslake  v.  Morgan,  5  T.  R.  517,  as  the  first  case  in  which  it  was 
held  that  the  giving  a  negotiable  instrument  was  pleadable  in  bar.  In  2  Wms.  Saund. 
103  6,  it  is  said:  "It  has  been  estabUshed  by  modern  authorities  that  the  acceptance 
of  a  negotiable  note  or  biU  '  for  and  on  account '  of  a  debt,  must  be  taken  prima  facie 
to  be  in  satisfaction  of  that  debt,  until  it  appears  that  the  note  or  bill  remains  unpaid 
in  the  possession  of  the  creditor,  without  any  laches  by  him.  Kearslake  v.  Morgan; 
Burden  v.  Halton,  4  Bingh.  454;  1  M.  &  P.  223;  Kendrick  v.  Lomax,  2  C.  &  J.  405; 
Mercer  v.  Cheese,  4  M.  &  G.  804;  5  Scott,  N.  R.  664.  It  is  usually  said  that  the  tak- 
ing of  the  note  or  bill  suspends  the  creditor's  remedy  for  the  time  it  has  to  run;  for 
that  it  amounts  to  an  agreement  by  him  not  to  sue  for  that  time  in  consideration  of 
the  debtor's  giving  the  note  or  bill.  See  Simon  v.  Lloyd,  2  C.  M.  &  R.  189;  3  Dowl. 
P.  C.  813.  It  may  be  observed,  however,  that  where  the  obligee  of  a  bond  even  ex- 
pressly covenants  not  to  sue  for  a  certain  time,  this  cannot  be  pleaded  in  bar  of  an 
action  on  the  bond,  but  is  a  covenant  only,  for  a  breach  of  which  the  obligor  may  bring 
his  action.  Ayloffe  v.  Scrimpshire,  Garth.  63;  1  Show.  46;  Gomb.  123;  2  Salk.  573. 
And  the  reason  seems  to  be,  that  if  such  covenants  were  allowed  to  operate  in  suspen- 
sion of  the  action,  the  right  of  action  would  be  altogether  lost;  inasmuch  as  it  is  a  rule 
that  where  a  personal  action  is  once  suspended  by  the  voluntary  act  of  the  party,  it 
is  forever  gone,  and  discharged.  Fryer  v.  Hobart,  10;  Dorchester  v.  Webb,  Gro.  Gar. 
372;  Wankford  v.  Wankford,  1  Salk.  302,  303.  In  truth,  then,  this  abeyance  of  the 
creditor's  right  to  sue  seems  an  anomaly  which  the  law  has  admitted,  as  part  of  the 
law-merchant,  in  respect  of  mercantile  securities.  Owen  v.  GrifSths,  Exch.  T.  T.  1844. 
The  difficulty  of  reconciling  the  doctrine  with  any  principle  is  increased  by  the  courts' 
having  declined  to  apply  it  to  the  case  of  a  debt  due  for  rent,  —  Davis  v.  Gyde,  2  Ad. 
&  E.  623;  4  N.  &  M.  462,  —or  on  a  specialty.  Worthington  v.  Wigley,  3  N.  C.  454; 
3  Scott,  558."  17V.  Williams,  J.  —  Is  not  the  plea  an  answer,  as  setting  up  a  new 
agreement,  as  in  Good  v.  Gheeseman,  2  B.  &  Ad.  328.  That  gets  over  the  difficulty 
as  to  accord  and  satisfaction.]  It  is  submitted  that  the  plea  may  be  upheld  in  that 
view  also.  [V.  William.s,  J.  —  Gan  there,  in  strictness,  be  a  reservation  of  liberty 
to  plead  a  thing  in  bar  which  is  not  a  release?  In  Dean  v.  Newhall,  8  T.  R.,  168,  it 
was  held  that  if  the  obligee  of  a  bond  cov(^nant  not  to  sue  one  of  two  joint  and  several 
obligors,  and  if  he  do,  that  the  deed  of  covenant  may  be  pleaded  in  bar,  he  may  still 
sue  the  other  obligor.  Maule,  .1.  —  Here  the  proviso  that  in  the  event  of  molestation 
the  covenant  may  be  pleaded  in  bar  .seems  designed  merely  to  expound  the  former 
part,  showing  that  it  was  intended  in  the  sense  in  which  it  would  furnish  a  bar.] 

Willen,  in  reply.  Good  v.  Gheeseman  is  altogether  inapplicable  to  the  view  pre- 
sented on  the  other  sidr;:  this  is  not  the;  simple;  case  of  a  composition- deed.  The 
passages  cited  from  Rolhi's  Abridgment,  as  explained  by  a  reference  to  the  Year 
Books,  show  that  the  deed  there  supposed  operated  as  an  immediate  release.  Here, 
however,  the  plain  and  obvious  intention  of  the  parties  was  merely  to  suspend  the 
remedy. 


SECT,  iv]  blare's  case  975 

the  parties.  To  extinguish  the  debt  would  manifestly  be  to  defeat  the 
whole  intention  of  the  deed.  But  upon  what  assumption  is  that  ground 
taken?  Upon  the  assumption  that  every  release,  to  have  any  opera- 
tion at  all,  must  operate  from  the  moment  at  which  it  is  given.  I  must 
confess  I  do  not  assent  to  that  proposition.  I  do  not  see  why  parties 
may  not  agree  that  a  certain  instrument  shall  operate  as  a  release, 
from  the  happening  of  such  an  event.  The  passage  in  Co.  Litt. 
referred  to  by  my  brother  Maule,  seems  to  show  that  they  may. 
There  is,  then,  a  clear  and  manifest  intent,  to  be  collected  from  the 
deed,  that  it  shall  operate  as  a  release,  from  the  happening  of  the 
event  which  the  parties  contemplated,  namely,  the  molestation  which 
has  happened.  It  is  no  reason  why  effect  should  not  be  given 
to  the  clear  intention  of  the  parties  that,  in  so  doing,  we  necessa- 
rily carry  its  operation  somewhat  beyond  what  was  contemplated. 
For  these  reasons,  I  am  of  the  opinion  that  the  defendant  is  enti- 
tled to  our  judgment.^ 


SECTION  IV 
ACCORD    AND     SATISFACTION 


BLAKE'S  CASE 

In  the  King^s  Bench,  Michaelmas  Term,  1605 

[Reported  in  6  Cohe,  43  &.] 

Eden  brought  a  writ  of  covenant  against  Blake,  assignee  of  Price, 
and  the  breach  was  for  not  repairing  of  the  house;  the  defendant 
pleaded  an  accord  between  him  and  the  plaintiff,  and  the  execution 
thereof  in  satisfactione  and  exoneratione  decasus  reparationum  pre- 
dict', upon  which  the  plaintiff  demurred;  which  plea  began  in  the 
Common  Pleas,  3  Jac.  Eot.  1083.  And  it  was  objected,  that  this 
action  of  covenant  was  founded  on  the  deed,  which  could  not  be  dis- 
charged but  by  matter  of  as  high  a  nature,  and  not  by  any  accord  or 
matter  in  pais;  for  nihil  tarn  conveniens  est  naturali,  ut  unumquod- 
que  dissolvi  eo  ligamine  quo  ligatum  est.  And  it  appears  by  all 
our  books  that  neither  arbitrament  nor  accord  with  satisfaction  is 
a  plea  when  the  action  is  grounded  on  a  deed.  Vide  1  H.  7,  14  b.,  33 
H.  8,  51,  59  Dyer,  1  H.  5,  6,  7  (67)  45  E.  3,  46,  25  H.  8,  Br.  Det  173, 
2.  When  the  action  is  in  the  realty,  or  mixed  with  the  realty,  accord 
with  satisfaction  is  no  plea;  for  accord  with  satisfaction  is  a  bar  for 
the  personalty,  and  not  of  the  realty,  and  when  the  personalty  is 
mixed  with  the  realty,  it  is  no  bar  for  the  personalty ;  for  omne  ma  jus 
trahit  ad  se  minus.    Vide  11  H.  7,  13  b.  13  H.  7,  20  a,  b,  in  Wast, 

*  V.  Williams,  J.,  delivered  a  brief  concurring  opinion  and  Mattlb  and   Tal- 
FOTIRD,  JJ.,  also  concurred. 


976  blake's  case  [chap,  vii 

Cr.  El.  357.  So  in  a  ravishment  of  ward,  Quare  impedit,  etc.  But 
it  was  resolved  by  the  whole  court  that  the  defendant's  plea  was 
good  in  the  case  at  bar ;  for  there  is  a  difference,  when  a  duty  accrues 
by  the  deed  in  certainty,  tempore  confectionis  scripti,  as  by  covenant, 
bill,  or  bond,  to  pay  a  sum  of  money,  there  this  certain  duty  takes  its 
essence  and'  operation  originally  and  solely  by  the  writing ;  and  there- 
fore it  ought  to  be  avoided  by  a  matter  of  as  high  a  nature,  although 
the  duty  be  merely  in  the  personalty;  but  when  no  certain  duty 
accrues  by  the  deed,  but  a  wrong  or  default  subsequent,  together  with 
the  deed,  gives  an  action  to  recover  damages  which  are  only 
in  the  personalty  for  such  wrong  or  default,  accord  with  satis- 
faction is  a  good  plea;  as  in  the  case  at  bar,  the  covenant  doth  not 
give  the  plaintiff  at  the  time  of  the  making  of  it  any  cause  of  action, 
but  the  wrong  or  default  after  in  not  repairing  of  the  house,  together 
with  the  deed,  gives  an  action  to  recover  damages  for  default  of 
reparations.  And  forasmuch  as  the  end  of  the  action  is  but  to  have 
amends  and  damages  in  the  personalty  for  this  wrong,  therefore 
amends  and  satisfaction  given  the  plaintiff  is  a  good  plea.  For  the 
action  is  not  merely  grounded  on  the  deed,  but  also  on  the  deed  and 
the  wrong  subsequent,  which  wrong  is  the  cause  of  the  action,  and  for 
which  damages  shall  be  recovered,  as  in  13  E.  4,  1  b,  &  5a,  b,  in  tres- 
pass, the  plaintiff  recovered  by  verdict,  the  defendant  brought  attaint 
against  the  plaintiff  and  petit  jury,  and  one  of  the  petit  jury  pleaded 
accord  between  the  plaintiff  and  the  defendant  and  satisfaction,  and 
held  a  good  plea.  For  the  writ  of  attaint  is  not  only  grounded  on  the 
record,  but  on  matter  in  fact  also,  for  the  supposition  of  the  falsity 
in  the  oath  is  matter  in  fact.  And  in  35  H.  6,  30a,  in  attaint  brought 
on  false  oath  in  appeal  of  Mayhem,  one  of  the  petit  jury  pleaded 
arbitrament  between  the  plaintiff  and  the  defendant ;  and  in  all  cases 
where  arbitrament  is  a  good  plea  accord  with  satisfaction  is  a  good 
plea.  Vide  6  H.  7,  10a,  b,  ace'.  And  generally  in  all  actions  where 
damages  only  are  to  be  recovered,  arbitrament  or  accord  with  satis- 
faction is  a  good  plea;  as  in  an  action  of  waste  in  the  tenuit,  where 
damages  are  only  to  be  recovered;  and  so  is  the  report  of  Serjeant 
Bendlowes  to  be  understood ;  for,  in  an  action  of  waste  against  lessee 
for  years  in  the  tenet,  accord  is  no  plea,  as  it  hath  been  before  said. 
So  it  is  to  be  collected  on  the  book  of  35  H.  6,  30a,  that  in  an  appeal 
of  Mayhem  accord  with  satisfaction  is  a  good  plea,  because  in  the 
same  action  damages  are  only  to  be  recovered.  And  so  is  the  general 
rule  put  in  6  E.  6  Dyer  (2  Roll.  Rep.  188,  9  Co.  78  a.,  Cr.  Jac.  100), 
75,  in  Andrews's  case.  Vide  47  E.  3,  20  b.  Accord  for  a  rent  reserved 
on  a  lease  for  years,  7  E.  3,  Issue  9,  10  H.  7,  4  a,  11  H.  7,  4. 


SECT.  IV]  CASE  V.    BARBER  977 


ELIZABETH  CASE  v.  JAMES  BAEBER 

In  the  King's  Bench^  Trinity  Term,  1681 

[Reported  in  Thomas  Raymond,  450] 

The  plaintiff  declares  in  an  indebitatus  assumpsit  for  £20  for  meat, 
drink,  washing,  and  lodging  for  the  defendant's  wife,  provided  for 
her  at  the  request  of  the  defendant,  and  lays  it  two  other  ways.  The 
defendant  pleads  that  after  making  the  said  promise,  &c.,  and  before 
for  exhibiting  the  said  bill,  viz.,  such  a  day,  it  was  agreed  between  the 
plaintiff  and  the  defendant,  the  one  Jacob  Barber  his  son,  that  the 
plaintiff  should  deliver  to  the  defendant  divers  clothes  of  the  defend- 
ant's wife  then  in  her  custody,  and  that  the  plaintiffs  should  accept  the 
said  Jacob,  the  son,  for  her  debtor  for  £9,  to  be  paid  as  soon  as  the 
said  Jacob  should  receive  his  pay  due  from  his  Majesty,  as  lieutenant 
of  the  ship  called  the  "Happy  Return,"  in  full  satisfaction  and  dis- 
charge of  the  premises  in  the  declaration  mentioned ;  and  avers  that 
the  plaintiff  the  same  time  did  deliver  to  the  defendant  the  said  clothes 
and  that  she  accepted  the  said  Jacob,  the  son,  her  debtor  for  the  said 
£9,  and  that  the  said  son  agreed  to  pay  the  same  to  the  plaintiff 
accordingly;  and  that  the  said  Jacob  afterwards,  and  as  soon  as  he 
received  his  pay  as  aforesaid,  viz.,  27  April,  32  Car.  2,  was  ready 
and  offered  to  pay  the  said  £9,  and  the  plaintiff  refused  to  receive  it ; 
and  that  the  said  Jacob  has  always  since  been,  and  is  still  ready  to 
pay  the  same,  if  the  said  plaintiff  will  receive  it.  Et  hoc  paratus,  &c. 
The  plaintiff  demurs.  And  it  is  alleged  by  the  defendant's  counsel 
that  the  plea  is  good;  for  though  in  Peyto's  case,  and  formerly,  it 
hath  been  held  that  an  accord  cannot  be  pleaded  unless  it  appears 
to  be  executed,  9  Co.  79  h,  3  Cro.  46,  pi.  2,  yet  of  late  it  hath  been  held 
that  upon  mutual  promises  an  action  lies,  and  consequently,  there 
being  equal  remedy  on  both  sides,  an  accord  may  be  pleaded  without 
execution  as  well  as  an  arbitrament,  and  by  the  same  reason  that  an 
arbitrament  is  a  good  plea  without  performance;  to  which  the  court 
agreed ;  for  the  reason  of  the  law  being  changed,  the  law  is  thereby 
changed;  and  anciently  remedy  was  not  given  for  mutual  promises, 
which  now  is  given;  and  for  this  reason,  Mich.  18  Car.  B.  R.  Palmer  v. 
Lawson,  ante.  In  indebitatus  assumpsit  against  an  executor  upon  a 
contract  made  by  the  testator,  the  defendant  pleads  judgment  in  debt 
upon  a  simple  contract  against  him  for  the  debt  of  the  testator, 
and  after  argument  resolved  a  good  plea;  because,  though  in  debt 
against  an  executor  upon  a  simple  contract  the  defendant  may  demur, 
yet  when  he  admits  the  demand,  and  executors  are  now  liable  to  pay 
such  debts  in  action  upon  the  case,  the  judgment  so  obtained  was 
•pleadable;  so  Vaughan,  Rep.  Dee  v.  Edgcomb. 

But  in  this  case  at  bar  judgment  was  given  for  the  plaintiff  for  two 
reasons :— 


978  FORD    f.    BEECH  [CHAP.   VII 

1.  Because  it  doth  not  appear  that  there  is  any  consideration  that 
the  son  should  pay  the  £9,  but  only  an  agreement  without  any 
consideration. 

2.  Admit  the  agreement  would  bind,  yet  now  by  the  statute  of 
frauds  and  perjuries,  29  Car.  2,  this  agreement  ought  to  be  in  writing, 
or  else  the  plaintiff  could  have  no  remedy  thereon;  and  though  upon 
such  an  agreement  the  plaintiff  need  not  set  forth  the  agreement  to  be 
in  writing,  yet  when  the  defendant  pleads  such  an  agreement  in  bar,  he 
must  plead  it  so  as  it  may  appear  to  the  court  that  an  action  will  lie 
upon  it,  or  he  shall  not  take  away  the  plaintiff's  present  action,  and 
not  give  him  another  upon  the  agreement  pleaded. 


ALLEIT  V.  HARRIS 

In  the  Common  Pleas,  Michaelmas  Term,  1701 

[Reported  in  1  Lord  Raymond,  122] 

Teover  for  a  waistcoat.  The  defendant  pleads  that  the  plaintiff,  in 
consideration  that  the  defendant  at  the  special  instance  of  the  plaintiff 
assumed  to  pay  the  plaintiff  205.,  agreed  to  discharge  the  defendant  of 
this  trover,  &c.,  and  lays  mutual  promises  to  perform,  &c.  The  plain- 
tiff demurs.  Girdler,  sergeant,  for  the  defendant.  The  old  rule  was, 
that  an  accord  with  satisfaction  ought  to  be  pleaded  executed,  that  the 
plaintiff  might  be  sure  of  something  for  his  damages ;  but  an  arbitra- 
ment may  be  pleaded  without  performance,  because  the  parties  may 
have  reciprocal  remedies.  Then  it  being  now  settled,  that  the  parties 
may  have  actions  upon  mutual  promises,  this  accord  may  be  pleaded, 
though  not  executed,  because  each  party  may  have  his  remedy.  T. 
Jones,  158;  Raym.  450,  Case  v.  Barber;  T.  Jones,  168,  Wickham  v. 
Taylor.  8ed  non  allocatur.  For,  per  curiam,  if  arbitrament  be 
pleaded  with  mutual  promises  to  perform  it,  though  the  party  has  not 
performed  his  part  who  brings  the  action,  yet  he  shall  maintain  his 
action ;  because  an  arbitrament  is  like  a  judgment,  and  the  party  may 
have  his  remedy  upon  it.  But  upon  accord  no  remedy  lies.^  And  the 
books  are  so  numerous  that  an  accord  ought  to  be  executed  that  it  is 
now  impossible  to  overthow  all  the  books.  But  if  it  had  been  a  new 
point,  it  might  be  worthy  of  consideration. 

Judgment  for  the  plaintiff. 


FORD   V.   BEECH 

In  the  Exchequer  Chamber,  TTov.  26,  1847-Feb.  3,  1848 

\Eeportod  in  11    Queens  Bench,  852] 

The  verdict  was  entered  up  as  directed  in  the  preceding  judgment; 
and  jndgmont  was  cntored  on  tlie  record,  with  a  consideratum,  est, 
'  Reevea  v.  Hcarno.  1  M.  &  W.  323;   EUiott  v.  Dazey,  3  T.  B.  Mon.  268,  ace. 


SECT.    IV]  FORD    V.    BEECH  979 

"that  the  plaintiff  take  nothing  by  his  said  writ,  but  that  he  be  in 
mercy,  &c.,  and  that  the  defendant  go  thereof  without  day,"  (fee, 
with  costs  for  defendant  against  plaintiff,  and  award  of  execution 
thereof. 

The  plaintiff  brought  error  in  the  Exchequer  Chamber,  assigning 
for  error  generally  that  judgment  ought  to  have  been  given  for  the 
plaintiff,  and  also  that  judgment  ought  to  have  been  given  for  the 
plaintiff  "by  reason  of  the  non-performance  by  the  said  William 
Beech  of  the  promise  in  the  said  third  count  of  the  said  declaration 
mentioned;  that  the  said  finding  of  the  said  jury  on  the  said  eighth 
issue  joined  between,"  &c.,  amounts  to  a  finding  in  favor  of  the  said 
John  Ford,  and  that  judgment  ought  to  have  been  given  accordingly; 
that  the  said  finding  is  imperfect,  uncertain,  and  argumentative,  and 
does  not  dispose  of  the  whole  of  the  said  issue,  and  that  no  judgment 
can  be  given  thereupon,  or  in  respect  thereof,  or  upon  the  said  record 
and  proceedings;"  that  the  fifth  and  sixth  pleas  "are  not,  nor  is 
either  of  them,  sufficient  to  bar  the  plaintiff  from  having  or  main- 
taining his  action  as  to  the  causes  of  action  to  which  those  pleas  are 
respectively  pleaded ;  that  the  said  pleas  show  an  accord  only  without 
satisfaction,  or  with  only  partial  satisfaction;  that  the  said  pleas 
attempt  to  set  up,  as  a  defence  to  the  causes  of  action  to  which  they 
are  pleaded,  an  accord  and  satisfaction  by  a  stranger  to  those  causes 
of  action;  that  the  said  pleas  attempt  to  set  up,  as  an  answer  to  the 
causes,"  &c.,  "the  payment  of  a  less  sum  than  the  amount  which 
they  profess  respectively  to  answer."       Joinder. 

Pashley,  for  the  plaintiff  in  error. 

Unthanh,  contra. 

Parke,  B.,  in  this  vacation  (February  3d)  delivered  the  judgment 
of  the  court. 

This  is  a  writ  of  error  brought  to  reverse  a  judgment  of  Her 
Majesty's  Court  of  Queen's  Bench.  The  first  count  is  upon  a  prom- 
issory note,  dated  28th  May,  1839,  made  by  the  defendant,  for  the  sum 
of  £140  and  interest,  payable  to  the  plaintiff  twelve  months  after  date ; 
the  second  count  is  also  on  a  promissory  note,  made  by  the  defendant, 
for  the  sum  of  £200,  payable  with  interest  to  the  plaintiff,  two  years 
after  date.  It  is  unnecessary  to  advert  to  the  other  counts  in  the 
declaration,  or  to  the  pleadings  connected  with  them.  Judgment  has 
been  given  upon  them  for  the  defendant;  and  no  question  arises  in 
respect  of  that  judgment. 

The  defendant  pleaded  to  the  first  count  that  he  did  not  make  the 
note  therein  mentioned,  and  the  like  plea  to  the  second  count.  Upon 
these  pleas  issues  were  joined,  and  the  verdicts  have  been  found  upon 
them  for  the  plaintiff.  The  defendant  also  pleaded,  to  both  the  first 
and  second  counts,  that,  after  the  making  of  the  notes  in  those  counts 
respectively  mentioned,  and  after  the  same  notes  respectively 
became  due,  it  was  agreed  between  the  plaintiff,  the  defendant, 
and  one  Alfred  Beech  that  the  said  Alfred  Beech  should  and  would, 


980  FORD    V.    BEECH  [CHAP,    VII 

at  the  request  of  the  plaintiff,  pay  to  the  plaintiff,  in  trust  for  Eliz- 
abeth Beech,  the  sum  of  £200,  for  her  own  sole  use  and  benefit, 
or  the  sum  of  £25  per  annum  so  long  as  the  sum  of  £200  should 
remain  unpaid,  which  sum  of  £25  should  be  paid  quarterly  as 
therein  mentioned;  and  that  the  rights  and  causes  of  action  of 
the  plaintiff'  upon  and  in  respect  of  the  said  two  several  notes 
should  be  suspended  as  long  as  the  said  A.  B.  should  continue  to 
pay  the  said  sum  of  £6  5s.  every  quarter;  the  payments  to 
commence  as  therein  set  forth.  The  plea  proceeds  to  aver  that  the 
said  A.  B.  duly  paid  the  annual  sum  of  £25  quarterly  according  to  the 
agreement.  The  plaintiff  in  his  replication  to  this  plea  traversed  the 
allegation  of  the  payments  alleged  to  have  been  made  by  Alfred  Beech 
of  the  annual  sum  of  £25 ;  and  a  verdict  was  found  for  the  defendant 
upon  the  issue  joined  upon  that  traverse.  And  judgment  having  been 
given  by  the  Court  of  Queen's  Bench  for  the  defendant  upon  the  ver- 
dict so  found,  the  present  writ  of  error  has  been  brought  to  reverse 
that  judgment,  upon  the  ground  that,  non  obstante  veridicto  upon  the 
matters  in  that  plea,  judgment  ought  to  have  been  given  for  the  plain- 
tiff upon  the  first  and  second  counts.  The  plaintiff  has  brought 
his  writ  of  error,  praying  for  a  reversal  of  this  judgment. 

And,  upon  the  argument  before  us,  the  learned  counsel  for  the  plain- 
tiff has  contended  that  the  plea  of  the  defendant  to  the  first  and  second 
counts  of  the  declaration  is  bad,  and  sets  forth  no  matter  which  is  in 
law  a  bar  to  his  right  of  recovery  upon  those  counts.  Upon  the  part 
of  the  plaintiff,  the  validity  of  the  agreement  mentioned  in  the  plea  is 
not  denied ;  but  it  has  been  insisted  in  the  argument  before  us,  that  the 
agreement  does  not  in  point  of  law  operate  as  a  suspension  of  the 
plaintiff's  right  of  action  or  power  to  sue  for  the  recovery  of  the  notes 
mentioned  in  the  first  and  second  counts  in  the  declaration;  and  that 
the  plea  which  sets  up  the  agreement  in  bar  of  the  present  action  is 
bad,  and  furnishes  no  answer  to  the  action,  although  such  an  agree- 
ment may  give  the  defendant  a  claim  to  damages  by  reason  of  the 
plaintiff  suing  in  breach  of  it.  The  defendant,  on  the  other  hand,  has 
contended  before  us  that  the  legal  operation  of  the  agreement  is  to 
suspend  the  plaintiff's  right  of  action  so  long  as  A.  B.  shall  continue  to 
make  the  quarterly  payments ;  and  such  agreement  has  therefore  been 
well  pleaded  in  bar.  The  question  for  the  decision  of  the  court  is, 
therefore,  what  is  the  legal  effect  of  the  agreement  between  the  parties 
set  forth  in  the  plea, — that  is,  whether  the  agreement  operates  as  a 
legal  suspension  of  the  plaintiff's  right  to  sue  upon  the  notes  so  long 
as  A.  B.  shall  continue  to  make  the  quarterly  payments,  or  whether  the 
effect  of  the  agreement  is  limited  to  the  rendering  the  plaintiff  liable  to 
an  action  for  damages  in  the  extent  of  his  suing  contrary  to  its  terms. 

In  adjudicating  upon  the  construction  and  effect  in  law  of  this 
agrf'cirir'nt,  the  common  and  universal  principle  ought  to  be  applied; 
namely,  tbat  it  ougbt  to  receive  that  construction  which  its  language 
will  admit,  and  which  will  best  effectuate  the  intention  of  the  parties, 


SECT.    IV]  FORD    V.    BEECH  981 

to  be  collected  from  the  whole  of  the  agreement,  and  that  the  greater 
regard  is  to  be  had  to  the  clear  intent  of  the  parties  than  to  any  par- 
ticular words  which  they  may  have  used  in  the  expression  of  their 
intent.  And  applying  this  rule,  the  question  is,  what  sense  and  mean- 
ing must  be  given  to  the  word  "suspended,"  used  by  the  parties. 
It  is  quite  clear  that  it  was  not  the  intention  of  the  parties  that  the 
agreement  should  have  the  effect,  from  the  moment  of  its  being  signed, 
of  utterly  and  forever  and  in  all  events  extinguishing  the  plaintiff's 
cliaim  and  demand  upon  the  notes,  and  of  ever  maintaining  an  action 
for  the  recovery;  or,  in  other  words,  that  it  should  operate  as  a 
release  of  the  money  due  upon  them.  This  is  plain  from  the  words 
which  import  that  the  plaintiff  might  sue  upon  the  notes  when  A.  B. 
should  cease  to  make  the  quarterly  payments  mentioned  in  the  agree- 
ment. 

It  is  a  very  old  and  well  established  principle  of  law  that  the  right 
to  bring  a  personal  action,  once  existing  and  by  act  of  the  party  sus- 
pended for  ever  so  short  a  time,  is  extinguished  and  discharged,  and 
can  never  revive.  It  is  said  in  Piatt  v.  The  Sheriffs  of  London,  Plowd. 
35,  36 :  "And  if  a  personal  thing  is  once  in  suspense,  or  the  person 
of  a  man  once  discharged  for  a  personal  thing,  it  is  a  discharge  for- 
ever." And  in  Lord  North  v.  Butts,  2  Dyer,  139  b,  140  a  (39),  it  is 
said :  "A  thing  personal  or  suspended,  or  action  personal  suspended  for 
an  hour,  is  extinct  and  gone  forever,  when  it  is  by  the  act  and  consent 
of  the  party  himself  who  has  the  thing  suspended."  And  in  Wood- 
ward V.  Lord  Darcy,  Plowd.  184,  it  is  said :  "For  a  personal  action  once 
suspended  by  the  act  or  agreement  of  the  party  is  always  extinct ;  and 
then  if  a  personal  thing  cannot  be  had  but  by  action,  if  the  action  is 
extinguished,  the  thing  itself  is  extinguished:"  The  principle  thus 
laid  down  is  repeated  throughout  the  text-books  of  authority,  and 
recognized  and  applied  through  a  long  course  of  decision.  And  in 
Cheetham  v.  Ward,  1  Bos.  &  P.  630,  633,  it  is  said  by  Lord  Chief 
Justice  Eyre  that  the  principle  is  "  now  acknowledged  that  where  a 
personal  action  is  once  suspended  by  the  voluntary  act  of  the  party 
entitled  to  it,  it  is  forever  gone  and  discharged." 

To  construe  the  agreement,  therefore,  to  operate  as  a  legal  suspen- 
sion or  bar  of  the  plaintiff's  right  to  sue  until  the  quarterly  payments 
should  cease,  would  have  the  effect  of  precluding  him  from  ever  suing 
at  all,  and  of  giving  to  the  agreement  the  effect  of  an  immediate 
release  of  the  demand  upon  the  notes,  and  an  extinction  of  the  debt. 
It  follows  that  giving  such  meaning  and  effect  to  the  word  "sus- 
pended," used  in  the  agreement,  would  be  contrary  to  the  intention  of 
the  parties;  and  it  is  a  well  approved  rule  of  law  that,  where 
parties  have  used  language  which  admits  of  two  constructions,  the  one 
contrary  to  the  apparent  general  intent  and  the  other  con- 
sistent with  it,  the  law  assumes  the  latter  to  be  the  true  construc- 
tion. 

A  few  authorities  will  suffice  in  support  of  this  principle.    In  com- 


982  FORD    V.    BEECH  [CHAP.    VII 

menting  upon  Littleton,  §  560, — where  Littleton  says,  "If  there  be 
lord  and  tenant,  and  the  tenant  grant  the  tenements  to  a  man  for 
term  of  his  life,  the  remainder  to  another  in  fee,  if  the  lord  grant  the 
services  to  the  tenant  for  life  in  fee,"  "the  services  are  put  in  sus- 
pense during  his  life;   but  the  heirs  of   the   tenant  for   life   shall 
have  the  services  after  his  decease," — Lord  Coke,  in  313  a  says:  "It 
is  to  be  observed  that,  albeit  a  grant,  as  hath  been  said,  may  enure  by 
way  of  release,  and  a  release  to  the  tenant  for  life  doth  work  an  abso- 
lute extinguishment,  whereof  he  in  the  remainder  shall  take  benefit, 
yet  the  law  shall  never  make  any  construction  against  the  purport 
of  the  grant  to  the  prejudice  of  any,  or  against  the  meaning  of  the 
parties,  as  here  it  should;  for  if  by  construction  it  should  enure  to 
a  release,  the  heirs  of  the  tenant  for  life  should  be  disherited  of 
the  rent;  and  therefore  Littleton  here  saith  that  the  heirs  of  the 
grantee  shall  have  the  seigniory  after  his  death."    In  the  present  case, 
if  the  agreement  operates  as  a  release  by  reason  of  a  suspension  of  the 
right  of  action  by  the  act  of  the  party,  it  must  be  by  a  consequence 
of  law,  inasmuch  as  there  is  no  express  release;  and  in  Co.  Litt. 
264  b,  it  is  said :    A  release  in  law  should  be  expounded  more  favor- 
able, according  to  the  intent  and  meaning  of  the  parties,  than  a  release 
in  deed,  which  is  the  act   of  the  party,   and   shall  be  taken   most 
strongly  against  himself."     The  general  rules  of  law  for  the  con- 
struction of  instruments  are  clearly  laid  down  by  Wiles,  C.  J.,  in 
Parkhurst  v.  Smith,  lessee  of  Dormer,  Willes,  327,  332,  and  which  is 
to  the  effect  that  greater  regard  is  to  be  had  to  the  intention  than  to 
the  precise  words ;  and  this  rule  is  said  to  have  the  authority  of  Little- 
ton, Plowden,  Coke,  Hobart,  and  Finch.     This  principle  is  recog- 
nized and  adopted  by  Gibbs,  C.  J.,  m  Hutton  v.  Eyre,  6  Taunt.  289, 
295,  s.  c.  1  Marsh.  603,  607 ;  and  it  is  also  stated  and  applied  by  Dal- 
las, C.  J.,  and  various  authorities  referred  to,  in  Solly  v.  Forbes,  2  Br. 
&  B.,  38,  48,  wherein  he  states,  as  the  result  of  modern  authority,  that 
the  courts  look  "rather  to  the  intention  of  the  parties  than  to  the  strict 
letter ;  not  suffering  the  latter  to  defeat  the  former ;"  and  he  observes 
that,  if  a  deed  can  "operate  two  ways,  one  consistent  with  the  intent 
and  the  other  repugnant  to  it,  courts  will  be  ever  astute  so  to  con- 
strue it  as  to  effect  to  the  intent,"  regard  being  had  to  "the  entire 
deed;"  and  remarks  upon  the  fallacy  of  assuming  that,  "wherever 
the  word  'release'  is  made  use  of,  it  must  operate  absolutely  and  uncon- 
ditionally," though  followed  by  Avords  of  qualification. 

Applying  the  rules  of  construction  before  referred  to  to  the  present 
case,  and  in  order  best  to  effectuate  the  intention  of  the  parties,  it  is 
necessary  to  construe  the  agreement  to  mean  that,  the  plaintiff  agreed 
to  forbear  bis  suit  until  the  quarterly  payment  should  cease  to  be 
made;  and  that  the  effect  of  such  agreement  on  his  part  was,  not  to 
suspend  his  right  of  action  in  the  mean  time,  but  to  subject  him  to  an 
action  for  damages  in  the  event  of  his  suing  contrary  to  his  agree- 
ment. 


SECT.    IV]  FORD    V.    BEECH  983 

The  general  doctrine  of  suspension  of  personal  actions  appears  to 
be  applicable  to  cases  where  persons  have,  by  their  own  acts,  placed 
themselves  in  circumstances  incompatible  with  the  application  of  the 
ordinary  legal  remedies;  the  cases  generally  referred  to  in  the  books 
being  where  the  party  to  pay  and  to  receive  had  become  identical,  or 
where  the  same  person  was  necessary  to  be  joined  at  once  both  as 
plaintiff  and  defendant,  which  by  law  cannot  be;  such  as  a  creditor 
making  his  debtor  his  executor,  or  debtor  making  his  creditor  execu- 
tor, or  debtor  and  creditor  marrying,  or  similar  cases  of  incapacity 
to  sue,  as  to  which  the  authorities  are  numerous.  See  Co.  Litt.  264  b, 
also  Butler's  note,  ib.  209;  Woodward  v.  Lord  Darcy,  Plowd.  184; 
Sir  J,  N^eedham's  case,  8  Rep.  135  a;  Dorchester  v.  Webb,  Cro.  Car. 
372 ;  Wankford  v.  Wankford,  1  Saik.  299 ;  Freakley  v.  Fox,  9  B.  &  C. 
130;  2  Williams  on  Executors,    1124  (4th  ed.). 

The  only  case  in  which  a  covenant  or  promise  not  to  sue  is  held  to 
be  pleadable  as  a  bar,  or  to  operate  as  a  suspension,  and  by  consequence 
a  release  or  extinguishment  of  the  right  of  action,  is  where  the 
covenant  or  promise  not  to  sue  is  general,  not  to  sue  at  any  time.  In 
such  cases,  in  order  to  avoid  circuity  of  action,  the  covenants  may  be 
pleaded  in  bar  as  a  release  (note  (1)  to  Fowell  v.  Forrest,  2  Wms. 
Saund,  47  gg)  for  the  reason  assigned  that  the  damages  to  be  recov- 
ered in  an  action  brought  for  suing  contrary  to  the  covenant  would  be 
equal  to  the  debt  (Smith  v.  Mapleback,  1  T.  H.  441,  446)  or  sum  to 
be  recovered  in  the  action  agreed  to  be  forborne.  Accordingly  in 
Deux  V.  Jeffries,  Cro.  Eliz.  352,  in  debt  on  obligation,  the  defendant 
pleads  that  the  plaintiff  covenanted  that  he  would  not  sue  before 
Michaelmas;  it  was  resolved,  upon  demurrer,  for  the  plaintiff,  for 
that  it  was  only  a  covenant  not  to  sue  and  should  not  enure  as  a 
release,  nor  could  be  pleaded  in  bar,  but  the  party  was  put  to  his 
writ  of  covenant,  if  sued  before  the  time.  'TBut  if  it  had  been  a 
covenant  that  he  would  not  sue  it  at  all,  there  peradventure  it  might 
enure  as  a  release,  and  to  be  pleaded  in  bar,  but  not  here ;  for  it  never 
was  the  intent  of  the  parties  to  make  it  a  release."  And  there  are 
other  authorities  to  the  same  effect.  The  agreement  in  the  present 
case,  though  not  under  seal,  being  founded  upon  a  good  consider- 
ation, may  be  argued  to  be  equivalent  in  effect  to  a  covenant,  but  can- 
not have  a  greater  effect;  and,  in  the  modern  case  of  Thimbleby 
V.  Baron,  3  M.  &  W.  210,  it  was  held  that  a  covenant  not  to  sue  for  a 
limited  time  for  a  simple  contract  debt  could  not  be  pleaded  in  bar  to 
an  action  for  such  debt.  In  that  case  the  plaintiff  had  covenanted  that 
he  would  not  before  the  expiration  of  ten  years  demand  or  compel 
payment  of  certain  sums  of  money,  nor  would  take  any  means  or  pro- 
ceedings for  obtaining  possession  or  receipt  of  the  same.  Lord 
Abinger,  C.  B.,  said :  "The  breach  of  the  agreement  to  forbear  suing 
renders  the  party  liable  in  damages,  but  it  is  not  pleadable  in  bar;" 
and  Parke,  B.,  said :  "The  books  are  full  of  authorities"  against  the 
defendant,  and  referred  to  Ayloffe  v.  Scrimpshire,  Carth.  63,  s.  c.  1 


984  FORD    V.    BEECH  [CHAP.    VII 

Show.  46:  judgment  for  plaintiff.  In  1  Roll.  Abr.  939,  tit.  Ex- 
tinguishment (L),  pi.  2,  it  is  said  that,  if  the  obligee  covenant  not 
to  sue  the  obligor  before  such  a  day,  and  if  he  do,  that  the  obligor 
shall  plead  this  as  an  aquittance,  and  that  the  obligation  shall  be 
void  and  of  none  effect,  this  is  a  suspension  of  the  debt,  and  by  con- 
sequence a  release.  It  must  be  observed  that  in  that  case  it  was 
expressly  covenanted  that,  in  the  event  of  the  covenantor  suing  upon 
the  obligation  contrary  to  his  covenant,  the  obligation  should  be  void, 
and  that  the  obligor  or  covenantor  should  plead  the  covenant  as  an 
acquittance,  which,  by  consequence,  was  a  release;  the  covenant  in 
that  case  therefore  went  much  beyond  a  mere  covenant  not  to  sue. 

By  holding  the  plea  in  question  a  valid  bar,  injustice  would  be  done 
to  the  plaintiff,  who  would  lose  his  demand  upon  the  notes,  contrary  to 
the  intention  of  the  parties;  but,  by  construing  the  agreement  not  to 
operate  as  a  suspension  of  the  plaintiff's  right  of  action  upon  the 
notes,  but  as  giving  a  remedy  to  the  defendant  by  a  cross-action  to 
recover  damages  to  the  extent  of  the  injury  sustained  by  the  defendant 
by  the  plaintiff  suing  in  breach  of  the  agreement,  no  injustice  is  done 
to  the  defendant. 

jSTor  is  such  a  construction  inconsistent  with  the  class  of  authorities 
in  which  matters  were  allowed  to  be  pleaded  in  bar  in  order  to  avoid 
circuity  of  action,  because  such  decisions  are  limited  to  cases  in  which, 
from  the  nature  of  them,  the  damages  to  be  recovered  must  be  sup- 
posed to  be  equal  in  both  actions :  Smith  v.  Mapleback,  1  T.  R.  441, 
446 ;  which  does  not  apply  to  the  present  instance,  as  the  damages  to 
which  the  defendant  could  be  entitled  as  against  the  plaintiff,  by 
reason  of  his  suing  upon  the  notes  before  a  discontinuance  of  the 
quarterly  payment,  can  in  no  view  be  assumed  to  be  equal  to  the 
plaintiff's  demand. 

ISTeither  is  the  decision  in  this  case  inconsistent  with  the  several 
cases  in  which  it  has  been  held  that  a  party  accepting  a  negotiable 
security  payable  in  future  for  and  on  account  of  an  antecedent  demand 
cannot,  until  after  such  negotiable  security  has  become  due  and  been 
dishonored,  sue  for  such  antecedent  demand;  because,  independently 
of  the  consideration  of  how  far  the  acceptance  of  such  negotiable 
security  may  be  deemed  payment  for  the  time,  all  such  decisions  seem 
to  be  grounded  upon  the  peculiar  nature  of  the  negotiable  instruments, 
and  are  deemed  to  be  necessary  exceptions  to  the  general  rules  of  law, 
in  favor  of  the  law  merchant.  See  note  (c)  to  Holdipp  v.  Otway,  2 
Wms.  Saund.  103  h  (6th  ed.). 

The  case  of  Stracey  v.  The  Bank  of  England,  6  Bing.  754,  was  cited 
on  th(!  defendant's  behalf,  as  an  authority  to  the  effect  that  a  right  to 
bring  a  personal  action  may  be  suspended  by  agreement,  without  oper- 
ating as  a  release  or  extinguishment.  But,  upon  examination,  it  will 
be  found  probably  not  to  be  an  authority  bearing  upon  the  point.  The 
action  was  brought  to  recover  damages  for  an  alleged  breach  of  a  pub- 
lif  flnty  in  not  making  a  transfer,  njjon  request,  of  certain  stock  to 


SECT.    IV ]  SLATER    V.    JONES  985 

which  the  plaintiffs  were  entitled;  the  defendant  insisted  that  the 
plaintiffs  had  for  good  consideration  agreed  not  to  make  such  request 
until  they  had  themselves  done  certain  acts ;  and  alleged  that  the  plain- 
tiffs, contrary  to  their  agreement,  made  the  request,  for  the  non-com- 
pliance with  which  they  brought  their  action,  before  they  had  doae 
those  acts;  the  defendants  therefore  contended  that  such  non-compli- 
ance was  no  breach  of  duty  on  their  part.  There  was  no  right  of 
action  suspended  by  the  agreement,  as  it  is  clear  for  the  case  that  no 
request  had  ever  been  made  to  the  bank  to  transfer  the  stock,  and  no 
means  had  ever  been  given  to  enable  the  bank  to  do  so,  no  name  of  a 
transferee  having  been  given  at  the  time  when  the  agreement  was 
made,  nor  for  a  long  time  afterwards ;  consequently  the  only  right  of 
action  the  plaintiffs  ever  asserted  was  a  right  founded  upon  a  request 
made  long  after  the  agreement.  The  decision,  therefore,  was,  not 
that  any  existing  right  of  action  was  suspended  by  the  agreement,  but 
that  the  plaintiff  suspended  his  right  to  call  upon  the  defendant 
to  make  a  transfer  until  after  he  had  done  the  acts  mentioned  in  the 
agreement.  And,  although  the  expression  of  suspending  an  action 
was  used,  perhaps  inaccurately,  yet  it  was  plain  that  they  referred 
to  the  right  to  call  for  the  transfer  of  stock,  and  to  that  only. 
At  all  events,  as  a  decision  upon  the  point  for  which  the  case 
was  cited,  it  could  not  be  supported,  as  it  would  be  inconsis- 
tent without  any  undoubted  principle  of  law  and  an  undeviating 
course  of  authority. 

In  the  result,  we  are  of  the  opinion  that  the  plea  in  question  is  bad  in 
substance,  and  that  the  judgment  which  has  been  pronounced  upon  it 
in  favor  of  the  defendant  must  be  reversed,  and  a  judgment  entered 
for  the  plaintiff,  non  ohsfante  veredicto,  upon  the  confession  and 
insufficient  avoidance  in  the  plea.  Judgment  accordingly. 


SLATER  V.  JON'ES 

CAPES  V.  BALL 

In  the  Exchequer,  April  28,  1873 

[Reported  in  Law  Reports,  8  Exchequer,  186] 

Kellt,  C  B.^  I  am  of  the  opinion  that  the  defendants  in  these 
actions  are  entitled  to  our  judgment.  The  question  raised  in  each  is 
the  same,  and  is  whether  a  creditor  is  bound  by  a  resolution  to  accept 
a  composition  to  be  paid  by  instalments  or  at  a  future  time  by  a 
debtor,  passed  in  conformity  with  the  126th  section  of  the  Bank- 
ruptcy Act,  1869,  can  sue  the  debtor  for  his  whole  debt  before  the 
time  has  come  for  the  payment  of  any  instalment,  or  of  the  compo- 
sition. 

^  Makttn,  Bramwell,  and  Pollock,  BB.,  delivered  concurrent  opinions. 


986  SLATER    V.    JONES  [CHAP.    VII 

Now,  mucli  stress  has  been  laid  upon  the  cases  decided  under  the 
Bankruptcy  Act  of  1861 ;  but  there  is  a  fundamental  distinction 
between  the  provisions  of  that  Act  and  of  the  present  Bankruptcy 
Act.  Under  the  former  statute  a  prescribed  majority  of  creditors 
could  bind  all  to  the  provisions  of  any  composition  deed  to  which 
such  majority  should  agree  and  all  that  the  192d  section  enacts  is 
that  the  deed,  whatever  its  provisions,  should,  upon  certain  conditions 
being  complied  with,  bind  all  the  creditors.  The  effect  of  each  deed 
must  of  course  be  considered  by  itself.  In  one,  provisions  might  be 
inserted  amounting  to  an  absolute  extinction  of  the  debt,  in  another, 
there  might  be  no  words  having  that  effect ;  and  if  the  intention  of  the 
parties  was  that  the  deed  should  be  a  bar,  it  was  necessary  to  express 
it  in  plain  words.  That  being  so,  I  think  the  courts  rightly  decided 
that  in  construing  those  deeds  the  ordinary  rules  of  law  must  be 
applied,  and  the  intention  of  the  parties  be  gathered  from  the  words 
used;  and,  applying  those  rules,  it  was  properly  held  that  a  deed 
which  did  not  contain  a  release,  or  words  equivilant  to  a  release, 
could  not  be  pleaded.  Compositions  are  no  longer  carried  out  by  deed, 
but  by  resolution;  and  we  have  to  say  what  the  true  construction  of 
the  statute  is.  The  matter  depends  upon  the  126th  section,  which 
provides  that  the  creditors  may,  by  an  extraordinary  resolution, 
resolve,  "That  a  composition  shall  be  accepted  in  satisfaction  of  the 
debts  due  to  them  from  the  debtor."  Could  the  legislature  have 
intended  that  a  creditor  who  has  assented  to,  or  is  bound  by  the 
resolution,  should  the  next  day  commence  an  action  against  the  debtor 
for  his  whole  debt?  Such  a  construction  seems  to  me  to  be  repug- 
nant to  common  sense,  and  certainly  one  which  is  not  forced  upon 
us  by  any  of  the  decided  cases.  Here  the  creditors  have  become 
bound  by  a  resolution  that  a  composition  to  be  paid  by  instalments,  or 
at  a  future  time,  shall  be  accepted  in  satisfaction ;  and  I  think  that  a 
person  who  is  bound  by  such  a  resolution  is  also  bound,  by  necessary 
implication,  not  to  sue  the  debtor  before  the  time  for  payment  comes, 
and  until  default  is  made.  This  construction  receives  confirmation 
from  many  of  the  cases  cited,  and  especially  from  those  referred 
to  by  my  brother  Bramwell,  and  collected  in  the  second  volume  of 
Starkie  on  Evidence,  p.  17,  whence  it  appears  that  an  agreement 
by  all  the  creditors  to  accept  a  composition,  though  not  properly  an 
accord  and  satisfaction,  is  really  a  new  agreement  for  which  the 
consideration  to  each  creditor  is  the  forbearance  of  all  the  others. 
A  creditor  who  is  a  party  to  such  an  agreement  cannot  sue  for  his 
original  debt  in  contraventation  of  the  rights  of  the  others. 

Tt  remains  to  add  a  few  words  on  the  cases  of  Edwards  v.  Coombe, 
Law  Kep.  7  C.  P.  .519,  and  Tn  re  Hatton,  Law  Rep.  7  Ch.  723.  With 
regard  to  the  latter,  I  do  not  dissent  in  any  way  from  the  decision. 
The  general  expressions  used  by  Mkllish,  L.  J.,  must  be  taken  secun- 
dum Huhjcciam  maleriem ;  and  do  not  seem  to  me  to  be  applicable  to  a 
case  where  there  has  been  no  default  in  i)aying  the  agreed  composi- 


SECT.    IV]  SLATER    V.    JONES  987 

tion.  The  same  remark  is  applicable  to  the  judgment  of  Willes,  J.,  in 
Edwards  v.  Coombe,  supra.  Indeed,  it  is  clear,  from  the  language  of 
the  earlier  part  of  his  judgment,  that  he  was  of  the  opinion  that  no 
action  could  have  been  maintained  until  default. 

Then  it  is  contended  that  the  ease  of  Ford  v.  Beech,  11  Q.  B.  8.52, 
17  L.  J.  Q.  B.  114,  interposes  an  insurmountable  difficulty  in  the  de- 
fendant's way ;  for  if  the  composition  resolution  is  a  good  bar  now,  the 
right  of  action  for  the  debt  would  be  gone  forever;  and  according  to 
the  decisions  I  have  just  referred  to,  it  is  clear  that  tTie  right  is  not 
gone,  but  exists  if  the  debtor  makes  default.  Ford  v.  Beech,  supra, 
however,  has  no  application  here.  For  all  that  it  is  necessary  to 
decide  is  that  although,  rebus  sic  stantibus,  the  plaintiffs  have  no  cause 
of  action,  in  another  state  of  circumstances  a  cause  of  action  may 
accrue  to  them;  and  Edwards  v.  Coombe,  supra,  evidently  contem- 
plates that  such  may  be  the  case.  I  see  no  difficulty,  therefore,  in 
holding  that  the  present  actions  will  not  lie,  although  in  a  certain 
event  the  original  debts  might  be  sued  for,  just  as  a  certificate  in 
bankruptcy  might  be  used  as  a  bar  to  an  action  for  the  debt,  and  yet 
the  same  debt  could  afterwards  be  sued  for  if  the  certificate  were 
set  aside  for  fraud;  or  again,  just  as  no  action  can  be  successfully 
brought  for  the  price  of  goods  for  which  a  bill  of  exchange  has 
been  given  whilst  the  bill  is  running,  and  yet  the  price  can  be  sued 
for  after  the  bill  has  been  dishonored. 

Judgment  for  the  defendants  in  each  action.^ 

1  In  Newington  v.  Levy,  L.  R.  5  C.  P.  607,  an  action  against  the  acceptor  of  a  bill 
of  exchange,  the  question  was  raised  whether  a  composition  deed,  which  provided  for 
a  future  payment  by  the  debtor  and  released  him,  but  provided  that  if  default  were 
made  in  paying  the  composition  the  creditors  should  not  be  bound  by  any  of  their 
covenants,  would  operate  as  a  defence  if  payment  or  tender  of  the  amount  of  the  com- 
position were  not  made  when  it  was  due.  Willes,  J.,  said:  "We  see  no  difficulty  in 
upholding  a  release  with  a  condition  subsequent,  in  accordance  with  the  suggestion  of 
Matjle,  J.,  in  Gibbons  v.  Vouillon,  8  C.  B.  487.  It  must  have  often  happened  that  a 
voluntary  payment  good  at  the  time  as  extinguishing  the  debt  has  been  rendered  void 
by  matter  subsequent,  as  in  the  event  of  bankruptcy  of  the  debtor  and  an  election  by 
his  assignees  to  treat  the  payment  as  a  fraudulent  preference;  and  it  has  never  been 
successfully  contended  that  the  debt  did  not  thereby  revive.  Indeed,  the  contrary  is 
involved  in  the  decision  of  Pritchard  ».  Hitchcock,  6  M.  &  G.  151.  We  can  see  no 
substantial  distinction  between  the  case  of  a  payment  avoided  by  subsequent  events 
and  a  release  so  avoided.  This  is  not  a  case  of  temporary  suspension,  like  Ford  v. 
Beech,  11  Q.  B.  852;  but  a  case  in  which  the  release  will  be  forever  operative,  unless 
itself  subsequently  avoided.  The  distinction  is  fine,  but  it  is  supported  by  analogy, 
and  it  gives  effect  to  the  clear  intention  of  the  parties." 

On  appeal  the  Court  of  Exchequer  Chamber  affirmed  the  judgment  below,  L.  R. 
6  C.  P.  180.  Blackburn,  J.,  said:  "The  first  question  that  arises  is,  what  is  the 
efifect  of  the  release  in  the  deed  of  composition  pleaded  in  the  first  action?  By  that 
deed  the  creditors  release  the  defendant  from  their  respective  debts  in  express  terms: 
and  in  equally  express  terms  it  is  declared  that,  if  default  should  be  made  in  payment 
of  the  composition,  the  release  should  be  void.  The  question  (which  has  never  yet 
arisen  in  a  court  of  error)  is  whether  this  is  pleadable  as  a  defence,  where  the  matter 
which  is  to  undo  the  release  has  not  yet  happened.  I  think  it  is.  The  old  rule  was 
■  that  a  right  of  action  once  suspended  is  gone  forever.  To  avoid  that,  where  it  was 
evidently  contrary  to  what  the  parties  intended,  the  Court  of  Exchequer  Chamber, 
in  Ford  v.  Beech,  11  Q.  B.  852,  construed  the  agreement,  not  as  suspending  the  plain- 
tiff's remedy  on  the  promissory  notes  there  used  upon,  but  as  giving  the  defendant 
merely  a  right  of  action  for  breach  thereof,  if  the  plaintiff  sued  whilst  the  payments 


988  GOOD    V.    CHEESMAN  [CHAP.    VII 

HARBOE  V.  MORGAN 

Indiana  Supreme  Court^  May  3,  1853 

[Reported  in  4  Indiana,  158] 

Stuart^  J.^  Assumpsit  on  a  note  due  October  1,  1849,  payable  in 
money  or  wheat,  at  the  customary  price  at  Fairview,  in  said  county. 
Breach,  that  the  defendant  had  failed  to  pay  the  money,  or  in  anywise 
comply  with  the  conditions  of  said  note. 

The  third  plea  alleges  an  agreement  made  in  December,  1849,  be- 
tween Jernagan,  the  holder  of  the  note,  and  the  defendant  below,  to 
the  effect  that  if  Harbor  would  procure  for  the  defendant  a  certain 
pacing  horse  which  was  specified,  he,  Jernagen,  would  accept,  and 
receive  the  horse  instead  of  the  wheat,  in  payment  of  the  note.  And 
Harbor  avers  that  he  purchased  the  horse  and  sent  him  to  Jernagen; 
but  that  the  latter  refused  to  receive  him,  &c. 

This  plea  is  also  bad.  It  lacks  the  acceptance  of  Jernagan  to  make 
it  a  bar  to  the  action.^  Perhaps  Harbor  may  have  a  remedy  against 
Jernagan  on   the   collateral   agreement. 


GOOD  V.  CHEESMAN" 
In  the  King's  Bench^  May  4,  1831 

[Reported  in  2  Barnewall  &  Adolphus,  328] 

Assumpsit  by  the  plaintiff  as  drawer  against  the  defendant  as 
acceptor  of  two  bills  of  exchange.  Plea,  the  general  issue.  At  the 
trial  before  Lord  Tenterden,  C.  J.,  at  the  sittings  in  London  after 
Trinity  Term,  1830,  it  was  proved,  on  behalf  of  the  defendant,  that 

were  continued,  that  is,  as  a  covenant  not  to  sue  for  a  limited  period.  It  must,  how- 
ever, be  taken  to  be  established  that,  where  a  covenant  not  to  sue  is  in  terms  expressed 
to  be  intended  as  a  release,  and  where  the  rights  of  surety  do  not  intervene,  it  is,  in 
order  to  avoid  circuity  of  action,  an  answer  to  the  plaintiff's  claim.  A  release  wliich 
in  terms  is  subject  to  a  defeasance  amounts  to  a  covenant  not  to  sue,  except  upon  the 
happening  of  the  event  contemplated.  Such  a  release  is  not  open  to  the  objection 
taken  in  Ford  v.  Beech,  aupra.  It  very  rarely  could  happen  that  matter  subsequent 
could  undo  that  which  had  suspended  the  plaintiff's  right  of  action,  and  therefore 
practically  it  was  enough  to  say  that  a  right  of  action  once  suspended  is  gone  forever; 
and  I  am  not  aurf^rised  that  the  research  of  Mr.  Williams  has  failed  to  enable  him  to 
find  an  instance  of  such  a  replication  as  this.  But,  where  there  is  a  covenant  not  to 
sue  which  is  pleadable  as  a  dofcmco  only  to  prevent  a  cross-action,  anything  which 
would  hav(;  been  an  answer  to  the  cross-action  upon  the  covenant  may  be  set  up  as 
an  answer  to  the  plea;  as  in  the  case  of  Eyton  v.  Littledale,  4  Ex.  159,  18  L.  J.  (Ex.) 
369,  where  it  was  held  to  be  a  good  replication  to  a  plea  of  set-off,  that  after  plea 
pleaded  the  plainfifT  paid  the  debt."     See  also  ex  parte  Burden,  16  Ch.  D.  675. 

'   A  portion  of  the  opinion  is  omitted. 

»  Wray  v.  Milestone,  5  M.  &  W.  21;  (Jabriel  v.  Dresser,  15  C.  B.  622;  Francis  v. 
DeminK,  .59  Conn.  108,  Burgess  v.  Deni.son  Mfg.  Co.,  79  Me.  266;  Brest  v.  Cole,  183 
Ma.ss.  283;  Cunnon  Hivc^rs  Assf)e.  v.  Rogers,  40  Minn.  376;  Hawley  ?>.  Foote,  19 
"Wend.  516;   Keen  v.  Vaughan's  Ex.,  48  Pa.  St.  477;   Hosier  v.  Hurst,  151  Pa.  415,  ace. 


SECT.    IV]  GOOD    V.    CHEESMAN  989 

after  the  bills  became  due,  and  before  the  commencement  of  this 
action,  the  plaintiff  and  three  other  creditors  of  the  defendant  met 
together,  in  consequence  of  a  communication  from  him,  and  signed 
the  following  memorandum :  "Whereas,  William  Cheesman  of 
Portsea,  brewer,  is  indebted  to  us  for  goods  sold  and  delivered,  and 
being  unable  to  make  an  immediate  payment  thereof,  we  have  agreed 
to  accept  payment  of  the  same  by  his  covenanting  and  agreeing  to 
pay  to  a  trustee  of  our  nomination  one  third  of  his  annual  income, 
and  executing  a  warrant  of  attorney  as  a  collateral  security  until 
payment  thereof.  As  witness  our  hands  this  31st  of  October,  1829." 
It  did  not  appear  whether  or  not  the  defendant  was  present  when  this 
paper  was  signed,  nor  did  he  ever  sign  it ;  but  it  was  in  his  possesion 
at  the  time  of  the  trial,  and  he  had  procured  it  to  be  stamped.  At  the 
time  of  the  signature  the  defendant  had  other  creditors  than  the  four 
above  mentioned,  and  particularly  one  Gloge,  to  whom  he  had  given 
a  warrant  of  attorney,  on  which  judgment  had  been  entered  up; 
and  it  was  agreed  at  the  meeting  of  the  31st  of  October,  that  if 
Gloge  would  come  into  the  arrangement  there  made,  an  additional 
201.  per  annum  should  be  set  apart  by  the  defendant  out  of  his  income. 
The  defendant,  on  the  16th  of  November,  1829,  wrote  to  the  plaintiff 
as  follows :  "  If  you  should  see  Mr.  Wooldridge"  (one  of  the  creditors 
who  signed)  "to-day,  I  should  be  glad  if  you  would  endeavor  to  be 
at  my  house  at  noon  that  you  may  be  down,  as  there  is  an  objection 
to  the  arrangement  by  Mr.  Gloge,  the  particulars  of  which  I  will 
explain  when  I  see  you.  I  am  sorry  to  be  so  troublesome;  but,  of 
course,  I  am  anxious  the  thing  should  be  settled."  Gloge  never 
acceded  to  the  agreement,  nor  was  any  trustee  ever  nominated,  or 
covenant  entered  into,  or  warrant  of  attorney  executed,  as  therein 
mentioned.  The  bills  of  exchange  continuing  wholly  unpaid, 
this  action  was  commenced.  The  Lord  Chief  Justice  left  it  to  the 
jury,  as  the  only  question  of  fact  in  the  case,  whether  the  agreement 
entered  into  by  the  four  creditors  was  conditional  only,  depending  on 
Gloge's  assent,  or  absolute;  in  the  latter  case,  he  was  of  opinion  that 
the  defendant  was  entitled  to  a  verdict.  The  jury  found  for  the 
defendant,  but  leave  was  given  to  move  to  enter  a  verdict  for  the 
plaintiff.    A  rule  nisi  having  been  obtained  accordingly, — 

Scotland  now  showed  cause. 

Follett,  contra 

Lord  TenteedeN;,  C.  J.  Upon  the  whole,  I  am  of  opinion  that 
the  verdict  in  this  case  was  right.  On  the  evidence  it  must  be  taken 
that  the  defendant  assented  to  the  composition  and  would  have  been 
willing  to  assign  a  third  of  his  income  to  a  trustee  nominated  by  the 
creditors,  and  execute  a  warrant  of  attorney,  as  required  by  the  agree- 
ment; but  he  could  not  do  so  unless  the  creditors  would  appoint  a 
trustee  to  whom  such  assignment  could  be  made,  or  warrant  of 
attorney  executed.  That  no  such  appointment  took  place  was  the 
fault  of  the  creditors,  not  of  the  defendant.    It  certainly  appears  that 


990  GOOD    V.    CHEESMAN  [CHAP.   VII 

this  was  not  an  accord  and  satisfaction  properly  and  strictly  so  called, 
but  it  was  a  consent  by  the  parties  signing  the  agreement  to  forbear 
enforcing  their  demands,  in  consideration  of  their  own  mutual 
engagement  of  forbearance;  the  defendant,  at  the  same  time,  prom- 
ising to  make  over  a  part  of  his  income,  and  to  execute  a  warrant  of 
attorney,  which  would  have  given  the  trustee  an  immediate  right  for 
their  benefit.  Then  is  it  not  a  case  where  each  creditor  is  bound  in 
consequence  of  the  agreement  of  the  rest?  It  appears  to  me  that  it 
is  so,  both  on  principle  and  on  the  authority  of  the  cases  in  which 
it  has  been  held  that  a  creditor  shall  not  bring  an  action  where  others 
have  been  induced  to  join  in  a  composition  with  the  debtor;  each 
party  giving  the  rest  reason  to  believe  that,  in  consequence  of 
such  an  engagement,  his  demand  will  not  be  enforced.  This  is,  in 
fact,  a  new  agreement,  substituted  for  the  original  contract  with  the 
debtor, — the  consideration  to  each  creditor  being  the  engagement 
of  the  others  not  to  press  their  individual  claims. 

LiTTLEDALE,  J.  This  is  not  strictly  an  accord  and  satisfaction  or 
a  release,  but  it  is  a  new  agreement  between  the  creditor  and  debtor, 
such  as  might  very  well  be  entered  into  on  a  valid  consideration. 
It  was  not  necessary  in  this  particular  case  that  there  should  be 
an  actual  assignment,  or  execution  of  a  warrant  of  attorney;  if  it 
only  rested  with  the  plaintiff  and  the  other  creditors  that  the  contract 
should  be  carried  into  effect,  and  the  defendant  was  always  ready  to 
do  his  part,  it  is  the  same  as  if  he  had  actually  executed  an  assign- 
ment or  warrant  of  attorney.  This  case,  therefore,  is  different  from 
Heathcote  1\  Crookshanks,  2  T.  R.  24.  And  it  would  be  unjust  that 
the  plaintiff  by  this  action  should  prejudice  the  other  three  creditors, 
each  of  whom  signed  the  agreement,  and  has  since  neglected  the 
recovery  of  his  demand,  under  a  persuasion  that  none  of  the  parties  to 
the  memorandum  would  proceed  against  the  defendant. 

Parke,  J.  I  am  of  the  opinion  that  the  verdict  was  right.  By 
the  agreement  entered  into  among  these  parties,  the  defendant  was  to 
give,  and  the  creditors  to  accept,  certain  securities  for  payment  in  the 
manner  there  stipulated;  and  upon  the  faith  of  that  compromise  the 
three  creditors  who  signed  with  the  plaintiff  have  postponed  their 
demands.  Then,  cannot  this  transaction  be  pleaded  in  bar  to  the 
present  suit?  It  is  laid  down  in  Com.  Dig.  Accord  (B  4),  that  an 
accord  with  mutual  promises  to  perform  is  good,  though  the  thing  be 
not  performed  at  the  time  of  action ;  for  the  party  has  a  remedy  to 
compel  the  performance:  but  the  remedy  ought  to  be  such  that  the 
party  might  have  taken  it  upon  the  mutual  promise  at  the  time  of 
the  agreement.  Here  each  creditor  entered  into  a  new  agreement  with 
the  defendant,  the  consideration  of  which,  to  the  creditor,  was  a  for- 
bearance by  all  the  other  creditors  who  were  parties  to  insist  upon 
their  claims.  Assumpsit  v^ould  have  lain'  on  either  side  to  enforce 
performance  of  this  agreement,  if  it  had  been  shown  that  the  party 
sniiif?  bad,  so  far  us  lay  in  him,  fulfilled  his  own  share  of  the  contract. 


SECT.    IV]  BABCOCK.    &   RUSSELL    V.    HAWKINS  991 

I  think,  therefore,  that  a  mutual  engagement  like  this,  with  an  im- 
mediate remedy  given  for  non-performance,  although  it  did  not 
amount  to  a  satisfaction,  was  in  the  nature  of  it,  and  a  sufficient 
answer  to  the  action. 

Patterson,  J.  The  question  is,  whether  or  not  this  agreement  was 
binding  on  the  plaintiff.  I  think  it  was.  The  agreement  was  entered 
into  by  him  on  a  good  consideration,  namely,  the  undertaking  of  the 
other  creditors  who  signed  the  paper  at  the  same  time  with  him,  on  the 
faith,  which  every  one  was  induced  to  entertain,  of  a  forbearance  by 
all  to  the  debtor.  Rule  discharged} 


BABCOCK  &  EUSSELL  v.  PETEK  HAWKIJ^TS 

Veemont  Supreme  Court,  August  Term,  1851 

{Reported  in  23  Vermont,  561] 

Book  account.  Judgment  to  account  was  rendered  in  the  county 
court  and  an  auditor  was  appointed,  who  reported  the  facts  substan- 
tially as  follows :  The  plaintiffs  exhibited  an  account  against  the  de- 
fendant, only  one  item  of  which  was  disputed,  which  was  for  a  horse, 
charged  by  the  plaintiff  at  $60,  and  which  was  allowed  by  the  auditor 
at  $52.50.  The  whole  account  was  allowed  by  the  auditor  at  $323.16. 
The  plaintiffs  exhibited  credits  to  the  amount  of  $285.87,  which  in- 
cluded a  credit  note  for  $30,  given  by  the  defendant  to  the  plain- 
tiffs August  14,  1849,  and  the  defendant  claimed  and  was  allowed  an 
account  of  75  cents ;  and  the  auditor  reported  that  there  was  a  balance 
due  from  the  defendant  to  the  plaintiffs  of  $31.68,  which  they  were  en- 
titled to  recover,  unless  the  facts  hereinafter  stated,  which  were  relied 
upon  by  the  defendant,  would  in  law  preclude  the  plaintiffs  from  any 
right  of  recovery.  It  appeared  that  on  the  14th  of  August,  1849,  which 
was  subsequent  to  the  commencement  of  this  suit,  the  parties  met,  and 
the  defendant  agreed  to  give  a  note  for  $30  to  the  plaintiffs,  and  pay 
all  the  plaintiffs'  costs  in  the  suit,  except  the  writ  and  service.  The 
defendant  executed  the  note, — which  is  the  one  credited  to  him  by  the 
plaintiffs  as  above  stated, —  and  agreed  to  pay  the  costs  as  above 
stated ;  and  the  plaintiffs  then  executed  and  delivered  to  him  a  receipt 
in  these  words:  ''Eeceived  of  Peter  Hawkins  thirty  dollars  by  note 
given  per  this  date  in  full  to  settle  all  book  accounts  up  to  this  date;" 
and  the  suit,  as  well  as  the  subject  matter  of  the  suit,  was  considered 
settled  by  the  parties.  The  defendant  never  paid  any  portion  of  the 
costs,  but  paid  part  of  the  note,  and  for  the  reason  that  the  defendant 
had  not  paid  the  costs  the  plaintiffs  refused  to  discontinue  the  suit. 
The  county  court,  Eebruary  Adjourned  Term,  1851,  Poland,  J.,  pre- 
siding, accepted  the  report  and  rendered  judgment  for  the  defendant. 
Exceptions  by  plaintiffs, 

*  C!ompare  Evans  v.  Powis,  1  Ex.  601. 


992  BABCOCK    &   RUSSELL    V.    HAWKINS  [CHAP.    VII 

G.  W.  Stone  and  /.  McLean,  for  plaintiffs. 

T.  Howard,  for  defendant. 

The  opinion  of  the  court  was  delivered  by 

Redfield,  J.  There  is  perhaps  no  subject  connected  with  the  law 
upon  which  there  has  been  more  discussion  than  that  of  accord  and 
satisfaction,  or  upon  which  there  is  more  want  of  agreement.  But  we 
think  it  must  be  regarded  as  fully  settled  that  an  agreement  upon  suffi- 
cient consideration,  fully  executed,  so  as  to  have  operated,  in  the  minds 
of  the  parties,  as  a  full  satisfaction  and  settlement  of  pre-existing 
contract  or  account  between  the  parties,  is  to  be  regarded  as  a 
valid  settlement,  whether  the  new  contract  be  ever  paid  or  not,  and 
that  the  party  is  bound  to  sue  upon  the  new  contract,  if  such  were 
the  agreement  of  the  parties.  This  is  certainly  the  common  under- 
standing of  the  matter.  It  is  reasonable,  and  we  think  it  is  in 
accordance  with  the  strictest  principles  of  technical  law. 

1.  There  is  no  want  of  consideration  in  any  such  case  where  one 
contract  is  substituted  for  another,  and  especially  so  where  the 
amount  due  upon  the  former  contract  or  account  is  matter  of  dis- 
pute. The  liquidating  a  disputed  claim  is  always  a  sufficient  con- 
sideration for  a  new  promise.    Holcomb  v.  Stimpson,  8  Vt.  141. 

2.  The  accord  is  sufficiently  executed,  when  all  is  done,  which 
the  party  agrees  to  accept  in  satisfaction  of  the  preexisting  obli- 
gation. This  is  ordinarily  a  matter  of  intention,  and  should  be 
evidenced  by  some  express  agreement  to  that  effect,  or  by  some  un- 
equivocal act  evidencing  such  a  purpose.  This  may  be  done  by 
surrender  of  the  former  securities,  by  release  or  receipt  in  full,  or  in 
any  other  mode.  All  that  is  requisite  is  that  the  debtor  should  have 
executed  the  new  contract  to  that  point  whence  it  was  to  operate  as 
satisfaction  of  the  pre-existing  liability  in  the  present  tense.  That 
is  shown  in  the  present  case  by  executing  a  receipt  in  full,  the  same 
as  if  the  old  contract  had  been  upon  note  or  bill  and  the  papers 
had  been  surrendered. 

3.  In  every  case  where  one  security  or  contract  is  agreed  to  be 
received  in  lieu  of  another,  whether  the  substituted  contract  be  of 
the  same  or  a  higher  grade,  the  action,  in  case  of  failure  to  per- 
form, must  be  upon  the  substituted  contract.  And  in  the  present 
case,  as  it  is  obvious  to  us  that  the  plaintiffs  agreed  to  accept  the 
note  and  the  defendant's  promise  to  pay  the  costs  in  full  satisfaction, 
and  in  the  place  of  the  former  liability,  the  defendant  remained  lia- 
ble only  upon  the  new  contract. 

4.  In  all  cases  where  the  party  intends  to  retain  his  former  remedy 
he  will  neither  surrender  nor  release  it;  and  whether  the  party 
shall  be  permitted  to  sue  upon  his  original  contract  is  matter  of 
intention  always,  unless  the  new  contract  be  of  a  higher  grade  of 
contrnct,  in  which  case  it  will  jilwaya  merge  the  former  contract, 
notwithstanding  tbe  agreement  of  the  debtor  to  still  remain  liable 
upon  tbe  original  contract. 


SECT.    IV]  KROMER    V.    HEIM  993 

5.  In  every  case  of  a  valid  contract,  upon  sufficient  consideration, 
to  discharge  a  former  contract  in  some  new  mode,  the  new  contract 
supersedes  the  remedy  for  the  time,  until  there  has  been  a  failure; 
and  then  the  creditor  may  always,  if  he  chooses,  sue  upon  the  new 
contract.  This  is  certainly  the  inclination  of  the  more  modern 
cases. 

We  think  the  judgment  must  be  affirmed.^ 


OTTO  KEOMEE  v.  ANTON  HEIM 

New  York  Court  of  Appeals,  December  5,  1878-January 

21,   1897 

[Reported  in  New  York,  547] 

Appeal  from  order  of  the  General  Term  of  the  Superior  Court  of 
the  city  of  New  York,  affirming  an  order  of  Special  Term  denying  a 
motion  on  the  part  of  the  defendant  to  set  aside  an  execution  issued 
upon  judgment  herein,  and  to  have  the  judgment  satisfied  of  record. 

On  June  24,  1876,  the  plaintiff  obtained  a  judgment  herein  for 
$4,334.08.  On  July  26,  1876,  and  pending  a  stay  of  execution,  plain- 
tiff's attorney  executed  and  delivered  to  defendant  a  written  stipu- 
lation, in  and  by  which  plaintiff  agreed  to  accept  in  settlement  of 
the  judgment,  if  paid  within  a  year,  $3,000  in  cash  and  an  assign- 
ment of  defendant's  interest  in  a  certain  patent  right  and  of  the 
assets  of  such  patent  business,  or  to  accept  $1,000  in  cash,  $250 
down  and  the  balance  in  instalments,  and  merchandise  to  be  de- 
livered in  amounts  stated,  sufficient,  with  cash  payments,  to  reduce 
the  judgment  to  $1,000,  and  an  assignment  of  said  patent  interests. 
Defendant  paid  the  $250  down,  and  made  the  other  cash  payments  and 
deliveries  of  merchandise,  as  specified  in  the  second  alter- 
native of  the  stipulation,  until  the  judgment  was  reduced  to  less 
than  $1,000,  all  of  which  payments  were  received  by  plaintiff  without 
objection.  Defendant  then  executed  and  tendered  to  plaintiff  an  as- 
signment of  the  patent  interests  as  required,  which  plaintiff  declined 
to  accept,  but  issued  an  execution  to  collect  the  balance  of  the  judg- 
ment. 

^  The  possibility  of  the  executory  accord  being  itself  accepted  as  satisfaction  is 
now  generally  recognized. 

Evans  v.  Powis,  1  Ex.  601;   Buttigieg  v.  Booker,  9  C.  B.  689;   Edwards  v.  Hancher, 

1  C.  P.  D.  Ill,  119;  Acker  v.  Bender,  33  Ala.  230;  Smith  r.  Elrod,  122  Ala.  269; 
Heath  v.  Vaughn,  11  Col.  App.  384;  Warren  v.  Skinner,  20  Conn.  356;  Goodrich  v. 
Stanley,  24  Conn.  613;  Brunswick,  &c.  Ry.  Co.  v.  Clem,  80  Ga.  534;  Simmons  v. 
Clark,  56  111.  96;  Hall  v.  Smith,  10  Iowa,  45,  15  Iowa,  584;  Whitney  v.  Cook,  53  Miss. 
551;  Yazoo,  &c.  R.  Co.  v.  Fulton,  71  Miss.  385;  Worden  v.  Houston,  92  Mo.  App. 
371;    Gerhart  Realty  Co.  v.  Northern  Assur.  Co.,  94  Mo.  App.  356;    Frick  v.  Joseph, 

2  N.  Mex.  138;  Perdew  v.  Tillma,  62  Neb.  865;  Morehouse  v.  Second  Nat.  Bank,  98 
N.  Y.  503;  Nassoiy  v.  Tomlinson,  148  N.  Y.  326;  Spier  v.  Hyde,  78  N.  Y.  App.  Div. 
151.  Compare  Campbell  v.  Hurd,  74  Hun,  235;  Wentz  v.  Meyersohn,  59  N.  Y.  App. 
Div.  130;   Hozler  v.  Hursh,  151  Pa.  415. 

32 


994  KROMER    V.    HEIM  [CHAP.   VII 

D.  M.  Porter,  for  appellant. 

/.  W.  Feeter,  for  respondent. 

Andrews,  J.  "Accord,"  says  Sir  William  Blackstone,  "is  a  satis- 
faction agreed  upon  between  the  party  injuring  and  the  party  in- 
jured; which  when  performed,  is  a  bar  to  all  actions  upon  this 
account."  3  Bl.  Com.  15.  An  accord  executory  without  performance 
accepted  is  no  bar;  and  tender  of  performance  is  insufficient.  Bac. 
Abr.  tit.  Accord  and  Satisfaction,  C.  also  accord  with  part  exe- 
cution cannot  be  pleaded  in  satisfaction.  The  accord  must  be  com- 
pletely executed,  to  sustain  a  plea  of  accord  and  satisfaction.  Bac. 
Abr,  Accord  Satisfaction,  A;  Cock  v.  Honeychurch,  T.  Ray.  203; 
Allen  V.  Harris,  1  Ld.  Ray.  122 ;  Lynn  v.  Bruce,  2  H.  Bl.  317.  In 
Peytoe's  case,  9  Co.  79,  it  is  said,  "and  every  accord  ought  to  be  full, 
perfect  and  complete;  for  if  divers  things  are  to  be  done  and  per- 
formed by  the  accord,  the  performance  of  part  is  not  sufficient,  but  all 
ought  to  be  performed."  The  rule  that  a  promise  to  do  another  thing 
is  not  a  satisfaction,  is  subject  to  the  qualification  that  where  the 
parties  agree  that  the  new  promise  shall  itself  be  a  satisfaction  of 
the  prior  debt  or  duty,  and  the  new  agreement  is  based  upon 
a  good  consideration,  and  is  accepted  in  satisfaction,  then  it  operates 
as  such,  and  bars  the  action.  Evans  v.  Powis,  1  Ex.  601 ;  Kinsler  v. 
Pope,  5  Strob.  126;  Pars,  on  Cont.  683,  note. 

An  exception  to  the  general  rule  on  this  subject  has  been  allowed 
in  cases  of  composition  deeds,  or  agreements  between  a  debtor  and  his 
creditors ;  and  they  have  been  held,  upon  grouds  peculiar  to  that  class 
of  instruments,  to  bar  an  action  by  a  separate  creditor,  who  had 
signed  the  composition  to  recover  the  debt,  although  the  composition 
agreement  was  still  executory.  Good  v.  Cheesmau,  2  B.  &  Ad.  328; 
Bayley  v.  Homan,  3  Bing.  N.  C.  915.  The  doctrine  which  has  some- 
times been  asserted  that  mutual  promises  which  give  a  right  of  action 
may  operate  and  are  good,  as  an  accord  and  satisfaction  of  a  prior 
obligation,  must,  in  this  State,  be  taken  with  the  qualification  that  the 
intent  was  to  accept  the  new  promise,  as  a  satisfaction  of  the  prior 
obligation.  Where  the  performance  of  the  new  promise  was  the  thing 
to  be  received  in  satisfaction,  then,  until  performance,  there  is  not 
complete  accord;  and  the  original  obligation  remains  in  force.  Rus- 
sell V.  Lytle,  6  Wend.  390 ;  Daniels  v.  Halenbeck,  19  id.  408 ;  Hawley 
V.  Foote,  id.  516;  The  Brooklyn  Bank  v.  DeGrauw,  23  id.  342;  Tilton 
V.  Alcott,  16  Barb.  598. 

Applying  the  well  settled  principles  governing  the  subject  of  accords 
to  this  case,  the  claim  that  the  plaintiff's  judgment  is  satisfied  cannot 
be  maintained.  There  is  no  ground  to  infer  that  the  agreement  of 
July  26,  1876,  was  intended  by  the  parties  to  be  or  was  accepted  as  a 
substitute  for  or  satisfaction  of  tlic  plaintiff's  judgment.  It  was,  in  ef- 
fect, a  pro7)09ition  on  the  part  of  the  plaintiff,  in  the  alternative,  to 
accept  $3,000  in  cash,  if  paid  within  one  year,  and  the  assignment  of 
the  patent  and  avails  of  the  patent  business,  in  full  of  the  judgment  of 


SECT.    IV]  KROMER    V.    HEIM  995 

$4,334.08,  or  to  accept  $1,000  in  cash,  in  instalments,  and  the  balance 
in  merchandise,  until  the  judgment  should  be  reduced  to  $1,000 ;  and 
for  that  balance  to  accept  the  assignment  of  the  patent  interests. 

The  defendant  had  the  election  between  the  alternatives  presented 
by  the  plaintiff.  He  elected  the  latter,  and  paid  the  $1,000,  and  sup- 
plied the  merchandise,  until  the  debt  was  reduced  to  $1,000,  and  then 
tendered  the  assignment  of  the  patent  interests,  which  the  plaintiff 
refused  to  accept. 

The  judgment  clearly  was  to  remain  in  force  until  the  satisfaction 
under  the  new  agreement  was  complete.  It  is  the  case  of  an  accord 
partly  executed.  So  far  as  the  plaintiff  accepted  performance,  his 
claim  was  extinguished.  So  far  as  it  was  unexecuted,  the  judgment 
remained  in  full  force ;  and  however  indefensible  in  morals  it  may  be 
for  the  plaintiff  to  refuse  to  abide  by  the  agreement  in  respect  to  the 
patent  interests,  he  was  under  no  legal  obligation  to  accept  the  assign- 
ment tendered ;  and  he  had  the  legal  right  to  enforce  the  judgment  for 
the  balance  remaining  unpaid.^ 

It  is  clear  that  the  right  to  supply  the  merchandise  was  for  the 
benefit  of  the  defendant.  The  plaintiff  gave  him  the  option  to  pay 
$3,000  in  cash,  and  assign  the  patent  interests,  or  to  pay  $3,334.08  in 
merchandise  and  assign  the  patent  interests.  The  merchandise  was 
to  be  furnished  on  "as  favorable  terms  as  would  be  allowed  by  Hoyt 
&  Co.,  or  New  York  rates  for  cash  sales."  It  gave  the  plaintiff  no 
benefit  beyond  what  he  would  derive  by  any  purchase  in  the  open 
market  of  the  same  kind  of  goods.  It  is  quite  clear  that  the  defendant 
preferred  to  pay  $3,334.08  in  merchandise  to  paying  $3,000  in  cash. 

We  think  that  no  distinction  arises  upon  the  circumstances  to  take 
the  case  out  of  the  general  rule,  that  an  unexecuted  accord  cannot  be 
treated  as  a  satisfaction. 

The  order  should  be  affirmed. 

All  concur.  Order  affirmed. 

1  Shepherd  v.  Lewis,  T.  Jones,  6;  Lynn  v.  Bruce,  2  H.  Bl.  317;  Carter  v.  Wormald, 
1  Ex.  81;  Gabriel  v.  Dresser,  15  C.  B.  622;  Humphreys  v.  Third  Nat.  Bank,  75  Fed. 
Rep.  852,  859;  Long  v.  Scanlan,  105  Ga.  424;  Woodruff  v.  Dobbins,  7  Blackf.  582; 
Deweese  v.  Cheek,  35  Ind.  514;  Young  v.  Jones,  64  Me.  563;  White  ».  Gray,  68  Me. 
579;  Clifton  v.  Litchfield,  106  Mass.  34;  Hayes  v.  Allen,  160  Mass.  34;  Prest  v.  Cole, 
183  Mass.  283;  Hoxsie  v.  Empire  Lumber  Co.,  41  Mhin.  548,  549;  Clarke  v.  Dins- 
more,  5  N.  H.  136;  Rochester  v.  Whitehouse,  15  N.  H.468;  Kidder  v.  Kidder,  53  N. 
H.  561;  Gowing  v.  Thomas,  67  N.  H.  399;  Russell  v.  Lytle,  6  Wend.  390;  Brooklyn 
Bank  v.  De  Grauw,  23  Wend.  342;  Tilton  v.  Alcott,  16  Barb.  598;  Hearn  v.  Keihl, 
38  Pa.  147;  Blackburn  v.  Ormsby,  41  Pa.  97;  Hosier  v.  Hursh,  151  Pa.  415;  Clarke 
V.  Hawkins,  5  R.  I.  219;  Carpenter  v.  Chicago,  &c.  Ry.  Co.,  7  S.  Dak.  594;  Gleason  v. 
Allen,  27  Vt.  364,  ace. 

Bradley  ».  Gregory,  2  Camp.  383;  Very  v.  Levy,  13  How.  345;  Latapee  v.  Pecho- 
lier,  2  Wash.  C.  C.  180;  Whitsett  v.  Clayton,  5  Col.  476;  Jenness  v.  Lane,  26  Me. 
475  (overruled);  Heim  v.  Carron,  19  Miss.  361;  Coit  v.  Houston,  3  Johns.  Cas.  243 
(overruled);  Bradshaw  v.  Davis,  12  Tex.  336;  Johnson  v.  Portwood,  89  Tex.  235,  239, 
contra. 


996  HUNT    V.    BROWN  [CHAP.    VII 


HE:NrEY  HUNT  v.  WILLIAM  BROWN 

SuPEEME  Judicial  Court  of  Massachusetts,  January  13- 
March  2,  1888 

[Reported  in  146  Massachusetts,  253] 

Holmes,  J.  The  plaintiff  made  three  notes  to  Russell,  the  defend- 
ant's intestate.  Afterwards,  according  to  the  plaintiff's  evidence  in 
the  present  case,  Russell  promised  that,  if  the  plaintiff  would  assent  to 
a  compromise,  by  the  executors  of  the  plaintiff's  father's  will,  of  a 
claim  in  their  hands  against  third  persons,  by  which  compromise  the 
plaintiff's  share  of  his  father's  estate  would  be  diminished,  Russell 
would  accept  in  full  settlement  of  the  balance  due  upon  the  notes  what- 
ever percentage  the  executors  should  take  in  settlement  of  their  claim. 
The  executors  then  settled  the  claim  for  sixty-two  per  cent  of  the 
amount,  with  the  plaintiff's  assent.  Then  Russell  died,  and  suit  was 
brought  by  his  administrator,  the  present  defendant,  upon  the  notes, 
against  the  present  plaintiff.  The  latter  pleaded  a  general  denial  and 
payment,  and  afterwards  made  an  offer  of  judgment  for  the  full 
amount  of  the  notes,  interest,  and  costs,  which  was  accepted,  and  the 
sum  was  paid.  The  present  suit  is  upon  Russell's  alleged  agreement. 
The  defendant  asked  a  ruling  that  the  agreement  was  without  con- 
sideration, and  also  that  the  judgment  in  the  former  case  was  a  bar. 
Both  rulings  were  refused,  and  he  excepts. 

1.  It  is  very  plain  that  the  jury  were  warranted  in  finding  that  the 
plaintiff's  assent  to  the  compromise  was  dealt  with  by  the  parties  as 
a  consideration,  that  is,  as  the  conventional  inducement  of  Russell's 
promise,  and  not  merely  as  a  condition  precedent,  and  that  if  it  was  so 
dealt  with  it  was  sufficient.  Evidence  or  even  an  admission  that  the 
compromise  was  for  the  plaintiff's  advantage  would  not  alter  the  case. 
In  determining  whether  or  not  an  act  was  dealt  with  by  the  parties  to 
an  oral  agreement  as  a  consideration,  the  fact  that  its  consequences 
were  seen  to  be  advantageous  to  the  actor  may  be  important;  but  on 
the  question  of  sufficiency  alone,  it  is  not  enough  that  the  immediate 
effect  of  the  act  is  an  abandonment  of  an  actual  or  supposed  right, 
whatever  the  balance  of  advantages  may  be  in  the  long  run.  It  is 
hard  to  imagine  any  change  of  position,  not  made  in  pursuance  of 
a  previous  duty,  which  may  not  be  sufficient  as  a  consideration,  or 
which  is  uot  a  detriment  in  a  legal  sense. 

2.  If  Russell  had  received  the  sixty-two  per  cent  as  agreed,  and  the 
suit  had  been  brought  for  the  residue,  the  question  would  arise 
whether  the  acceptance  of  less  than  the  sum  due,  upon  a  collateral 
consideration,  could  be  distinguished  from  an  acceptance  of  less,  be- 
fore tbc  notes  fell  due,  or,  like  that,  constituted  an  accord  and  satisfac- 
tion ;  Bowker  v.  Childs,  3  Allen,  434,  436;  and  if  it  was  technically  a 
satisfaction,  whether,  like  a  payment  (Fuller  v.  Shattuck,  13  Grey, 


SECT.    IV]  HUNT    V.    BROWN  997 

70),  it  must  not  have  been  pleaded  in  the  suit  upon  the  notes  if  it 
was  to  be  relied  on  at  all,  or  whether  there  remained  any  contract 
unexecuted  by  the  party  satisfied  which  he  would  break  if  he  after- 
wards brought  suit.  But  Russell  did  not  accept  the  sixty-two  per 
cent ;  so  that  the  only  question  is  whether  his  agreement  in  any  other 
way  extinguished  the  notes  in  whole  or  in  part,  since  in  that  case 
the  judgment  might  be  a  bar. 

The  agreement  was  not  itself  a  satisfaction.  It  was  not  a  new 
contract  substituted  for  the  notes,  and  entitling  the  plaintiff  to  de- 
mand their  surrender.  I^either  could  it  operate  as  a  release  of 
thirty-eight  per  cent  of  the  notes,  when  the  percentage  was  fixed  by 
the  compromise  referred  to.  Language  sometimes  has  been  used 
which  suggests  that  an  agreement  for  a  sufficient  consideration  might 
take  effect  by  way  of  release,  although  not  under  seal.  Goodnow  v. 
Smith,  18  Pick.  414,  416;  Petty  v.  Allen,  134  Mass.  265,  267;  Taylor 
'V.  Manners,  L.  R.  1  Ch.  48.  But  the  common  law  knows  no  such 
release.  Shaw  v.  Pratt,  22  Pick.  305,  308.  The  consideration  of  the 
notes  being  executed,  the  agreement  could  operate  only  by  way  of 
accord  and  satisfaction.  See  Cumber  v.  Wane,  1  Smith's  Lead.  Cas. 
(8th  Am.  ed.)  633  and  notes;  Bragg  v.  Danielson,  141  Mass.  195, 
196;  May  v.  King,  12  Mod.  537,  538.  The  suggestion  which  we  are 
considering,  if  stated  in  technical  form,  would  have  to  be  that 
Russell  accepted  the  plaintiff's  assent  to  the  compromise  which  he 
desired,  in  satisfaction  of  thirty-eight  per  cent  of  the  notes.  But  this 
is  plainly  a  distortion  of  the  evidence,  according  to  which  the  assent 
was  accepted,  not  as  partial  satisfaction  of  a  debt,  but  as  the  con- 
sideration for  a  promise. 

If,  however,  the  jury  might  have  been  warranted  in  finding  that 
the  agreement,  and  what  was  done  under  it,  had  released  or  satis- 
fied thirty-eight  per  cent,  they  were  warranted  at  least  equally  in 
finding  that  it  was  purely  executory  in  purport  as  well  as  in  form, 
viz.  to  accept  a  percentage  in  satisfaction  when  it  was  paid.  The 
court  could  not  rule,  as  a  matter  of  law,  that  the  opposite  construc- 
tion was  the  true  one,  or  assume  the  opposite  construction  as  a  foun- 
dation for  its  rulings. 

But  it  may  be  said,  that  the  contract  must  have  been  found  to 
embrace  the  element  that  Russell  would  not  sue  for  more  than  sixty- 
two  per  cent,  x^nd  it  may  be  argued  that,  if  not  technically  a  re- 
lease it  ought  to  have  been  available  in  defence  pro  tanio.  by  way 
of  estoppel  or  otherwise,  in  order  to  avoid  circuity  of  action,  upon 
the  same  principle  that  a  covenant  not  to  sue  is  allowed  to  enure  as 
a  release.  The  answer  is,  that  whether  available  in  this  way  or  not, 
whether  or  not  such  a  defence  would  escape  the  objection  that  in 
substance  it  was  accord  without  satisfaction,  the  plaintiff  was  not 
bound  to  use  the  agreement  in  defence.  For  if,  as  we  have  tried 
to  show,  and  as  the  suggestion  under  consideration  assumes,  Russell's 
agreement  did  not  extinguish  the  whole  or  any  part  of  the  notes, 


998  IN   RE    HATTON  [CHAP.    VII 

but  left  them  in  full  force,  it  also  necessarily  retained  its  independent 
character  as  a  collateral  contract.  See  further  Costello  v.  Cady,  102 
Mass.  140;  Blake  v.  Blake,  110  Mass,  202.  A  breach  of  it  was  a 
substantive  cause  of  action,  upon  which  the  present  plaintiff  might 
bring  his  own  suit  in  his  own  way,  and  he  was  no  more  bound  to 
plead  it  than  he  would  have  been  bound  to  plead  a  set-off,  fraud,  or 
a  breach  of  warranty.  Smith  v.  Palmer,  6  Cush.  513,  521 ;  Cobb  v. 
Curtiss,  8  Johns.  470.  See  Burnett  v.  Smith,  4  Gray,  50,  52 ;  Davis 
V.  Hedges,  L.  K.  6  Q.  B.  687. 

When  a  defendant  has  the  choice  of  setting  up  a  matter  in  defence, 
or  of  suing  upon  it  in  another  action,  if  he  chooses  not  to  set  it  up 
in  defence,  of  course  the  judgment  in  the  action  against  him  is  no 
bar  to  a  subsequent  suit  by  him.  Smith  v.  Palmer,  ubi  supra;  Star 
Glass  Co.  V.  Morey,  108  Mass.  570,  573 ;  Davis  v.  Hedges,  uhi  supra. 
Russell's  agreement  was  not  pleaded  in  the  former  action.  Even  if 
it  had  been  executed,  it  would  not  have  been  admissible  under  a 
plea  of  payment.  Ulsch  v.  Muller,  143  Mass.  379 ;  Grinnell  v.  Spink, 
128  Mass.  25.  The  present  plaintiff,  not  having  set  up  the  agree- 
ment, and  having  no  other  defence,  very  properly  saved  himself 
costs  and  his  antagonist  delay  by  submitting  at  once  to  the  in- 
evitable and  offering  judgment.  See  Bigge  v.  Burbidge,  15  M.  &  W. 
598.  Exceptions  overruled. 


In  Re  HATTON 

In  Chancery,  July  25,  1872 
[Reported  in  7  Chancery  Appeals,  723] 

George  Hatton,  on  the  24th  of  March,  1871,  filed  his  petition  for 
liquidation  or  composition  with  his  creditors,  and  at  the  first  meet- 
ing of  creditors  the  following  resolutions  were  passed :  "1.  That 
a  composition  of  55.  in  the  pound  shall  be  accepted  in  satisfaction 
of  the  debts  due  to  the  creditors  from  the  said  George  Hatton;  2. 
that  such  composition  be  payable  as  follows:  2s.  Qd.  in  the  pound 
three  months  after  registration  of  this  resolution,  and  2s.  %d.  in  the 
pound  six  months  after  registration";  which  resolutions  were  duly 
confirmed  and  registered. 

Messrs.  Hodge  &  Co.,  as  creditors  of  Hatton,  assented  to  the 
resolutions,  and  received  the  first  instalment  of  £5  18s.  9cZ.  on  their 
debt  of  £47  10s. 

The  second  instalment  became  due  on  the  26th  of  October,  1871, 
but  was  not  paid;  and  Hatton  now  alleged  that  he  was  unable  to 
pay  it.  Hodge  &  Co.  applied  for  payment,  and  on  the  30th  of  April, 
1872,  commenced  an  action  in  the  Court  of  Common  Pleas  to  recover 
a  bal;ir)ce  of  £45  8s. 

irattoTi  then  sent  them  an  order  for  £5  18s.  9d,  as  the  second 
instalment,  which  they  refused  to  receive. 


SECT.    IV]  IN    RE   HATTON  999 

Hatton  then  obtained  from  the  Registrar,  acting  as  Chief  Judge 
in  Bankruptcy,  an  injunction  restraining  Hodge  &  Co.  from  pro- 
ceeding with  their  action  until  further  order  of  the  court. 

Hodge  &  Co.  now  moved,  by  way  of  appeal,  to  discharge  the  order 
granting  the  injunction. 

Mr.  De  Gex,  Q.  C,  and  Mr.  Bagley,  for  the  Appellants. 

Mr.  Robertson  Griffiths,  for  Hatton. 

Sir  W.  M.  James,  L.  J.  I  think  that  we  are  bound  by  the  decision 
of  the  Court  of  Common  Pleas  in  Edwards  v.  Coombe,  Law  Rep.  7 
C.  P.  519. 

We  find,  indeed,  a  decision  in  In  re  Hemingway  ^  which  appears 
to  be  conflicting  with  that  decision,  but  there  were  peculiar  circum- 
stances in  that  case  which  may  have  had  some  influence  upon  the 
mind  of  the  Chief  Judge.  Here,  however,  the  question  has  resolved 
itself  into  the  simplest  form  possible.  If  the  debt  continues  to 
exist  at  common  law,  and  it  has  been  decided  that  the  debt  does 
continue  so  to  exist,  there  is  nothing  in  this  case  to  induce  us,  as  a 
Court  of  Equity,  or  a  Court  of  Bankruptcy,  to  say  that  the  debt 
does  not  exist  in  this  court. 

The  act  has  provided  that  a  certain  majority  of  the  creditors  shall 
have  power  to  bind  every  creditor  to  accept  a  composition,  or  some- 
thing less  than  he  is  entitled  to.  In  this  case  the  creditor  is  to  accept 
55.  in  the  pound,  payable  by  instalments,  at  three  months  and  six 
months.  It  must  be  conceded  that  if  this  had  been  an  agreement 
with  any  individual  creditor,  that  agreement  could  not  be  pleaded 
as  accord  and  satisfaction  of  the  debt  unless  actual  payment  of  the 
5s.  modo  et  forma  could  also  be  pleaded ;  and  I  do  not  see  why  we  are 
to  suppose  any  difference  between  the  two  cases.  It  is  true  that  the 
act  has  given  not  only  power  to  make  binding  resolutions  as  to 
the  composition,  but  power  to  the  creditors  to  enforce  in  bankruptcy 
payment  of  the  composition.  That,  however,  amounts  only  to  a 
further  security,  and  does  not  alter  the  nature  of  the  agreement. 
If  the  creditors  had  intended  to  make  such  an  alteration,  they  might 
have  said  so.  The  resolution  of  the  creditors  might  have  provided 
that  giving  promissory  notes,  with  or  without  sureties,  should  be 
accepted  in  discharge  of  the  existing  debts,  and  then  the  execution 
of  the  promissory  notes  by  the  debtor  and  the  sureties  might  be 
pleaded  as  accord  and  satisfaction. 

To  give  any  other  interpretation  to  the  act  would  be  to  interfere 
with  the  general  provisions  of  the  act,  and  would  in  fact  interfere 
with  the  ratable  distribution  of  the  assets,  instead  of  having  the 
contrary  effect,  as  had  been  argued.  It  was  said  that  the  debtor 
might  then  be  able  to  pay  half  his  creditors,  and  leave  the  others 
unpaid,  but  that  is  entirely  met  by  the  provision  at  the  end  of  the 
126th  section,  enabling  the  court  under  such  circumstances  to 
adjudge  the  debtor  a  bankrupt.  If  the  debtor  applies  great  part 
*  Reported  in  7  Ch.  App.  724,  n. 


1000  IN   RE    HATTON  [CHAP,    VII 

of  his  assets  in  payment  of  some  of  his  debts,  any  other  creditor,  see- 
ing that  the  debtor  would  then  not  be  able  to  pay  him,  can  go 
to  the  Court  of  Bankruptcy  and  have  the  debtor  adjudged  bankrupt, 
so  as  to  prevent  that  state  of  things. 

It  appears  to  me  that  the  Court  of  Common  Pleas  has  decided  in 
accordance  with  my  own  view,  that  the  composition  must  be  paid 
pursuant  to  the  agreement,  as  well  as  agreed  to  be  paid,  to  give  the 
debtor  a  valid  defence  to  an  action  at  law ;  nor  is  there  any  defence  or 
any  equity  in  this  court.  There  may  be  cases  in  which  by  accident, 
and  not  by  default  of  the  debtor,  the  composition  is  not  duly  paid, 
and  then  no  doubt  this  court  would  relieve  the  debtor  from  the  effect 
of  such  an  accident,  and  remove  any  injustice. 

Sir  G.  Mellish,  L.  J.  I  am  of  the  same  opinion.  At  common 
law,  where  a  body  of  creditors  accept  a  composition,  they  may  either 
agree  to  take  the  promises  of  the  debtor  with  or  without  a  surety 
in  satisfaction  of  the  debts,  or  they  may  agree  that  payment  shall  be 
a  condition  precedent,  and  that  if  the  debtor  pays  the  composition  at 
a  certain  time  and  place,  the  creditors  will  accept  that  composition 
in  satisfaction  of  their  debts.  It  is  a  question  of  construction  of 
the  instrument  of  arrangement,  and  it  is  not  uncommon  for  the  credi- 
tors to  accept  a  promise  by  the  debtor  and  a  surety  as  a  satisfaction 
of  their  debts.  But  where  they  agree  to  accept  a  composition,  the 
debtor  is  not  discharged  unless  he  pays  the  composition,  for  that 
is  the  only  thing  which  compels  him  to  pay  it,  and  that  is  the  only 
hold  which  the  creditors  have  upon  him.  There  may  be,  as  in  this 
case,  a  simple  composition  which  the  creditors  agree  to  accept  if 
paid  to  the  day,  and  there  is  in  my  opinion  no  reason  why  we  should 
construe  these  resolutions  otherwise. 

In  a  similar  case,  as  I  understand  it,  the  Court  of  Common  Pleas 
has  held  that  the  creditor  could  maintain  his  action  for  the  full 
amount,  and  there  is  nothing  to  induce  us  in  this  case  to  restrain 
him.  The  only  excuse  given  by  the  debtor  is  that  he  had  not 
money  with  which  to  pay  this  instalment;  but  that,  under  the  cir- 
cumstances, is  not  a  sufficient  excuse;  and  it  was  not  until  the  action 
was  brought  that  the  composition  was  tendered. 

The  order  of  the  "Registrar  must  be  discharged.  The  creditors 
will  have  their  costs  below,  but  not  of  the  appeal.^ 

'  Seo  also  Simmons  7;.  Oullahan,  75  Cal.  608;  Francis  v.  Deming,  59  Conn.  108; 
Prest  V.  Cole,  183  Mass.  283. 


SECT.    IV  ]  MITCHELL    V.    HAWLEY  1001 


MITCHELL  AND  Anothee  v.  HAWLEY,  impleaded  with  FOOTE 

AND  TAYLOK 

New  York  Supeeme  Couet,  May,  1847 

[Reported  in  4  Denio,  414] 

Debt  on  a  justice's  judgment  on  a  note  signed  by  Foote  as  prin- 
cipal and  HaM'ley  and  Taylor  as  sureties.  The  defendant  Hawley 
was  not  served  with  process  in  the  justice's  court,  and  he  alone  was 
served  with  process  in  the  present  action.  He  proved  as  a  defence 
an  agreement  by  the  plaintiff  with  Taylor,  made  after  the  judgment 
in  the  justice's  court  was  rendered,  but  before  the  time  for  appeal  had 
expired,  by  which  the  defendant  agreed  not  to  issue  execution  against 
Taylor,  or  endeavor  to  collect  the  judgment  from  him,  but  to  look 
solely  to  the  other  defendants,  in  consideration  of  Taylor's  agree- 
ment not  to  appeal. 

The  circuit  judge  held  that  this  agreement  constituted  no  defence,, 
and  directed  a  verdict  for  the  plaintiff,  to  which  the  defendant's 
counsel  excepted.^ 

N.  Hill,  Jun.,  for  the  defendant  Hawley,  moved  for  a  new  trial 
on  a  case. 

D.  Wright,  for  the  plaintiffs. 

By  the  Court,  Beardsley^  J.  It  was  said  in  James  v.  Henry,  16 
Johns.  233,  "That  a  justice's  judgment  was  equivalent,  at  least,  to 
a  specialty;  and  that  assumpsit  will  not,  therefore,  lie  on  such  a 
judgment."  But,  strictly  speaking,  the  judgment  of  a  justice,  in  a 
case  of  which  he  has  jurisdiction,  is  much  more  than  equivalent 
to  a  specialty,  for  that  may  be  impeached  on  various  grounds,  as 
fraud  or  illegality.  Such  a  judgment,  however,  while  unreserved,  is, 
for  every  purpose,  as  conclusive  between  the  parties  as  that  of  the 
highest  court  of  record  in  the  State.  Pease  v.  Howard,  14  Johns. 
479 ;  Andrews  v.  Montgomery,  19  id.  162. 

The  judgment  declared  on  in  this  case,  was  in  the  nature  of  a  debt 
of  record;  and  although  as  to  the  defendant  Hawley,  who  had  not 
been  served  with  process  and  who  did  not  appear  in  the  cause  before 
the  justice,  the  judgment  was  only  evidence  of  the  extent  of  the  de- 
mand after  establishing  his  liability  by  other  evidence,  it  was  as  to 
the  other  defendants,  who  had  been  duly  served  with  process,  abso- 
lutely conclusive.  2  R.  S.  247,  §  §  122,  3;  p.  251,  §  §  141,  2;  p.  377, 
§  1  to  5.  So  far,  therefore,  as  respects  the  defendants  Taylor  and 
Foote,  this  judgment  was  equivalent  to  a  debt  of  record;  and  if, 
as  to  the  defendant  Hawley,  it  should  be  regarded  as  a  security  of  an 
inferior  grade,  that  would  not  affect  the  decision  to  be  made  upon 
the  questions  now  before  the  court. 

A  judgment  may  certainly  be  released.     Co.  Lit.  291,  a:  2  Shep. 

^  The  statement  of  facts  has  been  abbreviated. 


1002  MITCHELL    V.    HAWLEY  [CHAP.   VII 

Touch,  by  Preston,  322,  3 ;  Barber  v.  St.  Quentin,  12  M.  &  W.  452, 
Parke,  B.  But  a  release  is  always  under  seal,  and  here  was  none. 
Kowley  v.  Stoddard,  7  Johns.  207 ;  Co.  Lit.  264.  In  the  present  case 
there  was  nothing  more  than  a  parol  agreement  by  the  plaintiffs, 
founded  on  a  like  engagement  by  the  defendant  Taylor,  that  they 
would  not  take  any  proceeding  on  the  judgment  to  collect  the  same 
of  him,  but'  would  look  to  the  other  defendants  alone  for  satisfaction 
thereof.  This  was  in  no  sense  a  release,  nor  was  the  arrangement 
made  between  these  parties  valid,  by  way  of  accord  and  satisfaction. 
It  was  an  accord  only,  for  nothing  was  received  in  satisfaction  of 
the  judgment.  Taylor  agreed  not  to  carry  the  case  to  the  common 
pleas  by  appeal,  and  the  plaintiffs  agreed  not  to  enforce  the  judg- 
ment against  him.  So  far  everything  rested  in  promises,  for  nothing 
whatever  was  executed  by  either  party.  An  accord  executory  is  in  no 
case  a  bar.  Com.  Dig.  Accord,  B.  1,  B.  4;  Vin.  Ab.  Accord,  A; 
Davis  V.  Ockham,  Sty.  245 ;  James  i'.  David,  5  D.  &  E.  141 ;  Lynn  v. 
Bruce,  2  H.  Black.  317;  Bayley  v.  Homan,  3  Bing.  N".  C.  915;  Allies 
V.  Probyn,  2  C.  M.  &  E.  408;  Daniels  v.  Hallenbeck,  19  Wend.  408; 
Brooklyn  Bank  v.  De  Grauw,  23  id.  342. 

There  is  another  insuperable  difficulty  in  looking  at  this  arrange- 
ment as  an  accord  and  satisfaction ;  for  such  a  plea  can,  in  no  case, 
be  interposed  as  a  bar  to  an  action  of  debt  founded  on  a  record,  or 
on  a  judgment  in  the  nature  of  a  record.  "An  obligation  is  not  made 
void  but  by  a  release;  for  naturals  esf,  quidlibet  dissolve  eo  modo  quo 
ligatur  —  a  record  by  a  record,  a  deed  by  a  deed ;  and  a  parol  prom- 
ise or  agreement  is  dissolved  by  parol,  and  an  act  of  parliament 
by  an  act  of  parliament.  This  reason  and  this  rule  of  law  are 
always  of  force  in  the  common  law."  Jenk.  Cent.  p.  70.  And  this 
is  strictly  true  with  a  single  qualification,  that  a  record,  as  well  as 
a  specialty,  may  be  cancelled  by  a  release.  Barber  t).  St.  Quentin, 
Parke,  B.,  supra;  Broom's  Legal  Max.  407 ;  Sliep.  Touch,  supra; 
1  Saund.  PI.  &  Ev.  23;  West  v.  Blakeway,  2  Scott's  K  R.  199;  9 
Dow,  846,  s.  c. 

The  principle  stated  applies  as  well  to  debts  by  specialty  as  to 
debts  of  record.  But  here  a  distinction  is  to  be  noted,  for  "  when  a 
duty  doth  accrue  by  the  deed  in  certainty,  tempore  confectionis 
scripti,  as  by  covenant,  bill  or  bond  to  pay  a  sura  of  money,  there 
this  certain  duty  takes  its  essence  and  operation  originally  and  solely 
by  the  writing;  and  therefore  it  ought  to  be  avoided  by  a  matter 
of  as  high  nature,  although  that  the  duty  be  merely  in  the  personalty: 
but  when  no  certain  duty  accrues  by  the  deed  but  a  wrong  or  de- 
fault subsequent,  together  with  the  deed,  gives  an  action  to  recover 
rlamages  which  are  only  in  the  personalty,  for  such  wrong  or  de- 
fault, accord  with  satisfaction  is  a  good  plea."  Blake's  Case,  6 
Itf'7).  43.  Accord  and  satisfaction  cannot  discharge  a  specialty,  al- 
though they  will  damag(^H  arising  from  the  breach  of  a  specialty.  1 
Leigh's  N.  P.  694;  1  CTiit.  PI.  ed.  1837,  521,  c;  Com.  Dig.  Accord, 


SECT.    IV ]  STEEDS    V.    STEEDS  1003 

A.  2,  4;  Bac.  Ab.  Accord  and  Satisfaction,  B.;  Vin.  Ab.  Accord, 
B.;  Alden  v.  Blague,  Cro.  Jac.  99;  Neal  v.  Sheaffield,  id.  254;  Kaye 
V.  Waghorne,  1  Taunt.  428;  Strang  v.  Holmes,  7  Cowen,  224. 

"Accord,"  says  Sir  Wm.  Blackstone,  "is  a  satisfaction  agreed 
upon  between  the  party  injuring  and  the  party  injured;  which, 
when  perfornied,  is  a  bar  to  all  actions  upon  this  account."  3  Com. 
15.  The  bar  rests  on  the  agreement  and  not  on  the  mere  reception 
of  property,  for  whatever  amount  may  have  been  received,  the  right 
of  action  will  not  be  exting-uished,  unless  it  was  agreed  that  the  prop- 
erty should  be  received  in  satisfaction  of  the  injury.  1  Saund.  PI. 
&  Ev.  23  to  26;  Bac.  Abr.  Accord  and  Satisfaction;  3  Steph.  Com. 
373;  1  Ch.  PI.  613;  2  id.  924,  1022,  1031,  1156;  Webb  v.  Weatherby, 
1  Bing.  N.  C.  502;  Kidley  v.  Tindall,  7  Adol.  &  El.  134.  But  the 
agreement  thus  to  accept  satisfaction  is  by  parol,  which,  in  its 
nature,  is  capable  of  discharging  an  obligation  by  record  or  specialty 
—  quodque  dissolvitur  eodem  ligamine  quo  ligatur. 

On  the  same  principle,  payment  of  a  debt  of  record  could  not, 
at  common  law,  be  pleaded  to  an  action  brought  for  the  recovery 
of  such  debt;  1  Ch.  PI.  521;  2  id.  996,  a,  note  h;  2  Saund.  PI.  &  Ev. 
712,  713,  717;  or  of  a  debt  by  specialty.  Dyer,  25,  h.  But  it  is 
otherwise  by  statute.  2  E.  S.  353,  §  §  11,  12,  13;  I  R.  L.  of  1813, 
p.  517,  §  5. 

The  judgment  on  which  this  action  was  brought,  not  having  been 
cancelled  or  impaired  as  to  either  of  the  parties,  by  the  arrangement 
between  the  plaintiffs  and  Taylor,  no  defence  was  shown  on  the  trial, 
and  the  motion  for  a  new  trial  must  be  denied. 

New   trial   denied.^ 


STEEDS    AND   ANOTHER    V.    STEEDS    AND    ANOTHER 

In  the  Queen^s  Bench  Division,  Court  of  Appeal,  February  4,  6, 

1889 

[Reported  in  22  Queens  Bench  Division,  537] 

The  judgment  of  the  court  (Huddleston,  B.,  and  Wills,  J.)  was 
read  by  — 

Wills,  J.  The  plaintiffs  in  this  case  sue  for  a  sum  of  money 
alleged  to  be  due  for  principal  and  interest  on  a  bond  made  in  their 
favor  by  the  two  defendants. 

1  In  BoflSnger  v.  Tuyes,  120  U.  S.  198,  205,  Mr.  Justice  Matthews  in  delivering 
the  opinion  of  the  court,  said:  "The  technical  difficulty  that  there  can  be  no  satisfac- 
tion and  discharge  of  a  judgment  or  decree,  except  by  matter  of  record,  Mitchell  v. 
Hawley,  4  Denio,  414;  8.  c.  47  Am.  Dec.  260,  cannot  be  interposed.  At  common  law 
actual  payment  of  a  debt  of  record  could  not  be  pleaded  in  bar  of  an  action  for  the 
recovery  of  the  debt.  This  has  been  changed  by  statute  both  in  England  and  in  this 
country,  and  no  reason  can  be  assigned  why  an  accord  and  satisfaction  should  not 
have  the  same  effect."  See  also  Re  Freeman,  117  Fed.  Rep.  680,  684;  Savage  v. 
Blanchard,  148  Mass.  348;   Fowler  v.  Smith,  153  Pa.  639,   Black  on  Judgments,  §976. 


1004  STEEDS    V.    STEEDS  [CHAP.    VII 

One  of  the  defendants  pleads  that  he  delivered  to  one  of  the 
plaintiifs  certain  stock  and  goods  which  were  given  by  him  and  ac- 
cepted by  the  said  plaintiff  in  satisfaction  and  discharge  of  the 
money  due  upon  the  bond.  The  other  defendant  pleads  that  he 
executed  the  bond  as  surety  and  was  discharged  by  the  transaction 
set  up  by  the  first  defendant. 

The  plaintiffs  apply  to  have  this  defence  struck  out,  as  being  no 
answer  to  their  claim.  The  same  question  arises  as  to  both  de- 
fendants, and  is  shortly  whether  in  respect  of  a  bond  given  by  C. 
to  A.  and  B.,  accord  and  satisfaction  made  by  C.  to  A.  after  the 
cause  of  action  had  arisen,  and  accepted  by  A.,  is  an  answer  to  the 
claim  of  A.  and  B. 

On  behalf  of  the  plaintiffs  two  objections  are  raised.  1.  That  in 
respect  of  a  specialty  debt,  accord  and  satisfaction  of  the  cause  of 
action  by  the  person  or  persons  liable  is  no  more  an  answer  to  the 
action  in  equity  than  it  is  at  law.  2.  That  even  if  it  would  be  so, 
were  the  bond  made  in  favor  of  A.  alone,  accord  and  satisfaction 
with  A.  is  no  answer  in  equity  to  the  action  by  A.  and  B. 

It  is  clear  that  at  law  accord  and  satisfaction  of  a  debt  due  upon 
a  bond  is  no  bar  to  the  action.  This  is,  however,  purely  the  result 
of  a  technicality  absolutely  devoid  of  any  particle  of  merits  or  jus- 
tice, viz.,  that  a  contract  under  seal  cannot  be  got  rid  of  except 
by  performance  or  by  a  contract  also  under  seal;  so  that  supposing 
it  had  really  been  the  case  that  in  satisfaction  of  an  overdue  bond 
for  £1,000  the  person  liable  had  given  property  worth  £2,000,  which 
had  been  accepted  in  discharge  of  the  obligation,  still  at  law  the 
obligee  of  the  bond  might  recover  his  £1,000  without  returning  the 
property. 

One  would  have  thought  that  if  the  Courts  of  Equity  ever  in- 
terfered at  all  to  prevent  a  man  from  enforcing  an  unconscientious 
and  dishonest  demand  to  which  there  was  no  answer  at  law,  they 
would  perpetually  restrain  an  action  brought  under  the  circum- 
stances described.  Mr.  Wood,  however,  who  is  an  equity  lawyer, 
contended  before  us  that  this  was  a  case  in  which  equity  would 
follow*  the  law,  and  would  refuse  to  interfere,  and  he  laid  great  stress 
upon  a  case  of  Webb  v.  Hewitt,  3  K.  &  J.  438,  which  he  said 
established  that  proposition.  We  are  glad  to  say  that  we  are  unable 
to  agree  with  him,  and  that  we  think  he  has  done  injustice  to  a 
system  of  which  one  recommendation  has  been  supposed  to  be  that 
it  was,  sometimes  at  all  events,  competent  to  correct  some  of  the 
worst  and  most  odious  technicalities  of  the  common  law.  The  case 
cited  appears  to  us  to  lead  to  the  opposite  conclusion  to  that  con- 
tended for,  and  we  think  it  perfectly  clear  that  the  ratio  decidendi 
of  the  learned  Vice-Chancellor  was,  that  when  the  plaintiff  had 
accepted  money's  worth  in  place  of  money  in  discharge  of  the  bond, 
the  debt,  in  (rquity  was  gone,  and  there  was  an  end  of  it. 

Upon  the  first  point,  therefore,  we  are  against  Mr.  Wood,  and  have 


SECT.    IV ]  STEEDS    V.    STEEDS  1005 

no  doubt  that  if  payment  to  one  of  the  plaintiffs  would  have  been  an 
answer,  the  delivery  to  him  and  acceptance  by  him  of  goods  in  satis- 
faction of  the  debt  would  be  equally  an  answer. 

But  Mr.  Wood  is,  we  think,  right  in  saying  that,  as  the  defence 
is  an  equitable  one,  it  is  equally  necessary  to  establish  that  payment 
by  C,  the  obligor,  to  A.,  the  latter  being  joint  obligee  with  B.,  would 
in  equity  be  an  answer  to  the  claim  by  A.  and  B.  on  the  bond.  We 
cannot  follow  Mr.  Bullen's  argument  that  as  equity  would  treat  the 
satisfaction  as  equivalent  to  payment,  having  got  so  far,  he  is  at 
liberty  to  discard  any  further  reference  to  equity,  and  say  that  as 
at  common  law  payment  to  or  release  by  A.  would  prevent  A.  and  B. 
from  suing,  he  is  now  in  a  position  to  treat  A.  as  having  been  paid, 
and  say  that  as  this  is  a  common  law  action  there  is  the  equivalent 
to  a  common  law  defence.  If  he  is  obliged  to  resort  to  equity  for  his 
defence,  he  must  take  the  equitable  principles  applicable  to  the  cir- 
cumstances in  their  entirety;  and  we  must  therefore  inquire  what 
is  the  rule  in  equity  with  respect  to  payment  to  one  of  two  co-obligees 
or  co-creditors. 

The  reason  why  the  defence  is  a  good  one  at  law  is  that  the  two 
creditors  are  treated  as  having  a  joint  interest  in  the  debt,  with  its 
incident  of  survivorship,  and  the  satisfaction  to  one  of  the  parties 
of  a  joint  demand  due  to  himself  and  others  puts  an  end  to  the  joint 
demand,  and  he  cannot  afterwards,  by  joining  the  other  parties  with 
him  as  plaintiffs,  recover  the  debt;  nor  can  a  right  of  action  be  sup- 
posed to  exist  which,  if  it  existed,  might  survive  to  the  very  person 
who  had  already  received  full  value.  Wallace  v.  Kelsall,  7  M.  & 
W.  264. 

In  equity,  however,  it  would  appear  as  if  the  general  rule  with 
regard  to  money  lent  by  two  persons  to  a  third  was  that  they  will 
prima  facie  be  regarded  as  tenants  in  common,  and  not  as  joint 
tenants,  both  of  the  debt  and  of  any  security  held  for  it.  Petty  v. 
Styward,  Eq.  Ca.  Abr.  290;  Kigden  v.  Vallier,  2  Ves.  Sen.  258, 
cited  in  the  notes  to  Lake  v.  Craddock,  1  White  &  Tudor,  5th  ed.  208. 
"Though  they  take  a  joint  security,"  says  Lord  Alvanley,  M.  R., 
"each  means  to  lend  his  own  money  and  to  take  back  his  own." 
Morley  v.  Bird,  3  Ves.  631.  Where  a  mortgage  debt  has  been  paid  to 
one  of  the  mortgagees,  accordingly,  it  was  held  that  the  land  was  not 
discharged,  and  that  the  concurrence  of  the  other  mortgagees  was 
necessary  to  make  a  good  title.  Matson  ik  Dennis,  10  Jur.  (n.  s.) 
461,  12  W.  R.  926.  This  is  on  the  ground  that  the  debt  is  held  by 
the  two  in  common  and  not  jointly,  and  the  principle  seems  to  us 
equally  applicable  whether  the  debt  is  secured  by  a  mortgage  or  is 
merely  the  subject  of  a  personal  contract.  The  principal  right  of 
a  mortgagee  is  to  the  money,  the  estate  in  the  land  is  only  an  ac- 
cessory to  that  right. 

It  is  obvious,  however,  that  this  proposition  cannot  be  put  hicrher 
than  a  presumption  capable  of  being  rebutted.     If  the  money,  sup- 


1006  STEEDS    V.    STEEDS  [CHAP.    VII 

posing  it  to  have  been  lent,  were  trust  money,  the  presumption  of  a 
tenancy  in  common  on  the  part  of  the  two  trustees  could  not,  as  it 
seems  to  us,  arise.  Survivorship  is  essential  for  the  purpose  of  trusts, 
and  so  there  may  be  a  variety  of  circumstances  which  may  settle 
the  question  either  one  way  or  the  other.  In  the  present  case  we 
do  not  even  know  whether  the  bond  was  for  money  lent,  or  what  was 
the  groundwork  of  the  obligation,  and  it  is  clear  that  if  the  presump- 
tion is  that  the  interest  in  this  obligation  belonged  in  equal  portions 
in  severalty  to  the  two  plaintiffs,  the  plaintiff  who  was  settled  with 
by  the  accord  and  satisfaction  has  been  paid  his  half,  at  all  events, 
and  it  cannot  be  recovered  again  in  this  action. 

We  think,  therefore,  that  we  cannot  strike  out  this  defence  as  we 
are  invited  to  do.  It  seems  to  us  that  it  must  be  good  for  a  part 
of  the  claim  at  all  events.  But  we  think  the  statement  of  defence 
defective,  and  that  Mr.  Bullen  ought  to  amend  by  a  further  state- 
ment of  the  material  facts,  and  our  order  is  that  tbe  statement  of 
defence  be  amended  accordingly,  and  if  that  be  not  done  within  ten 
days,  the  plaintiff  be  at  liberty  to  sign  judgment  for  half  the  amount 
claimed.  We  trust  that  upon  the  amended  pleading  being  delivered 
the  plaintiffs  will,  if  possible,  meet  it  by  any  necessary  addition  to 
or  correction  of  the  facts  alleged,  and  not  repeat  a  motion  of  this 
kind,  which  asks  the  court  to  do  what  is  to  the  last  degree  unsatisfac- 
tory, give  judgment  for  a  defect  of  pleading  and  in  ignorance  of 
all  the  facts  which  ought  to  be  known  before  the  rights  of  the  parties 
are  definitely  adjudicated  upon.  Both  parties  are  partly  responsible 
for  the  present  motion,  and  the  costs  of  this  appeal  will  be  costs 
in  the  cause.  Order  accordingly.^ 

1  In  Savage  v.  Blanchard,  148  Mass.  348,  Holmes,  J.,  in  delivering  the  opinion  of 
the  court,  said:  "In  former  days,  possibly  a  technical  difficulty  might  have  been  found 
in  the  rule,  that,  although  accord  and  satisfaction  is  a  defence  to  a  hability  for  damages, 
even  on  a  specialty,  a  discharge  of  an  obligation  under  seal  or  of  record  to  pay  a  defi- 
nite sum  of  money  must  be  of  as  liigh  a  nature  as  the  obUgation.  Blake's  case,  6 
Rep.  43  b,  44  a;  Peploe  v.  Galliers,  4  Moore,  163,  165;  Spence  v.  Healey,  8  Exch.  668; 
Riley  v.  Riley,  Spencer  114;  Mitchell  v.  Hawley,  4  Denio,  414.  But  this  rule  has 
been  much  broken  in  upon  by  statute,  and  by  decisions  upon  equitable  grounds,  in 
modern  times.  Bond  v.  Cutler,  10  Mass.  419,  421;  Farley  v.  Thompson,  15  Mass.  18, 
25;  Sewall  v.  Sparrow,  16  Mass.  24,  27,  and  cases  cited  in  Quincy  v.  Carpenter,  135 
Ma.s8.  102,  104;  Ballou  v.  Billings,  136  Mass.  307,  309;  Hastings  v.  Lovejoy,  140  Mass. 
201,  265;  Herzog  v.  Sawyer,  61  Md.  344;  Weston  v.  Clark,  37  Mo.  368,  572;  Hurlbut 
V.  Phelps,  30  Conn.  42.  We  have  no  doubt  that  an  indorser  of  a  writ  may  prove  pay- 
ment, or  accord  and  satisfaction,  by  parol  evidence,  and  that  satisfaction  before  judg- 
ment in  the  original  suit  is  as  good  a  bar  as  satisfaction  afterwards." 

See  further  3  Williston  Contracts,  §§  1849,  1850 


SECT.    IV]  CHAIN   TREAD   CO.    V.    AUTO   SUPPLY    CO.  1007 

WHITTAKEK  CHAIN  TEEAD  COMPANY  v.   STANDAKD 
AUTO  SUPPLY  CO 

Supreme  Judicial  Court  of  Massachusetts,  January  15- 
December  13,  1913 

[Reported  in  216  Massachusetts,  204] 

LoRiNG,  J.  The  plaintiff  sold  and  delivered  to  the  defendant 
goods  to  amount  of  $80.03.  The  defendant  undertook  to  return  a 
part  of  the  goods  sold,  of  the  value  of  $50.02.  The  plaintiif  dis- 
puted its  right  to  do  so  and  refused  to  receive  the  goods  from  the 
teamster  through  whom  the  defendant  undertook  to  make  the  return. 
While  matters  were  in  this  condition  the  defendant  sent  the  plain- 
tiff a  check  for  $30.01,  which  was  admittedly  due  and  which  the  de- 
fendant stated  was  in  full  settlement  of  the  account.  The  plaintiff 
cashed  the  check  and  on  the  following  day  notified  the  defendant 
that  it  had  done  so,  and  demanded  payment  of  $50.02,  the  balance 
claimed  by  it  to  be  due  after  crediting  the  amount  of  the  check  as 
a  payment  on  account.  The  judge  found  that  the  defendant  had  no 
right  to  return  the  goods  which  it  attempted  to  return,  and  that 
the  plaintiff  was  entitled  to  recover  the  $50.02  due  from  them  unless 
it  was  barred  by  cashing  the  check. 

Cases  in  which  debtors  have  undertaken  to  force  a  settlement  upon 
their  creditors  by  sending  a  check  in  full  discharge  of  a  disputed 
account  have  given  rise  to  more  than  one  question  upon  which  there 
is  a  conflict  in  the  authorities. 

In  Day  v.  McLea,  22  Q.  B.  D.  610,  it  was  decided  by  the  Court  of 
Appeal  in  England  that  a  creditor  who  cashes  a  check  sent  in  full 
settlement  is  not  barred  from  contending  that  he  did  not  agree  to 
take  it  on  the  terms  on  which  it  was  sent  if  at  the  time  he  accepts 
it  he  says  that  he  takes  it  on  account.  The  ground  of  that  decision 
was  that  to  make  out  the  defense  of  accord  and  satisfaction  the 
debtor  must  prove  an  agreement  by  the  creditor  to  take  the  sum  paid 
in  settlement  of  the  account,  and  that  if  the  creditor  in  taking  the 
check  notifies  the  debtor  that  he  accepts  it  on  account  and  that  he  re- 
fuses to  accept  it  in  full  settlement,  the  debtor  as  a  matter  of  law  has 
not  proved  an  agreement  on  the  part  of  the  creditor  to  accept  the 
check  in  satisfaction  of  the  claim,  but  that  that  question  must  be  de- 
cided by  the  jury.  This  doctrine  is  upheld  in  17  Harvard  Law 
Review,  at  p.  469,  and  in  the  case  of  Goldsmith  v.  Lichtenberg,  139 
Mich.  163.  See  also  in  this  connection  Krauser  v.  McCurdy,  174 
Penn.  St.  174;  Kistler  v.  Indianapolis  &  St.  Louis  Railroad,  88 
Ind.  460. 

But  the  true  rule  is  to  the  contrary.  The  true  rule  is  put  with 
accuracy  in  Nassoiy  v.  Tomlinson,  148  IST.  Y.  326,  331,  in  these 
words :  "The  plaintiff  could  only  accept  the  money  as  it  was  offered, 
which  was  in  satisfaction  of  his  demand.     He  could  not  accept  the 


1008  CHAIN   TREAD    CO.    V.    AUTO    SUPPLY    CO.         [CHAP.    VII 

benefit  and  reject  the  condition,  for  if  he  accepted  at  all,  it  was 
cum  onere.  "When  he  indorsed  and  collected  the  check,  referred  to 
in  the  letter  asking  him  to  sign  the  enclosed  receipt  in  full,  it  was 
the  same,  in  legal  effect,  as  if  he  had  signed  and  returned  the  receipt, 
because  acceptance  of  the  check  was  a  conclusive  election  to  be  bound 
by  the  condition  upon  which  the  check  was  offered."  And  to  that 
effect  is  the  weight  of  authority.  Nassoiy  v.  Tomlinson,  148  N".  Y. 
326.  Washington  N.  Gas  Co.  v.  Johnson,  123  Penn.  St.  576.  Part- 
ridge Lumber  Co.  v.  Phelps-Burruss  Lumber  &  Coal  Co.  91  Neb. 
396.  :N'eely  v.  Thompson,  68  Kans.  193.  Hull  v.  Johnson,  22  R.  I. 
66.  Cunningham  v.  Standard  Construction  Co.  134  Ky.  198.  Can- 
ton Union  Coal  Co.  v.  Parlin,  215  111.  244.  Petit  v.  Woodlief,  115 
:N'.  C.  120.  Pollman  &  Brothers  Coal  &  Sprinkling  Co.  v.  St.  Louis, 
145  Mo.  51.  Potter  v.  Douglass,  44  Conn.  541.  Cooper  v.  Yazoo 
&  Mississippi  Valley  Railroad,  82  Miss.  634.  Barham  v.  Kizzia, 
100  Ark.  251.  Thomas  v.  Columbia  Phonograph  Co.,  144  Wis.  470. 
Sparks  v.  Spaulding  Manuf.  Co.,  159  Iowa,  491.  See  also  in  this 
connection  McDaniels  v.  Bank  of  Rutland,  29  Vt.  230;  Hutton  v. 
Stoddart,  83  Ind.  539 ;  Creighton  v.  Gregory,  142  Cal.  34. 

Indeed  the  decision  in  Day  ik  McLea,  uhi  supra,  was  explained  by 
the  Court  of  Appeal  in  the  recent  case  of  Hirachand  Punamchand  y. 
Temple,  [1911]  2  K.  B.  330,  and  made  to  rest  not  on  the  lack  of 
agreement,  but  on  the  lack  of  consideration. 

But  in  cases  (like  the  case  at  bar)  where  there  is  a  dispute  as  to 
the  amount  due  under  a  contract,  and  payment  of  an  amount  which 
he  (the  debtor)  admits  to  be  due  (that  is  to  say,  as  to  which  there  is 
no  dispute)  is  made  by  the  debtor  in  discharge  of  the  whole  contract, 
further  and  other  questions  arise. 

The  question  whether  the  creditor  who  under  these  circumstances 
accepts  such  a  payment,  protesting  that  he  takes  it  on  account,  is 
or  is  not  barred,  is  a  question  upon  which  again  the  authorities  are 
in  conflict.  It  was  held  in  the  following  cases  that  creditor  in  such 
a  case  is  barred :  ISTassoiy  v.  Tomlinson,  148  K  Y.  326 ;  Ostrander  v. 
Scott,  161  111.  339;  Tanner  v.  Merrill,  108  Mich.  58;  Neely  v. 
Thompson,  68  Kans.  193;  Treat  v.  Price,  47  Neb.  875;  Hull  v.  John- 
son, 22  R.  I.  6;  Cunningham  v.  Standard  Construction  Co.  134  Ky. 
198;  Pollman  &  Brothers  Coal  &  Sprinkling  Co.  v.  St.  Louis,  145 
Mo.  651.  See  also  in  this  connection  Chicago,  Milwaukee  &  St.  Paul 
Railway  r.  Clark,  178  U.  S.  353.  But  in  the  following  cases  it  was 
hold  that  he  was  not  barred :  Demeules  v.  Jewel  Tea  Co.,  103  Minn. 
150;  Seattle,  Ronton  8:.  Southern  Railway  v.  Seattle-Tacoma  Power 
Co.,  .?  Wash.  639;  Prudential  Ins.  Co.  ?;."  Cottingham,  103  Md.  319. 
See  also  in  this  connection  Chrystal  v.  Gerlach,  25  So.  Dak.  128; 
Robinson  v.  Leatherbee  Tie  &  Lumber  Co.  120  Ga.  901  ;  Walston  v. 
F.  D.  Cj.lkins  Co.  119  Iowa,  150;  Weidner  v.  Standard  Life  & 
Accident  Ins.  Co.  130  Wis.  10;  Louisville,  N.  A.  &  C.  Railway  v. 
Helm  &  Bruce,  109  Ky.  388. 


SECT.    IV]        CHAIN    TREAD    CO.    V.    AUTO    SUPPLY    CO.  1009 

The  decision  in  most  of  these  cases  was  made  to  turn  upon  the 
question  whether  the  payment  of  the  amount  admitted  to  be  due 
without  dispute  did  or  did  not  constitute  a  valid  consideration  for  the 
discharge  of  the  balance  of  the  debt  about  which  there  was  a  dispute. 
If  that  were  the  only  question  involved  in  the  case  at  bar  it  would  be 
necessary  to  consider  whether  Tuttle  v.  Tuttle,  12  Met.  551,  is  in  con- 
flict with  the  well  settled  law  of  the  Commonwealth  that  a  promise 
to  pay  one  for  doing  that  which  he  was  under  a  prior  legal  duty  to 
the  promisee  to  do  is  not  binding  for  want  of  a  valid  consideration. 
The  cases  are  collected  in  Parrot  v.  Mexican  Central  Kailway,  207 
Mass.  184,  194. 

Tuttle  V.  Tuttle,  uhi  supra,  was  a  case  in  which  the  holder  of  a  note 
made  an  express  agreement  to  forego  a  claim  which  he  had  made  to 
interest  on  the  note  in  consideration  of  payment  of  the  balance  of  the 
principal  then  unpaid.  It  was  a  question  whether  he  was  entitled  to 
interest,  but  there  was  no  question  of  his  right  to  the  principal.  It 
was  held  that  this  agreement  was  a  bar  to  any  claim  for  interest  on  the 
note.  There  was  no  discussion  in  the  opinion  as  to  the  lack  or  valid- 
ity of  a  consideration.     But  the  point  was  involved  in  the  decision. 

In  the  case  at  bar  there  was  no  express  agreement  by  the  creditor  to 
forego  the  balance  of  his  claim  on  receiving  payment  of  the  amount 
admitted  without  dispute  to  be  due.  The  only  way  in  which  such  an 
agreement  can  be  made  out  in  the  case  at  bar  is  on  the  ground  that  the 
plaintiif  had  to  take  the  check  sent  him  on  the  condition  on  which  it 
was  sent,  and  that  by  cashing  the  check  he  elected  to  accept  the  condi- 
tion and  so  took  the  part  admittedly  due  in  full  discharge  of  the  whole 
debt.  But  while  the  doctrine  of  election  is  sound  where  a  check  is  sent 
in  full  discharge  of  a  claim  no  part  of  which  is  admitted  to  be  due,  it 
does  not  obtain  where  a  debtor  undertakes  to  make  payment  of  what  he 
admits  to  be  due  conditioned  on  its  being  accepted  in  discharge  of 
what  is  in  dispute.  Such  a  condition,  under  those  circumstances,  is 
one  which  the  debtor  has  no  right  to  impose,  and  for  that  reason  is 
void.  In  such  a  case  the  creditor  is  not  put  to  an  election  to  refuse  the 
payment  or  to  take  it  on  condition  on  which  it  is  offered.  He  can 
take  the  payment  admittedly  due  free  of  the  void  condition  which  the 
debtor  has  sought  to  impose.  Take  an  example :  Suppose  the  defen- 
dant had  agreed  to  deliver  to  the  plaintiff  a  stipulated  quantity  of 
iron  for  a  stipulated  price  during  each  month  of  the  year,  and  after 
six  months  the  market  price  of  iron  was  double  that  stipulated  for 
in  the  contract.  Suppose  further  that  the  defendant  on  the  seventh 
month  sent  the  stipulated  amount  of  iron  but  on  condition  that  the 
plaintiff  should  pay  double  the  stipulated  price,  can  there  be  any  doubt 
of  the  plaintiff's  right  to  retain  the  iron  without  paying  the  double 
price  ?  That  is  to  say,  can  there  be  any  doubt  that  the  condition  which 
required  the  plaintiff  to  pay  double  the  contract  price  for  the  install- 
ment sent  was  void  and  that  the  plaintiff  under  those  circumstances 
is  not  put  to  an  election  but  can  keep  the  iron  under  the  contract? 


1010  JACKSON    V.    PENN.    R.  R.    CO.  [CHAP.    VII 

There  can  be  no  doubt  on  that  question  in  our  opinion;  and  in  our 
opinion  the  principle  of  law  governing  that  case  governs  the  case  at 
bar,  where  the  debtor  undertook  without  right  to  impose  upon  a  pay- 
ment of  what  admittedly  was  due  a  void  condition  that  it  be  re- 
ceived in  full  discharge  of  what  was  in  dispute. 

It  follows  that  in  accepting  the  check  in  the  case  at  bar  as  a  pay- 
ment on  account,  the  plaintiff  was  within  its  rights  and  that  it  has 
not  agreed  to  accept  it  in  full  settlement  of  the  balance  of  the 
account.  By  the  terms  of  the  report  judgment  is  to  be  entered  for 
the  plaintiff  in  the  sum  of  $50.02,  with  interest  from  the  twentieth 
day  of  October,  1911;  and  it  is  So  ordered.^ 


FKANK  L.   JACKSON,   Plaintiff  in  ereor,  v.   THE   PENN- 
SYLVANIA  RAILROAD    COMPANY,   Defendant   in    Error 

New  Jersey  Court  of  Errors  and  Appeals,  November  23,  1900- 

April  29,  1901 

[Reported  in  66  New  Jersey  Laiv,  319] 

Adams,  J.  The  plaintiff,  a  driver  employed  by  the  Adams  Ex- 
press Company,  was  injured  on  October  18,  1899,  at  the  Pennsyl- 
vania railroad  depot,  in  Jersey  City,  while  transferring  goods  from 
his  wagon  to  a  freight  car.  He  brought  suit  against  the  railroad 
company,  and  recovered  a  verdict.  Exceptions  were  taken  to  the 
refusal  of  the  trial  judge  to  nonsuit  the  plaintiff,  and  to  direct  a 
verdict  for  the  defendant,  and  on  these  exceptions  error  has  been 
assigned.  The  question  of  negligence  is  in  the  case,  but  need 
not  be  considered,  as  the  defence  of  accord  and  satisfaction  is 
decisive. 

[The  defendant  proved  in  support  of  its  defence  of  accord  and 
satisfaction  that  the  Adams  Express  Company  was  bound  by  a 
contract  with  the  defendant  to  save  it  harmless  from  certain  lia- 
bilities, including  such  actions  as  that  of  the  plaintiff,  and  that  in 
consideration  of  the  payment  to  him  by  the  Express  Company  of 
wages  during  a  period  of  incapacity,  the  plaintiff  had  agreed  to 
accept  such  payment  in  full  satisfaction  of  all  claims  for  his  injuries. 
The  case  is  free  from  any  charge  of  fraud  aAd  from  any  suggestion 
that  the  plaintiff  did  not  comprehend  the  document  that  he  signed.^] 

It  remains  to  consider  the  real  question  in  controversy,  which 
is  as  to  the  effect  of  an  accord  and  satisfaction  entered  into,  not  with 
the  person  against  whom  n  claim  is  asserted,  but  with  a  third  per- 
son. In  this  case  the  third  person  is  a  corDoration,  which,  between 
itsfir  and  the  person  against  whom  the  claim  is  asserted,  has  made 

'  Tho  niirnfirous  aTithoritins  on  the  questions  discussed  in  this  caso  are  collected  in 
3   WillJHt^jn,   Contracts,    1S.')4,  et  seq. 

*  This  Htutoraent  has  been  substituted  for  the  fuller  statement  in  the  opinioa. 


SECT.    IV]  I  JACKSON    V.    PENN.   R.  R.    CO.  1011 

itself  primarily  liable  by  an  agreement  undisclosed  to  the  claimant. 

An  early  authority  as  to  accord  and  satisfaction  with  a  third 
person  is  Grymes  v.  Blofield,  Cro.  Eliz.  541,  which  reads  as  follows: 

"Debt  Upon  an  Obligation  of  20  pounds.  The  Defendant  pleads, 
That  J.  S.  Surrendered  a  Copy-hold  Tenement  to  the  use  of  the 
Plaintiff  in  satisfaction  of  that  20  pounds,  which  the  Plaintiff  ac- 
cepted, &c.  And  it  was  thereupon  demurred.  Popham,  and  Gawdy 
held  it  to  be  no  plea :  for  J.  S.  is  a  mere  stranger,  and  in  sort  privy 
to  the  Condition  of  the  Obligation :  and  therefore  satisfaction  given 
by  him  is  not  good.  Vide  36  H.  6;  Barr,  166;  7  H.  4,  pi.  31.  After- 
wards, Pasch.  31,  Eliz,  by  Popham;  and  Clench,  coeteris  justiciariis 
ahsentihus,  it  was  adjudged  for  the  Plaintiff." 

In  Edgcombe  v.  Kodd,  1  Smith,  515,  reported  also  in  5  East,  294, 
the  case  of  Grymes  v.  Blofield  was  discussed,  Mr.  Justice  Lawrence 
remarking  that  it  was  quite  unreasonable  to  doubt  the  authority  of 
that  case.  In  Jones  v.  Broadhurst,  9  C.  B.  193,  Mr.  Justice  Cress- 
well  commented  upon  Grymes  v.  Blomfield,  and  pointed  out  its 
inconsistency  with  an  earlier  case,  which  is  thus  stated  in  Fitz,  Abr. 
tit.  "Barre,"  pi.  166  (Hilary,  36  H.  of  L.  6)  :  "If  a  stranger  doth 
trespass  to  me,  and  one  of  his  relations,  or  any  other,  gives  anything 
to  me  for  the  same  trespass,  to  which  I  agree,  the  stranger  shall  have 
advantage  of  that  to  bar  me;  for,  if  I  be  satisfied,  it  is  not  reason 
that  I  be  again  satisfied.  Quod  tota  curia  concessit."  A  course  of 
decision  ensued,  which  Baron  Parke  summed  up  in  Simpson  v. 
Eggington,  10  Exch.  844,  in  the  following  words: 

"The  general  rule  as  to  payment  or  satisfaction  by  a  third  person, 
not  himself  liable  as  a  co-contractor  or  otherwise,  has  been  fully  con- 
sidered in  the  cases  of  Jones  v.  Broadhurst,  9  C.  B.  193 ;  Belshaw  v. 
Bush,  11  C.  B.  191,  and  James  v.  Isaacs,  22  L.  J.  C.  P.  73;  and 
the  result  appears  to  be  that  it  is  not  sufficient  to  discharge  a  debtor 
unless  it  is  made  by  the  third  person,  as  agent  for  and  on  account 
of  the  debtor,  and  with  his  prior  authority  or  subsequent  ratification. 
In  the  first  of  these  cases,  in  an  elaborate  judgment  delivered  by 
Mr.  Justice  Cresswell,  the  old  authorities  are  cited,  and  the  question 
whether  an  unauthorized  payment  by  and  acceptance  in  satisfaction 
from  a  stranger  is  a  good  plea  in  bar  is  left  undecided.  It  was  not 
necessary  for  the  decision  of  that  case.  In  Belshaw  v.  Bush,  it  was 
decided  that  a  payment  by  a  stranger  considered  to  be  for  the  de- 
fendant and  on  his  account,  and  subsequently  ratified  by  him,  is  a 
good  payment;  and  in  the  last  case  of  James  v.  Isaacs,  a  satisfac- 
tion from  a  stranger,  without  the  authority,  prior  or  subsequent, 
of  the  defendant,  was  held  to  be  bad.  We  consider  therefore  the  law 
as  fully  settled  by  these  cases." 

The  English  cases  justify  the  observation  of  Mr.  Justice  Wales,  in 
Snyder  r.  Pharo,  25  Fed.  Rep.  398  (at  p.  401),  that  none  of  the 
later  decisions  adhere  with  any  strictness  to  the  rule  laid  down  in 
Grymes  v.  Blofield,  and  that  it  is  evident,  from  an  examination  of 


1012  JACKSON    V.    PENN.    R.  R.    CO.  [CHAP.    VII 

them,  that  a  plea  of  satisfaction  by  a  stranger,  when  properly 
averred,  would  be  held  good. 

In  the  United  States  the  case  of  Grymes  v.  Blofield  has  been,  to 
some  extent,  followed,  notably  in  the  State  of  New  York.  The 
earliest  case  is  Clow  v.  Borst,  6  Johns,  37,  which,  like  Grymes  v. 
Blofield,  arose  upon  a  point  of  pleading.  It  was  there  held,  on  de- 
murrer, in  an  action  of  covenant,  that  a  plea  of  the  acceptance  of  a 
satisfaction  by  the  plaintiff  from  a  third  person  or  stranger  is  not 
good.  The  case  was  followed  in  Daniels  v.  Hallenbeck,  19  Wend. 
408;  Bleakley  v.  White,  4  Paige,  654;  Atlantic  Dock  Co.,  &c.  v. 
New  York,  53  N.  Y.  64,  and  Muller  v.  Eno,  14  id.  597,  605.  To  the 
same  effect  is  Armstrong  v.  School  District  No.  3,  28  Mo.  App.  169. 
These  cases  are  not,  on  the  whole,  inconsistent  with  the  idea  that  this 
defence  may  be  made  if  it  be  properly  pleaded. 

The  tendency  of  the  American  decisions  is  strongly  in  favor  of 
supporting  a  satisfaction  moving  from  a  third  person,  when  such 
person  either  had  authority  to  make  it  or  the  act  was  followed  by 
ratification  and  the  article  received  in  satisfaction  was  retained. 
In  Leavitt  v.  Morrow,  6  Ohio  71 ;  s.  c.  67  Am.  Dec.  334,  the  Supreme 
Court  of  Ohio  (Chief  Justice  Bartley  reading  the  opinion)  held, 
after  a  vigorous  discussion  of  the  doctrine,  that  an  accord  with  and 
satisfaction  coming  from  a  stranger  having  no  pecuniary  interest  in 
the  subject-matter  are,  if  accepted  in  discharge  of  the  debt,  a  perfect 
defence  to  a  subsequent  action  against  the  debtor.  Another  valuable 
case  is  Snyder  v.  Pharo,  25  Fed.  Rep.  398,  401,  where,  in  an  opinion 
written  by  Mr.  Justice  Wales,  all  the  leading  cases  are  cited.  The 
head-note  reads  as  follows :  "Satisfaction  of  a  debt  by  the  hands  of 
a  stranger  is  good  when  made  by  the  authority  of  or  subsequently 
ratified  by  the  defendant.  The  fact  of  pleading  it  will  be  sufficient 
evidence  of  ratification."  In  Beach  Mod.  L.  Cont.  542,  it  is  said 
that  an  accord  with  and  satisfaction  moving  from  a  stranger  or 
person  having  no  pecvmiary  interest  in  the  subject-matter,  if  ac- 
cepted in  discharge  of  the  debt,  constitute  a  good  defence  to  an  action 
to  enforce  the  liability  against  the  debtor.  In  the  note  to  Cumber  v. 
Wane,  1  Sm.  Lead.  Cas.  (9th  ed.)  625,  the  same  conclusion  is  reached. 
The  reason  of  the  rule  is  simple.  On  the  one  hand,  no  party  can 
be  deprived  of  a  right  by  mere  payment  by  a  volunteer.  On  the  other 
hand,  since  a  party  is  entitled  to  only  one  satisfaction,  his  ac- 
knowledgment that  he  has  received  it,  and  his  retention  of  it,  oper- 
ate to  extinguish  his  right.  As  was  said  in  Hanshaw  v.  Rawlings,  1 
Str.  23:  "Although  payment  by  a  stranger  be  not  a  legal  discharge, 
yet  acceptance  in  satisfaction  is."  In  2  Pars.  Cont.  (8th  ed.)  688, 
the  same  rule  is  stated,  with  the  remark  that  the  defence  is  clearly 
available  when  the  debtor  and  the  stranger  are  principal  and  agent. 
In  2  Chit.  Cont.  (11th  ed.)  1133,  this  is  said  to  be  the  correct  doc- 
trine. This  is  true,  because  the  nature  of  the  relation  of  principal 
and  jigent  is  such  that  proof  of  its  existence  necessarily  shows  that 


SECT.    IV]  IN   RE   LAYCOCK     V.    PICKLES  1013 

the  person  against  whom  the  claim  is  asserted  has  made  the  accord 
and  the  satisfaction  his  own. 

In  the  case  in  hand  the  express  company  was  not  an  agent  of  the 
railroad  company.  It  was  its  indemnitor.  This  does  not  weaken 
the  defence.  The  express  company  is  bound  by  contract  to 
answer  for  just  such  damages  as  these.  As  the  plaintiff  is  no  party 
to  this  contract,  and  so  is  not  bound  by  it,  the  performance  by  the 
express  company  of  its  obligation  goes  in  exoneration  of  the  ex- 
press company.  To  use  the  language  of  Baron  Parke,  its  payment 
is  "for  the  defendant  and  on  its  account,"  since  the  plaintiff's  right 
of  action  against  the  railroad  company  is  one  of  which  nothing  but 
his  own  consent  can  deprive  him.  Moreover,  the  plea  recognizes 
and  adopts  the  settlement.  There  are  present  here  original  author- 
ity; action  beneficial  to  the  defendant,  founded  on  a  new  considera- 
tion; ratification  and  retention  by  the  plaintiff  of  the  payment 
received  in  satisfaction.  These  are  the  elements  that  bring  a  case 
within  the  rule.  It  follows  that  the  defence  of  accord  and  satis- 
faction was  sustained  by  the  proof,  and  that  it  was  error  to  refuse  to 
direct  a  verdict  for  the  defendant.  The  judgment  is  reversed.^ 


In  Re  LAYCOCK  v.  PICKLES  AND  ANOTKER 

In  the  Queen's  Bench,  November  13,  1863 
[Reported  in  4  Best  &  Smith,  497] 

The  plaintiff,  having  a  claim  for  work  and  labour  and  materials 
against  the  defendants  to  the  amount  of  67/,  was  indebted  to  them  in 
lllZ.  The  defendants,  as  security  for  1001.  held  an  equitable  mort- 
gage upon  land  of  the  plaintiff.  The  parties,  having  met  together, 
ascertained  the  value  of  the  plaintiff's  interest  in  the  land  to  be  70L; 
and  it  was  verbally  agreed  that  the  defendants  should  have  the  plain- 
tiff's equity  of  redemption,  and  that  the  plaintiff  should  be  credited 
with  70L  which  being  added  to  the  67/.  the  debt  of  111/,  was  to  be 
wiped  out,  and  a  balance  of  26/.  left  in  his  favour;  but  it  was  finally 
agreed  that  it  should  be  taken  at  22/.  The  plaintiff,  before  action 
brought,  sold  the  land  to  the  defendants. 

Blackbuen,  J.  After  stating  the  facts,  proceeded :  It  may  have 
been  a  great  advantage  to  the  defendants  that  there  should  be  a 
settlement  of  the  accounts,  including  many  items,  in  the  manner 
stated ;  and  I  think  that  the  stating  of  the  accounts  itself  was  a 
sufficient  consideration  to  support  this  action. 

The  question  is,  whether  the  balance  can  be  recovered  on  a  count 
upon  an  account  stated.  An  account  stated  is  commonly  called  an 
admission  of  a  debt;  but  it  is  merely  evidence  of  it.     There  is  a 

^  See  3  WilUston,  Contracts,    §  1857,  et  seq. 


1014  IN   RE    LAYCOCK     V.    PICKLES  [CHAP.    VII 

real  account  stated,  called  in  old  law  an  insimul  computassent,  that  is 
to  say,  when  several  items  of  claim  are  brought  into  account  on  either 
side,  and,  being  set  against  one  another,  a  balance  is  struck,  and 
the  consideration  for  the  payment  of  the  balance  is  the  discharge  of 
the  items  on  each  side.  It  is  then  the  same  as  if  each  item  was 
paid  and  a  discharge  given  for  each  and  in  consideration  of  that 
discharge  the  balance  v/as  agreed  to  be  due.  It  is  not  necessary,  in 
order  to  make  out  a  real  account  stated,  that  the  debts  should  be 
debts  in  praesenti,  or  that  they  should  be  legal  debts.  I  think  equi- 
table claims  might  be  brought  into  account,  and  I  am  not  certain 
that  a  moral  obligation  is  not  sufficient.  It  is  to  be  taken  as  if  the 
sums  had  been  really  paid  down  on  each  side;  and  the  balance  is 
recoverable  as  if  money  had  been  really  taken  in  satisfaction ;  subject 
to  this,  that  where  some  of  the  items  are  such  that,  if  they  had  been 
actually  paid,  the  party  paying  them  would  have  been  able  to  recover 
them  back  as  on  a  failure  of  consideration,  the  account  stated  would 
be  invalidated.  That  is  borne  out  by  Com.  T)'\g.  tit.  Pleader  (2G.  11)  : 
"So  to  an  assumpsit,  the  defendant  may  plead  that,  since  the  promise 
made,  he  and  the  plaintiff  insimul  computaverunt,  et  super  compot' 
ill'  ipse  inventus  fuit  in  arrear,  so  much,  which  he  has  paid."  And 
further  on  it  is  said,  "But  an  account  without  payment  or  release 
is  no  plea  to  an  indebitatus  assumpsit" ;  referring  to  a  case  in  3 
Lev.  238,  "for  a  chose  in  action  cannot  discharge  a  matter  executed." 
I  think  that  is  true  of  an  account  stated  where  there  is  only  one 
item ;  but  when  there  are  several  cross-items,  it  is  really  an  account 
stated  and  there  is  a  discharge  of  the  items  on  either  side :  as  was 
ruled  in  Milward  v.  Ingram,  2  Mod.  43,  where,  in  indebitatus 
assumpsit  for  50Z.,  the  Court  held  a  plea  good,  which  stated  that 
after  the  promise  made,  and  before  the  action  brought,  the  parties 
came  to  an  account  concerning  divers  sums  of  money,  and  that  the  de- 
fendant was  found  in  arrear  to  the  plaintiff  30s.;  whereupon,  in  con- 
sideration that  the  defendant  promised  to  pay  him  the  said  30s.,  the 
plaintiff  likewise  promised  to  release  and  acquit  the  defendant  of  all 
demands.  The  same  principle  is  to  be  found  in  Dawson  v.  Remnant, 
6  Esp.  24.  The  report  of  that  case,  though  not  in  a  book  of  high 
authority  is  clear  and  intelligible,  and  therefore  may  be  taken  to  be 
correct,  except  that,  in  p.  25,  where  Mansfield,  C.  J.,  is  reported  to 
have  said,  "A  set-off  is  in  the  nature  of  payment,"  "set-off"  seems  a 
mistake  for  "settlement  in  account."  Here  the  arrangement  be- 
tween the  parties  was,  that  the  70Z.  at  which  the  plaintiff's  interest 
in  tbe  land  was  valued  should  be  taken  as  if  it  had  been  paid  by  the 
deffridants  to  the  plaintiff,  niul  paid  back  to  the  defendants  in  part 
payment  of  the  111/,  due  from  the  plaintiff  to  the  defendants.  The 
defendants  object  that,  inasmuch  as  this  transaction  was  by  word 
of  mouth,  they  could  not  enforce  the  agreement  for  the  transfer  of 
the  equity  of  redempfion,  but,  if  the  70/.  had  been  actually  paid 
down,    the    defendants    could    not    hnvc    recovered    it    back    without 


SECT.   IV]  SLAYBACK    V.    ALEXANDER  1015 

showing  that  the  plaintiff  had  made  default  in  transferring  the 
equity  of  redemption,  or  had  refused  to  transfer  it;  in  which  case 
they  might  have  opened  the  account.  But  there  is  no  attempt  to 
show  that  the  plaintiff  ever  refused  to  perform  the  agreement,  or 
that  he  set  up  the  Statute  of  Frauds  in  order  to  be  off  his  bargain. 
I  therefore  think  that  here  was  sufficient  evidence  of  an  account 
stated,  and  that  the  plaintiff  was  entitled  to  succeed.^ 


HENRY  B.  SLAYBACK  v.  HOWARD  T.  ALEXANDER 

New  Yobk  Supkeme  Couet,  Appellate  Division, 
November  9,  1917 

[Reported  in  179  New  Yorh  Appellate  Division,  696] 

Laughlin,  J.:  On  the  stipulated  facts  the  plaintiff  claims  the 
right  to  recover  the  sum  of  $1,015.71,  the  amount  of  defendant's 
indebtedness  to  him  as  shown  by  an  account  rendered  on  the  1st  day 
of  March,  1913,  together  with  interest  thereon  from  that  date.  De- 
fendant claims  that  the  account  so  rendered  did  not  constitute  an 
account  stated  and  that  the  cause  of  action  which  on  the  facts  stipu- 
lated plaintiff  once  had,  is  barred  by  the  Statute  of  Limitations.  The 
point  presented  for  decision  is  whether  there  was  an  account  stated 
between  the  parties  on  the  1st  day  of  March,  1913,  as  claimed  by  the 
plaintiff,  for  if  there  was  concededly  the  Statute  of  Limitations  has 
not  run  against  it. 

On  the  2d  day  of  May,  1907,  defendant  opened  an  account  with 
the  stock-brokerage  firm  of  Slayback  &  Co.  for  the  purpose  of  buying 
and  selling  securities  upon  margin  pursuant  to  the  rules  and  customs 
of  the  New  York  Stock  Exchange.  Numerous  orders  to  buy  and  sell 
securities  were  executed  by  the  firm  for  defendant's  account,  and  the 
last  transaction  was  the  purchase  of  fifty  shares  of  Union  Pacific 
Railway  Company  stock  on  the  13th  day  of  July,  1908,  to  cover  a 
prior  sale.  After  that  purchase  the  customer  was  neither  long  nor 
short  of  securities,  but  there  was  a  balance  owing  by  him  to  the 
brokerage  firm  of  $758.64.  During  the  time  the  account  was 
active  the  brokerage  firm  rendered  monthly  statements  to  the  cus- 
tomer in  accordance  with  the  general  custom  and  rendered  such  a 
statement  on  the  1st  day  of  August,  1908,  after  the  last  transac- 
tion. Thereafter  the  brokerage  firm  continued  to  render  monthly 
statements  which  showed  no  items  of  account  between  the  parties 
but  merely  the  balance  as  shown  by  the  preceding  monthly  account 
upon  which  interest  for  the  month  had  been  computed  and  added, 
thus  showing  a  new  balance  by  the  addition  of  one  month's  interest 
on  the  former  balance.     Such  was  the  statement  rendered  by  the 

WiGHTMAN  and  Mellor,  JJ.  delivered  concurring  opinions. 


1016  SLAYBACK    V.    ALEXANDER  [CHAP.    VII 

brokerage  firm  to  the  defendant  on  the  1st  day  of  March,  1913,  which 
the  plaintiff  claims  constituted  the  account  stated.  On  the  28th 
of  March,  1914,  the  brokerage  firm  dissolved  and  the  plaintiff, 
who  was  one  of  the  members  thereof,  became  the  assignee  of  the 
account. 

On  the  facts  stipulated  the  account  rendered  on  the  1st  day  of 
August,  1908,  after  the  last  transaction  between  the  parties,  which 
w^as  received,  examined  and  retained  by  defendant  without  exception, 
clearly  constituted  an  account  stated  as  to  the  entire  balance  and  gave 
rise  to  a  new  cause  of  action  quite  independent  of  the  original  cause 
of  action  on  the  account,  the  Statute  of  Limitations  not  having 
then  run  against  any  of  the  items  of  the  account  constituting  the 
original  transactions.  (Lockwood  v.  Thorne,  11  jST.  Y.  170;  Spell- 
man  V.  Muehlfeld,  166  id.  245;  Eames  Vacuum  Brake  Co.  v.  Prosser, 
157  id.  289;  Daintrey  v.  Evans,  148  App.  Div.  275;  Knickerbocker 
V.  Gould,  115  N.  Y.  533;  Schutz  v.  Morette,  146  id.  137;  Delabarre  v. 
McAlpin,  101  App.  Div.  468;  25  Cyc.  1138.)  The  subsequent 
monthly  statements  of  the  account  were  merely  renditions  of  the 
account  already  rendered  with  the  exception  of  the  addition  of  the 
monthly  interest.  Manifestly  the  addition  of  the  interest  monthly 
did  not  constitute  the  statement  then  rendered  a  new  account,  for 
m  so  far  as  it  involved  compound  interest,  which  was  the 
only  new  item  in  it,  it  was  unauthorized  and,  therefore,  the 
monthly  accounts  rendered  were  quite  analogous  to  the  monthly 
rendition  of  an  overdue  account  by  a  merchant  to  a  customer,  and 
only  differed  therefrom  in  the  addition  of  the  interest.  No  decision 
has  been  cited  and  we  have  found  none  in  which  the  question 
arose  as  to  whether  a  cause  of  action  on  an  account  stated  may  be 
continued  indefinitely  against  the  Statute  of  Limitations  by  merely 
rendering  the  same  over  and  over  again  within  each  six-year  period. 
We  are  of  the  opinion  that  where  an  account  becomes  an  account 
stated  by  reason  of  its  being  forwarded  and  received  and  retained 
after  examination  as  here  the  cause  of  action  upon  that  account  stated 
thereupon  accrues  and  the  Statute  of  Limitations  commences  to 
run  and  that  it  is  not  within  the  power  of  the  creditor  to  extend 
the  running  of  the  Statute  of  Limitations  merely  by  rendering  the 
same  account  over  again  from  time  to  time. 

It  follows  that  the  defendant  should  have  judgment  for  a  dismissal 
of  the  complaint  as  claimed,  but,  in  accordance  with  the  stipulation, 
without  costs. 

Scott,  Smith,  Page  and  Davis,  J  J.,  concurred. 


SECT.    V]  FREEMAN    V.    BERNARD  1017 

SECTION  V 
ARBITRATION   AND    AWARD 


FREEMAN  V.  BERNARD 

In  the  King^s  Bench,  Teinity  Term,  1702 

[Reported  in  1  Lord  Raymond,  247] 

Assumpsit  upon  an  agreement  for  the  delivery  of  a  certain 
quantity  of  hops,  etc.  The  defendant  pleads  that  the  plaintiff  and 
he  had  submitted  this  matter  to  the  arbitration  of  J.  S.,  ita  quod 
the  award  should  be  made,  and  ready  to  be  delivered,  by  such  a 
day,  &c.,  and  the  defendant  shows  that  J.  S.  made  an  award  before 
the  day  that  the  defendants  or  his  executors  or  administrators  should 
give  a  general  release  to  the  plaintiff,  and  that  the  plaintiff  should 
give  a  general  release  to  the  defendant;  and  the  defendant  pleads 
that  he  was  always  ready,  and  yet  is,  to  sign  and  seal  a  release. 
The  plaintiff  demurs.  And  divers  exceptions  were  taken  to  this 
award:  1.  That  the  submission  is  ita  quod  the  award  be  ready  to 
be  delivered  by  such  a  day,  and  the  defendant  has  not  averred  that 
it  was  ready  to  be  delivered  by  the  day.  8ed  non  allocatur.  For  per 
Holt,  C.  J.,  it  has  been  often  held  in  this  court  that  if  the  award 
be  made  by  the  day,  it  is  ready  to  be  delivered,  and  so  it  appears, 
and  therefore  there  is  no  need  to  aver  that  it  was  ready.  2.  Exc. : 
That  the  award  is  void  for  the  uncertainty,  viz.,  that  he  or  his 
executors  or  administrators,  &c.,  so  that  time  is  left  to  him  to  per- 
form it  during  his  life,  or  he  may  leave  it  to  his  executors.  And 
election  given  in  an  award  is  ill.  1  Roll.  Rep.  271.  But  to  this 
exception  Mr.  How,  for  the  defendant,  argued  that  the  court  will 
reject  the  words  "or  his  executors  or  administrators,"  because  as  to 
them  (he  said)  the  award  was  void;  for  the  executor  or  administra- 
tor is  out  of  the  submission,  and  the  power  of  the  arbitrator  de- 
termines with  the  life  of  the  person  submitting  and  so  cannot  ex- 
tend to  the  executor  or  administrator.  Debt  upon  award  does  not 
lie  against  an  executor  or  administrator.  But  Holt,  C.  J.,  said 
that  the  executors  are  bound  by  the  submission  of  their  testator; 
but  the  addition  of  them  in  this  award  is  but  cautionary,  and  there- 
fore will  not  vitiate.  3.  The  third  exception  was  that  the  plea  is 
ill  because  the  defendant  has  not  averred  performance  of  this  award, 
and  the  plaintiff  has  no  remedy  to  compel  him  to  perform  it.  Sed 
non  allocatur.  For  per  Holt,  C.  J.,  heretofore  if  the  award  was 
that  the  party  should  do  any  collateral  act,  it  was  held  that  the  party 
could  not  plead  this  before  performance;  contra  if  the  award  ap- 
pointed the  payment  of  money.  And  the  reason  was  because  the 
party  had  no  remedy  in  the  former  case  to  compel  performance; 


1018  ALLEN    V.    MILNER  [CHAP.    VII 

but  otherwise  in  the  latter  case.  But  that  reason  fails  now;  for 
now  assumpsit  lies  upon  the  mutual  promises,  and  no  assumpsit  was 
allowed  formerly  upon  mutual  promises;  but  heretofore,  if  the  sub- 
mission was  by  bond,  the  award  might  have  been  pleaded  before 
performance,  because  the  party  might  have  had  remedy  to  compel 
performance.  And  Holt,  C.  J.,  said  that  he  had  known  a  rule  of 
court  to  submit  to  an  award  to  be  given  in  evidence  upon  assumpsit. 
But  judgment  was  given  by  the  whole  court  for  the  plaintiff;  for 
the  arbitrator  has  awarded  nothing  in  satisfaction,  but  only  has 
ordered  means  to  discharge  the  action.  He  has  not  awarded  a  horse 
or  money  in  satisfaction,  but  only  mutual  releases.  Where  an  award 
creates  a  new  duty  instead  of  that  which  was  in  controversy,  the 
party  has  remedy  for  it  upon  the  award;  and  therefore  if  the  party 
resorts  to  demand  that  which  was  referred  and  submitted,  the  arbit- 
rament is  a  good  bar  against  such  action.  Contra  where  the  award 
does  not  create  a  new  duty,  but  only  extinguishes  the  old  duty  by  a 
release  of  the  action. 


ALLEN  V.  MILNEE 

In  the  Exchequer,  Michaelmas  Term,  1831 

[Reported  in  2  Crompton  &  Jervis,  47] 

Lord  Lyndhurst.  This  was  an  action  of  indehitatiis  assumpsit^ 
for  tolls,  &c.  The  defendant  pleaded,  as  to  the  count  for  tolls,  that 
differences  had  arisen  between  him  and  the  plaintiff,  touching  the 
said  claim,  and  that  they  mutually  submitted  themselves  to  refer, 
and  did  refer,  the  said  matter  in  difference  to  arbitration;  that 
they  mutually  promised  to  abide  by  the  award ;  and  that  the  umpire 
made  his  award  of  and  concerning  the  said  premises,  and  did  there- 
by award,  that  the  defendant  should  pay  to  the  plaintiff  the  sum  of 
£13.  To  this  plea,  the  plaintiff  demurred  specially,  because  the 
plaintiff  did  not  aver  payment  of  the  £13,  or  any  other  satisfaction 
of  the  plaintiff's  demand.  The  question,  therefore,  is,  whether  this 
award  is,  of  itself,  without  payment  or  satisfaction,  any  bar;  and 
considering  the  nature  of  the  plaintiff's  demand,  and  the  nature  of 
the  award,  we  are  of  opinion  that  it  is  not.  The  plaintiff's  demand 
is  for  a  debt,  and  the  award  is  not  for  the  performance  of  any  col- 
lateral act,  but  for  the  payment  of  money.  The  matter,  therefore, 
for  the  consideration  of  the  arbitrator  was,  whether  there  were  any, 
and  what  debt;  the  award  only  ascertains  that  there  is  a  debt, 
specifies  the  amount,  and  directs  the  payment;  but  the  money,  till 
paid,  is  due  in  respect  of  the  original  debt,  i.  e.  for  tolls;  its  char- 
acter remains  the  same,  nothing  is  done  to  vary  its  nature  or  destroy 
its  original  quality.  Had  the  demand  boon  of  a  different  description, 
as  for  the  delivery  of  goods,  and  the  award  had  directed  a  payment 
of  money  in  satisfaction  of  the  demand,  it  might  then  have  been  said 


SECT.    V]  ALLEN    V.    MILNER  1019 

that  the  award  had  changed  the  nature  of  the  original  demand,  that 
the  right  to  have  the  goods  was  gone,  and  the  only  right  remaining 
was  the  substituted  right,  i.  e.  the  right  to  have  the  money;  or, 
had  the  demand  been  for  a  debt,  and  the  award  had  directed  not  pay- 
ment in  money,  but  payment  in  a  collateral  way,  as  by  delivery  of 
goods,  performance  of  work,  &c,,  it  might,  perhaps,  have  been  said, 
that  the  right  to  have  payment  in  money  was  gone;  but  here  the 
£13  is  to  be  paid  for  the  original  demand,  i.  e.  for  the  tolls,  and  it  is 
to  be  paid  as  that  demand  was  to  have  been  paid,  i.  e.  in  money.  In 
the  case  of  Crofts  v.  Harris,  Carth.  187,  the  declaration  contained 
three  counts:  one,  for  not  shipping  and  consigning  cotton  wool;  one, 
upon  an  indebitatus  for  goods  sold,  with  a  conditional  promise  to 
pay  in  money,  if  the  defendant  did  not  ship  and  consign  cotton 
wool  to  the  plaintiff;  and  the  third,  upon  a  general  indebitatus 
assum'psit,  for  goods  sold;  the  defendant  pleaded  a  submission  of 
all  matters,  and  an  award  thereon,  which  he  set  out,  but  he  did  not 
allege  performance  on  his  part;  what  the  matter  awarded  was, 
whether  the  payment  of  money,  or  the  performance  of  any  other 
matter,  does  not  appear.  It  turned  out  on  demurrer,  that  the  award 
related  only  to  the  cotton  wool,  not  to  the  other  matters;  so  that  it 
was  pleaded  to  what  it  could  not  bar,  and,  as  to  the  cotton  wool,  it 
was  conditional  only,  and  therefore  void.  The  plaintiff,  therefore, 
had  judgment.  Carthew  says,  the  following  diversities  were 
taken  by  the  Court  to  be  law:  First,  That  an  award  without  per- 
formance is  a  good  bar  to  an  action  on  the  case,  if  the  parties  have 
mutual  remedies  against  each  other,  to  compel  the  execution  of  the 
matters  awarded;  and  (after  other  two  positions,  not  bearing  upon 
this  case),  that  if  the  award  in  that  case  had  been  general,  the  de- 
fendant might  have  pleaded  it  in  bar  of  all  the  promises  in  the 
declaration,  and  it  would  not  have  amounted  to  the  general  issue. 
In  this  case,  therefore,  there  was  no  decision  upon  the  point.  The 
position,  that  an  award  without  performance  would  be  a  good  bar 
to  an  action  upon  the  case,  would  be  within  the  distinction  we  have 
taken,  if  by  an  action  on  the  case  were  meant,  as  it  probably  was, 
not  an  action  for  a  debt,  but  a  special  action  on  the  case  for  damages ; 
and,  as  we  are  not  apprised  what  the  award  there  was,  it  does  not 
follow,  that,  because  the  award  in  that  case  would  have  been  a  good 
har,  the  award  here,  which  is  only  an  award  of  payment,  is.  In 
Allen  V.  Harris,  Ld.  Raym.  122,  relied  upon  in  Gascoyne  v.  Edwards, 
it  is  certainly  said  by  counsel,  arguendo,  that  arbitrament  may  be 
pleaded  without  performance,  because  the  parties  may  have  recipro- 
cal remedies,  and  the  Court  is  represented  to  have  said,  that  "if 
arbitrament  be  with  mutual  promises  to  perform  it,  though  the  party 
has  not  performed  his  part,  who  brings  the  action,  yet  shall  he  main- 
tain his  action,  because  an  arbitrament  is  like  a  judgment,  and 
the  party  may  have  his  remedy  upon  it."  But  this  was  not  the 
point  in  judgment  before  the  Court,  the  defendant  had  pleaded  not 


1020  COMMINGS    V.    HEARD  [CHAP.   VII 

an  arbitrament,  but  an  accord,  which  was  held  bad;  and  the  action 
was  not  an  action  for  a  debt,  but  an  action  of  trover.  The  case  of 
Gascoyne  v.  Edwards,  1  Younge  &  Jervis,  19,  admits  (if  not  of  both 
answers  we  have  mentioned)  clearly  of  the  first,  viz.  that  the  demand 
was  for  general  damages,  and  not  for  a  debt.  The  first  count  of 
th§  declaration,  we  have  ascertained  from  the  pleadings,  was  covenant 
for  not  repairing;  the  award  was  pleaded  to  that  count  only,  and 
it  directed  the  payment  of  £5  for  damages,  the  repair  of  the 
premises,  and  the  quitting  them  at  a  given  period.  The  case  there- 
fore, according  to  the  distinction  we  have  taken,  does  not  govern 
the  present,  because  the  action  there  was  not  for  a  debt,  but  for 
general  damages  for  not  repairing.  Upon  the  ground,  therefore, 
that  the  present  action  is  for  a  debt,  that  the  award  only  ascertains 
the  amount  of  that  debt,  and  that  money  payable  under  the  award 
is  nothing  but  the  original  debt  so  ascertained  in  amount,  we  are  of 
opinion  that  this  plea  is  bad,  and  that  the  plaintiff  is  entitled  to 
judgment.  Judgment  for  the  plaintiff. 


COMMINGS  V.  HEAED 
In  the  Queen's  Bench,  July  25,   1869 
[Reported  in  Law  Reports,  4  Queen's  Bench,  669] 

Declaration  containing  indebitatus  counts  for  work  done  and 
materials  provided,  for  money  paid,  for  the  conveyance  of  goods, 
for  interest  and  money  due  on  accounts  stated,  and  claiming  400/. 

Fourth  plea :  Except  as  to  the  sum  of  145Z.  3s.  Id.,  parcel  of  the 
money  claimed,  the  defendant  says  that  the  plaintiff  ought  not  to 
be  admitted  or  received  to  claim  or  allege  that  at  the  commencement 
of  this  suit  any  more  than  the  sum  of  145/.  3s.  Id.  was  due  from  the 
defendant  to  the  plaintiff  in  respect  of  the  causes  of  action  in  the 
declaration  mentioned,  because  the  defendant  says  that  after  the 
accruing  of  the  causes  of  action  in  the  declaration  mentioned,  and 
before  this  suit,  a  dispute  arose  between  the  plaintiff  and  the  de- 
fendant as  to  how  much  was  due  from  the  defendant  to  the  plaintiff 
in  respect  of  the  causes  of  action,  and  thereupon  by  agreement  made 
between  them  before  this  suit  they  referred  the  question  of  how 
much  was  due  from  the  defendant  to  the  plaintiff  in  respect  of  the 
causes  of  action  to  the  award  of  William  Wills,  and  agreed  to  be 
bound  by  his  award  as  to  such  amount;  and  that  afterwards,  and 
before  this  suit,  the  said  William  Wills,  having  taken  upon  himself 
th(^  burden  of  the  arbitration,  and  having  heard  and  considered  all 
that  the  plaintiff  and  defondniit  respectively  had  to  allege,  and  all 
the  evidence  which  they  had  to  produce  relating  to  the  premises 
80  referred,  made  his  award  in  writing  of  ,  and  concerning  the 
premises  so  referred  to  him  as  aforesaid,  and  thereby  awarded  that 


SECT.   V]  COMMINGS    V.    HEARD  1021 

the  amount  due  from  the  defendant  to  the  plaintiff  in  respect  of  the 
causes  of  action  was  145L  3s.  Id. 
Demurrer  and  joinder. 
Anstie,  in  support  of  the  demurrer. 
Jelf,  contra. 

Lush,  J.  This  was  a  demurrer  to  a  plea.  [The  learned  judge 
read  the  plea.]  It  is  to  be  observed  that  the  plea  does  not  profess 
to  be  an  answer  to  the  entire  claim,  but  to  the  excess  over  and  above 
the  amount  of  145L  The  question  is,  whether  the  plaintiff  is  con- 
cluded by  the  award  from  alleging  that  the  entire  amount  was  due 
to  him.  I  am  of  opinion  that  he  is  concluded,  and  that  the  award 
is  binding  between  the  parties  in  all  matters  which  it  professes  to 
decide.  It  was  contended  that  an  award  is  not  an  estoppel,  that  the 
parties  are  not  concluded  by  an  award,  and  that  it  is  distinguishable 
from  a  judgment,  which,  it  is  admitted,  would  have  bound  the 
parties.  The  contention  was  that  it  was  so  distinguishable  because 
an  award  was  an  adjudication  by  a  tribunal  appointed  by  the  parties, 
and  not  one  constituted  by  the  sovereign  power  within  the  realm. 
It  is  impossible,  to  my  mind,  to  suggest  any  good  ground  of  dis- 
tinction between  these  two,  when  we  consider  that  the  reason  why 
a  matter  once  adjudicated  upon  is  not  permitted  to  be  opened  again 
is  because  it  is  expedient  that  there  should  be  an  end  to  litigation. 
"When  once  a  matter  has  been  decided  between  parties,  the  parties 
ought  to  be  concluded  by  the  application,  whatever  it  may  be.  I  am 
at  a  loss  to  suggest  any  reason  that  would  be  applicable  to  the  one, 
that  would  not  be  applicable  to  the  other  tribunal. 

Several  cases  were  cited  which  it  was  supposed  were  authorities 
in  favor  of  the  plaintiff,  but  which,  I  think,  may  be  contended  to 
be  clearly  authorities  in  favor  of  the  defendant.  It  is  not  a  new 
doctrine  that  an  award  is  a  bar.  That  is  found  in  Comyn's  Digest, 
Tit.  Accord,  D.  1 ;  and  there  are  several  instances  of  it  to  be  found  in 
the  books.  The  case  of  Allen  v.  Milner,  2  0.  &  J.  47,  was  relied  on, 
on  the  part  of  the  plaintiff.  When  that  case  is  examined  it  will  be 
found  to  differ  from  the  present  in  a  most  essential  particular. 
There  the  money  demand  had  been  referred  to  arbitration.  The 
arbitrator  has  found  a  given  sum  to  be  due  from  one  to  the  other. 
That  case  was  a  money  demand,  as  this  is;  the  action  was  brought 
on  the  original  consideration,  but  the  plea,  unlike  the  plea  in  this 
case,  set  up  the  award  as  a  bar  to  the  entire  action.  The  plea  was 
held  bad,  and  for  this  reason,  that  an  award  upon  a  money  claim 
does  not  alter  the  nature  of  the  original  debt;  it  leaves  it  remaining 
due.  The  amount  which  the  arbitrator  found  to  be  due  was  for  the 
original  consideration.  The  award  did  not  change  the  nature  of 
the  debt,  consequently  a  plea  which  professed  to  answer  the  whole 
of  the  debt,  and  admitted  a  part  of  it  was  due,  was  a  bad  plea.  That 
is  the  ground  of  that  decision. 

On  the  other  hand,  it  is  settled,  where  the  claim  is  one  for  un- 


1022  COMMINGS    V.    HEARD  [CHAP.    VII 

liquidated  damages,  an  award  which  settles  the  amount  may  be 
pleaded  in  bar  to  the  entire  action,  although  the  plea,  on  the  face  of 
it,  shows  that  the  money  is  not  paid.  In  the  case  of  Gascoyne  v. 
Edwards,  1  Y.  &  J.  19,  there  was  a  general  plea  pleaded  to  the 
whole  declaration,  by  which  it  was  alleged  that  the  parties  had 
agreed  to  refer  the  amount  of  the  damages  to  arbitration,  and  an 
award  had  been  made,  by  which  it  was  awarded  that  the  defendant 
should  pay  the  plaintiff  5?.  to  put  the  premises  in  repair.  The  plea, 
although  it  did  not  aver  that  the  5/.  was  paid,  was  held  to  be  a  good 
plea  because  an  award,  fixing  the  amount  and  creating  a  debt  be- 
tween the  parties,  extinguished  the  original  demand  for  unliquidated 
damages.  The  principle  upon  which  this  was  held  a  good  plea  is, 
that  an  award,  professing  to  determine  the  matter,  is  binding  upon 
both  parties,  and  it  as  much  precludes  the  parties  from  alleging 
anything  contrary  to  the  award  as  a  judgment  would,  on  the  ground 
that  it  is  res  judicata.  If  this  action  had  been  brought  upon  the 
award,  it  is  clear  the  defendant  would  be  precluded  from  saying  the 
145?.  was  not  due,  because  the  arbitrator  found  it  was.  Why  is 
not  a  plaintiff  equally  prohibited  from  alleging  that  more  is  due 
when  the  amount  has  been  found  by  the  arbitrator?  Each  must  be 
concluded  by  the  finding.  It  is  elementary  knowledge  that  an  award, 
good  on  the  face  of  it,  is  binding  and  conclusive  upon  both  parties 
to  it  until  it  is  set  aside.  Nothing  appears  on  the  face  of  this  plea 
to  show  that  the  award  is  not  perfectly  good.  It  professes  to 
adjudicate  upon  all  matters  referred,  and  it  has  decided  finally  the 
whole  matter.  In  answer  to  the  argument  that  the  award  may  be 
bad,  it  is  enough  to  say  that  if  the  award  is  bad  it  might  be  shown 
by  a  replication  setting  it  out.  If  it  is  not  bad  on  the  face  of  it, 
then  the  parties  not  having  moved  to  set  it  aside,  it  stands,  and  each 
party  is  prohibited  from  objecting  to  it.  The  plea  is  a  perfectly 
good  plea,  and  our  judgment  must  be  for  the  defendant. 

The  plea,  no  doubt,  is  in  an  unusual  form,  because  it  is  pleaded 
by  way  of  estoppel.  It  begins  in  the  ordinary  way  of  a  plea  of 
estoppel,  that  the  plaintiff  ought  not  to  be  admitted  or  received  to 
say  so  and  so.  That  I  consider  immaterial.  The  award  is  a  bar,  and 
it  concludes  the  parties. 

Hayes,  J.  I  quite  agreed  that  this  plea  is  good,  although  pleaded 
in  form  of  an  estoppel,  but  upon  consideration  I  think  it  is  a  plea 
in  bar,  and  in  truth,  a  plea  to  the  merits.  It  is  pleaded,  not  to  the 
whole  of  the  demand,  but  only  to  the  excess  beyond  the  amount 
found  by  the  arbitrator.  It  is  objected  that  the  plea  is  bad  be- 
cause it  does  not  show  that  the  sum  awarded  has  been  paid.  We 
have  not  the  whole  record  before  us,  and  for  anything  we  know, 
the  money  may  have  been  paid  into  court. 

The  cases  that  were  cited  on  both  sides  clearly  show  the  plea  to 
be  good.  In  Whitehead  v.  Tattersall,  1  A.  &  E.  491,  an  action  Avas 
brought  on  a  covenant.     It  appeared  that  before  action  the  plain- 


SECT.V]        BOSTON  &L0WELLR.R.1;.  NASHUA  &  LOWELL  R.R.       1023 

tiff  and  defendant  had  agreed  to  refer  to  arbitration  a  dispute  re- 
lating to  the  repairs  of  certain  premises,  and  the  referee  had  ascer- 
tained the  amount  of  the  dilapidations.  That  case  was  before  the 
new  rules  of  pleading.  The  defendant  pleaded  non  est  factum,  and 
the  award  was  held  to  be  conclusive  as  to  the  amount  of  damages 
to  which  the  plaintiff  was  entitled  for  the  breach  of  covenant.  The 
court  said  the  award  was  binding  on  the  plaintiff,  and  therefore,  on 
the  defendant.  Taunton,  J.,  says:  "The  award  of  an  arbitrator 
concludes  the  right,  unless  you  can  impeach  the  award."  There- 
fore the  award  there  was  held  conclusive  with  respect  to  the  amount 
of  damages.  Parkes  v.  Smith,  15  Q.  B.  297,  19  L.  J.  (Q.  B.)  405, 
seems  to  me  to  be  quite  undistinguishable  from  the  present.  It 
was  pleaded  that  the  award  of  the  arbitrator  was  conclusive  on  both 
parties,  and  it  was  contended  that  it  was  a  matter  of  estoppel,  and 
ought  to  be  pleaded  as  estoppel;  but  the  court  thought  it  was  a 
matter  in  bar,  and  not  a  matter  of  estoppel.  Coleridge,  J.,  pointed 
out  the  distinction,  and  said  the  defence  was  that  there  was  no  cause 
of  action,  and  not  that,  admitting  a  cause  of  action  to  exist,  the 
plaintiff  was  estopped  from  setting  it  up.  The  plea  in  that  case 
did  not  allege  a  payment  of  the  sum  found  to  be  due  by  the  arbitra- 
tor. Therefore  it  seems  to  me  this  case  is  not  distinguishable  from 
Parkes  v.  Smith,  15  Q.  B.  297;  19  L.  J.  (Q.  B.)  405.  In  the  case 
of  Allen  V.  Milner,  2  C.  &  J.  47,  the  plea  was  held  bad  because  it 
was  pleaded  to  the  whole  cause  of  action.  It  admitted  that  the 
amount  found  by  the  arbitrator  was  due,  but  did  not  show  that  the 
plaintiff's  claim  in  respect  of  it  was  answered.  There  is  this 
difference  between  the  cases :  In  the  present  case  the  plea  is  pleaded 
to  the  excess  of  what  the  arbitrator  found  to  be  due.  We  do  not  know 
what  has  taken  place  as  to  the  145?.  Ss.  Id.;  all  we  know  is,  that  the 
excess  to  which  the  plea  is  directed  has  been  found  by  the  arbitrator 
not  to  be  due,  and  both  parties  are  bound  by  the  finding.  There- 
fore, whatever  the  form  of  the  plea,  it  would  not  be  bad,  because 
pleas  are  not  governed  by  their  beginning  and  by  their  ending,  but 
by  the  substance  of  them.  Therefore  this  is  substantially  a  good 
defence  to  the  action.  Judgment  for  the  defendant. 


BOSTOI^  AND  LOWELL  RAILEOAD  CORPORATION  v. 
NASHUA  AND  LOWELL  RAILROAD  CORPORATION 

Supreme  Judicial  Coubt  or  Massachusetts,  March   5- 
June  22,  1885 

[Reported  in  139  Massachusetts,  463] 

CoNTEACT  upon  an  award  of  arbitrators.  The  agreement  of  sub- 
mission, dated  September  30,  1882,  and  signed  by  the  parties,  re- 
cited that  certain  disputes  and  differences  had  arisen  between  them 


1024    BOSTON  «&  LOWELL R.R.  v.  NASHUA  &  LOWELL  R.R.     [  CHAP.  VII 

concerning  their  rights  under  or  growing  out  of  a  certain  joint 
traffic  contract  entered  into  in  1857,  and  which  continued  for  twenty 
years  from  October,  1,  1858;  and  that  the  Nashua  and  Lowell  Eail- 
road  Corporation,  on  April  17,  1880,  brought  a  bill  in  equity  in  the 
Circuit  Court  of  the  United  States  for  the  District  of  Massachusetts 
for  the  recovery  of  the  sums  claimed  to  be  due  to  it.  Then  followed 
this  recital:  "And  whereas,  it  has  been  agreed  by  and  between  the 
said  parties  to  said  suit  to  refer  the  said  claims  and  all  other  claims 
now  existing  in  favor  of  either  party  against  the  other  to  arbitra- 
tion, upon  the  understanding  that  said  arbitrators  shall  be  governed 
in  their  determination  and  award  by  the  rules  of  law  applicable  to 
the  case,  but  without  prejudice  from  any  defence  based  on  the  statute 
of  limitations,  unless  such  defence  would  be  good  and  valid  in  law 
if  pleaded  to  the  bill  in  equity  aforesaid,  commenced  April  17th, 
1880."  The  agreement  then  stated  that  the  parties  submitted  all 
demands  of  either  against  the  other  which  originated  before  October 
1,  1880,  to  the  determination  of  Elias  Merwin,  William  S.  Gardner, 
and  Waldo  Colburn,  "the  award  of  whom,  or  of  the  greater  part  of 
whom,  shall  be  final;  and  if  either  of  the  parties  neglects  to  appear 
before  the  arbitrators,  after  due  notice  of  the  time  and  place 
appointed  for  hearing  the  parties,  the  arbitrators  may  proceed  in 
its  absence,  and  the  arbitrators  may  make  such  award  respecting 
costs  and  expenses  as  they  shall  judge  reasonable,  including  a  com- 
pensation for  their  own  services;  and  the  parties  further  agree  that 
they  will  respectively  obey,  observe,  perform,  fulfil,  and  keep  the 
award  of  the  said  arbitrators  of  and  concerning  the  premises.  It 
is  understood  and  agreed  that  the  same  rule  and  limitation  of  time 
as  to  the  statute  of  limitations  shall  govern  the  arbitrators  afore- 
said, if  said  statute  is  pleaded  by  either  party." 

Annexed  to  the  agreement  were  certain  exhibits,  containing  a 
statement  of  the  claims  of  the  respective  parties.  On  August  7, 
1883,  the  arbitrators  signed  their  award.  The  instrument  began  by 
stating  that  the  arbitrators  met  the  parties  on  February  23,  1883, 
and  proceeded  as  follows :  "It  was  then  agreed  by  the  said  parties 
that  it  was  desirable  that  the  arbitrators  should  first  hear,  consider, 
and  determine  the  claims  of  the  Nashua  and  Lowell  Eailroad  Corpora- 
tion marked  'Numbers  3,  4,  5,  and  6,'  in  their  statement  of  claims 
annexed  to  said  agreement,  entitled  Exhibit  1,  before  entering  upon 
a  hearing  of  any  other  claims  of  either  party  under  said  submission, 
and,  with  the  consent,  and  at  the  request  of  both  parties,  the  arbi- 
trators thereupon,  and  upon  subsequent  days,  namely,  on  the  twenty- 
fourth  and  twenty-sixth  days  of  February,  1883,  proceeded  to  hear 
the  respective  claims  of  the  Nashua  and  Lowell  Kailroad  Corpora- 
tion, at  each  of  which  hearings  the  respective  counsel  aforesaid  were 
present,  and  having  fully  heard  and  considered  the  respective  proofs 
and  arguments  of  the  said  parties  in  reference  thereto,  the  sub- 
scribers, on   the  twenty-tliird   day  of   May,    1883,   at  Boston,   made 


SECT.V]        BOSTON  &  LOWELL  R.R.f.  NASHUA  &  LOWELL  R.R.       1025 

their  final  award  and  determination  in  respect  to  said  claims,  and 
announced  the  same  to  the  said  parties  who  were  present  by  their 
said  counsel,  in  the  words  following,   namely :  — 

"  'Several  of  the  claims  made  by  the  Nashua  and  Lowell  Rail- 
road Corporation  against  the  Boston  and  Lowell  Railroad  Corpora- 
tion were  by  consent  of  both  parties  submitted  to  the  referees  for 
their  award  and  determination,  with  the  understanding  and  reserva- 
tion that  the  remaining  claims  made  by  the  respective  parties  were 
to  remain  open,  either  for  adjustment  by  the  parties  themselves, 
or  for  future  hearing  and  determination  by  the  referees.  The  items 
submitted  to  the  referees,  and  upon  which  they  have  been  requested 
to  pass,  are  those  numbered  3,  4,  5,  and  6  in  Exhibit  1,  annexed  to 
the  agreement  of  reference.  The  referees  have  considered  these 
items,  and  are  of  the  opinion,  and  so  award  and  determine,  that 
the  Nashua  and  Lowell  Railroad  Corporation  is  not  entitled  to  re- 
cover anything  from  the  Boston  and  Lowell  Railroad  Corporation 
in  respect  to  either  of  said  items.'  " 

The  award  then  stated  that  the  hearing  of  any  other  claims  under 
the  submission  "was  then  by  agreement  of  all  parties"  adjourned 
to  June  29,  1883 ;  that,  at  a  hearing  on  the  day  to  which  the  matter 
had  been  adjourned,  the  counsel  for  the  Nashua  and  Lowell  Rail- 
road Corporation  presented  a  motion  for  a  rehearing  as  to  the  law 
involved  in  the  fifth  claim,  and  in  so  much  of  the  sixth  claim  as 
accrued  after  June  25,  1877;  that  this  motion  was  overruled;  that 
the  further  hearing  was  adjourned  until  August  1,  1883;  and  that 
on  July  30,  31,  each  of  the  arbitrators  received  from  the  Nashua 
and  Lowell  Railroad  Corporation  certain  papers,  copies  of  which 
were  annexed  to  the  award. 

The  first  paper  purported  to  contain  a  vote  of  the  directors  of  the 
defendant  corporation,  passed  July  5,  1883,  which,  after  reciting 
the  proceedings  before  the  arbitrators,  proceeded  as  follows :  "Now, 
therefore,  resolved,  under  the  circumstances  above  set  forth,  that 
this  corporation  will  revoke  said  submission,  and  refuse  to  proceed 
further  under  the  same,  unless  the  referees  will  either  make  a  special 
report  of  their  findings  of  fact  and  rulings  of  law  in  relation  to  the 
fifth  claim,  and  that  portion  of  the  sixth  arising  after  May,  1877, 
or  else  unless  this  corporation  shall  be  permitted  to  amend  the 
said  submission  by  striking  out  or  withdrawing  therefrom  the  said 
fifth  claim,  and  that  portion  of  the  sixth  claim  which  has  accrued 
or  arisen  since  the  vote  of  June  25th,  1877." 

The  second  paper,  dated  July  30,  1883,  was  signed  by  the  corporate 
name  of  the  defendant,  by  its  president.  It  contained,  after  numer- 
ous recitals,  the  following :  "Now,  therefore,  the  Nashua  and  Lowell 
Railroad  Corporation,  in  pursuance  of  said  vote,  does  hereby  re- 
voke the  said  submission  and  all  authority  therein  and  thereby 
conferred  upon  Elias  Merwin,  William  S.  Gardner,  and  Waldo  Col- 
burn,    as    arbitrators   named   therein,   and   does   hereby  terminate, 


1026     BOSTON  &  LOWELL  R.R.f.  NASHUA  &  LOWELL  R.R.      [CHAP.VU 

SO  far  as  it  lawfully  may,  any  and  all  power  heretofore  given  them 
to  act  under  the  said  submission." 

The  award  then  stated,  that  on  August  1,  1883,  the  arbitrators 
met  the  parties,  according  to  adournment;  and  that  the  counsel  for 
the  Nashua  and  Lowell  Railroad  Corporation  handed  to  the  arbitra- 
tors a  paper  of  which  the  following  is  a  copy :  — 

"At  a  meeting  of  the  directors  of  the  Nashua  and  Lowell  Rail- 
road held  at  Boston,  August  1,  1883,  at  nine  o'clock  in  the  fore- 
noon, the  president  having  laid  before  the  board  a  copy  of  an  instru- 
ment of  revocation  of  the  submission  entered  into  on  the  30th  day 
of  September  last,  between  this  company  and  the  Boston  and  Lowell 
Railroad  Corporation,  said  submission  being  executed  by  him  in 
behalf  of  this  company,  in  pursuance  of  the  directors'  vote  of  July 
5th  last,  it  was  voted  that  the  course  so  taken  by  him  be  ratified 
and  approved,  and  that  the  directors  will  treat  the  said  submission 
as  no  longer  in  force. 

"A  true  extract  from  the  record.   Attest :  "W.  W.  Bailey,  Clerk." 

The  award  then  stated  that  the  arbitrators  were  of  the  opinion 
that  they  were  bound  to  proceed  with  the  hearing  if  either  party 
so  desired,  and  so  informed  the  parties,  and  that  they  were  ready  to 
hear  them;  that  the  counsel  for  the  Nashua  and  Lowell  Railroad 
Corporation  stated  that  that  corporation  did  not  intend  to  proceed 
further,  and  that  he  then  withdrew. 

The  award  then  stated  the  further  proceedings  before  the  arbi- 
trators, and  concluded  with  a  "summary,"  which  began  as  follows :  — 

"The  subscribers,  having  fully  heard  the  respective  parties  under 
said  submission,  so  far  as  they  desired  to  be  heard,  and  having 
fully  considered  their  respective  proofs  and  arguments,  do  now,  in 
addition  to  their  final  award  and  determination  of  May  23,  1883, 
as  hereinbefore  set  forth,  award  and  determine,  and  this  is  our  final 
award  and  determination  in  the  premises,  namely:  — 

"1.  That  the  Nashua  and  Lowell  Railroad  Corporation  is  not 
entitled  to  recover  any  sum  of  the  Boston  and  Lowell  Railroad 
Corporation  by  reason  of  any  of  the  claims  specifically  made  by  it 
or  embraced  by  said  agreement  of  reference  against  said  Boston 
and  Lowell  Railroad  Corporation." 

TIk'ti  followed  an  award  in  favor  of  the  Boston  and  Lowell  Rail- 
road Corporation,  on  their  claims,  to  the  amount  of  $12,148.88. 

Trial  in  the  Superior  Court,  before  Mason,  J.,  who  allowed  a  bill 
of  exceptions  in  substance  as  follows:  — 

Tbr-re  was  contrndictory  oviflenco  whether  the  statement  of  the 
arbitrators  cnntainofl  in  tlie  cljuise  brginning  "Several  of  the  claims," 
find  cTidiiic  witb  the  words,  "by  the  referees,"  was  correct,  the  de- 
ff'iifl.'ifit  insisting  that  such  statement  was  not  correct,  and  the 
plaint! fT  insisting  that  it  was  correct.  The  other  facts  stated  in 
thf  jiwnrr]  were  not  in  dispute. 

The  dcifendant  took  the  ground  that  the  only  assent  given  by  it 


SECT.V]        BOSTON&LOWELLR.R.  v.  NASHUA  &  LOWELL  R.R.       1027 

was  to  the  determination  by  the  arbitrators  in  the  first  instance  of 
certain  questions  of  law  as  preliminary,  and  that  they  might  pass 
upon  such  legal  questions,  and  announce  the  result,  before  proceed- 
ing to  consider  other  claims  embraced  in  the  submission,  and  before 
passing  upon  such  other  claims,  and  that  the  defendant  never 
assented  to  any  partial  and  final  award  being  made,  so  as  to  be  bind- 
ing on  the  defendant  before  the  revocation  was  notified  to  the  arbi- 
trators. The  plaintiff  contended  that  the  statement  in  the  award 
was  true. 

Thereupon  the  defendant  contended,  and  requested  the  judge  to 
rule  as  follows:  "1.  The  clause  in  the  submission  stating  that  it  was 
entered  into  'upon  the  understanding  that  said  arbitrators  shall 
be  governed  in  their  determination  and  award  by  the  rules  of  law 
applicable  to  the  case,  operated  as  a  limitation  or  restriction  of  the 
power  of  the  arbitrators,  so  that  their  determination  of  matters 
of  law  was  not  final.  2.  If  the  arbitrators  treated  the  submission  as 
making  them  final  judges  of  all  questions  of  law  raised  before  them, 
and  undertook  to  pass  finally  upon  all  matters  of  law  laid  before 
them,  and  did  so  in  such  a  way  that  the  defendant  was  deprived  of  all 
means  of  revising  their  legal  rulings  except  by  revoking  the  said 
submission,  and  the  defendant  did  revoke  the  submission  for  that 
reason,  then  such  revocation  was  legally  justifiable.  3.  Whether 
the  defendant's  revocation  of  the  submission  in  this  case  was  legally 
justifiable  or  not,  it  operated  to  deprive  the  arbitrators  of  all  further 
power  of  action  under  the  same." 

The  plaintiff  asked  the  judge  to  rule,  whatever  he  might  find  upon 
the  question  of  fact  in  dispute,  that  the  plaintiff  was  entitled  to 
a  finding  in  its  favor  for  the  amount  of  the  award,  and  interest  on 
the  same;  but  the  judge  declined  so  to  rule. 

The  judge  refused  to  give  the  first  two  rulings  requested  by  the 
defendant,  but  did  give  the  third  ruling  requested,  and  thereupon 
found  for  the  defendant.     The  plaintiff  alleged  exceptions. 

A.  A.  Strout,.ioT  the  plaintiff. 

F.  A.  Brooks,  for  the  defendant. 

Field,  J.  The  award  on  which  this  action  was  brought  was  in 
writing,  and  was  signed  and  published  by  the  arbitrators  on  August 
7,  1883.  Before  the  award  was  signed,  the  defendant  delivered  to 
the  arbitrators  a  paper  signed  by  the  president  of  the  defendant 
corporation  in  its  name,  dated  July  30,  1883,  and  a  copy  of  the  vote 
of  the  directors  of  the  corporation  passed  on  August  1,  1883.  These 
papers  we  construe  to  be  an  unconditional  revocation  by  the  de- 
fendant of  the  authority  of  the  arbitrators  to  proceed  under  the 
submission.  It  is  not  contended  that  this  revocation  was  waived 
or  withdrawn  by  the  defendant. 

A  submission  to  arbitration  is  a  power  which  may  be  revoked 
at  any  time  before  it  is  executed  by  the  publication  of  the  award, 
and  an   agreement  that   the  arbitrators   may   proceed   ex  parte,   if 


1028    BOSTON  &  LOWELL  R.  R.  V.  NASHUA  &  LOWELL  R.  R.     [  CHAP.  VII 

either  party  neglects  to  appear,  does  not  make  the  submission  irrev- 
ocable. Wallis  V.  Carpenter,  13  Allen,  19,  24;  Marsh  v.  Bulteel, 
5  B.  &  Aid.  507 ;  Mills  v.  Bayley,  2  H.  &  C.  36. 

The  contention  is,  that  the  submission  was  partially  executed  by 
the  award  that  the  defendant  was  not  entitled  to  recover  anything 
from  the  plaintiff  in  respect  to  the  items  numbered  3,  4,  5,  and  6 
in  the  statement  of  claims  made  by  the  defendant.  It  does  not 
appear  that  this  was  a  separate  award,  actually  reduced  to  writing 
and  signed  by  the  arbitrators.  The  unavoidable  inference  is,  that 
this  conclusion  was  announced  to  the  parties  as  the  determination 
of  the  arbitrators  upon  these  items ;  and  that  the  meeting  of  the  arbi- 
trators was  adjourned  for  the  purpose  of  subsequently  hearing  and 
determining  the  other  claims  of  the  parties,  unless  meanwhile  the 
parties  settled  them. 

An  award  must  cover  all  the  claims  submitted  and  presented  to 
the  arbitrators,  and  must  be  mutual,  certain,  and  final.  If  we 
assume  that  the  oral  announcement  of  the  arbitrators  of  their  de- 
termination upon  these  items  was  intended  to  be  their  final  award 
on  these  items,  the  award  would  be  bad,  unless  the  parties  had  agreed 
that  these  items  should  be  the  subject  of  a  separate  award,  because 
this  award  did  not  decide  all  the  substantial  matters  submitted  and 
presented.  Eandall  v.  Randall,  7  East,  81 ;  Robson  v.  Railston,  1 
B.  &  Ad.  723 ;  Stone  v.  Phillipps,  4  Bing.  N".  C.  37 ;  Bhear  v.  Harra- 
dine,  7  Exch.  269. 

It  has  not  been  found  as  a  fact,  that  the  parties  agreed  that  these 
items  should  be  the  subject  of  a  separate  award.  If  this  fact  were 
found,  it  would  perhaps  show  that  the  parties,  by  their  subsequent 
agreement,  entered  into  two  separate  submissions  instead  of  one; 
but  then  the  making  and  publishing  of  an  award  under  one  submis- 
sion would  not  be  a  part  execution  of  the  power  conferred  by  the 
other.  But  if  it  be  assumed  that  the  statement  in  the  award  is  true, 
we  are  of  opinion  that  the  award  itself  does  not  show  that  the 
announcement  of  the  determination  of  the  arbitrators  upon  the 
items  mentioned  was  intended  by  them  as  the  making  and  publica- 
tion of  an  award.  The  award,  as  it  was  finally  made  and  published, 
is  one  and  entire.  The  power  of  the  arbitrators  over  all  the  matters 
submitted,  if  there  had  been  no  revocation,  would  have  continued 
until  the  award  was  finally  made  and  published.  Before  this  was 
done,  it  was  competent  for  them  to  change  their  minds  upon  these 
items,  to  rehear  the  parties,  and  to  revise  their  decision.  The  an- 
nouncement was  interlocutory,  and  not  final.  It  is  therefore  un- 
necessary to  consider  whether  any  partial  award,  made  and  published 
under  a  submission  such  as  this  is,  would  preclude  a  party  from  re- 
voking the  authority  of  the  arbitrators  to  proceed,  under  the  sub- 
mission, to  consider  and  determine  the  remainder  of  the  matters 
submitted.  Exceptions   overruled.^ 

'  In  Tohfy  v.  County  of  Bristol,  :i  Story,  800,  819,  Story,  J.,  said:  "But  supposing 
it  to  l)c  otlKTwi.sf!  and  here  there  was  a  real  contract  or   agreement,  not  conditional 


SECT.    V]    WILLIAMS    V.    THE   LONDON    COM.   EXCH.    CO.  1029 


WILLIAMS  V.  THE  LONDON"  COMMEECIAL  EXCHANGE 

COMPANY 

In  the  Exchequer,  Michaelmas  Vacation,   1854 

[Reported  in  10  Exchequer,  569] 

The  first  count  of  the  declaration  stated,  that  the  plaintiff  em- 
ployed the  defendants  in  the  way  of  their  business  as  share-brokers, 
for  commission  to  be  paid  by  the  plaintiff  to  the  defendants  in  that 
behalf,  to  purchase  for  the  plaintiff,  when  and  as  soon  thereafter 
as  the  defendants  could,  one  hundred  shares  in  the  Great  JSTorthern 
Railway  Company,  as  the  market  price  of  such  shares  for  the  time 
being;  and  although  the  defendants  then  could  and  ought  to  have 
purchased  for  the  plaintiff  such  shares,  at  the  then  market  price 
thereof,  the  defendants  did  not  then  purchase  such  shares,  or  any 
part  of  them,  but  fraudulently  and  wrongfully  neglected  and  omitted 
to  do  so,  &c.  —  There  were  other  counts  in  respect  of  other  shares. 

Plea  —  That,  after  the  accruing  of  the  causes  of  action  in  the 
declaration  mentioned,  and  before  the  making  of  the  agreement 
hereinafter   mentioned,   disputes   and   differences   were   existing   be- 


but  absolute,  on  the  part  of  the  commissioners,  to  refer  the  claims  to  arbitration,  can 
such  an  agreement  be  enforced  by  a  court  of  equity?  No  one  can  be  found,  as  I 
believe,  and  at  all  events,  no  case  has  been  cited  by  counsel,  or  has  fallen  within  the 
scope  of  my  researches,  in  which  an  agreement  to  refer  a  claim  to  arbitration,  has 
ever  been  specifically  enforced  in  equity.  So  far  as  the  authorities  go,  they  are  alto- 
gether the  other  way.  The  cases  are  divided  into  two  classes.  One,  where  an  agree- 
ment to  refer  to  arbitration  has  been  set  up  as  a  defence  to  a  suit  at  law,  as  well  as  in 
equity;  the  other,  where  the  party  as  plaintiff  has  sought  to  enforce  such  an  agree- 
ment in  a  court  of  equity.  Both  classes  have  shared  the  same  fate.  The  courts  have 
refused  to  allow  the  former  as  a  bar  or  defence  against  the  suit;  and  have  declined 
to  enforce  the  latter  as  ill-founded  in  point  of  jurisdiction.  In  respect  to  the  former 
class,  I  will  barely  refer  to  Wellington  v.  Mackintosh,  2  Atk,  569,  Mitchell  v.  Harris, 
4  Bro.  Ch.  R.  311;  a.  c.  2  Ves.  Jr.  129,  Kill  v.  HoUister,  1  Wils.  R.  129,  Street  v.  Rigby, 
6  Ves.  815,  and  Thompson  v.  Charnock,  8  Term  R.  139.  In  respect  to  the  latter  class. 
In  Street  v.  Rigby,  6  Ves.  R.  813,  818,  Lord  Eldon  significantly  said,  that  no  instance 
is  to  be  found  of  a  degree  for  specific  performance  of  an  agreement  to  name  arbitrators, 
or  that  any  discussion  upon  it  has  taken  place  in  experience  for  the  last  twenty-fiye  years; 
and  he  referred  to  the  case  of  Price  v.  Williams,  before  Lord  Thurlow,  in  which  he, 
Lord  Eldon,  was  counsel,  where  Lord  Thurlow  held,  that  the  court  could  not  per- 
form such  an  agreement.  I  do  not  find  in  the  very  brief  and  unsatisfactory  reports 
of  the  case  of  Price  v.  WilUams,  3  Bro.  Ch.  R.  163,  and  1  Ves.  Jr.  R.  365,  any  notice 
of  this  point;  but  there  cannot  be  any  serious  doubt  of  the  accuracy  of  Lord  Eldon's 
recollection  of  the  case.  In  Gourlay  v.  The  Duke  of  Somerset,  19  Ves.  R.  430,  Sir 
William  Grant,  one  of  the  greatest  masters  of  equity  of  his  age,  expressly  said,  that 
a  bill  seeking  to  enforce  the  specific  performance  of  an  agreement  to  refer  to  arbitra- 
tion, was  a  species  of  bill  that  has  never  been  entertained  by  a  court  of  equity.  There 
are  several  other  cases  bearing  strongly  on  the  same  doctrine,  such  as  Milnes  v.  Gery, 
14  Ves.  400,  Blundell  v.  Brettargh,  17  Ves.  232,  and  Wilks  v.  Davis,  3  Meriv.  R.  507. 
But  a  later  case,  directly  in  point,  is  Agar  v.  Macklew,  2  Sim.  and  Stu.  R.  418,  where 
Sir  John  Leach  utterly  refused  to  decree  the  specific  performance  of  an  agreement 
to  refer  to  arbitration.  On  that  occasion,  he  said:  'I  consider  it  to  be  quite  settled, 
that  this  court  will  not  entertain  a  bill  for  the  specific  performance  of  an  agreement 
to  refer  to  arbitration;  nor  will  it,  in  such  a  case,  substitute  the  master  for  the  arbi- 
trators, which  would  be  to  bind  the  parties  contrary  to  their  agreement.'"  See 
further  Ames  Gas.  Eq.  Jur.  65-68;  3  Williston,  Contracts,  §§  1421,  1719,  1925. 


1030      WILLIAMS    V.    THE   LONDON    COM.    EXCH.    CO.     [CHAP.    VII 

tween  the  plaintiff  and  the  defendants  touching  and  concerning 
divers  dealings  and  transactions  which  had  taken  place  between 
them,  and  touching  certain  matters  of  account  arising  out  of  those 
dealings  and  transactions;  and  that  some  of  the  said  matters  con- 
sisted of  the  several  transactions  in  the  declaration  mentioned  as  to 
the  direction  to  purchase  shares  for  the  plaintiff,  and  others  of  such 
matters  were  the  subject  of  an  action  then  depending  in  this  Court 
by  the  plaintiff  against  the  defendants  for  damages  claimed  by  the 
plaintiff  in  respect  of  certain  other  dealings  between  the  plaintiff 
and  the  defendants,  and  certain  other  directions  by  the  plaintiff  to 
the  defendants  to  purchase  for  the  plaintiff  certain  other  shares. 
Whereupon,  the  said  disputes  and  differences  then  existing  and  the 
said  action  depending  as  aforesaid,  it  was  agreed  between  the  plain- 
tiff and  the  defendants,  that,  in  consideration  that  the  defendants 
would  consent  to  a  judge's  order,  by  which  the  matters  of  the  said 
action  should  be  referred  to  the  award  of  C.  C,  and  that  the  de- 
fendants would  agree  to  perform  in  all  things  his  award,  to  be  made 
of  and  concerning  the  matters  so  to  be  to  him  referred,  so  far  as 
the  same  award  should  direct  performance  to  be  made  by  the  de- 
fendants, the  plaintiffs  should  and  would  accept  such  agreement  by 
the  defendants  in  full  satisfaction  of  all  damages  sustained  by  the 
plaintiff  for  and  in  respect  of  the  several  causes  of  action  in  the 
declaration  in  this  action  alleged.  —  Averments :  That,  in  pursuance 
of  the  said  agreement,  a  judge's  order  in  the  said  then  depending 
action  was  consented  to  by  the  defendants,  and  was  made  by  Sir 
T.  J.  Piatt,  Knight,  one  of  the  Barons  of  this  Court,  whereby,  and 
by  consent  of  the  plaintiff  and  the  defendants,  the  matters  of  the  said 
then  depending  action  were  referred  to  the  award  of  the  said  C.  C, 
and  whereby  it  was  ordered  that  the  costs  of  the  said  cause  should 
abide  the  event  of  the  said  award,  <Src. ;  and  the  plaintiff  did  then 
accept  such  consent  and  such  order  made  in  pursuance  of  the  said 
agreement,  in  full  satisfaction  and  discharge  of  all  damages  by 
tbe  plaintiff  sustained  for  and  in  respect  of  the  several  causes  of 
action  in  the  declaration  in  this  present  action  alleged.  —  The  plea 
then  proceeded  to  state  that  the  arbitrator  made  his  award,  and 
found  for  the  plaintiff,  dnmages,  £423  95.  6d.,  which  the  defend- 
ants paid  to  the  plaintiff,  with  costs. 

Demurrer,  and  joinder  therein. 

Willes,  in  support  of  the  demurrer.  —  The  plea  is  bad,  as  an 
accord  without  satisfaction.  An  agreement  to  refer  to  arbitration 
an  action  then  pending  cannot  operate  as  a  satisfaction  or  release 
of  other  causes  of  action  not  included  in  that  reference.  [Parkk,  B. 
—  There  is  good  consideration  for  the  plaintiff's  relinquishing  those 
claims.  The  defendants  consent  to  refer  the  action  by  a  judge's 
order,  which  may  bo  enforced  by  attachment.  Martin,  B.  —  Sup- 
posf  ;i  i)frsoti  hns  two  claims  against  nnother,  and  he  says  to  the 
latter,  "If  you  will  consent  to  refer  the  one  claim,  I  will  give  up 


SECT.   V]  ROBINSON    V.    HAWKINS  1031 

the  other,"  surely  such  an  agreement  would  be  binding.]  An  accord 
must  appear  to  be  advantageous  to  the  party,  otherwise  it  is  no 
satisfaction:  Bac.  Abridg.  tit.  "Accord  and  Satisfaction"  (A.)  This 
reference  is  not  more  advantageous  to  the  plaintiff  than  it  is  to  the 
defendants.  It  cannot  be  considered  that  either  party  obtains  by  it 
more  than  he  is  justly  entitled  to  in  respect  of  the  matters  referred; 
consequently,  there  is  nothing  in  satisfaction  of  the  claims  not  in- 
cluded in  the  reference.  [Parke,  B.  —  The  matters  in  question 
could  not  have  been  referred  unless  by  consent  of  both  parties. 
Then,  as  it  appears  that  there  was  a  binding  agreement  to  refer, 
that  is  a  satisfaction  of  the  other  claims.] 

Barstow  appeared  in  support  of  the  plea,  but  was  not  called  upon 
to  argue. 

Pee  Curiam.^ — There  must  be  judgment  for  the  defendants. 

Judgment  for  the  defendants. 


CALVIN  ROBmSON^  V.  FERDINAND  HAWKINS 

Vermont  Supreme  Court,  February  Term,  1866 
[Reported  in  38  Vermont,  693] 

Peck,  J.^  [The  action  is  trespass  for  the  taking  and  conversion 
of  a  cow.  The  defendant  justified  as  deputy  sheriff  under  a  writ 
of  attachment  in  favor  of  one  Gilson.  The  plaintiff  claims  that  the 
cow  was  his  only  cow  and  therefore  exempt.  The  referee  so  finds 
the  fact.] 

The  defendant  relies  on  a  submission  and  award  of  an  arbitrator 
between  the  plaintiff  and  Gilson,  as  a  bar  to  the  action.  It  appears 
that  in  1858,  while  the  suit  in  which  the  cows  were  attached  w^as 
pending  in  the  county  court,  to  which  it  had  been  appealed,  Calvin 
Robinson,  2d,  and  his  father,  William  Robinson,  and  Gilson  executed 
mutual  bonds  of  subhission  to  arbitration,  in  pursua^jce  of  which 
an  award  was  made  in  May,  1859.  The  arbitration  bonds  specify 
as  a  matter  of  difference  submitted,  a  "disagreement  relative  to  the 
sale  and  purchase,  or  rent  and  occupancy,  of  certain  premises, 
wherein  the  said  Gilson  claims  damages  of  said  Calvin  Robinson, 
which  disagreement  has  resulted  in  a  suit  at  law"  (referring  to  the 
suit  already  mentioned),  and  also  specifying  a  claim  on  the  part 
of  the  said  William  Robinson,  that  Gilson  has,  by  deputy  sheriff 
Hawkins,  attached  a  certain  cow  claimed  by  William  Robinson  as 
his  property,  for  which  Robinson  has  a  suit  pending  against  Gilson. 

•  Parke,  B.  Platt,  B.,  and  Martin,  B. 

2  The  statement  of  facts  in  the  opinion  is  abbreviated  and  a  portion  is  omitted. 


1032  ROBINSON    V.    HAWKINS  [CHAP.   VII 

To  this  particular  description  of  the  matters  submitted  is  added  a 
general  clause  of  all  matters  existing  between  Gilson  and  William 
Eobinson,  and  between  Gilson  and  Calvin  Robinson.  The  defend- 
ant's counsel  insists  that,  under  this  general  clause,  the  plaintiff  was 
bound  to  present  the  claim  embraced  in  this  suit  before  the  arbi- 
trator and  have  it  there  adjudicated,  and  that  if  he  neglected  to  do 
so  he  is  barred  of  all  remedy,  not  only  as  against  Gilson  but  as 
against  this  defendant.  We  recognize  the  principle  established  by 
the  cases  cited  in  argument,  that  under  a  general  submission  of  all 
matters  existing  between  the  parties,  if  a  party  withholds  a  part 
of  his  claims  from  the  arbitration  he  cannot,  as  a  general  rule,  after- 
wards enforce  it  against  the  other  party  to  the  submission.  Whether 
this  rule  is  limited  to  cases  where  a  party,  in  bad  faith  and  inten- 
tionally in  violation  of  his  contract,  withholds  a  claim,  it  is  not 
necessary  to  decide.  ISTor  is  it  necessary  to  decide  what  exceptions 
there  are  to  this  rule  as  between  the  parties  to  the  submission.  It 
is  sufficient  to  say  that,  in  the  opinion  of  the  court,  the  neglect  of 
the  plaintiff  to  present  this  claim  before  the  arbitrator  does  not 
operate  to  bar  him  from  his  remedy  against  the  defendant,  who  was 
no  party  to  the  submission.  The  cases  on  this  subject,  in  which  it 
is  held  that  the  party  is  concluded,  proceed  upon  the  ground  that  the 
party  was  bound,  by  his  contract  of  submission,  to  present  the  claim 
and  have  it  adjudicated  by  the  arbitrator.  We  think  in  this  case 
the  plaintiff  was  not  bound  by  the  submission  to  present  the  claim 
before  the  arbitrator,  but  had  a  right  to  look  to  the  officer  who 
actually  committed  the  trespass.  It  is  true  he  might  have  made 
Gilson  liable  for  the  acts  of  the  officer  if  he  could  have  shown  that 
Gilson  directed  the  officer  to  attach  and  sell  the  particular  cow  in 
question,  but  he  was  not  bound  to  resort  to  him  instead  of  the  officer 
for  remedy.  The  submission  and  award  is  no  bar  to  a  recovery, 
without  showing  that  the  matter  was  submitted  to  and  adjudicated 
by  the  arbitrator,  and  this  the  referee  says  he  does  not  find. 

The  defendant's  counsel  claims  that  the  presumption  is  that  it 
was  presented  to,  and  adjudicated  by,  the  arbitrator,  unless  the 
contrary  is  shown.  This  would  be  so  if  by  the  terms  of  the  sub- 
mission it  became  the  duty  of  the  plaintiff  to  present  it  to  the  arbi- 
trator, but  not  so  in  this  case. 


SECT,  vi]  Albert's  ex.  v.  ziegler's  ex.  1033 

SECTION  VI 

SURRENDER   AND    CANCELLATION 


CROSS  V.  POWEL 

In  the  Common  Pleas,  Trinity  Term,  1596 

[Reported  in  Crohe  Elizabeth,  483] 

Debt.  The  case  was,  A  deed-poll  was  made  between  Cross  and 
Powel,  whereby  Cross  covenants  with  Powel  to  assure  unto  him 
such  land,  and  Powel  by  the  same  deed  covenanted  with  Cross  to 
pay  unto  him  for  it  £40.  Powel  delivered  the  deed  first  to  Cross, 
and  Cross  afterwards  delivered  it  to  Powel.  Cross  brings  debt  for 
this  £40.  And  all  this  matter  being  disclosed  by  pleading,  it  was 
thereupon  demurred  by  the  defendant,  pretending,  that  by  this  re- 
delivery of  the  deed  unto  him  it  had  lost  its  force,  —  But  all  the 
Court  held,  that  it  is  a  good  deed  to  both;  for  here  is  a  writing, 
sealing,  and  delivery,  and  the  delivery  thereof  to  the  defendant  is 
not  material:  for  if  a  deed  be  delivered  to  be  cancelled,  to  the  party 
himself,  yet  if  it  be  not  cancelled,  and  the  other  gets  it  again,  it 
remains  a  good  deed.    Wherefore  it  was  adjudged  for  the  plaintiff. 


ALBERT'S  EXECUTORS  v.  ZIEGLER'S  EXECUTORS 

Pennsylvania  Supreme  Court,  1857 
[Reported  in  29  Pennsylvania  State,  50] 

Knox,  J.  "We  are  of  opinion  that  the  Court  of  Common  Pleas 
erred  in  permitting  the  jury  to  find  under  the  evidence,  that  the 
single  bill  upon  which  this  suit  was  brought,  did  not  truly  express 
the  contract  between  the  parties  to  it. 

There  was  no  evidence  of  either  fraud  or  mistake  in  the  execution 
and  delivery  of  the  instrument,  and  therefore  it  could  not  be  contra- 
dicted or  varied  by  parol.  The  plaintiff  has  the  right  to  a  trial 
upon  the  basis  that  the  contract  was  correctly  set  forth  in  the  instru- 
ment upon  which  the  suit  was  brought.  That  instrument  was  in 
the  following  words :  — 

"Know  all  men  by  these  presents,  that  I,  John  Ziegler,  of  Lati- 
more  township,  Adams  county,  Pennsylvania,  do  promise  to  pay  to 
Jacob  Albert,  of  the  same  place  aforesaid,  the  full  interest  of  $1500, 
one  year  and  every  year  until  the  said  Jacob  Albert's  decease:  I, 


1034  Albert's  ex.  v.  ziegler's  ex.  [chap,  vii 

John  Ziegler,  bind  myself,  my  heirs,  executors,  and  administrators 
for  the  same,  it  being  for  value  received,  as  witness  my  hand  and 
seal  the  first  day  of  April,  a.  d.  1833. 

Signed,         "John  Ziegler,    [l.  s.]" 

Jacob  Albert  died  on  the  5th  September,  1851;  so  that,  according 
to  the  terms  of  the  contract,  the  plaintiff  was  entitled  to  recover 
the  interest  on  $1500,  from  the  first  day  of  April,  1833,  to  the  5th 
September,  1851.  But  the  defendant  alleges  that  the  instrument 
upon  which  the  suit  was  brought,  was  cancelled  by  Jacob  Albert  in 
his  lifetime:  first,  by  an  indorsement  upon  the  back  of  the  paper; 
and  second,  by  his  direction  to  have  the  paper  burned. 

The  indorsement  was  without  date  and  was  not  signed,  but  was 
proved  to  be  in  the  handwriting  of  the  present  plaintiff,  who  was 
the  executor  and  the  only  person  interested  in  the  estate  of  Jacob 
Albert.     It  was  as  follows :  — 

"This  within  obligation  after  my  decease  shall  be  of  no  effect,  but 
till  then  to  be  and  remain  in  full  force  and  virtue." 

Whether  this  indorsement  was  made  by  the  direction  of  the 
testator,  was  a  question  of  fact  for  the  jury.  If  so  made,  its  legal 
effect  was  for  the  court.  The  plaintiff  asked  the  court  to  instruct  the 
jury  that  the  indorsement,  even  if  proved  to  have  been  made  by  the 
holder,  would  not  amount  to  a  release  of  the  interest  stipulated  to 
be  paid;  to  which  an  affirmative  answer  was  given.  This  was  cor- 
rect. For  although  the  bond  could  be  released  in  equity  by  parol, 
it  could  only  be  done  by  delivery  and  upon  sufficient  consideration. 
That  natural  love  and  affection  is  not  a  sufficient  consideration,  is 
conclusively  established  by  the  cases  of  Kennedy's  Executors  v.  Ware, 
1  Barr,  445,  and  In  re  Campbell's  Estate,  7  Barr,  100.  And  that 
there  was  no  delivery  is  proved  by  the  indorsement  itself,  for  the 
bond  was  to  remain  good  until  Jacob  Albert's  decease. 

The  reason  why  a  parol  release  of  a  sealed  instrument  is  good 
in  equity,  is  because  it  is  there  treated  as  an  agreement  not  to  sue, 
and  is  executed  specifically  by  a  perpetual  injunction.  But  there 
must  be  a  contract  to  release,  founded  upon  a  sufficient  considera- 
tion, otherwise  it  is  at  the  most  only  an  executory  gift,  subject  to 
the  control  of  the  donor,  and  which  can  neither  be  enforced  against 
him  nor  his  personal  representative.  It  is  clear,  therefore,  that  the 
indorsemi-'nt  upon  the  single  bill  was  not  a  valid  rol(>ase  of  the  debt, 
nor  would  the  more  unexecuted  testamentary  direction  for  the 
destnietion  of  tlie  instrnnient  nniount  to  an  extinguishment  of  the 
debt.  But  the  cnneellntion  of  a  bond, .or  its  delivery  to  the  obligor, 
or  oven  to  a  stranger,  with  the  intent  that  it  shall  be  cancelled, 
amounts  to  an  extinction  of  the  rlebt :  Licey  v.  Licey,  7  Barr,  251. 
If  thereforf!  the  jury  should  be  satisfied  upon  another  trial,   that 


SECT.    VI]  MARSTON    V.    MARSTON  1035 

Jacob  Albert  in  his  lifetime  gave  the  bond  in  question  to  his  grand- 
son, Hiram  Albert,  and  told  him  to  burn  it,  it  would  in  effect  be 
cancelled  and  the  debt  extinguished;  and  the  subsequent  preserva- 
tion of  the  bond,  and  the  institution  of  this  suit  upon  it  by  John  E. 
Albert  against  the  manifest  intention  and  express  direction  of  his 
father,  would  be  a  fraud  upon  the  estate  of  John  Ziegler,  which 
could  not  be  permitted  to  succeed  in  a  court  of  justice.  If  however 
this  allegation  is  not  satisfactorily  established,  we  see  nothing  in  the 
case,  as  now  presented,  which  would  prevent  the  plaintiff  from  re- 
covering the  amount  of  his  claim. 

The  indorsement  upon  the  single  bill,  that  it  should  be  of  no 
effect  after  the  holder's  death,  as  well  as  the  declarations  of  Jacob 
Albert  testified  to  by  John  Trump,  Jacob  Furst,  Lewis  Myers,  and 
others,  although  not  evidence  to  vary  the  written  instrument,  nor  to 
establish  an  independent  defence,  may  properly  be  received  as  cor- 
roborative to  the  testimony  of  Nelson  Day.  For  the  often  repeated 
declarations  of  the  plaintiff's  testator,  that  he  did  not  intend  to 
claim  anything  upon  the  bond  from  the  estate  of  his  deceased  son- 
in-law,  John  Ziegler,  tends  to  the  more  ready  belief  in  his  direction 
for  its  destruction. 

Judgment  reversed  and  venire  de  novo  awarded} 


MARSTON,  ADM.,  Appellant,  v.   MARSTON"  &  Another 

New  Hampshire  Supreme  Court,  June,  1866 

[Reported  in  64  New  Hampshire,  146] 

Appeal,  from  a  pro  forma  decree  of  the  judge  of  probate,  charg- 
ing the  appellant  with  the  amount  of  two  notes  signed  by  Orissa 
J.  Pillsbury,  two  notes  signed  by  L.  D.  Kelly,  and  one  note  signed 
by  Anson  R.  Marston,  all  payable  to  his  intestate,  Mercy  Marston. 

Aldrich  &  Remich,  for  the  appellant. 

Drew  &  Jordan  and  R.  Farnham,  for  the  appellees. 

Smith,  J.^  In  November,  1878,  Mrs.  Marston  made  known  her 
desire  and  purpose  to  give  to  her  son  the  plaintiff,  and  to  her 
daughter  Mrs.  Pillsbury,  the  promissory  notes  which  she  held  against 
them.  That  purpose  she  understandingly  carried  into  effect  by  the 
transfer  to  them  of  the  possession  of  the  notes,  without  condition 
or  reservation.'  The  transaction  was  intended  by  her  and  understood 
by  them  to  be  a  complete  delivery  of  the  notes,  operating  as  an  ab- 
solute extinguishment  of  all  claim  against  them  as  signers  of  the 
notes.     None  of  the  elements  to  constitute  a  valid  gift  inter  vivos 

*  Surrender  of  a  bond  to  the  obligee  with  intent  to  extinguish  the  obligation  has 
the  intended  effect.  Hurst  v.  Beach,  5  Madd.  351;  Beach  v.  Endress,  51  Barb.  570; 
Picot  v.  Sanderson,  1  Dev.  309;  Wentz  v.  Dehaven,  1  S.  &  R.  317;  Licey  v.  Licey, 
7  Pa.  St.  251. 

2  Most  of  the  statement  of  facts  and  a  portion  of  the  opinion  have  been  omitted. 


1036  DARLAND    V.    TAYLOR  [CHAP.    VII 

were  wanting.  The  gift  was  by  a  person  competent  to  give,  of  prop- 
erty she  had  a  right  to  give,  to  persons  competent  to  receive,  and 
was  completed  by  an  absolute  and  unconditional  transfer  of  the  pos- 
session of  the  thing  given.  The  gift  having  been  perfected  by  de- 
livery and  acceptance,  became  an  executed  contract,  founded  in 
mutual  consent,  irrevocable  by  the  donor,  and  the  notes  became  the 
absolute  property  of  the  donees.  Creditors  only  could  interfere, 
but  there  is  no  suggestion  that  there  were  any. 

The  redelivery  of  the  notes  to  Mrs.  Marston  subsequently  on  the 
same  day  was  not  a  revocation  of  the  gift,  for  it  is  found  as  a  fact, 
and  the  paper  drawn  up  by  Mr.  Herbert  and  signed  by  her  shows, 
that  the  parties  did  not  understand  that  the  gift  was  revoked,  and 
did  not  intend  to  revest  the  title  to  the  notes  in  her,  except  in  the 
contingency  which  has  never  happened.  Nor  was  the  redelivery  a 
gift  inter  vivos  from  the  children  to  their  mother;  the  facts  show 
that  was  not  what  the  parties  intended ;  and  besides,  a  gift  of  the 
donor's  promissory  note  may  be  avoided.  If  the  reissue  of  the 
notes  was  intended  as  security  for  their  agreement  to  support  their 
mother,  the  answer  is,  there  was  no  valuable  consideration  for  the 
agreement.     3  Pars.  Cont.  362.^ 

Decree   of  probate  court  reversed. 


DARLAND  v.  TAYLOR 

Iowa  Supreme  Court,  December  6,  1876 

[Reported  in  52  Iowa,  503] 

Day,  J.  [The  plaintiff  as  administrator  of  Alsey  Darland  sues 
for  the  price  of  a  certain  piece  of  land  sold  by  her  to  the  defendant. 
Promissory  notes  were  given  by  the  defendant  for  this  money,  but 
shortly  before  her  death  Alsey  Darland  destroyed  the  notes,  and  in- 
formed her  son  of  the  fact,  and  that  she  had  done  it  because  she  did 
not  want  the  defendant  to  have  those  notes  to  pay  on  her  death. 
There  was  no  evidence  that  the  defendant  knew  of  the  destruction. 
The  court  below  gave  judgment  for  the  plaintiff.]- 

The  court  grounded  the  opinion  that  the  declaration  of  the  donor 
is  in  itself  insufficient  to  establish  a  gift.  Burney  v.  Ball,  24  Ga., 
565.    What  is  there  said  upon  the  subject  is  as  follows :  "Our  opinion 

'  Surrender  of  a  note  to  the  maker  with  intent  to  extinKuish  it  has  the  intended 
effect.  SliermJin  v.  Shermun,  3  Ind.  337;  Cihson  v.  Gibson,  15  111.  App.  328;  Denman 
V.  McMiihiii,  37  Ind.  241,  240;  Pwilxxiy  v.  P('iil)0(ly,  59  Ind.  .5.50;  Shide  v.  Mutrie,  156 
M11.S.S.  H>;  Stewart  v.  Hidden,  13  Minn.  43;  Vanderbock  v.  Vanderlieck,  30  N.  J.  Eq. 
205;  Larkin  v.  IIardenbn)f)k.  90  N.  Y.  .333;  .laffray  v.  Davis,  124  N.  Y.  104,  170; 
Kent  V.  Reynolds,  8  Hun,  559;  BridRerH  v.  Ihitchins,  11  Ircd.  OS;  Molvin  v.  Billiard, 
82  N.  f;.  33;  Dittoe's  Adm.  v.  Cluney's  Ex.,  22  Ohio  St.  430;  Ellsworth  v.  Fosifi,  35 
Vt.  3.55;  Lee'H  Ex.  v.  Boak,  11  Gratt.  182.  See  also  Uniform  Nck.  Inst.  Law,  §§  119, 
120. 

'  The  statement  of  facts  in  the  opinion  has  been  abbreviated. 


SECT.  Vl]  OAKLAND  V.    TAYLOR  1037 

is  that  the  declarations  of  the  donor  that  he  had  given  are  always 
admissible  in  evidence  in  cases  of  this  sort.  We  have  heretofore 
held,  and  still  hold,  that  they  are  insufficient  of  themselves  to 
establish  a  gift.  To  constitute  a  good  and  valid  gift  there  must 
be  a  delivery,  actual  or  constructive,  or,  as  it  is  termed  sometimes, 
symbolical,  or  a  writing."  It  is  evident  from  the  foregoing  that 
the  court  simply  determined  that  the  declarations  of  a  donor  that 
he  had  made  a  gift  are  not  sufficient  without  some  proof  of  delivery, 
actual  or  constructive.  It  is  not  held,  nor  intimated,  that  the  decla- 
ration of  the  donor  is  not  admissible  to  establish  the  facts  from 
which  a  delivery  may  be  inferred.  That  such  facts  may  be 
established  by  the  declaration  of  the  donor  we  do  not  doubt. 

The  court  further  held  that  there  was  no  delivery  or  acceptance 
of  the  gift,  and  that  both  are  necessary.  The  authorities  hold  that 
the  delivery  may  be  actual  or  symbolical.  In  Granigan  v.  Arden, 
]0  Johnson,  292,  a  father  bought  a  ticket  in  a  lottery,  which  he 
declared  he  gave  to  his  daughter,  and  wrote  her  name  upon  it.  After 
the  ticket  had  drawn  a  prize  he  declared  that  he  had  given  the 
ticket  to  his  child,  and  that  the  prize  money  was  hers.  This  was 
held  sufficient  to  authorize  a  jury  to  infer  all  the  formality  requi- 
site to  a  valid  gift,  and  that  the  title  to  the  money  was  complete 
and  vested  in  the  daughter.  In  Gardner  v.  Gardner,  22  Wendell, 
525,  a  debt  contracted  by  the  wife  was  held  to  be  discharged,  as  a 
gift,  causa  mortis,  by  the  husband's  destroying  the  bond,  the  evi- 
dence of  the  debt,  and  declaring  that  the  money  was  hers.  See,  also, 
Blaisdel  v.  Locke,  52  N.  H.  238. 

In  Hillebrant  v.  Brewer,  8  Texas,  45,  where  the  father  branded 
certain  cattle  in  his  son's  name,  and  recorded  the  brand,  it  was  held 
sufficient  to  establish  a  symbolical  delivery.  The  destruction  of 
the  notes,  together  with  the  repeated  declarations  of  the  deceased 
that  she  did  not  intend  the  defendant  to  pay  the  debt,  constitute  a 
sufficient  delivery  under  the  authorities  cited.  As  the  gift  was  for 
the  benefit  of  the  donee  and  coupled  with  no  condition,  his  accept- 
ance of  it,  from  all  the  circumstances  proved,  in  the  absence  of  any 
opposing  testimony,  must  be  presumed.  Blaisdel  v.  Locke,  52  ]^.  H. 
238  (244). 

The  court  further  held  that  the  gift  was  made  by  the  donor  in 
apprehension  of  death  before  morning,  and  that,  as  she  did  not  die, 
there  was  a  revocation  of  the  gift.  The  evidence  does  not  at  all 
sustain  the  position  that  the  gift  was  intended  to  be  operative  only 
in  the  event  of  the  death  of  the  donor  before  morning.  Upon  the 
contrary  the  evidence  clearly  shows  that  the  deceased  desired  to 
discharge  the  defendant  from  liability  upon  the  notes,  and  that  the 
destruction  of  the  notes  was  made  at  the  time  in  question  because 
she  feared  that  she  might  die  before  morning,  and  thus  be  prevented 
from  discharging  the  defendant  as  she  desired.  Afterward,  and 
during  her  last  sickness,   and  but   a  short  time  before  death,   the 


1038  pigot's  case  [chap,  vii 

deceased  declared  that  she  had  destroyed  the  notes  so  that  "W.  H. 
Taylor  would  get  the  property,  and  that  she  intended  him  to  have  it. 
There  was  not,  we  think,  any  revocation  of  the  gift. 

The  evidence   we  think  establishes   a   completed   and   valid  gift, 
causa  mortis,  of  the  amount  of  the  notes  in  question. 

Reversed.^ 


SECTION  VII 

ALTERATION 


HEKKY  PIGOT'S  CASE 

In  the  King's  Bench,  Trinity  Term,  1614 

[Reported  in  11  Cohe,  26h] 

Benedict  Winchcombe,  Esq.,  brought  an  action  of  debt  against 
Henry  Pigot  which  was  entered  Trin.  11  Jac.  Regis,  Rot.  566,  in 
Banco  Regis  on  a  bond  made  to  the  plaintiff  in  £60  2  Martii,  anno 
8  Jac.  Regis.  The  defendant,  without  demanding  oyer  of  the  bond 
or  condition,  pleaded  non  est  factum.  And  the  jury  gave  a  special 
verdict  to  this  effect,  that  the  bond  was  made  to  the  plaintiff  in  the 
same  manner  as  he  had  declared,  and  found  the  bond  in  these  words, 
Noverint  universi  per  praesentes  nos  Georgium  Watkins  Generos' 
Henricum  Pigot  de  civitate  Oxon'  Draper,  et  Johannem  Pyme  de 
eadem  civitate,  Cordwayner,  teneri  et  iirmiter  obligari  Benedicto 
Winchcombe  Armig'  in  60  libris,  &c.  And  in  truth  the  plaintiff  was 
Sheriff  of  the  county  of  Oxford ;  and  the  condition  of  the  bond  was, 
that  the  said  George  Watkins  should  appear  in  the  King's  Bench 
mense  Paschcc  to  answer  to  George  Cottle  in  a  plea  of  trespass;  and 
that  the  said  bond  was  delivered  by  the  said  Henry  Pigot  as  his 
deed  to  the  use  of  the  plaintiff;  and  that  after  the  delivery  of  the 
said  deed  hsec  verba  sequentia,  videlicet  (Vicecom'  Comitatus  Oxon') 
insert'  et  interlineat'  fuerunt  in  eodem  scripto  post  pra>dicta  verba 
f Benedicto  Winchcombe  Armig')  et  ante  prredicta  verba  (in  sexa- 
giiita  libris)  superius  in  obligatione  prredicta  mentionat',  sine 
notitia,  Anglice  the  privity,  sou  maiidat'  prredict'  Bonedicti,  et  utrura 
super  tota  matorin,  &c.  vidcbitur  justie'  et  cur'  hie  quod  scriptum 
pra;d'  sit  factum  pr»d'  Heiirici  necne  iidem  jur  penitus  ignorant,  et 
petunt  adviaamentuni   mr'  hie,  &c. 

'  Dofltniction  of  a  noU-,  op{!riit<;s  as  a  disoharKo  of  the  maker.  Gilbert  v.  WethercH, 
2  Sim.  A  St,.  :?58;  MeDonalfl  r.  Jackson,  50  Iowa,  04.3;  Fisher  v.  Mershon,  .3  Bibb, 
627;  Van  Aiiken  o.  Ilornbcck,  2  Green,  17H;  Hlarlc;  v.  Nolanrl,  12  Wend.  IT.'i.  So  of 
a  bond,  Gardner  v.  Gardner,  22  Wend.  .')20;  Bond  v.  Bnntinp;,  78  Pa.  210,  218;  Reef? 
V.  Ri-cH,  11   Ilieh.  E.|.  80.     See  al.so  Uniform  Ne^.  Inst.  Law,  §§  110,  120. 


SECT.  VII  ]  pigot's  case  1039 

And  in  this  case  these  points  were  resolved:  1.  When  a  lawful 
deed  is  rased,  whereby  it  becomes  void,  the  obligor  may  plead  non 
est  factum,  and  give  the  matter  in  evidence,  because  at  the  time  of 
the  plea  pleaded,  it  is  not  his  deed. 

Secondly,  it  was  resolved,  that  when  any  deed  is  altered  in  a  point 
material,  by  the  plaintiff  himself,  or  by  any  stranger,  without  the 
privity  of  the  obligee,  be  it  by  interlineation,  addition,  rasing,  or 
by  drawing  of  a  pen  through  a  line,  or  through  the  midst  of  any 
material  word,  that  the  deed  thereby  becomes  void :  as  if  a  bond  is  to 
be  made  to  the  Sheriff  for  appearance,  &c.  and  in  the  bond  the 
Sheriff's  name  is  omitted,  and  after  the  delivery  thereof  his  name 
is  interlined,  either  by  the  obligee  or  a  stranger,  without  his  privity, 
the  deed  is  void :  so  if  one  makes  a  bond  of  £10  and  after  the  sealing 
of  it  another  £10  is  added,  which  makes  it  £20,  the  deed  is  void :  so 
if  a  bond  is  rased,  by  which  the  first  word  cannot  be  seen,  or  if  it 
is  drawn  with  a  pen  and  ink  through  the  word,  although  the  first 
word  is  legible,  yet  the  deed  is  void,  and  shall  never  make  an  issue, 
whether  it  was  in  any  of  these  cases  altered  by  the  obligee  himself, 
or  by  a  stranger  without  his  privity.  So  if  the  obligee  himself  alters 
the  deed  by  any  of  the  said  ways,  although  it  is  in  words  not 
material,  yet  the  deed  is  void :  but  if  a  stranger,  without  his  privity, 
alters  the  deed  by  any  of  the  said  ways  in  any  point  not  material, 
it  shall  not  avoid  the  deed.  Vide  Dyer,  9  Eliz.  fol.  261  b.  And 
therefore  in  the  principal  case,  the  addition  made  by  a  stranger, 
without  the  privity  of  the  plaintiff,  being  in  a  point  not  material 
for  anything  that  appears  to  the  court;  for  this  cause,  judgment 
was  given  for  the  plaintiff;  and  so  you  will  the  better  understand 
the  book  in  14  H.  8,  fol.  25  b. 

And  in  this  case  it  was  moved  at  the  bar,  when  a  deed  shall  be 
good  in  part,  and  void  in  part :  as  to  that,  I  conceive,  there  is  a 
difference  when  a  deed  is  void  ab  initio,  and  when  it  becomes  void  by 
misfeasance  ex  post  facto.  Also  there  is  a  difference  when  the  deed, 
which  is  void  in  part  ab  initio,  doth  consist  upon  the  entirety,  and 
when  upon  divers  several  clauses :  and  in  these  also  there  is  a  differ- 
ence, when  the  several  clauses  are  absolute  and  distinct,  and  when 
they  are  several,  and  yet  the  one  has  dependency  upon  the  other. 

As  to  the  first,  it  is  unanimously  agreed  in  14  H.  8,  25,  26,  &c. 
that  if  some  of  the  covenants  of  an  indenture,  or  of  the  conditions 
indorsed  upon  a  bond,  are  against  law,  and  some  good  and  lawful; 
that  in  this  case,  the  covenants  or  conditions  which  are  against 
law  are  void  ab  initio,  and  the  others  stand  good.^ 

But  if  a  deed  contains  divers  distinct  and  absolute  covenants,  if 
any  of  the  covenants  are  altered  by  addition,  interlineation,  or 
rasure,  this  misfeasance,  ex  post  facto,  avoids  the  whole  deed,  as  it  is 
held  in  14  H.  8,  25,  26.  For  although  they  are  several  covenants, 
yet  it  is  but  one  deed,  3  H.  7,  fol.  5,  a.  If  two  are  bound  in  a  bond, 
*  A  portion  of  the  case  is  here  omitted. 


1040  DAVIDSON    V.    COOPER    &    BRASSINGTON       [CHAP.    VII 

and  afterwards  the  seal  of  one  of  them  is  broken  off,  this  misfeasanee 
ex  post  facto  avoids  the  whole  deed  against  both.  Vide  the  case 
of  Matthewson,  Mich.  39  &  40  Eliz.  in  the  Fifth  Part  of  my  Reports, 
fol.  23  a/ 


DAVIDSON",  Public  Officer,  &c.,  v.  COOPER  & 
BRASSINGTON 
In  the  Exchequer  Chamber,  July  6,  1844 
[Reported  in  13  Meeson  &  Welshy,  343] 

Lord  Denman,  C.  J.  This  was  a  declaration  in  assumpsit  on  a 
written  guarantee,  to  which  one  defendant  pleaded,  that,  while  the 
guarantee  was  in  the  plaintiff's  hands,  it  was,  without  the  defend- 
ant's consent  or  knowledge,  materially  altered  by  the  addition  of 
two  seals  opposite  the  names  of  the  defendant  and  the  other  party 
to  it,  whereby  its  apparent  nature  and  effect  were  wholly  altered. 
Issue  being  taken  on  this  plea,  the  jury  found  it  was  so  altered; 
and  judgment  has  been  given  by  the  Court  of  Exchequer  for  the 
defendant,  after  having  discharged  a  rule  for  judgment,  non  obstante 
veredicto,  upon  argument. 

After  much  doubt,  we  think  the  judgment  right.  The  strictness 
of  the  rule  on  this  subject,  as  laid  down  in  Pigot's  Case,  can  only 
be  explained  on  the  principle  that  a  party  who  has  the  custody 
of  an  instrument  made  for  his  benefit,  is  bound  to  preserve  it  in 
its  original  state.  It  is  highly  important  for  preserving  the  purity 
of  legal  instruments  that  this  principle  should  be  borne  in  mind, 
and  the  rule  adhered  to.  The  party  who  may  suffer  has  no  right  to 
complain,  since  there  cannot  be  any  alteration  except  through  fraud, 
or  laches  on  his  part.  To  say  that  Pigot's  Case  has  been  overruled, 
is  a  mistake ;  on  the  contrary,  it  has  been  extended :  the  authorities 
establishing,  as  common  sense  requires,  that  the  alteration  of  an  un- 
sealed paper  will  vitiate  it.  Upon  the  doubt  whether  this  instrument 
is  altered,  because  it  remains  exactly  as  it  was  when  signed,  but 
only  sometliing  is  added  near  to  the  signatures  of  the  defendants, 
we  may  observe,  that  that  addition  gives  a  different  legal  character 
to  tbe  writing,  and  would,  if  made  with  the  consent  of  all  interested, 
completely  change  the  nature  of  the  relation  towards  each  other 
of  tbe  parties  to  it,  and  tbe  remedies  upon  it.  The  observation  that 
a  deed  is  not  made  by  sealing,  but  by  delivery,  docs  not  appear  to 
touch  the  argument,  for  no  addition,  erasure,  or  interlineation,  after 

'  In  Bayly  v.  Garforr],  March,  125,  tho  soals  of  two  oblinors  on  a  joint  and  several 
bond  had  bcicn  oaten  hy  mice;  and  rats,  but  the  neal  of  the  defendant's  testator  had  not 
b<!on.  The  court  "did  Htrf)iiKly  indine  that  jiidnnient  oupiht  to  l)e  niven  for  the  de- 
fendant, anfi  their  reason  was  that  if  the  olili^ec!  by  his  act  or  own  lachesse  discharge 
one  of  thr-  ol)liKors, where  they  are  jointly  and  sc'verally  bound,  that  the  same  diseharges 
thfTfi  all,  l)ut  uM-vi-  day  ff>r  tlie  furth(!r  debating  of  the  case,  for  that  this  was  the  first 
time  it  was  argued." 


SECT.   VIII ]  HIGGENS'S   CASE  1041 

execution,  makes  the  actual  instrument  different  in  legal  effect  from 
what  it  was;  the  original  document  may  be  perfectly  visible  through 
the  attempt  to  disguise  it,  but  a  different  appearance  is  produced. 
The  truth  cannot  be  known  from  inspection,  but  would  require  to 
be  established  by  evidence,  and  this  through  some  default  of  the  per- 
son to  whose  care  it  was  consigned,  and  who  would  be  possessed  of 
a  superior  legal  remedy  if  the  altered  writing  could  be  imposed  on 
the  contractor  as  genuine.  We  are  therefore  of  opinion,  both  upon 
principle  and  authority,  that  this  judgment  must  be  affirmed. 

Judgment  affirmed? 


SECTIOIsr  VIII 

MERGER.2 


HIGGENS'S  CASE 

In  the  Common  Pleas,  Michaelmas  Term,  1605 

[Reported  in  6  Coke,  4:4:  h] 

In  debt  by  Randal  and  his  wife,  executrix  of  Themilthorp  against 
Higgens,  on  a  bond  made  to  the  testator,  the  defendant  pleaded  that 
the  testator  in  vita  sua  in  curia  de  Banco  hie  recuperavit  debitum 
prsedictum,  ac  QOs.  pro  domnis  (without  alleging  any  execution), 
quod  quidem  recordum  recuperationis,  was  removed  extra  Bancum 
per  br.  de  errore  coram  Rege,  &  ibidem  demanet  minime  reversatum 
sen  adnullatum;  and  thereupon  it  was  demurred.  And  it  was  ob- 
jected, that  if  a  man  recovers  debt  on  a  bond,  or  rent  on  a  lease  for 
years,  it  is  at  the  plaintiff's  election  to  sue  execution  on  that  judg- 
ment, or  to  have  a  new  action ;  and  that  for  divers  reasons.  1.  By 
the  judgment,  the  deed  or  rent  is  not  changed,  but  continues  a  deed 
and  a  rent  notwithstanding  the  judgment;  as  if  a  man  be  indebted 
in  arrears  on  accompt,  and  takes  a  bond  for  the  payment  of  them, 

*  The  nile  in  Pigot's  Case  was  applied  to  bills  of  exchange  and  promissory  notes 
in  Master  v.  Miller,  4  T.  R.  320,  2  H.  Bl.  141,  and  has  been  frequently  applied  to 
such  instruments.     See  Ames  Cas.  B.  &  N.,  I.  447,  Bills  of  Exchange  Act,  §  64. 

In  the  United  States,  alteration  by  a  stranger  has  been  held  not  to  avoid  a  con- 
tract. Ames  Cas.  B.  &  N.,  I.  447;  3  Williston  Contracts,  §1892.  The  Negotiable 
Instruments  Law  (§  124)  has,  however,  copied  the  English  rule.  See  16  Harv.  L. 
Rev.  260;  3  Williston  Contracts,  §  1S02. 

The  rule  against  alteration  is  aiDplicablo  to  simple  written  contracts.  Powell  v. 
Divett,  15  East,  29;  Forshaw  v.  Chabert,  3  Brod.  &  B.  156;  Nichols  v.  .Johnson,  10 
Conn.  192;  Baxter  v.  Camp.  71  Conn.  245;  .lohnson  v.  Brown,  51  Oa.  498;  Kline  v. 
Raymond,  70  Ind.  271;  Andrews  v.  Burdick,  62  Iowa,  714,  720;  Davis  v.  Campbell,  93 
Iowa,  524;  Lee  v.  Alexander,  9  B.  Mon.  25;  Osgood  v.  Stevenson,  143  Mass.  .399; 
Consaul  u.  Sheldon,  35  Neb.  247;  Meyer  v.  Huneke,  55  N.  Y.  412;  Martin  v.  Trades- 
men's Ins.  Co.,  101  N.  Y.  498;  Cline  v.  Goodale,  23  Oreg.  406;  American  Pub.  Co.  v^ 
Fisher,  10  Utah.  147:   Schwalm  v.  Mclntyre,  17  Wis.  232. 

2  See  3  Williston  Contracts,  §1918,  et  seq. 


1042  HIGGENS'S    CASE  [CHAP.    VII 

yet  he  may  have  an  action  on  the  one  or  the  other,  as  it  is  agreed 
in  11  H,  4  and  Mich.  2  Jac.  Rot.  3272,  in  this  court,  in  debt  by 
Richard  Branthwait  against  Sir  "William  Cornwalleys  the  younger, 
on  a  bond  for  payment  of  money,  the  defendant  pleaded  in  bar,  quod 
querens  post  diem  solutionis  pecunice,  and  before  the  purchase  of  the 
writ  did  accept  of  a  statute-staple  for  the  same  debt,  and  in  full 
satisfaction  of  the  bond,  on  which  the  plaintiff  demurred :  and  it 
was  adjudged  for  the  plaintiff.  For  although  he  had  taken  a  statute 
for  the  same  debt,  which  is  a  matter  of  record,  and  of  a  higher 
nature  than  the  bond  is,  yet  the  bond  did  remain  in  force;  and  it 
was  in  the  plaintiff's  election  to  take  his  action  or  remedy  on  the 
one  or  the  other.  2.  It  was  objected,  that  it  would  be  against 
reason  to  compel  the  plaintiff  to  sue  execution  on  the  first  judgment, 
for  perhaps  the  plaintiff  knows  that  the  first  judgment  is  erroneous, 
or  that  he  has  recovered  by  false  oath,  in  which  case  the  judgment 
is  reversable  by  error,  or  attaint,  and  therefore  if  he  should  sue 
execution  it  would  be  in  vain;  for  he  ought  to  restore  (when  the 
judgment  is  reversed)  all  that  which  he  has  received.  3.  It  was 
objected,  if  in  debt  on  a  bond  the  defendant  denies  his  deed,  and  it 
be  found  his  deed,  in  that  case  the  deed  shall  be  delivered  to  the 
plaintiff,  and  the  reason  is,  to  the  end  that  he  may  have  a  new 
action  if  he  will:  but  if  it  be  found  not  his  deed,  the  deed  ought 
always  to  remain  in  court,  till  the  plaintiff  has  reversed  the  judg- 
ment. Vide  9  E.  4,  50  a,  b.  4.  If  two  be  bound  in  a  bond  jointly 
and  severally,  and  the  obligee  recovers  against  one  of  them  on  this 
bond,  the  nature  of  the  bond  is  not  so  changed  by  this  recovery  but 
he  may  on  the  same  bond  have  an  action  against  the  other.  But  it 
was  resolved,  that  as  long  as  the  judgment  remains  in  force,  he  can- 
not have  a  new  action  upon  the  same  bond;  for  as  he  who  has  a 
debt  by  simple  contract,  and  takes  a  bond  for  the  same  debt,  or  any 
part  of  it,  the  contract  is  determined,  3  H.  4,  17  b,  11  H.  4,  79,  b, 
9  E.  4,  50,  b,  51,  a.  So  when  a  man  has  a  debt  on  a  bond,  and  by 
ordinary  course  of  law  has  judgment  thereon,  the  contract  by 
specialty  which  is  of  an  inferior  nature,  is  by  judgment  of  law 
changed  into  a  matter  of  record,  which  is  of  a  higher  nature.  2. 
If  he  who  recovers  may  have  a  new  action  and  a  new  judgment 
he  may  have  infinite  actions,  and  infinite  judgments  to  the  perpetual 
vexation  and  charge  of  the  defendant  and  infinitum  in  jure  repro- 
hatvr.  3.  On  every  judgment  the  defendant  shall  be  amerced,  and 
if  he  be  a  duke,  marquis  earl,  viscount  or  baron,  he  shall  be  amerced 
to  one  hundred  shillings,  and  so  the  defendant  might  be  infinitely 
amerced  on  one  and  the  same  obligation,  Avhich  would  be  mischievous, 
and  interest  reipuldicoe  ut  fit  finis  litium.  And  if  a  man  has  a 
liberty  by  prescription,  and  takfs  letters  patent  thereof,  the  matter 
of  record  drowns  the  prescription  which  was  the  inferior,  as  it  is 
held  in  33  H.  8  Br.  Prescription  102.  Vide  10  H.  7,  21,  a,  b,  &  24, 
b,  2  E.  4,  14,  b,  22  H.  6,  56,  8  H.  4,  16,  34  II.  6,  26,  &c.    And  if  a 


SECT.   VIII  ]  HIGGENS'S   CASE  1043 

man  has  an  annuity  by  deed  or  prescription,  and  brings  his  writ 
of  annuity  and  has  judgment  so  long  as  this  judgment  doth  remain 
in  force,  he  shall  never  have  a  writ  of  annuity  (although  it  be  an 
annuity  of  inheritance),  but  a  Sc.  fac.  on  that  judgment;  because 
the  matter  of  the  specialty  or  prescription,  is  by  the  judgment 
altered  into  a  thing  of  a  higher  nature.  Vide  37  H.  6,  13,  b,  judg- 
ment in  an  action  of  forgery  of  a  false  deed,  is  a  good  bar  in  another 
action  on  the  same  forgery.  But  if  recovery  be  in  debt  on  a  bond  in 
the  county  by  justices,  there,  notwithstanding  such  judgment,  the 
plaintiff  may  have  an  action  of  debt  on  the  bond  in  a  court  of 
record;  for  the  county  court  is  not  of  record,  and  therefore  the 
bond  is  not  changed  into  anything  of  a  higher  nature;  but  so  long 
as  such  judgment  remains  in  force  the  plaintiff  shall  not  have 
another  action  by  justices  in  the  same  court  for  infinite  vexation 
of  the  party,  as  hath  been  said. 

And  as  to  the  said  case  of  Branthwait  it  was  agreed  to  be  good 
law;  for  a  statute-staple,  or  bond  in  the  nature  thereof,  is  but  a 
bond  recorded,  and  one  bond,  be  it  of  record,  or  not  of  record  can- 
not merge  another.  Also  a  bond,  and  bond  in  the  nature  of  a 
statute-staple  are  two  distinct  liens,  made  by  assent  of  the  parties 
without  process  of  law,  whereof  the  one  hath  no  dependency  on  the 
other.  But  in  an  action  brought  on  a  bond,  the  suit  is  grounded 
on  the  bond,  as  a  building  upon  a  foundation ;  and  the  plaintiff  hath 
judgment  to  recover  the  debt  due  by  the  bond;  so  that  by  judi- 
cial proceeding,  and  act  in  law,  the  debt  due  by  the  bond  is  trans- 
formed and  metamorphosed  into  a  matter  of  record ;  and  judgment 
in  a  court  of  record  is  of  a  higher  nature  than  a  statute-staple, 
statute  merchant,  or  any  recognizance  acknowledged  by  assent  of 
the  parties,  without  judicial  proceeding.  And  as  to  the  objection 
which  was  made,  that  perhaps  the  recovery  is  erroneous;  to  that 
it  was  answered,  that  that  was  the  plaintiff's  fault,  and  although 
it  be  erroneous,  yet  so  long  as  it  remains  in  force,  it  ought  to  be 
executed;  and  when  it  is  reversed,  then  the  obligee  is  restored  to 
his  new  action  on  the  bond.  And  it  is  true,  that  in  old  books,  after 
judgment  given  in  an  action  of  debt  on  a  bond;  the  bond  shall  be 
damned,  because  the  duty  was  changed  into  another  nature,  and 
that  was  the  true  reason  of  the  old  books,  and  not  the  reason  which 
Brook  supposes  in  abridging  the  case  of  11  H.  4,  Faits  19,  that  other- 
wise the  obligee  might  again  recover  thereupon.  And  therewith 
agree  9  E.  4,  51,  a,  V  H.  4,  39,  b,  11  H.  4,  73,  b,  45  E,  3,  11,  &c. 
And  the  court  had  consideration  of  the  book  in  17  E.  3,  24,  where 
Edward  Devon  brought  an  action  of  debt  on  a  bond  of  £20  against 
Richard  Scott,  who  pleaded,  that  before  the  mayor  and  bailiffs  of 
Newcastle  upon  Tine,  the  plaintiff  by  plaint  on  the  same  bond,  re- 
covered and  had  execution;  and  there,  because  the  defendant  did  not 
procure  the  bond  to  be  damned,  the  plaintiff  had  judgment  to  recover 
again,  notwithstanding  the  former  judgment   and   execution.     And 


1044  RUNNAMAKER    V.    CORDRAY  [CHAP.    VII 

there  Shard  said  to  the  defendant,  see  now  the  deed  be  damned.  But 
the  court  said,  that  the  judgment  was  given  because  it  was  the 
defendant's  folly  that  the  deed  was  not  damned  on  the  former  judg- 
ment. For  in  the  time  of  E.  3,  R.  2,  and  H.  4,  it  was  held,  that 
when  a  man  did  recover  on  a  bond,  that  the  bond  (as  hath  been 
said)  should  be  damned.  Wherein  the  content  and  quietness  of  men 
in  old  times  ought  to  be  observed,  that  when  judgment  was 
given  against  them  by  course  of  law,  they  were  satisfied  therewith, 
without  prying  with  eagles'  eyes  into  matters  of  form,  or  the  manner 
of  proceeding,  or  of  the  trial,  or  insufficiency  of  the  pleading,  &c. 
to  the  intent  to  find  error  to  force  the  party  to  a  new  suit,  and  him- 
self to  a  new  charge  and  vexation.  But  since  men  became  more 
contentious,  and  not  satisfied  with  any  trial  or  judgment,  but  writs 
of  error  and  attaints  (which  in  old  times  were  rare,  and  especially 
writs  of  error)  were  so  frequent,  as  of  more  late  time  they  were,  the 
judges  thought  it  dangerous  to  cancel  the  deed,  either  where  the 
plaintiff  recovered,  or  where  he  was  barred  by  judgment,  for  in 
both  cases  the  judgment  might  be  reversed  by  error  or  attaint,  and 
therefore  the  reason  or  cause  of  the  said  judgment  in  17  E.  3  is 
now  changed,  and  there  is  not  any  question  but  judgment  and  exe- 
cution upon  a  bond,  is  a  good  bar  in  a  new  action  thereupon;  and 
therefore  the  said  book  of  17  E.  3  is  not  to  be  urged  against  this 
judgment.  Also  the  court  said,  that  if  a  man  brings  an  action  of 
debt  on  a  bond,  and  is  barred  by  judgment,  so  long  as  the  judgment 
stands  in  force,  he  shall  not  have  a  new  action.  And  as  to  the  case 
which  has  been  objected,  that  where  two  are  bound  jointly  and 
severally,  and  the  obligee  has  judgment  against  one  of  them,  that 
yet  he  may  sue  the  other,  it  was  well  agreed.  For  against  him  the 
nature  of  the  bond  is  not  changed,  for  notwithstanding  the  judgment, 
he  may  plead  that  it  is  not  his  deed.  And  afterwards  in  the  case 
at  bar,  judgment  was  given  against  the  plaintiff,  and  the  doubt  in 
9  E.  4,  50,  b,  51,  a,  where  this  matter  is  very  well  debated  on  both 
sides,  well  resolved. 


WILLIAM  RUNNAMAKER  v.  HENRY  CORDRAY 

Illinois   Supremk  Court,   June   Term,   1870 

[Reported  in  54   Illinois,  303] 

Wrar  of  Error  to  the  Circuit  Court  of  Jasper  county;  the  Hon. 
IlruAM  B.  Dkcius,  judge,  presiding. 
The  opinion  states  the  case. 
Mr.  John  77.  TJalley,  for  the  plaintiff  in  error. 
Mr.   W.   B.  Cooper,  for  the  defendant  in  error. 
Mr,  JrsTK'K  Wai.kkk  delivered   the  o])inioii  of  the  Court: 
This  was  an  action  of  debt,  brought  by  plaintiff  in  error  in  the 


SECT.    VIII  ]  RUNNAMAKER    V.    CORDRAY  1045 

Jasper  circuit  court,  against  defendant  in  error.  A  declaration  was 
filed  containing  the  common  counts;  lie  also  sued  out  a  writ  of 
attachment.  At  the  return  term,  defendant  filed  the  plea  of  nil  debit, 
and  issue  was  joined.  The  cause  was  submitted  to  and  tried  by  the 
court,  without  the  intervention  of  a  jury,  by  consent  of  the  parties. 
On  the  trial,  plaintiff  in  error  proved  that  soon  after  the  defendant 
in  error  came  to  the  county,  the  transcript  of  a  judgment  from  a 
justice  of  the  peace  in  the  State  of  Ohio,  against  defendant  in  error, 
was  presented  to  him,  and  that  he  promised  to  pay  it,  but  soon  after- 
wards, said  it  was  unjust,  but  he  would  pay  it;  and  again,  that  he 
would  pay  it  as  soon  as  he  could.  He  also  introduced  evidence,  that 
defendant  had  said  to  different  persons,  that  the  judgment  had 
followed  him,  and  that  he  wanted  to  place  his  property  in  their 
hands  to  avoid  its  payment. 

He  then  offered  to  read  the  transcript  of  a  judgment  for  $130.50 
and  costs  against  defendant  in  error,  rendered  by  a  justice  of  the 
peace  of  Coshockton  county,  in  the  State  of  Ohio,  in  evidence,  but, 
on  objection,  it  was  rejected  by  the  court;  and  thereupon  the  court 
rendered  a  judgment  for  defendant  in  error  for  costs.  Plaintiff 
entered  a  motion  for  a  new  trial,  which  was  overruled,  and  he  brings 
the  record  to  this  court  and  asks  a  reversal. 

The  first  question  presented,  is,  whether  plaintiff  could  recover 
on  the  verbal  promise  of  defendant  to  pay  the  judgment.  Such  a 
promise  is  without  consideration,  and  cannot  increase  or  change  the 
liability  of  the  debtor.  The  recovery  of  the  judgment  imposes  the 
obligation  to  pay,  and  that  obligation  is  in  nowise  increased  or 
changed  by  the  verbal  promise.  The  verbal  promise  does  not  ex- 
tinguish the  binding  force  of  the  judgment.  It  remains  unimpaired. 
Nor  does  the  promise  create  a  new  debt  or  undertaking  of  binding 
force.  If  debt  or  assumpsit  could  be  maintained  on  such  a  promise, 
an  action  could  still  be  maintained  on  the  judgment,  thus  giving 
two  causes  of  action  for  one  debt. 

N^or  can  the  original  consideration,  upon  which  the  judgment  was 
rendered,  be  recovered  under  the  common  counts. 

That  consideration  was  merged  and  extinguished  by  the  higher 
security  and  obligation  of  record  —  the  judgment.  If  it  were  not 
so,  then  several  actions  might  be  maintained  in  different  forms,  at 
the  same  time,  for  the  same  debt. 

Lastly,  it  is  urged  that  the  court  erred  in  rejecting  the  record  of 
the  judgment  as  evidence.  It  is  a  familiar  rule,  that  the  allegation 
and  proof  must  correspond;  and  we  are  at  a  loss  to  perceive  how  a 
judgment  can  support  the  money  counts  in  debt.  A  judgment  may 
be  declared  on  as  such,  but  it  cannot  be  evidence  of  money  had  and 
received,  loaned,  paid  out  and  expended,  or  of  an  account  stated. 
It  is  only  the  finding  by  a  court,  that  one  person  owes  another  a 
certain  specified  sum  of  money,  and  a  sentence  that  it  be  collected 
from  the  debtor.    We  have  searched  in  vain  to  find  a  precedent  for 


1046  BACON    V.    REICH  [CHAP.    VII 

such  a  recovery,  counsel  have  referred  to  none,  and  it  is  believed 
that  none  exists.  To  recover,  plaintiff  in  error  should  have  declared, 
in  the  usual  manner,  in  debt  on  the  judgment,  and  then  produced 
a  transcript,  properly  authenticated,  as  evidence.  We  perceive  no 
error  in  this  record,  and  the  judgment  must  be  affirmed. 

Judgment  affirmed. 


BACON  V.  EEICH 

Michigan  Supreme  Court,  June  9-October  3,  1899 

[Reported  in  121  Michigan,  480] 

Assumpsit  by  Elbridge  F.  Bacon  against  William  Reich  for  goods 
sold  and  delivered.  From  a  judgment  for  defendant,  plaintiff 
brings  error.     Affirmed, 

Bacon  &  Palmer,  for  appellant. 

Louis  C.  Wurzer,  for  appellee. 

Hooker,  J.  The  defendant  recovered  a  judgment  against  the 
Architectural  Iron  &  Wire  Works  for  a  breach  of  a  contract.  He 
was  afterwards  sued  by  the  assignee  of  the  iron  works  for  the  price 
of  the  articles  furnished  to  him  under  the  contract,  the  assignment 
being  made  before  his  action  for  damages  was  instituted.  In  this 
action  he  sought  to  set  off  or  recoup  his  damages,  which  was  per- 
mitted by  the  trial  court.  The  plaintiff  has  appealed  the  case,  con- 
tending that  the  claim  for  damages  is  merged  in  the  defendant's 
judgment,  and  therefore  will  not  again  support  an  action  or  de- 
fence, and  that  the  judgment  cannot  be  set  off  against  the  plaintiff, 
for  the  reason  that  there  is  a  want  of  privity.  It  is  also  claimed 
that  the  plea  was  insufficient  to  warrant  the  admission  of  this  proof. 

It  must  be  admitted  that  the  plaintiff  is  not  privy  to  the  judgment, 
because  he  acquired  his  rights,  whatever  they  are,  before  defendant 
began  his  action.  Bartero  r.  Bank,  10  Mo.  App.  76;  Powers  v. 
Heath's  Adm'r,  20  Mo.  319;  Mathes  v.  Cover,  43  Iowa,  512;  Todd 
V.  Flournoy's  Heirs,  56  Ala.  99  (28  Am.  Rep.  758)  ;  Marshall  v. 
Croom,  60  Ala.  121;  Cook  r.  Parham,  63  Ala.  456;  Coles  v.  Allen, 
64  Ala.  98;  Winslow  v.  Grindal,  2  Greonl.  64;  Weed  Sewing-Machine 
Co.  V.  Baker,  1  McCrary,  579;  Bigelow,  Estop.  135,  136.  He  is 
privy,  however,  to  the  injury  upon  which  defendant's  judgment 
rests.  It  is  also  true  that  the  claim  of  the  defendant  was  merged  in 
the  judgment  against  the  iron  works,  and  the  judgment  would  be  a 
bar  to  another  action,  or  an  attempt  to  recoup  damages,  against  the 
Architectural  Iron  &  Wire  Works.  But  the  judgment  could  be 
set  off  in  an  action  bronglit  by  tlie  iron  works,  or  an  action  might  be 
brought  upon  it.  We  deem  it  unnecessary  to  cite  authorities  in  sup- 
port of  these  principles,   which   arc  elementary. 

It  is  nevertheless  true  that  the  plaintilF  took  this  claim  subject  to 


SECT.   VIIl]  BACON    V.   REICH  1047 

the  equitable  right  of  the  defendant  to  have  his  damages  applied 
upon  it,  and  all  that  can  prevent  is  the  technical  rule  that  they  are 
merged  in  a  judgment  against  plaintiff's  assignor.  Theoretically, 
this  may  be  said  to  be  no  hardship,  because,  if  the  defendant  shall 
pay  the  plaintiff's  claim,  he  would  yet  have  the  right  to  collect 
his  judgment  for  damages,  which  would  work  out  exact  justice  to  all. 
Practically,  however,  this  is  not  so,  because  he  cannot  collect  his 
judgment.  The  iron  works  is  insolvent,  and  was  at  the  time  the 
plaintiff,  who  was  a  stockholder  in  the  concern,  took  his  assignment, 
and  the  defendant  cannot  collect  his  judgment  in  any  other  way 
than  to  set  it  off  against  this  contract  obligation.  Furthermore,  the 
record  contains  evidence  that  he  was  ignorant  of  the  assignment 
at  the  time  he  took  his  judgment,  and  had  a  right  to  suppose  that, 
by  obtaining  the  judgment,  he  had  settled  the  question  of  his  lia- 
bility on  the  contract,  and  was  led  to  do  so  to  avoid  liability  in 
a  garnishing  suit,  which  was  adjourned  for  the  purpose.  But  for 
the  previous  assignment,  this  would  have  been  so,  because  the  judg- 
ment would  have  bound  all  persons  afterwards  acquiring  title  to  the 
claim  from  the  iron  works. 

"According  to  more  recent  cases,  the  doctrine  that  claims  be- 
come merged  in  judgments  is  supported  on  the  grounds  that  the 
allowance  of  a  new  suit  is  a  superfluous  and  vexatious  encourage- 
ment to  litigation,  injurious  to  the  defendant  and  of  no  benefit  to 
the  plaintiff."     15  Am.  &  Eng.  Enc.  Law,  339,  and  cases  cited. 

The  doctrine,  if  rigorously  applied,  may  work  hardship  and  in- 
justice, and  it  seems  to  be  lawful  to  disregard  it  in  some  cases.  Thus, 
a  foreign  judgment  does  not  bar  an  action  upon  the  original  claim. 
Vanquelin  v.  Bouard,  15  C.  B.  (n.  s.)  341;  Wilson  v.  Tunstall, 
6  Tex.  221;  Wood  v.  Gamble,  11  Cush.  8  (59  Am.  Dec.  135);  New 
York,  &c.  R.  Co.  v.  McHenry,  17  Fed.  414.  See,  also,  Olcott  v. 
Little,  9  N".  H.  259  (32  Am.  Dec.  357).  In  Eastern  Townships 
Bank  v.  Beebe,  53  Vt.  177  (38  Am.  Rep.  665),  it  is  said  that: 

"A  foreign  judgment,  when  shown  in  evidence,  upon  a  matter 
within  the  jurisdiction  of  the  court,  and  in  which  the  court  had 
jurisdiction  of  the  parties,  so  that  they  were  personally  bound  by 
the  judgment  in  the  country  where  rendered,  is  conclusive  upon  the 
matter  therein  adjudicated.  But  it  at  the  same  time  is  held  that 
the  original  cause  of  action  is  not  so  merged  by  that  judgment  that 
it  is  incapable  of  being  the  subject  of  a  suit  in  a  country  foreign 
to  that  in  which  the  judgment  was  recovered.  The  books  are  uni- 
form in  making  the  distinction  between  merger  of  the  cause  of 
action  and  conclusiveness  of  effect,  as  matter  of  evidence,  when  the 
effect  of  a  foreign  judgment  is  brought  in  question  in  a  suit  upon 
the  same  original  cause  of  action." 

In  cases  where,  through  mistake  or  fraud,  it  would  be  inequitable 
to  treat  such  judgments  as  a  bar,  the  doctrine  cannot  be  invoked. 
The  case  of  Ferrall  v.  Bradford,  2  Fla.  508  (50  Am.  Dec.  293),  is 
in  point.    We  quote: 


1048  BACON    V.    REICH  [CHAP.    VII 

"The  plaintiffs  in  the  court  below  took  judgment  against  only 
one  of  the  joint  obligors,  and,  when  that  fact  is  pleaded  by  the 
defendants  in  bar,  they  reply  that  they  did  only  do  so  because  their 
attorney  was  circumvented,  and  induced  to  dismiss  the  proceedings 
as  to  the  other  defendants,  in  consequence  of  the  fraudulent  repre- 
sentations of  one  of  the  defendants.  It  matters  little  as  to  the  mode 
or  manner  in  which  fraud  is  effected.  A  court  must  look  to  the 
effect,  and  ask  if  the  result  is  a  consequence  of  the  fraud.  Here  the 
defendants  seek  to  avail  themselves  of  a  legal  defence,  arising  from 
a  state  of  facts  which  they  themselves,  by  their  fraud,  have  pro- 
duced. They  admit,  virtually,  by  their  demurrer,  that  the  plaintiffs 
have  been  deprived  of  a  legal  right  by  their  fraud,  and  they  seek 
now,  by  their  defence,  to  take  advantage  of  their  own  wrong,  —  a 
defence  admitted  to  arise  from  their  own  fraudulent  act.  The  ques- 
tion now  is,  Will  such  a  defence  be  available,  tolerated,  or  allowed? 
Law,  reason,  justice  and  morality  unite  in  a  negative  response.  .  .  . 
At  first  blush,  we  thought  we  discovered  some  difficulty  arising  from 
the  fact  that  only  one  of  the  defendants  is  alleged  to  have  been 
guilty  of  the  fraud;  but  it  soon  disappeared,  for  we  find  this  princi- 
ple broadly  laid  down,  —  that  interests  gained  by  one  person  by 
the  fraud  of  another  cannot  be  held  by  them ;  otherwise,  fraud  would 
always  place  itself  beyond  the  reach  of  the  court." 

Clark  V.  Rowling,  3  N.  Y.  216  (53  Am.  Dec.  290),  denies  the 
unyielding  character  ascribed  to  merger,  as  shown  by  the  following 
extract  from  the  opinion  of  Mr.  Justice  Hurlbut: 

"It  is  true  that  the  notes,  as  evidence  of  an  indebtedness,  were 
merged  in  the  judgment,  which,  being  greater  security,  operated 
to  extinguish  the  lesser;  but  does  it  therefore  follow  that  the  judg- 
ment to  all  intents  became  a  new  debt,  and  that  the  merger  or  ex- 
tinguishment of  the  notes  was  so  complete  as  that,  for  the  purpose 
of  protecting  the  defendants  in  an  equity  connected  with  their 
original  indebtedness,  we  may  look  behind  the  judgment,  and 
see  upon  what  it  was  founded?  A  judgment,  instead  of  being  re- 
garded strictly  as  a  new  debt,  is  sometimes  held  to  be  merely  the 
old  debt  in  a  new  form,  so  as  to  prevent  a  technical  merger  from 
working  injustice.  And  this  exception  to  the  doctrine  contended 
for  by  the  plaintiff  bas  obtained,  especially  in  cases  of  insolvency 
and  bankruptcy,  for  the  protection  as  well  of  the  creditor  as  the 
debtor,  and  has  been  applied  impartially  for  the  benefit  of  both." 

In  Stevens  v.  Damon,  29  Vt.  521,  it  was  held  that: 

"Tljf  judgment  of  the  justice  in  such  a  suit  will  not  be  a  bar 
to  a  subsequent  suit  for  the  recovery  of  the  account  of  the  plaintiff 
which  was  not  presented,  if  its  presentation  was  omitted  by  mistake, 
or  for  any  other  sufficient  reason." 

See  Cramer  v.  M;irmf;iffiiriiig  Co.,  35  C.  C.  A.  508,  93  Fed.  63fi; 
Fox  V.  Althorp,  40  Ohio  St.  322;  Kane  r.  Morehouse,  46  Conn.  300 
(closely  resembles  Stevens  ?;.  Damon);  Wyman  v.  Mitchell,  1  Cow. 


SECT.   VIII ]  BACON    V.   REICH  1049 

316,  and  other  cases  cited  in  the  case  of  Clark  v.  Rowling,  supra; 
also,  Johnson  v.  Insurance  Co.,  12  Mich.  216  (86  Am,  Dec.  49). 

In  the  case  before  us,  there  is  evidence  from  which  it  might  be 
found  that  the  course  taken  by  the  defendant  in  procuring  a  judg- 
ment for  the  breach  of  the  contract  was  due  to  the  concealment  on 
the  part  of  the  iron  works  of  the  fact  of  the  transfer  of  the  claim, 
or,  at  least,  of  the  mistake  of  the  defendant  in  supposing  that  it  be- 
longed to  the  iron  works  at  that  time.  We  think  the  hardship  and 
injustice  of  a  strict  application  of  the  rule  of  merger  is  so  apparent 
that  we  are  justified  in  considering  the  case  within  the  principle  of 
the  cases  cited,  and  holding  that,  although  the  plaintiff  was  not 
strictly  in  privity  as  to  the  judgment,  he  was  as  to  the  cause  of 
action  upon  which  it  was  based,  and  that  the  defence  made  was 
proper.  We  think  this  conclusion  renders  it  unnecessary  to  discuss 
the  subject  of  election  of  remedies  raised  by  the  briefs. 

The  further  point  is  made  that  the  defence  was  not  admissible 
under  the  pleadings.  The  case  began  in  justice's  court.  The  plea 
was  presumably  oral,  and  consisted  of  "the  general  issue,  notice  of 
set-of  and  recoupment."  This  was  not  a  sufficiently  definite  plea, 
under  the  case  of  Kerr  v.  Bennett,  109  Mich.  546,  but  it  was  amend- 
able, and,  had  attention  been  called  to  it,  doubtless  would  have  been 
amended. 

The  objections  shown  in  the  record  do  not  indicate  that  the  suffi- 
ciency of  the  plea  was  attached.  They  are  simply  that  certain 
questions  and  testimony  were  incompetent  and  immaterial.  That 
might  mean  that  the  plea  was  insufficient,  or  that  the  defence  of  re- 
coupment could  not  be  proved  because  of  the  former  judgment, 
which  seems  to  have  been,  then,  as  here,  the  main  contention.  Such 
objections  are  admirably  adapted  to  the  concealment  of  the  real 
point  relied  upon,  and  we  have  often  held  that  they  will  not  justify 
a  reversal.  The  authorities  are  collected  in  the  recent  case  of 
Detzur  V.  Brewing  Co.,  119  Mich.  282. 

The  judgment  should  be  affirmed. 

MooRE  and  Long^  JJ.,  concurred  with  Hooker,  J. 

Grant,  C.  J.  (dissenting).  This  suit  is  originated  in  justice's 
court.  Defendant  entered  into  a  contract  with  the  iVrchitectural 
Iron  &  Wire  Works,  a  corporation,  by  which  it  agreed  to  furnish 
defendant  certain  iron  trusses  for  the  sum  of  $400.  The  iron  works, 
being  indebted  to  the  plaintiff,  assigned  the  amount  due  upon  the 
contract  to  him.  The  justice  returned  that  "the  defendant  pleads 
the  general  issue,  notice  of  set-off  and  recoupment."  Defendant, 
claiming  a  breach  of  contract,  sued  the  iron  works,  and  recovered 
a  judgment  for  $358  damages,  from  which  no  appeal  was  taken,  and 
the  judgment  remained  in  full  force  and  effect.  It  was  admitted 
that  $100  was  due  upon  the  contract.  The  court  permitted  the 
defendant  to  recoup  damages,  and  verdict  and  judgment  were  ren- 
dered for  him. 


1050  BACON    V.    REICH  [CHAP.    VII 

1.  The  notice  of  recoupment  was  too  indefinite  to  permit  any 
evidence  under  it.  Kerr  v.  Bennett,  109  Mich.  546;  Roethke  v. 
Brewing  Co.,  33  Mich.  340;  Delaware,  &c.  Canal  Co.  v.  Roberts, 
72  Mich.  49;  Darrah  v.  Gow,  77  Mich.  16.  Had  objection  been 
seasonably  made,  it  should  have  prevailed,  unless  defendant  had 
asked  leave  to  amend.  But  the  record  discloses  that  this  point  was 
not  raised  until  the  testimony  was  concluded,  and  then  the  plaintiff 
requested  the  court  to  instruct  the  jury  "that,  under  the  plea  and 
notice  filed  in  this  case,  the  defendant  cannot  be  allowed  for  any  of 
the  items  of  his  claim."  Under  the  record  as  it  now  appears,  plain- 
tiff saw  fit  to  go  to  trial  in  both  the  justice's  and  circuit  courts  with- 
out any  objection  to  the  sufficiency  of  the  plea  and  notice.  We  think 
a  plaintiff  should  not  be  permitted  to  raise  such  an  objection  at  the 
close  of  the  trial. 

2.  Defendant,  claiming  damages  for  violation  of  contract  on  the 
part  of  the  Architectural  Iron  &  Wire  Works,  had  two  courses 
open  to  him.  He  could  have  waited  until  the  iron  works  or  its 
assignee  sued  him,  and  then  have  recouped  his  damages,  or  he  could 
have  brought  an  independent  action  for  damages.  He  chose  the 
latter.  The  tort  became  merged  in  the  judgment,  which  became 
a  new  debt,  unaffected  by  the  claim  upon  which  it  was  based.  Judg- 
ments are  contracts,  and  are  subject  to  set-off  in  actions  of  assumpsit. 
1  Freem.  Judgm.  §  217;  15  Am.  &  Eng.  Enc.  Law,  338,  339.  The 
latter  authority  states  the  rule  as  follows  : 

"And  the  present  rule  undoubtedly  is  that  no  second  suit  can  be 
maintained  on  the  same  cause  of  action,  irrespective  of  the  question 
whether  the  judgment  in  the  first  suit  was  of  a  higher  or  lower 
nature  than  the  cause  of  action;  the  reason  for  the  rule  being  that 
the  judgment  is  a  judicial  determination  of  the  right  of  the  parties, 
into  which  the  plaintiff  has  voluntarily  elected  to  transform  his 
claim." 

The  authorities  in  support  of  this  are  cited  in  note  7. 

The  general  rule,  as  above  stated,  is  admitted,  but  it  is  urged  that 
that  there  are  exceptions  to  it,  and  that  the  present  case  forms  one 
of  the  exceptions.  In  Eastern  Townships  Bank  v.  Beebe,  53  Yt. 
177  (38  Am.  Rep.  65),  the  opinion  recognizes  the  rule,  but  appears 
to  limit  it  to  domestic  judgments.     The  opinion  says: 

"It  [the  judgment]  is  not  so  merged  unless  it  has  become  a  debt 
of  record,  so  that  the  record  itself  has  become  a  cause  of  action  .... 
The  books  are  uniform  in  making  the  distinction  between  merger 
of  the  cause  of  action  and  conclusiveness  of  effect,  as  matter  of  evi- 
dence, when  the  effect  of  a  foreign  judgment  is  brought  in  question 
in  a  suit  upon  the  same  original  cause  of  action." 

The  same  rule  was  announced  by  this  court  in  Boucsteel  v.  Todd,  9 
Mich.  371  eSO  Am.  Dec.  90).  We  are  not  dealing  with  a  foreign 
jndgmf'iit,  and  the  rnlc  of  those  cases  does  not  apply. 

In  Ferrall  v.  Bradford,  2  Fla.  508  (50  Am.  Dec.  293),  suit  was 


SECT.   VIIlJ  BACON    V.   REICH  1051 

brought  against  three  parties  upon  a  joint  bond.  The  Bradfords, 
by  fraud,  procured  a  judgment  to  be  rendered  against  the  other 
obligor  alone.  The  court  would  have  applied  the  maxim,  "transit  in 
rem  judicatam,"  but  for  the  fraud  of  the  defendants.  In  that  case 
there  was  no  judgment  against  the  defendants,  but  only  against  their 
joint  obligor.  So,  it  was  held  in  Bonesteel  v.  Todd,  supra,  that  a 
judgment  rendered  against  two  joint  debtors  in  the  State  of  New 
York,  one  of  whom  was  not  served  with  process  and  did  not  appear, 
did  not  bind  the  party  not  appearing,  and  did  not  prevent  the  plain- 
tiff from  suing  upon  the  original  cause  of  action  in  this  State.  In 
Clark  V.  Rowling,  3  N.  Y.  216  (53  Am.  Dec.  290),  the  sole  question 
was  the  effect  of  a  discharge  in  bankruptcy  upon  a  judgment 
rendered  after  the  petition  in  bankruptcy  was  filed,  the  decree 
in  bankruptcy  being  rendered  after  the  judgment  was  taken.  The 
basis  of  the  decree  in  Clark  v.  Rowling  is  found  in  Wyman  v. 
Mitchell,  1  Cow.  316,  where  the  same  questions  arose.  Of  that  case 
the  court,  in  Clark  v.  Rowling,  say: 

"And  the  court  held  that,  although  the  original  undertaking  of 
the  defendant  was  so  merged  in  the  judgment  that  no  suit  could 
be  maintained  upon  it,  yet  that  it  was  proper  to  inquire  into  the 
time  and  circumstances  of  the  contract  upon  which  the  first  judg- 
ment was  founded,  for  the  purpose  of  taking  the  case  out  of  the 
operation  of  the  defendant's  discharge." 

All  the  cases  there  cited  involve  the  effect  of  a  discharge  in  bank- 
ruptcy. 

In  Stevens  v.  Damon,  29  Vt.  521,  the  sole  question  litigated  was 
whether  items  omitted  by  mistake  from  an  account  sued  upon  in 
justice's  court  were  merged  in  the  judgment,  upon  the  ground  that  a 
party  cannot  split  up  his  cause  of  action.    It  is  there  said : 

"Ordinarily,  such  a  judgment  will  bar  a  subsequent  suit  on  the 
account  so  omitted,  as  the  plaintiff  cannot  divide  his  account  and 
make  it  the  subject  of  several  actions." 

A  like  case  is  Kane  v.  Morehouse,  46  Conn.  300. 

In  Fox  V.  Althorp,  40  Ohio  St.  322,  the  sole  question  was  the 
right  of  the  plaintiff  to  maintain  four  suits  for  monthly  instalments 
of  overdue  rent.  Four  suits  had  been  begun  before  a  justice  of  the 
peace  for  the  instalments  due  on  the  1st  days  of  September,  October, 
ISTovember,  and  December.  Judgment  was  rendered  in  the  suits  in- 
volving the  September  and  October  instalments,  and  the  justice 
then  rendered  judgment  upon  the  same  evidence  in  each  of  the 
other  suits.  Defendant  paid  the  judgments  for  the  instalments  due 
in  November  and  December,  and  appealed  the  other  judgments  to 
the  common  pleas,  and  there  pleaded  satisfaction  of  the  judgments 
in  bar.  The  court  found  that  practically  the  four  suits  were  tried 
as  one,  and  the  court  based  its  judgment  upon  the  ground  that  the 
defence  was  purely  technical,  and  that  defendant  acquiesced  in 
the  severance.    In  Cramer  v.  Manufacturing  Co.,  35  C.  C.  A.  508,  93 


1052  BACON    V.   REICH  [CHAP.    VII 

Fed.  636,  the  sole  question  was  whether  a  party  was  bound  by  a  judg- 
ment rendered  in  a  suit  brought  by  him  against  another  defendant, 
and  whether  such  judgment  was  res  judicata  as  to  the  latter  suit. 
The  decision  was  based  upon  the  fact  that  the  real  party  defending 
had  not  done  so  openly,  to  the  knowledge  of  the  opposite  party, 
and  therefore  was  not  bound  by  the  judgment. 

In  these  cases  it  was  not  sought  to  reopen  the  judgments  for 
the  purpose  of  contesting  the  original  causes  of  action,  where  judg- 
ments had  been  rendered  against  defendants  who  had  been  served 
with  process,  or  who  had  appeared  and  contested  the  suits.  Nor  do 
they  involve  a  case  like  the  present,  where  the  party,  having  a 
choice  of  two  remedies,  has  chosen  to  bring  his  suit  for  damages. 
Defendant,  Keich,  had  been  garnished,  and  evidently  disclosed  in 
the  garnishment  suit  his  claim  for  damages,  which  was  greater  than 
the  amount  due  upon  the  contract.  Evidently,  at  his  request,  the 
garnishment  suit  was  held  to  permit  him  to  establish  in  a  separate 
suit  his  claim  for  damages.  I  see  no  reason  why  he  could  not  have 
made  that  defence  in  the  garnishment  suit,  which  would  have  wiped 
out  the  claim  assigned  to  Bacon.  I  find  no  evidence  of  fraud  or  de- 
ception on  the  part  of  Bacon  or  his  assignor  in  the  assignment  of 
this  claim,  or  any  evidence  that  it  was  assigned  for  the  purpose  of 
defeating  Reich.  The  rule  of  law  involved  cannot,  in  my  judgment, 
be  changed  by  the  fact  that  the  iron  works  has  become  insolvent. 
Tlje  original  cause  of  action  in  Reich  against  the  iron  works  has, 
in  the  language  of  Eastern  Townships  Bank  v.  Beebe,  53  Yt.  177 
(38  Am.  Rep.  665),  become  so  merged  in  the  judgment  "that  the 
record  itself  has  become  a  cause  of  action."  The  only  office  which 
that  judgment  can  now  serve  is  as  a  set-off.  Huntoon  v.  Russell,  41 
Mich.  316. 

Judgment  should  be  reversed  and  new  trial  ordered. 

MoNTGOMEEY,  J.,  concurred  with  Grant,  C.  J. 


INDEX 

In  the  index  reference  is  made  to  a  case  by  citing  the  page  on 
which  the  case  begins. 

A 

ABILITY, 

conditions  precedent  of  promisor's,  488, 

ACCEPTANCE,  66-151. 

after  the  time  limited  in  the  offer,  150. 

by  mail,  4,  97-132. 

must  comply  with  terms  of  offer,  84,  97,  117,  132,  135,  137  n.,  139. 

notice  of,  in  bilateral  contracts,  97-132. 

notice  of,  when  necessary  in  unilateral  contracts,  94,  139  n. 

reasonable  time  for,  33-43,  150. 

of  offer  of  reward,  63,  80-89. 

of  offer  of  guaranty,  83,  94. 

whether  silence  can  be,  144-151. 

ACCORD, 

whether  a  defence  to  an  action,  253,  977-1016. 
whether  a  valid  contract,  253-259. 

ACCORD  AND  SATISFACTION, 

as  a  discharge  of  liability,  975-1016. 

by  third  person,  1010. 

of  judgment,  1001. 

of  promise  under  seal,  993,  1003. 

promise  may  itself  be,  988-992. 

smaller  sum  than  debt  cannot  be,  196-207. 

whether  check  sent  in  full  is,  1007. 

ACCOUNT  STATED, 

nature  and  effect  of,  1013-1041. 

ADEQUACY, 

of  consideration  immaterial,  165. 

ADMINISTRATOR.     (See  Executor.) 

ADVERTISEMENT, 

offer  by,  18,  60,  80-88. 

ALEATORY  CONTRACTS, 
consideration  in,  236. 
no  implied  conditions  in,  640. 

(See  Insurance,  Guaranty.) 
1053 


1054  INDEX 

ALTERATION, 

discharges  contract  when,  1038-1041. 

AMBIGUITY  OF  BARGAIN, 
effect  of,  66-75. 

ANTICIPATORY  BREACH, 

meaning  and  effect  of,  647,  653,  655-712. 

APPRAISAL, 

condition  precedent  of,  480. 

ARBITRATION, 

agreements  for,  when  unenforceable,  854-875. 
withdrawal  from  agreement  for,  1023. 

* 

ARBITRATION  AND  AWARD, 

as  method  of  discharging  liability,  1017-1032, 

ARCHITECT'S  CERTIFICATE, 

condition  precedent  of,  470-479,  490. 

ASSENT, 

mutual,  1-151. 

ASSIGNMENT, 

of  contracts,  365-408. 

of  personal  contracts  is  ineffectual,  397. 

partial,  399. 

ASSUMPSIT, 

concurrent  remedy  with  debt,  159. 
history  of,  152-165. 

AUCTION, 

agreement  to  refrain  from  bidding  at,  when  illegal,  909. 
when  sale  by,  is  complete,  1. 

B 
BANKRUPT, 

promise  of  discharge,  to  pay  debt  is  binding,  270,  287,  293;  co»/.  273. 

BENEFICIARY, 

whether  he  may  sue  on  contract,  333-365. 

BREACH  OF  CONTRACT.     (See  Anticipatory  Breach,  Conditions, 

Discharge.) 

C 

CANCELLATION, 

discharges  contract,  1033,  1036. 

CHAMPERTY  AND  MAINTENANCE, 
what  is,  and  effect  of  it,  ii.  418-437. 

COMPOSITION, 

agrfcment  for  secret  advantage;  makes  illegal,  907. 


INDEX  1055 

CONDITIONS, 

arising  from  matters  subsequent  to  the  formation  of  tiie  contract, 

620-640. 
concurrent,  510,  517,  519,  523. 
distinguished  from  consideration,  183-196. 
express  precedent,  452-499. 
express  subsequent,  500-506. 
imphed,  507-712. 
implied  in  fact,  594-616. 
impossibility  does  not  excuse,  552. 
in  aleatory  contracts,  640. 
in  charter  parties,  533-542. 
in  contracts  of  service,  507,  525,  575. 
in  instalment  contracts,  521,  523,  577-594. 
in  insurance  policies,  459-468,  491-495,  501-506, 
in  leases,  610-617,  642. 
in  notes  and  bonds,  617. 
in  partly  bilateral  contracts,  525. 

in  sales  of  land,  508,  512-519,  523,  561,  570,  575  n.,  617-636,  707. 
in  sales  of  personalty,  508,  510,  519,  529,  576-594. 
of  ability  to  perform  in  the  future,  630-640. 
of  appraisers'  valuation,  480. 
of  arbitration,  854-875. 

of  architect's  or  surveyor's  certificate,  470-479,  490. 
of  defendant's  ability  to  pay,  488. 
of  defendant's  satisfaction,  483^88. 
of  notice,  601-616. 
of  plaintiff's  co-operation,  644-648. 
partial  failure  to  perform  imphed,  512,  513,  521-600. 
payment  of  money  as,  519,  521,  571,  580-592. 
solvency  as,  636. 
waiver  of,  494-499,  644-655,  673-695. 

(See  also  Time,  Divisible  Contracts^  Impossibility.) 

CONDITIONAL  PROMISE, 
as  consideration,  172-183. 

CONSIDERATION, 

adequacy  of,  immaterial,  165. 

aleatory  promise  is  sufficient,  236. 

conditional  promises,  172-183. 

distinguished  from  condition,  183-197. 

early  development  of,  152-165. 

executed  and  moral,  260-312. 

forbearance  when  sufficient,  238-253. 

illegal.     (See  Illegal  Contracts.) 

negotiable  paper  for  part  of  debt  is  insufficient,  197. 

of  accords,  253-259. 

of  promises  to  marry,  171. 

of  promises  to  pay  unequal  sums,  168. 

of  subscriptions,  188-196. 

pajTnent  of  debt  is  not  sufficient,  196-207. 

payment  of  disputed  claim  is  sufficient,  200. 


1056  INDEX 

CONSIDERATION,  Continued. 

performance  of  public  duty  is  not  sufficient,  226-233. 

promise  of  infant  is  sufficient,  172. 

promise  of  lunatic  is  sufficient,  174. 

refraining  from  tort  is  not  sufficient,  231. 

refraining  from  vice  when  sufficient,  233. 

sealed  contracts  need  no,  328-332. 

whether  alternative  promise  is  sufficient,  172-183. 

whether  performance  of  prior  obligation  to  promisee  is  sufficient,  206- 

215. 
whether  performance  of  prior  obligation  to  third  person  is  sufficient, 

216-225. 
written  contracts  require,  163. 

CONSTRUCTION, 

of  language  of  parties,  66-79. 

(See  Conditions,  Impossibility.) 

CONTRACTS.     (See  Table  of  Contents  and  special  headings.) 

D 
DAMAGES, 

for  breach  of  contract  of  sale,  649. 

when  notice  to  perform  has  been  given,  680. 

when  suit  is  brought  before  expiration  of  time  for  performance,  673. 

DEATH, 

or  illness  excuses  performance  of  promise  when,  739-747. 
revokes  offer,  59. 

DEBT, 

assumpsit  concurrent  remedy  with,  159. 

payment  of,  by  third  person,  1010. 

payment  of,  is  not  sufficient  consideration,  196-207. 

promise  of  debtor  after  composition  to  pay  balance  of,  is  not  binding, 

273. 
promise  of  discharged  bankrupt  to  pay,  is  binding,  270,  287,  293. 
promise  to  pay  to  third  person,  333,  338-352,  361,  363. 
promise  to  pay,  when  original  contract  usurious,  275. 
unliquidated,  payment  in  satisfaction  of,  200. 

DELIVERY, 

of  contracts  under  seal,  325-328. 

DEPENDENT  PROMISES.     (See  Conditions.) 

DETRIMENT.     (See  Consideration.) 

DISCHARGE  OF  CONTRACTS, 

by  accord  and  satisfaction,  975-1016. 

by  accoimt  stated,  1013-1015. 

by  altenition,  103.S-1041. 

by  arbitration  and  award,  ii.  1017-1032. 

by  merger,  1041-1052. 

by  novation,  965-969. 


INDEX  1057 

DISCHARGE  OF  CONTRACTS,  Continued. 
by  parol  agreement,  955-969. 
by  release,  970-975. 
by  surrender  and  cancellation,  1033-1038. 

DIVISIBLE  CONTRACTS, 

performance  of,  521,  523,  577-594. 
with  reference  to  illegality,  916. 

DIVORCE, 

agreements  facilitating,  are  illegal,  918. 

E 
ENTIRE  CONTRACT. 

(See  Divisible  Contracts.) 

EXECUTED  AND  MORAL  CONSIDERATION, 
when  sufficient,  260-312. 

EXECUTOR  OR  ADMINISTRATOR, 

promise  of,  to  pay  legacy  is  binding,  268. 
promise  of,  to  pay  testator's  debts,  163. 

F 
FORBEARANCE, 

to  prosecute  well-founded  suit  for  divorce  is  legal  consideration,  923  n. 
when  sufficient  consideration,  238-253. 

FIXTURES, 

contracts  for  sale  of,  whether  within  Statute  of  Frauds,  i.  535. 

FRAUD, 

as  affecting  formation  of  contract,  76,  77. 

FRAUDS,  STATUTE  OF, 

fourth  and  seventeenth  sections  of,  427. 

what  are  agreements  not  to  be  performed  within  a  year  under,  427- 
451. 

G 

GAMBLING  CONTRACTS.     (See  Wagering  Contracts.) 

GUARANTY, 

contracts  of,  89,  94,  165,  424. 
no  implied  conditions  in  mutual  promises  of,  640. 
(See  Surety.) 

promise  to  perform  revoked,  is  ineffectual,  285. 

I 

ILLEGAL  CONTRACTS,  ii.  349-571. 

agreements  in  consideration  of  forbearance  to  sue  for  divorce  are  not, 

923  n. 
agreements  in  restraint  of  the  trade  are,  when,  784-803. 
agreements  made  or  performable  on  Sunday  are,  ii.  538,  914,  916, 


1058  INDEX 

ILLEGAL  CONTRACTS,  Continued. 

agreements  not  to  marry  whether,  949. 

agreements  obstructing  justice  are,  827-875. 

agreements  tencUng  to  corruption  are,  876-888. 

agreements  to  arbitrate  are,  when,  854-875. 

agreements  to  evade  revenue  laws  are,  when,  889,  925. 

agreements  to  indemnify  from  consequences  of  illegal  acts  are,  911. 

agreements  to  make  fictitious  market  prices  are,  904. 

agreements  to  marry  after  obtaining  a  divorce  are,  918. 

agreements  to  marry  married  man,  934. 

agreements  to  pay  for  wife's  consortium,  whether,  920. 

agreements  to  refrain  from  bidding  at  auction  are,  when,  909. 

agreements  to  stifle  prosecution  are,  846-854, 

champertous  agreements  are,  827-846. 

divisibility  of,  916. 

effect  of,  ii.  923-954. 

in  connection  with  composition  agreements,  907. 

gambling  agreements  are,  804-826. 

lobbying  contracts  are,  876. 

made  in  ignorance  of  illegality,  934,  938. 

recovery  on,  when  executed,  952,  953. 

refusal  to  perform  justified,  though  illegality  unknown,  900. 

valid  upon  their  face,  917. 

whether  knowledge  of  ulterior  illegal  purpose  makes,  891,  895. 

ILLNESS, 

or  death  excuses  performance  of  promise  when,  739-747. 

IMPLIED  CONDITIONS.     (See  Conditions.) 

IMPLIED  PROMISES,  644-673. 

IMPOSSIBILITY, 

of  performance  by  one  party  excuses  the  other,  552. 
prospective,  of  performance  by  one  party  excuses  the  other,  630-640. 
caused  by  death  or  illness  excuses  performances,  739-747,  761. 
caused  by  destruction  of  subject-matter  excuses  performances,  718- 

739,  767. 
caused  by  dissolution  of  corporation,  752. 
caused  by  the  law  excuses  performance,  713;  conf.  566. 
excuses  promisor's  performance  when,  713-782. 

INFANT, 

promi.se  of,  is  sufficient  consideration,  172. 

jjromise  ratifying  voidable  obligation  of,  is  binding,  267. 

INDEMNIFY,  CONTRACT  TO, 

from  consequences  of  illegal  act,  whether  void,  911. 

INDET'ENDENT  PROMISES,  640,  642.    (See  Conditions.) 

INDORSER, 

promise  of  discharged,  is  l)iiidinR,  286. 

INSOLVENCY, 

how  far  performance  excused  by  jther  party's,  636. 


INDEX  1059 


INSTALMENT  CONTRACTS, 

dependency  of  promises  in,  521,  523,  577-594. 

INSURANCE, 

conditions  in  policies  of,  459-468,  491-495,  501-506. 

INVITATION  FOR  OFFERS,  1,  8,  10,  15. 


JOINT  AND  SEVERAL  OBLIGATIONS,  408. 

JOINT  OBLIGATIONS,  408-426. 
contribution  in  case  of,  422. 

covenant  not  to  sue  one  obligor  does  not  discharge  others,  419. 
discharge  of  one  obligor  in,  discharges  others,  418,  conf.  419. 
judgment  against  one  defendant  in,  bars  right  against  others,  415. 
non-joinder  of  joint  defendant  in,  is  matter  of  abatement,  411. 
non-joinder  of  joint  plaintiff  is  matter  in  bar,  414. 
promises  of  two  or  more  are  presumptively,  409. 
release  of  one  obligor  in,  releases  all,  418. 
release  of  obhgor  in,  may  reserve  right  against  others,  419. 
survivorship  of,  411,  421. 

JOINT  RIGHTS, 

discharged  by  settlement  with  one  creditor,  i.  501. 
non-joinder  of  plaintiff  to  enforce,  is  matter  in  bar,  414. 
promises  of  two  or  more  create,  when,  470. 
survivorship  of,  421. 

JUDGMENT, 

against  one  joint  obligor,  discharges  others,  415. 
discharge  of,  by  accord  and  satisfaction  ineffectual,  1001. 
discharge  of  by  parol,  ineffectual,  964. 
merges  rights  of  action,  1041-1052;  conf.  704. 


K 
KNOWLEDGE, 

lack  of,  that  contract  is  illegal,  effect -of,  934,  938. 
of  ulterior  illegal  purpose,  effect  of,  891,  895. 
(See  Notice.) 

L 
LAND, 

conditions  implied  in  contract  for  sale  of,  508,  512-519,  523,  561,  570, 
575  n.,  617-636,  707. 

LEASES, 

conditions  in,  610-617,  642. 

LIMITATIONS, 

part  payment,  removes  bar  of,  when.  298,  305-312. 
promise  of  debtor  to  pay  debt  barred  by,  289-312. 


1060  INDEX 

LIQUIDATED  DEBT, 

part  payment  does  not  discharge,  197. 

LOBBYING  CONTRACTS, 

are  illegal,  876. 

LUNATIC 

promise  of,  is  sufficient  consideration,  174. 


M 
MAIL, 

acceptance  by,  4,  97-132. 
revocation  by,  42. 

MARRIAGE, 

agreement  to  refrain  from,  whether  illegal,  949. 
is  sufficient  consideration,  216,  221. 

MARRIED  WOMAN, 

consortium  of,  not  legal  consideration  for  husband's  promise,  920. 
promise  of,  whether  sufficient  consideration  for  later  promise,  276. 

MARRY,  PROMISES  TO, 

after  obtaining  a  divorce  are  illegal,  918. 
anticipatory  breach  of,  647,  653,  655-712. 
by  a  married  man,  effect  of,  934. 
sufficient  consideration,  171. 

MERGER, 

of  contract  in  judgment,  1041-1052;  conj.  704. 
of  contract  in  specialty,  1041. 

MISTAKE, 

as  affecting  formation  of  contract,  66-79. 

MORAL  OBLIGATION, 

as  consideration,  260-312. 

MORTGAGE, 

contract  to  assume,  347. 

N 
NON-JOINDER, 

of  joint  d(;fendant  is  matter  in  abatement,  411. 
of  joint  plaintiff  is  matter  in  bar,  414. 

NON-PERFORMANCE, 

of  plaintifT  as  a  defence. 

(See  Conditions.) 
NOTES, 

conditions  implied  as  defence  to,  617. 


INDEX  1061 

NOTICE, 

conditions  of,  601-616. 

that  tender  will  not  be  accepted,  excuses  tender  when  647,  650,  676- 
713. 

(See  Anticipatory  Breach,  Damages,  Knowledge.) 

NOTICE  OF  ACCEPTANCE, 

in  bilateral  contracts,  97-132. 
in  unilateral  contracts,  94,  139  n. 

NOVATION, 

discharge  of  contract  by,  965-969. 

0 
OFFER,  1-65. 

ambiguity  of,  66-75. 

by  advertisement,  18,  60,  80-88. 

by  mail,  4. 

duration  and  termination  of,  33-43. 

in  jest,  6. 

invitation  for,  1,  8,  10,  15. 

mistake  in  telegraphic,  73. 

of  indefinite  quantity,  37,  137,  139,  181. 

of  reward,  63,  80-89. 

or  quotation,  15. 

rejected  by  counter  offer,  44. 

revocation  of,  must  be  communicated,  42,  51;  conf.  56,  60. 

revoked  by  death,  59. 

P 
PAROL, 

discharge  of  contract  by,  955-969. 
modification  of  contract  under  seal  by,  525,  723. 

PAYMENT, 

as  a  condition,  519,  521,  571,  580-592. 
part  revives  barred  debt  when,  298,  305-312. 

PERFORMANCE  OF  CONTRACTS, 

express  conditions  precedent,  452-499. 
express  conditions  subsequent,  500-506. 
implied  condition  of  plaintiff's,  507-512. 

(See  Conditions,  Impossibility.) 

PERSONAL  CONTRACTS, 

cannot  be  assigned,  399. 

PRECEDENT.     (See  Conditions.) 

PREVENTION  OF  PERFORMANCE, 
by  other  party,  effect  of,  644,  645. 

PROSECUTION, 

agreement  to  stifle,  is  illegal,  846-854. 


1062  INDEX 

Q 

QUOTATION, 

of  price  is  not  an  offer,  15. 

R 

REASONABLE  TIME, 

for  accepting  offer,  33-43,  150. 

REJECTION  OF  OFFER, 
counter  offer  is,  44. 

RELEASE, 

agreement  for  temporary  forbearance  does  not  amount  to,  978. 

covenant  for  perpetual  forbearance  amounts  to,  970. 

discharge  of  contract  by,  970-975. 

of  one  joint  debtor,  releases  all,  418. 

one  joint  debtor,  reserving  right  against  others,  419. 

of  promisor  for  benefit  of  third  person,  347,  358. 

REPAIR, 

performance  of  covenant  to,  is  not  in  condition  of  obligation  to  pay 
rent,  642. 

REPUDIATION, 

647,  653,  655-712. 

RESCISSION, 

allowed  after  repudiation,  655  w. 

as  a  means  of  discharging  contracts,  959-969. 

of  contract  for  the  benefit  of  third  person,  347,  358. 

of  wagering  contract,  804. 

(See  Discharge  of  Contracts,  Repudiation.) 

RESTRAINT  OF  TRADE, 
agreements  in,  784r-803. 

RETURN  OF  POST, 
meaning  of,  123  n. 

REVENUE  LAWS, 

agreements  in  evasion  of,  whether  illegal,  889,  925. 

REVOCATION  OF  OFFER, 

after  part  performance,  63,  64,  89. 

by  death,  59. 

by  sale  of  goods,  4. 

is  a  matter  of  defence,  7;    conf.  2. 

must   be   communicated  to   offerer,  42,  51,    150;    conf.  56,  60. 

REWARD, 

offer  of,  63. 

ossontials   of  acceptance  of,   80-89. 

lif)\v    revoked,   60. 

RISK   OF  LOSS, 

after  contract  to  aell   realty,  501. 


INDEX  1063 

s 

SALE  OF  GOODS, 

conditions  in  contracts  for,  508,  510,  519,  529,  576-594. 

SALE  OF  LAND, 

conditions  in  contracts  for,    508,  512-519,  523,  561,  570,  575  w.,  617- 
636,  707. 

SATISFACTION, 

promises  conditional  upon  promisor's,  483-488. 

SEAL, 

what  is  a,  314-318. 

SEAL,  CONTRACTS  UNDER, 

accord  and  satisfaction  of,  993,  1003. 

delivery  of,  325-328. 

illegality  not  apparent  on  face  of,  may  be  shown,  917, 

merge  simple  contracts,  1041. 

need  no  consideration,  328-332. 

need  not  be  signed,  313. 

need  not  be  dated  correctly,  313. 

of  several  covenantors,  321. 

parol  modification  of,  525,  723,  955-969. 

require  definite  covenantee,  322. 

rescission  of,  955-969. 

whether  recital  is  necessary  to,  314. 

SILENCE, 

when,  may  indicate  assent,  144-151. 

SPECIALTY.    (See  Seal,  Contracts  under,  Notes.) 

STATUTE  OF  LIMITATIONS,  289-312.     (See  Limitations.) 

SUBSCRIPTIONS, 

consideration  for,  188-196. 
promises  in,  are  several,  410  n. 

SUBSEQUENT.      (See  Conditions.) 

SUNDAY, 

agreements  made  on,  are  illegal,  914. 
agreements  to  work  on,  are  illegal,  916. 

SURETY, 

on  death  of  joint  obligor  who  is,  his  liability  is  discharged,  422. 
(See  Guaranty.) 
SURRENDER, 

discharges  contract,  1033-1038. 

T 

TELEGRAPH, 

contract  by,  when  complete,  102  n. 
effect  of  mistake  in  offer  by,  73. 


1064  INDEX 

TENDER, 

excused  when  evidently  useless,  647,  650,  676-713. 
when  may  be  made  anew  after  insisting  on  defective,  703. 

THIRD  PERSON, 

contracts  for  the  benefit  of,  333-365. 

TIME, 

reasonable,  for  accepting  offer,  33-44. 

when  of  the  essence,  468,  533,  570,  571,  577,  580-592. 

TORT, 

refraining  from,  is  not  sufficient  consideration,  231. 


U 

UNLIQUIDATED  CLAIM, 

payment  accepted  as  satisfaction  discharges,  200. 
whether  check  sent  as  full  payment  discharges,  1007. 

USURY, 

Promise  to  pay  debt  tainted  with,  275. 

W 
WAGERING  CONTRACTS, 

at  English  common  law  not  as  such  illegal,  804,  818. 

illegal  by  common  law  in  America,  809-826, 

illegal  by  statute  in  England,  804. 

recovery  from  stakeholder  in,  804. 

speculations  in  stock  and  commodities  are  when,  809-820. 

what  are,  804-826. 

WAIVER, 

of  conditions,  494r-499,  644r-655,  673-695. 

WRITTEN  CONTRACT, 

agreement  contemplating,  10,  14. 
is  a  parol  contract,  163. 

Y 

YEAR, 

agreements  not  to  be  performed  within,  what  are,  427-451. 


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